FINANCE BILL.—(No. 190.)

HC Deb 21 June 1894 vol 25 cc1651-716

COMMITTEE. [Progress, 9th June.]

[SIXTEENTH NIGHT.]

Bill considered in Committee.

(In the Committee.)

Clause 10.

On Motion of The SOLICITOR GENERAL (Mr. R. T. Reid, Dumfries, &c), the following Amendments were agreed to:—

Page 8, line 16, leave out "proof to their satisfaction," and insert "being satisfied."

Page 8, line 17, after "been," insert "or will be."

*MR. BARTLEY

said, he wished, in line 18, to insert "shall, if required," in lieu of the word "may," and he was willing, at the suggestion of the late Attorney General, to add the additional words "by the person accountable." He thought that this was not a matter as to which the Commissioners should have discretion. If the duty were paid they should be bound to grant a certificate.

Amendment proposed, in page 8, line 18, to leave out the word "may," and insert the words "shall, if required by the person accountable."—(Mr. Bartley.)

Question proposed, "That the word 'may' stand part of the Clause."

*THE ATTORNEY GENERAL (Sir J. RIGBY,) Forfar

said, he thought the clause as at present worded was more convenient and less likely to give rise to trouble. He doubted if the change would be a good one.

*SIR R. WEBSTER (Isle of Wight)

said, he should not so much object to the word "may" being retained. But it was obvious that if a certificate was to be given it should be on the request of the person accountable for the duty.

MR. GIBSON BOWLES (Lynn Regis)

said, he thought the word "shall" was necessary under the new conditions set up by this Bill. He did not know whether the Solicitor General bore in mind that under the system of taxation here imposed the number of certificates to be issued would be simply enormous. He thought the Commissioners might be excused if for their own protection they took some steps to prevent the wholesale issue of certificates. For the present he was afraid that neither the Government nor the Inland Revenue Authorities had formed the slightest notion of the enormous number of certificates that would have to be issued under the Act.

Amendment agreed to.

SIR R. WEBSTER

moved to insert the words "person accountable for." He said he thought this Amendment was necessary. The clause contemplated the discharge of property from further claims in respect of duty. If these words were carried it would not only discharge the property, but the person accountable. When the certificate had been given there would be no further remedy either against the person or the property.

SIR J. RIGBY

made some remarks which were inaudible in the Reporters Gallery.

Amendment, by leave, withdrawn.

On Motion of Mr. R. T. REID, the following Amendment was agreed to:—Page 8, line 20, to leave out "part of that estate," and insert "the estate or part thereof as the case may be."

*SIK G. BADEN-POWELL (Liverpool, Kirkdale)

moved, in page 8, line 10, at end, insert— Provided always that the said Commissioners shall allow to be deducted from the amount, payable for such full Estate Duty any sum or sums shown to their satisfaction to have been legally paid as Death Duties on property situate outside the United Kingdom, to the Government of the country in which the property is situate, and in which equivalent exemption is granted in respect of Death Duties payable there on property situate in the United Kingdom. He said he wished to make the suggestion to the Chancellor of the Exchequer with a view to saving the time of the House that the Amendment should be accepted without prejudice to any future settlement of the question.

Question proposed, "That those words-be there inserted."

THE CHANCELLOR OF THE EXCHEQUER (Sir W.HARCOURT,) Derby

said, he was obliged to the hon. Member, and he would tell him what the view of Government generally was in this matter. As regarded the method of procedure, he did not think it would be a convenient form to put, in any such important matter as this in the shape of an addition to Clause 10. He thought there must be a separate clause dealing with a matter of this consequence. The view of the Government was that whatever they did should be done for the colonies and not for all places outside the United Kingdom. In principle the Government was prepared to accept the principle set forth in the Amendment of the hon. and learned Member for the Isle of Wight. The object of that Amendment was to prevent the imposition of double duties—that was to say, where the colonies charged the duty that amount should be deducted from the charge made in this country. That he accepted in principle; but if they made that abatement to the colonies, the colonies should make the abatement to them so as to secure reciprocity. It would be necessary to provide proper machinery. The most convenient mode of securing this reciprocity would be by applying a clause by Order in Council when Her Majesty was satisfied that the conditions were fulfilled. He undertook to bring up a clause which he thought would be a satisfactory settlement of the matter.

SIR R. WEBSTER (Isle of Wight)

said, after the statement of the Chancellor of the Exchequer, which, so far, was satisfactory, he should not press his proposal. His object in putting down the Amendment was to prevent what appeared to be the payment of a double duty, or, at, any rate, a duty largely in excess of the Estate Duty. It seemed desirable that some system of reciprocity should be established so that the colonies should not be in the position any more than the Home Government to impose an excessive duty. He hoped, after what had fallen from the Chancellor of the Exchequer, that the matter would be made to depend upon the principle of reciprocity being accepted by the colonies, and that when the right hon. Gentleman brought up his clause he would be able to say that an arrangement had been entered into with the colonies for a settlement of the matter.

*SIR G. BADEN-POWELL

said, ho was sorry that the Chancellor of the Exchequer had not come to his present decision when the question was raised on a previous occasion, because in that case much time would have been saved. However, he congratulated him upon the form which his decision had taken. The matter of reciprocity was a practical feature of his Amendment, which he was glad to find the Chancellor of the Exchequer had accepted. Upon that principle he hoped that some communication would be made to the colonies. He would like to point out that in South Australia the matter was not a question of an Order in Council but of Statute Law, and he was surprised that the present Government should have consented to make preferential arrangements which might be described as the thin end of the wedge of Protection. At the same time, he congratulated the Government generally upon the decision at which they had arrived.

SIR C. W. DILKE (Gloucester, Forest of Dean)

said, he thought that the Government would meet with considerable difficulty when they came to apply the principle to property situated in foreign countries and also in many of our own dependencies. For instance, how was it to be applied to property in India and to those portions of our Eastern Possessions that were dependencies only of this Empire?

MR. GOSCHEN (St. George's, Hanover Square)

said, he did not wish to discuss this question upon the present Amendment, but thought it desirable to wait until they saw what the Chancellor of the Exchequer proposed. He did not know whether there ought to be the same exemption in the case of foreign countries as in the case of the colonies. But while he suggested that the matter should not be debated at that time, he hoped, however, that the Chancellor of the Exchequer would not assume that the Debate upon this important question had been concluded. It might be necessary to bring it up again on Report or in the shape of an Amendment to the Chancellor of the Exchequer's clause.

*SIR W. HARCOURT

said, the abatement would apply to colonial and not to foreign property. He wished it to be distinctly understood that the Government made no pretension to legislate in the colonies with regard to taxation. They did not propose to impose any tax upon any person in the colonies. They only proposed that persons domiciled here should be subjected to certain taxation which would fall upon any British subject, and they only proposed to get from the executor here duty to the extent of the assets which were under his control. They did not propose to go into the colonies to collect money where they had no jurisdiction or authority, but only to collect the duty from the executor at home.

MR. GIBSON BOWLES (Lynn Regis)

said, this question of exemption or quasi-exemption ought to be very carefully considered before being embodied in a clause. They would be differentiating between the colonies and foreign countries, and they must take care to avoid the possibility of the colonies imposing a duty upon property in Great Britain. As he understood the subject persons would have to pay the same amount of duty in the long run, whether the principle of the Amendment were really carried out or not. The only question was, whether the tax would go into the coffers of the Colonial Government or into those of the Chancellor of the Exchequer?

MR. COURTNEY (Cornwall, Bodmin)

, said, bethought that the Chancellor of the Exchequer had indicated too decided a preference for the language in which the hon. Member for the Isle of Wight had worded his Amendment. He pointed out that the words of the Amendment exempted a man from the payment of taxation in regard to property liable at the death of the deceased to Estate Duty in the country where it was situated. That would include Legacy Duty as well as Death Duty. How would the Amendment affect property liable to taxation other than Estate Duty? Could any exemption be claimed in that case?

SIR W. HARCOURT

said, that property in the colonies liable to any Death Duty there would be entitled to have this duty deducted from the Estate Duty.

MR. COURTNEY

pointed out that the Legacy Duty as well as Estate Duty was payable here, and that the wording of the Amendment did not meet his difficulty.

SIR G. BADEN-POWELL

thought that was so. It was such a case as that which he had specially in view when he drafted his Amendment, and which was precisely covered by it.

SIR W. HARCOURT

said, it was essential that they should bear in mind that the Government did not intend to establish in any form a differential duty as against English capital in favour of capital elsewhere. The Government must try to keep an even keel in the matter, and see that no advantage or disadvantage accrued to one party or the other.

MR. BARTLEY (Islington, N.)

said, he thought the question which had been raised was a very important one, and that the only way in which it could be fairly settled would be to arrive at some arrangement by which every colony would have the same rate.

Amendment, by leave, withdrawn.

MR. GIBSON BOWLES (Lynn Regis)

moved to omit Sub-section (2). He said he thought that everything that could be done under Sub-section (2) with the time limit could be done under other sections of the Bill without the time limit. He admitted that it was necessary that the Commissioners should have the power given to them by Sub-section 2, but it seemed to him that the only powers the sub-section conferred upon them were already given in other parts of the Bill.

Amendment proposed, to leave out Sub-section (2).—(Mr. Gibson Bowles.)

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

*SIR J. RIGBY

said, he was grateful to the hon. Gentleman for trying to shorten the Bill, as anything in that direction would be a relief to the Government. He did not, however, think that it would improve the Bill to omit this sub-section. He should prefer that the sub-section should remain, even though it might overlap some of the other provisions of the Bill. He thought it was well to give the Commissioners an indication that estates should be wound up within two years.

MR. GIBSON BOWLES

said, that if the Attorney General considered the sub-section necessary he should not press his Amendment.

MR. BARTLEY

said, he thought it would be immensely difficult to get anybody to undertake the administration of an estate, when it was evident that after everything had been done it might take two years before the rate of the Estate Duty was determined. Some means ought to be adopted by which the unfortunate persons who would have to fulfil the duties of administrators might be relieved to a certain extent; otherwise he was afraid that some public Department would have to be appointed to administer estates.

Amendment, by leave, withdrawn.

MR. GRANT LAWSON (York, N.R., Thirsk)

moved (on behalf of Mr. T. H. Bolton) to leave out, in page 8, lines 22 and 23, "after the lapse of two years from such death." He said the object of this proposal was to omit the limit of two years which, under the clause as it stood, must necessarily elapse before an application could be made to the Commissioners. He thought that one of the terrors which this Bill would add, not to death but to survivorship, was that no estate could be wound up under it except after a very considerable period of time. The unfortunate people who came into property would be in the position of wards of the Commissioners or of suitors in Chancery in the bad old days. Why should it be said that two years must elapse before an application could be made to the Commissioners to fix the rate of duty?

Amendment proposed, in page 8, line 22, after the word "applies," to leave out to the first "to," in line 23.—(Mr. Grant Lawson.)

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

*SIR J. RIGBY

said, he could do little more than repeat the reply he had given to the previous Amendment. He thought it was advisable to retain the limit of two years, and he could not accept the Amendment.

SIR R. WEBSTER

said, there was a very important point underlying the Amendment which might have escaped the Attorney General's attention. As the clause was now framed, practically speaking no application could be made to the Commissioners for relief until after the lapse of two years. It was, however, absolutely necessary to make provision for certain kinds of property being dealt with before the expiration of that period. An Amendment appeared lower down on the Paper with reference to the sale of reversions. If an executor satisfied the Commissioners that he intended to deal with certain property for money or money's worth, it would, he (Sir R. Webster) thought, be absolutely necessary that there should be some means of making immediate application for a certificate of discharge. He should, therefore, have thought it would have been desirable to leave out the words "after the lapse of two years from such death," so as to give the Commissioners a freer hand. If, however, the Government thought that such a limit must be retained in the Bill some protecting words must be inserted for dealing with special cases. No doubt it was desirable that there should be somewhere in the Bill an indication of the period within which estates must be wound up, but his suggestion to the Government was that this was not the best clause in which to insert such an indication.

SIR J. RIGBY

said, the Government had carefully considered this matter, and had had the benefit of the advice of those who were really acquainted with it. Under Clause 10, Sub-section 1, anyone could go before the Commission at any time and say that such-and-such circumstances ought to satisfy the minds of the Commissioners that everything had been done. Two years was a limit which might well be fixed, because by the end of that time the Commissioners would have come to know all about the property and could act without further investigation. As to the Amendments which stood later on the Paper, he could not now deal with them, but he thought that a great deal of unnecessary apprehension had been raised as to the case of reversioners. He hoped the hon. Member would not insist upon the Amendment.

SIR M. HICKS-BEACH

said, that after what the hon. and learned Gentleman had said, he would suggest that the Government should consider whether "one year" would not be sufficient instead of "two years." That would be fixing a time limit—and a considerable time, too—after the death of the deceased, after which the Commissioners would exercise that discretion which this subsection proposed to give them. It would be an enormous advantage to all concerned that, consistently with the requirements of the Revenue Department, these matters should be wound up, or that the Commissioners should be able to wind them up if they were satisfied under the provisions of this second subsection. He did not know if that would commend itself to the hon. Member who moved the omission of the words, but if the hon. and learned Gentleman could not accept the Amendment this proposal might be acceptable.

*SIR J. RIGBY

said, he would willingly give way in this matter if it were only a question of his opinion against those of hon. Gentlemen opposite, who knew as much as he did. But the Government had discussed the matter with officials who would be responsible for carrying out the Act, and knowing what they did as to the time occupied in the administration of estates those officials declared that they could not undertake the responsibility of the work with any degree of satisfaction unless they had a period of two years allowed them to turn round in. The effect of shortening the period to one year would, he was afraid, only lead to dissatisfaction through the necessity the Commissioners would be under in so many cases of refusing certificates at the end of the specified time. No doubt in many cases the matter might be settled in a moment; but where they were called on by the mere statement of the persons interested to fix the duty, unless more time than one year were allowed, they might not be able to do the work. He was not obstinately standing on his own opinion, but was guided in the matter by the views of the permanent officials.

MR. GOSCHEN

said, the hon. and learned Gentleman the Attorney General had made a conciliatory speech, but, at the same time, one which might alarm the country by giving the impression that under the Bill certificates in many cases would not be given for two years. He understood that a term of years ought to be fixed which would not give rise to that dissatisfaction which the hon. and learned Gentleman suggested if the Com- missioners were frequently obliged to refuse certificates if the word "may" were altered to "shall." He understood the hon. and learned Gentleman to mean that, though the Commissioners were not bound to give a certificate, yet it would give dissatisfaction—two years having been inserted in the Bill—if the certificate were refused at the end of the two years. A great deal naturally turned on the number of cases that might occur. He was afraid it would give the impression out of doors that the Government advisers thought there were a great many cases that would take longer than two years to deal with. He was sure the Inland Revenue authorities wished to do their utmost to reduce the time that would elapse before this important certificate was given. Would the Attorney General appeal once more to the Inland Revenue authorities before the Report stage was reached?

*SIR J. RIGBY

said, the matter had been discussed at length already, and he could not promise any change in the view of the Government. However, the authorities would be put in possession of everything said in the Committee on the subject. The matter would be put before them again, and if they thought the Bill could be altered it should be done.

MR. COURTNEY (Cornwall, Bodmin)

said, that the period of two years might well be adopted if in the sub-section the words "the Commissioners may determine the rate of the Estate Duty" were altered to "the Commissioners shall determine the rate of the Estate Duty."

MR. BYRNE

said, he thought some such phraseology as this might be adopted: "shall, unless they see good reason to the contrary." He did not want words put in which would compel the Commissioners at the end of two years to give a cerficate; but if they added these words they would differentiate from the former clause.

MR. GRANT LAWSON

said, the Amendment that ought to have been carried was the one they had just passed, and in regard to that the Attorney General said the great virtue of it was the time limit. He spoke once before on this Bill on the subject of a time limit, and he then proposed that the executor should have 12 months and not six months in which to wind up the estate, when he was assailed by the learned Attorney General, who said he was encouraging habits of sloth; now, when he wished to hurry up the Commissioners, the learned Attorney General asserted they should be allowed to have two years. But there were circumstances that day that caused him not to press the Amendment to a Division, and he therefore begged leave to withdraw it.

Amendment, by leave, withdrawn.

SIR R. WEBSTER

wished now to move the Amendment to leave out of line 25 the words "and the several persons entitled thereto," as he could not understand what was the necessity for these words. He understood it was the duty of the Commissioners, after the period of two years, to fix what the rate of the Estate Duty should be, and he quite agreed in thinking that should be done. The person accountable ought to give a full statement of all the property, but it seemed to him it would be unfair that the Commissioners should be entitled to ask for information as to "the several persons entitled thereto." It might be a difficult thing for a person to give the information, though he agreed the Commissioners would be entitled to ask for full information, according to his best knowledge and belief, of all persons entitled thereto. He failed to see under what circumstances the information as to the "several persons entitled thereto" would affect the question the Commissioners had to solve, and having regard to the earlier provisions of the Bill it seemed to him these words were really unnecessary.

Amendment proposed, in page 8, line 25, to leave out the words "and the several persons entitled thereto."—(Sir R. Webster.)

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

*SIR J. RIGBY

said, that the information to be furnished would be according to the person's best knowledge and belief, and therefore there was no difficulty about the matter. The person was simply told he should give a satisfactory account, and in some cases he only could go so far as to say that he knew nothing of any other property or of any other person interested in the property, and that would be a full and complete statement. But why should not a man connected with the estate in that way be called upon to do that, and to say whether or not he knew certain properties and that he believed the owners to be so-and-so?

*SIR R. WEBSTER

said, he did not wish to appear pertinacious, but the words were— A full statement to the best of his knowledge and belief of all property passing on such death and the several persons entitled thereto, If the hon. and learned Gentleman was in the position of controlling the Department they would not have so much difficulty, but he might shortly be in higher places. A man would have to go and make inquiries before he was supposed to have discharged his duties, and he submitted the hon. and learned Gentleman had not sufficiently considered the meaning of the words.

*SIR J. RIGBY

said, the information to be given the Commissioners might affect material questions, as in the case, for instance, of settled property, whether the settled property ought to be aggregated or not: that would be of great importance to the Commissioners to know, and they had a right to have the information.

Amendment, by leave, withdrawn.

SIR R. WEBSTER

said, that in consequence of the discussion that took place just now, and the suggestions of the right hon. Gentleman the Member for Bodmin (Mr. Courtney), he had handed in an Amendment to leave out of line 26 the word "may," and insert the word "shall." He submitted that, in this place, "shall" was the proper word to use. The clause presumed that the persons should have given a full statement of all property and the persons entitled thereto, and therefore it ought not to be left optional to the Commissioners to determine the rate of interest.

Amendment proposed, in page 8, line 26, to leave out the word "may," in order to insert the word "shall."—(Sir R. Webster.)

Question proposed, "That the word 'may' stand part of the Clause."

*SIR.J. RIGBY

said, that in reading the context it would be found that "may" was directory only, whereas "shall" would be obligatory, and therefore it would be very unfortunate indeed, taking the limit of two years, if they adopted this Amendment. They were dealing in some cases with estates belonging to persons having interests all over the world; in the other cases, where people died without any really recognised heirs, or without any heirs at all, there were cases where for months and even years it was doubtful who ought to administer the estate; and there were numerous cases in which two years would be a very small time indeed in which to get an approximate knowledge of the items of the property or of the persons interested in it. He agreed that taking things generally two years was enough, and in that time they might hope all these matters would be settled, but to say that after two years in all cases there should be a discharge given was going too far. Such a discharge would operate in favour of exonerating people who wanted to defraud the Revenue and escape the payment of the duty they ought to pay, and to adopt the Amendment would be an inducement to them at every stage to linger out the proceedings and prevent all being discovered, and at the end of two years they might say to the Commissioners, "We have kept you at arm's length all this time, and now in obedience to the Statute you are obliged to give a certificate." This ought not to be, especially when from their conduct they might almost be satisfied there was something behind that was suspicious.

MR. GIBSON BOWLES (Lynn Regis)

said, that if the Commissioners at the end of two years were not to be directed to fix the rate of duty on the estate the whole value of the clause disappeared. Whether two years or not was the proper period to fix he would not at this moment undertake to say, but it would be monstrous if they were always to keep these accounts open and to keep the liability of persons accountable for this duty open. Under this Bill an entirely new principle of accountability had been set up; it was not merely that they were to be accountable for the property that came into their hands, but for a vast amount of other property of which they might be supposed to know something, and for which they were to be accountable. Under those circumstances, this tremendous burden ought to be capable of being removed at some period or other. The period chosen by the Government was two years, and, that being so, it was nonsensical to say that it was only to be removed if the Commissioners chose. That would destroy the whole value of the sub-section. To carry out the intention of the sub-section he thought it was very necessary to substitute the word "shall" for "may."

MR. GRANT LAWSON (York, N.R., Thirsk)

said, that considering the immense amount of information the Inland Revenue officers had, considering the great store of learning there was at Somerset House, considering they had had years to collect that information, and considering that the Government were giving power to enable them to get information from everyone, whether he knew anything about it or not, he was sure two years' time was sufficient to wind up the estate, and at the end of that time it was only reasonable to say the matter should be wound up. There would be no loss to the Revenue. They asked that the Commissioners should be compelled to do—what? To determine the rate of the Estate Duty on the property for which the person accountable was to pay. If any further property was discovered it could be taxed, and the only loss that could occur to the Revenue would be in the case where the estate was on the margin of one of the steps of graduation when the property coming in afterwards might have entitled them to a higher rate of duty. Except in very rare cases there would be no loss of Revenue on the undiscovered property.

MR. COURTNEY (Cornwall, Bodmin)

could not understand what objection there was to make the language of the Statute a little more rigorous by transforming "may" into "shall," accompanied by the qualifying words which had been suggested.

MR. GIBSON BOWLES

pointed out that the word "shall" occurred at the end of the sub-section in a very much more important relationship. The word "may" occurred only in relation to the determination of the Estate Duty, whereas the word "shall" had reference to the giving of the certificate; therefore, the original drafting of the clause appeared to be weak.

Question put.

The Committee divided:—Ayes 212; Noes 166.—(Division List, No. 115.)

MR. GRANT LAWSON

said, he wished, as a result of the discussion that afternoon, to move the following Amendment at the end of line 31 of the clause:— But any person aggrieved by the refusal of the Commissioners to determine such rate, or by the rate so determined, may appeal to the High Court in the manner directed by Rules of Court. The hon. Member said, it was quite obvious there might be cases of hardship if the Commissioners were to refuse to determine the rate and wind the matter up. The Inland Revenue Commissioners acted at present with great kindness to those who applied personally to them, and acted justly to everybody as far as possible. But because that was so now, and had been so in the past, it was no reason why it should always be so, and it was not desirable they should have, in the future, an uncontrolled power of keeping these matters open. As they had just passed the word "may" in this clause and made it optional, it was only reasonable they should now proceed to say that if anybody was aggrieved by the way the option of the Commissioners was exorcised he should be allowed to appeal to the High Court. He begged to move the Amendment.

Amendment proposed, in page 8, line 31, after the word "discharge," to insert the words but any person aggrieved by the refusal of the Commissioners to determine such rate, or by the rate so determined, may appeal to the High Court in the manner directed by Rules of Court."—(Mr. Grant Lawson.)

Question proposed, "That those words be there inserted."

*SIR J. RIGBY

, in opposing the Amendment, said, if it were accepted it would deprive the Commissioners of that class of information they now got as strictly confidential. The Commissioners might have a reasonable suspicion that all the facts had not been disclosed; they might receive some credible but unofficial and private information that such was the case, and it would be outrageous to bring all these matters before the High Court. The Commissioners would have no power to bring evidence of this character before the High Court of Justice, and the High Court of Justice might decide that the Commissioners ought to give a certificate and they might not know the reasons—which might be potent and sufficient—that the Commissioners had for refusing. The reasons that the Commissioners had for so acting might be good reasons, but not supported by strictly legal evidence. It could not, therefore, be put before the High Court, which in these circumstances might decide against the Commissioners without having the proper materials before it for dealing with the subject.

SIR R. WEBSTER

pointed out that a practically similar Amendment, which he had moved to Clause 7, was accepted by the Solicitor General. The actual words of his Amendment were these— Any person aggrieved by the decision of the Commissioners under this sub-section, may appeal to the High Court within the time and in the manner directed by the Rules of Court. His lion, and learned Friend the Member for Thirsk had moved a similar provision with reference to the decision of the Commissioners under the clause now being discussed. He should have thought there was not much difference, and that practically the same Amendment having been accepted to a former clause, it might now be accepted to this. This was a matter which might properly be reviewed by the High Court and he thought there were very fair grounds for asking that the Amendment should be accepted.

MR. BARTLEY

said, the Commissioners were to give a certificate after two years unless there was something serious to prevent them. If that was the case, surely it was only fair that the Court should judge whether the Commissioners were acting reasonably or not. The Attorney General said it would be a matter of the absence of knowledge which would prevent the Commissioners giving a certificate, but surely in the interests of the public and of everybody, if there was this absence of knowledge it was time, after two years, that this matter should be ended, and he entirely objected to the idea laid down by the Attorney General that these cases were to stand over, dependent upon secret knowledge which the Commis- sioners might have. The hon. and learned Gentleman said the Commissioners might have some secret evidence which might prevent them giving a certificate, but which they did not like to put into the witness box of the High Court. But these were the very cases they ought to look after, and he entirely objected to the notion that the Inland Revenue were to be the judges in this matter because of some secret evidence which nobody could appeal to or understand. They had passed a clause giving the Commissioners the right to go to any person they liked and demand information concerning an estate, whether the man knew anything about it or not, simply because the Commissioners might think he ought to know. Take a simple concrete case. There was a dispute between those who had to administer an estate and the Commissioners concerning the property. The Commissioners would say that they had reason to believe that there was more property in the estate than was shown by the affidavits and other evidence. Those persons who were administering the estate would say there was not, and the Commissioners would say they had reason to believe from those mysterious persons whom the Attorney General had referred to that there was further property. If that was the state of the case, how could it be settled except by an appeal to the High Court? These would be all large cases, in which there would be a good deal of conflicting evidence, and therefore it seamed to him only common justice that both parties should appear before an impartial tribunal by whom the difference could be settled. According to the Attorney General, they were to leave it absolutely to the Commissioners, who were to be the judges in their own cause and were not to give that appeal which, it seemed to him, every person in the country ought to have a right to if he felt himself aggrieved by the decision of the Commissioners. Inasmuch as they had retained the word "may," and were leaving it absolutely to the Commissioners to say whether they would or would not give these certificates—which were practically the title-deeds to much of the property—great hardships might be inflicted in many cases, and he hoped, therefore, his hon. Friend would press the Amendment to a Division.

Question put.

The Committee divided:—Ayes 169; Noes 209.—(Division List, No. 116.)

*MR. T. H. BOLTON (St. Pancras, N.)

moved to insert a new sub-section enabling persons intending to deal with reversions in respect of which duty would become payable to apply to the Commissioners for a certificate fixing the rate of duty chargeable, the property thereupon to become freed in the hands of purchasers or mortgagees from any higher rate. He said that the liability to aggregation introduced an element of uncertainty into the value of reversions. The duty might, at a future time, when the reversionary interest fell into possession, be very largely increased, and that fact would militate against the saleable value of the reversionary interest. The variation would amount to 5 per cent. In the ease of a stranger in blood the full duty might be very considerable, amounting to as much as 18 per cent. This proposal was necessary in the interests of persons desirous of mortgaging or selling their reversions as well as Insurance Companies and others purchasing reversionary interests, and would be a mere act of justice to all the persons interested.

Amendment proposed, in page 8, line 31, after the word "discharge," to insert as a new sub-section the words— (3) Any person intending to deal with a reversion in respect of which duty will thereafter become payable may apply to the Commissioners for a certificate fixing the rate at which duty is to be charged on such reversion, and such certificate when made shall free the property in the hands of purchasers or mortgagees from any higher rate of duty."—(Mr. T. II. Bolton.)

Question proposed, "That those words be there inserted."

*SIR J. RIGBY

said, that the Commissioners already possessed under the earlier part of the Bill the power of granting certificates. Why should the purchasers and vendors of reversions be picked out for exceptionally favourable treatment? The purchase of reversions was by its very nature a speculative business, because there were so many elements of uncertainty about the value of a reversion; and that uncertainty would not be appreciably increased by the fact that the rate of duty was not fixed. In order however, to further progress with the Bill and to assist business without giving an undue preference to one form of property, he would promise to bring in a clause enabling the Commissioners to come to a compromise where it was desirable.

*SIR J. LUBBOCK (London University)

said, that this Amendment raised one of the many cases in which the Bill introduced difficulties and hardships without any advantage to the Revenue. The learned Attorney General did not seem to have grasped the point, because he said that under a previous part of the Bill the Commissioners could give a certificate. But that was only on payment of the duty and after the death of the deceased. But reversioners often required to deal with their reversions 10, 20, or even 40 years before they fell in. Again, the learned Attorney General asked why should reversioners have a privilege which was not given to other property. For the simple reason that other property passed outright. Consols would be as saleable as before, but reversions would not, because it would be impossible to ascertain the duty. In hundreds and thousands of cases it was of great importance to raise a sum on reversionary rights to start a young man in life; but, unless this Amendment were accepted, this would become practically impossible, because no one could calculate beforehand what the value of the reversion would be. He hoped, therefore, the learned Attorney General would see his way to accept this Amendment.

MR. BARTLEY

urged that a reversion was often valueless to a man unless he could sell it or raise money upon it, and a variation of 5 per cent, in the duty to be charged would often make all the difference between a reversion being worth anything and worth nothing. The whole scope and scheme of this Bill was to put an enormous hardship on owners and reversions, and this clause would only put them in a fair position with regard to other properties. No doubt the law ought not to encourage the sale of reversions, but the fact was that the Bill as it stood would make it necessary for all but rich men to sell them by putting the holders in a most unfair and awkward position, whereas it would be more in accordance with public policy to offer people facilities for keeping them. He regretted that some plan had not been adopted which would render the clause unnecessary; but the clause as it stood would render sale compulsory, and would make the inheritance of a reversion really a misfortune to a man. Only rich persons and Insurance Companies would be able to hold reversions, and the result would be that the Exchequer would suffer loss. The result of the Bill would be that reversioners would be treated with great hardship.

MR. COURTNEY

said, the attention of the Committee had been chiefly directed to reversions expectant on the decease of father or mother, but the Amendment ought also to be considered with regard to reversions on the termination of leases; and it was not in the public interest that there should be any impediment to dealing freely with the whole leasehold property of London or in any other part of the country. Facilities had already been given for the payment of Estate Duty while properties were in possession, and it was only fair that dealing with reversionary interests where necessary should not be made in many cases practically impossible.

*MR. BUTCHER (York)

urged that without the Amendment the Bill would interfere with a large legitimate and increasing business done by Insurance Companies. As they would be, of course, bound to protect themselves against the risk of having to pay the highest Estate Duty, their margin of safety would often make a difference of hundreds of pounds to a reversioner. Unless the Government was prepared to say they would interfere by legislation with the sale of reversions altogether, it was only fair that this facility for dealing with them should be given. He therefore urged that they should accept this Amendment or indicate their intention to insert a provision on similar lines.

SIR R. WEBSTER

said, that was an important point. The difference represented by uncertainty would be so substantial as not only to reduce the amount to be paid by an Insurance Company on purchasing a reversion, but would cause the Company to hesitate in some cases to entertain the transaction at all.

MR. GRANT LAWSON

said, this point raised the question of beneficial interest accruing on death. It was doubtful whether reversions were really property passing on death, and therefore whether they ought to be taxed under this Bill. The Attorney General had urged that reversions were, under any circumstances, speculative and that purchases of them must therefore be speculations in any case. But that might be said of every investment—that it involved uncertainty. These investments, on the other hand, were purchased on carefully framed actuarial tables, and the purchases were spread over a sufficient number of transactions to give an average of certainty. An ordinary part of the business of Insurance Companies was that of averages. By bringing in the principle of graduation the Government left it absolutely uncertain what the rate on the reversion would be, and in such a case the actuary would be of no use. He had never met an actuary who was able to tell what a man would leave another at his death; and until the table which gave information of that kind was framed, it would be impossible to give the rate on a reversion. The Amendment would enable the holders of reversions to raise money on the reversions to start themselves in life; and it seemed hard that that should not be so.

MR. A. J. BALFOUR

said, that perhaps the explanation of the action of the Government in regard to this clause was to be found in the fact that the case of holders of reversions would be met by the new clause which the Government were about to introduce. But if that were not so, an answer might be given to the case which had been made in support of the Amendment. It had been shown that the holders of reversions would be under the Bill placed in the position of being only able to sell their reversions at a much lower rate than now, owing to the uncertain character of the charge that would be imposed on reversions by the Bill. He should like to know specifically, from the Government whether they thought the new clause they were about to introduce would meet the difficulty?

*SIR J. RIGBY

said, the Government had promised to bring in a new clause to protect what they called commercial transactions. His answer to the right hou. Gentleman opposite was that the clause would not include the present case, but what was sufficient for the present case was Section 41 of the Succession Duty Act.

SIR J. LUBBOCK

Will the hon. Gentleman speak up? We cannot hear him here.

*SIR J. RIGBY

said, he was only answering an argument he thought was not of any interest to the Committee. It was said that holders of reversions would be worse off under the Bill than at present. If people were not worse off by the operation of the Bill the Government would not get any Revenue.

MR. A. J. BALFOUR

said, his complaint was that, at present, holders of reversions knew the rate they would have to pay; but nobody knew what the rate would be under the Bill.

*SIR J. RIGBY

said, the complaint of the right hon. Gentleman was, no doubt, a reason against graduation; but there were overwhelmingly better reasons in favour of it. The Government had already given the holder of the reversions the opportunity of paying the rate down; and if they postponed the payment of the rate it was for their own benefit they would do so. What was asked by the Amendment was that the holder of a reversion could go to the Commissioners of Inland Revenue and say, "We want to sell this property; fix a final duty upon it now before you have time to investigate the matter, simply because it will be convenient for us and convenient for the reversionary interest purchasing Companies." He desired to speak of those Companies with respect, because he knew they performed a useful function. It was said that, unless the rate was fixed, the Companies would be obliged, in order to cover themselves, to exact the maximum; but if the Companies carried on their business by exacting the maximum in every case, they would soon have no business to carry on, and they ought to have none, for the business would go to people who would be more reasonable, and would strike an average.

MR. BYRNE

said, the Solicitor General had not dealt with the argument in support of the Amendment. A man who was entitled to a reversion knew, under the existing law, the duty that would be payable in respect to it; and, therefore, if he desired to sell the reversion there would not be the slightest difficulty about it. Under the Bill, however, the man would not know what would be payable on his reversion until the death of another person, for that other person's estate and property would all have to be considered before the rate payable on the reversion could be determined. The amount of the duty might be 3, 4, 5, 6, 7, or 8 per cent.; it was impossible to say what it would be, and the purchaser of a reversion would naturally give a less price for it than at present, for he would calculate that a much higher rate of duty would be payable when the reversion fell in. That uncertainty would make the reversions much more difficult to deal with after than before the Bill. At present young men of 25 or 30 who had reversions, and who desired to start in life, or emigrate, or set up in business could sell their reversions, and get their full and ascertained value. In future, unless some form of compromise, such as that suggested in the Amendment, was arrived at, they would not get the full price of their reversions. What they would get was a price less the calculated high rate.

SIR R. WEBSTER

said, the Committee ought to understand clearly that the Attorney General would not give to holders of reversions the relief sought in the Amendment.

MR. MOULTON (Hackney, S.)

said, the main argument of the other side was that persons owning reversions would be in a difficulty, because they would not be able to tell the rate at which they would be taxed. That was perfectly true, and the answer was, because no one could tell the rate. If they were going to graduate the rate according to the wealth of the person at whose death the reversion fell in—as would be done in every case—neither the Inland Revenue Commissioners nor any other person could tell how rich the man would die, and consequently would be unable to tell the rate at which the reversion would be taxed. To calculate what the rate would be was a thing beyond the human mind. It was a new risk, a new element of uncertainty, that was absolutely inseparable from the plan of graduating the duty according to the wealth of the person who died. They must accept that risk or uncertainty as one of the consequences of graduation. It was one of the minor inconveniences of graduation, and if they were not prepared to accept it they must give up graduation, because it was quite impossible to separate one from the other. But they had decided in favour of graduation, and, having so decided, they must recognise that the rate at which reversions were to be taxed was beyond the wisdom of man to foresee.

MR. GIBSON BOWLES

congratulated the hon. Member for Hackney on discovering America. The hon. and learned Member had just found out that no one could tell the rate of duty payable under the Bill. Why, that was the point which the Opposition had vainly endeavoured to drive into the heads of hon. Gentlemen opposite in all the discussions of the Bill; and he was proud that they had at least carried conviction to the open mind of the lion. Member for Hackney The Attorney General, having as an afterthought consulted the Succession Duties Act, told the Committee that under Section II of that Act there would be no difficulty in dealing with those reversions. But that was because at present the duty was fixed; and because the Commissioners of Inland Revenue could from the estimated value of the reversions fix the duty upon it. No man could tell what the rate would be under the Bill; and therefore they would turn reversions out of the region of property by preventing them from being buyable and saleable. A pretty mess they had got reversions and everything else in under the Bill. But he thought the Government would find it absolutely impossible to apply this new principle that was called graduation.

*SIR J. LUBBOCK (London University)

said, the hon. and learned Member for Hackney contended that persons who held reversions were no worse off than anyone else under the Bill. Let them test that. If a man had Consols or railway shares he could sell them, and the Bill would not damage their sale, for he would get just as much for them after the Bill as before it. But the holder of a reversion was in a totally different position. He could not sell it at its full value, for no one would know what the duty on it would be; and, therefore, the Bill affected a man holding reversions in a different way from a man who held any other class of property. "But," said the Attorney General, "if the Insurance Offices charge too much they will get no business; and the offices which strike an average will get the business." But why should not the Commissioners of Inland Revenue strike an average? If that were done, the holders of rever- sions would be able to deal with them. This was not a matter that affected the revenue at all; and unless they accepted the Amendment they would lower the value of a great amount of property in the country, without doing any advantage whatever to the revenue. The question affected a great number of persons. For instance, a widow had a life interest in railway shares and other property, which on her death went to her children. It was often of the utmost importance to children to be able to raise money on their reversions in order to make a start in life. The Government, by their action, were imposing a great disadvantage on those people, and the arguments they had advanced against the Amendment showed that they really had not grasped the effect of their Bill.

Question put.

The Committee divided: —Ayes 123; Noes 167.—(Division List, No. 117.)

*SIR M. HICKS-BEACH

said, he begged to move to leave out the words "or property," in line 33, so that the sub-section would read— (3.) A certificate of the Commissioners under this section shall not discharge any person from Estate Duty in case of fraud or failure to disclose material facts, and shall not affect the rate of duty payable on any property afterwards shown to have passed on the death, and the duty thereon shall be at such rate as would be payable if the value thereof were added to the value of the property on which duty has been already paid. He had understood from the discussion on the previous clause that in cases of fraud or failure to disclose facts for which no defence could be pleaded by persons accountable for duty, those persons could be punished by a large fine at the discretion of the Commissioners and the Court, which fine would have to be paid by those persons themselves, and would not come out of the property. Therefore, as the offence against which the subsection provided was a personal offence, and not one committed by the property or beneficiaries, the property ought not to be made liable. He did not know why these words "or property" were inserted, but the point was a legal one, and he did not propose to speak upon it with authority. He moved the Amendment, in the hope of eliciting some information.

Amendment proposed, in page 8, line 33, to leave out the words "or property" —(Sir M. Hicks-Beach.)

Question proposed, "That the words 'or property' stand part of the Clause."

MR. R. T. REID

said, the right hon. Gentleman desired that the granting of a certificate should be a discharge of the property affected, whether or not the certificate was obtained by fraud or failure to disclose facts. The right hon. Gentleman considered that the immunity should not attach to the person but to the property, and said, "Why do you not release the property?" The answer was, "If it has not been sold to a purchaser who buys for valuable consideration, why should it not be charged?" The duty was charged on the property, and why should the property not pay?

SIR M. HICKS-BEACH

said, his point was that the person accountable was the person who might be supposed to be guilty of the fraud or suppression of facts. He was punishable under the Bill, and would remain so under the Amendment. Why, when he was not a beneficiary or owner of the property, should the liability to pay rest upon the property as well as on the person who committed the offence?

MR. R. T. REID

said, it should rest upon the property for the reason that, although the beneficiaries might be innocent persons, they would be represented by the person accountable, and they would derive benefit from the fraud. The Amendment was intended to release the property from liability to duty under certain conditions, and in so far as it would do that it was against the interests of the Exchequer. He did not think they ought to release the property where there had been a fraud unless the rights of some third innocent party intervened. That, he thought, was an intelligible line of policy. He had put down an Amendment which would give all the protection which was necessary to innocent persons.

SIR R. WEBSTER

said, the learned Solicitor General had put his case clearly, but the Amendment raised a matter as to which the Government had not gone far enough. The hon. and learned Gentleman's Amendment would only give protection to bona fide purchasers for valuable consideration. In the Interpretation Clause there was no definition of "bonâ, fide purchaser for valuable consideration." Take the case of a person who had acquired the property under a marriage settlement, and had not paid money for it; would he be a "bona fide purchaser for valuable consideration"? The position of the right hon. Gentleman the Member for Bristol was that the Government did not go far enough. It was not fair that the property should be charged where they had a person liable to heavy penalty. To except all beneficiaries would be going too far, but it was clear that the words used were too narrow, and that unless the clause were amended, or necessary words were inserted in the Definition Clause, all transactions other than those of "purchasers for valuable consideration" would for all time remain chargeable with the duty.

*SIR J. LUBBOCK

said, that unless the words "or property" were omitted they would not gain what they expected by the abandonment of Clause 8. If the Amendment were not accepted the sub-section as it stood would have the effect of putting an end to all transactions on the Stock Exchange, because it would be impossible for anyone to safely buy either stocks or shares in case they should have formed part of the estate of a deceased person which had not paid the proper amount of Death Duty. He believed it would be found impracticable to require that a certificate to that effect should be given with the ordinary transfers.

MR. R. T. REID

said, he could assure the right hon. Member for the University of London that bona fide purchasers in the sense referred to would be sufficiently protected by the clause as it would stand.

COMMANDER BETHELL

asked if the Solicitor General would be good enough to explain whether, if there was an evasion of duty from whatever cause, on the estate again passing and a fresh duty being imposed, the old duty would be payable by the beneficiaries?

MR. R. T. REID

Yes.

COMMANDER BETHELL

said, it seemed extremely hard that a future owner of the property should be liable to make good, after an indefinite lapse of years, and after having paid the Estate Duty due on his own account, any part of the duty that, either from fraud or mistake, had not been paid on a former succession.

MR. R. T. REID

said, that where the liability to duty was in the nature of a charge on the property the liability was not diverted by the granting of the certificate, should that certificate have been obtained by fraud. A second death would involve a second duty.

COMMANDER BETHELL

said, he thought that was the case. Though he agreed it was fair that the estate should be liable for the whole duty, if it had not been paid owing to fraud, he thought it was hard that a later possessor having paid his own duty, if the former Estate Duty had been defaulted, should be chargeable for that duty. The default might have taken place through a mistake on the part of the Commissioners themselves; nevertheless, the future possessor might have to bear the consequences. This was a case which should be taken into consideration, especially in view of the immense duty that would now have to be paid.

MR. BARTLEY

said, a point which struck him was that when there was really fraud or evasion the clause would be found to offer no protection to the Revenue at all, as in such cases the property would certainly be sold, and the State had no power to recover against a bona, fide purchaser. That seemed to him to show the weakness of the clause, and the property had passed to somebody without sale, it would always be liable for any charge, whether owing through fraud or otherwise. What a person would have to do, supposing fraud had been committed, would be to part with the property to a third person, when all claim on it would be barred. It was a provision, therefore, that might often hit with great hardness a perfectly innocent man, while it offered a loophole of escape to the rogue, that was sure to be taken full advantage of.

MR. GIBSON BOWLES

said, that the liability under this clause would be a * serious one to impose upon estates. The liability was one which would never cease. Even after the lapse of centuries it would still exist, and could be enforced. In short, this clause, like the other clauses of the Bill, contemplated eternity —and two or three days more. This was not a liability which should be im- posed upon an estate. In the Succession Duty Act there was nothing corresponding to this provision,' although that Statute contemplated these things, and provided that bona fide purchasers should not be liable. If fraud was committed, it would be largely owing to the negligence of the Commissioners, who were armed with largely increased powers under the Bill for obtaining information and ascertaining facts. Either they would have got all the facts together—in which case it would be their own fault if they were misled—or else they had not got them, in which case they would not have performed their duty. Instead of there now being a stronger case for imposing this unfair charge, there was now a weaker one, having regard to the powers of the Commissioners. It seemed to him that the penalty for fraud should be confined to the person who committed it.

Question put.

The Committee divided: —Ayes 125; Noes 63.—(Division List, No. 118.)

Amendment proposed, in page 8, line 38, after the word "paid," to insert the words— Provided, nevertheless, that a certificate purporting to be a discharge of the whole Estate Duty payable in respect of any property included in the certificate shall exonerate a bona fide purchaser for valuable consideration without notice from the duty, notwithstanding any such fraud or failure."—(Mr. R. T. Held.)

Question proposed, "That those words be there inserted."

*MR. BUTCHER (York)

said, he was authorised by the hon. and learned Member for the Isle of Wight to say that he accepted the Amendment as amended.

Question put, and agreed to.

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

MR. GIBSON BOWLES

said, that before they parted with the clause, he would like to point out that it introduced a new principle of aggregation, making the third embodied in the Bill.

Question put, and agreed to.

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

Clause 11.

MR. GRANT LAWSON

said, he proposed to leave out from the word "reason," in page 8, line 39, to "death," in line 41. The words proposed to be left out limited the cases in which composition for the Death Duties could be accepted by the Commissioners. He had a very strong impression that no estate would ever be wound up under that Act, and no duty would ever be received by the Exchequer under that Act, except by some composition being arrived at, which would avoid the necessity of anybody attempting to understand that Act, or trying to put it into practice. He thought it desirable, therefore, that there should be every encouragement of composition. There was no need to limit the section, which was after all a permissive section, in which their old friend the word "may" appeared. There were lives other than those covered by the words he wished to omit tinder which it was desirable that there should be composition. There might be cases in which the property was scattered all over the world, or in which part of the property consisted of a ship which had sunk in some distant sea, and which might or might not be raised again, or there might be an estate dependent upon the fact whether a man was or was not alive, who, for instance, had gone with Nansen to the North Pole, and had not been heard of for some years. Indeed, a hundred other cases might be mentioned in which it was desirable that compositions should be effected. It was for that reason that he wanted to go back to the beautiful simplicity of the Succession Duty Act of 1853, which had been pointed to as a model of legislation, and which had, as they knew, held its own for a number of years. The clause he suggested that they should follow was Clause 39—" Powers of Commissioners-to compound duties "—and it provided for composition in any case in which the Commissioners deemed it expedient to exercise their authority.

Amendment proposed, in page 8, line 39, to leave out from the word "reason" to the word "death," in line 41.—(Mr. Grant Lawson.)

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

MR. R. T. REID

said, he could not accept the terms of the Amendment of his hon. Friend, but at the same time he was quite prepared to meet him in a way he would probably deem to be satisfactory by the insertion in line 41, after the word "death," of the words "or from any other cause."

MR. GRANT LAWSON

said he would withdraw his Amendment.

Amendment, by leave, withdrawn.

Amendment—(Mr. R. T. Reid)— agreed to.

*LORD BURGHLEY (Northampton, N.)

said, he was not sure that the Amendment of the hon. and learned Solicitor General would cover the purposes of his Amendment. The question of the succession of a man at an advanced age had been overlooked by the Bill. Take the case of a man of 70 years of age succeeding to property. They found in such a case that the expectation of life was eight years, and the consequence was that such a man would have to spend the remaining years of his life in paying the duties. It appeared to him extremely hard that this matter had not been regarded in this proposal for taking the duties upon the principal value, and he hoped that in this clause there might be some limit placed which would give persons of advanced age some relief. The case for some Amendment was stronger when they got to the case of a man of 80 years of age succeeding, which often happened where the persons interested were brothers. A man of that age would only have four or five years expectation of life, and it would be a great hardship to throw upon him the heavy burden of paying what would practically be a double duty during those years. He would have been waiting many years for his succession; he might have grandchildren, and when he was so far advanced in years might find himself brought into a large landed estate, the payment of duty on which would leave him for the first four years to live entirely without income. He trusted that the Solicitor General, and those who advised him, would consider the case, and see if it was possible to devise some plan under which persons of this advanced age should be separately considered, as against those who succeeded when they were young. He moved, after the word "reason," to insert "of the age of a person succeeding to the property or."

Amendment proposed, in page 8, line 159, after the word "reason," to insert the words "of the age of a person succeeding to the property or."—(Lord Burghley.)

Question proposed, "That those words be there inserted."

MR. R. T. REID

said, that the speech of the noble Lord was really directed against the principle of the Bill. He was afraid that it was quite impossible to accept the Amendment. This clause was intended to enable the Commissioners to compound in cases where, for various reasons, it was difficult to ascertain the amount of the Death Duties. The noble Lord proposed that where the successor to property was of advanced age the Commissioners should have power not merely to arrive at a rough estimate of what the duty should be, but to mitigate the amount of the duty. He should be very glad indeed if he could say anything that could be satisfactory to hon. Gentlemen opposite, but he was afraid that he could not candidly hold out any hope that such a revolutionary change as was proposed in the principle of the Bill could be adopted. He thought the noble Lord must have anticipated that the Amendment could not be accepted.

MR. BARTLEY

said, the fact that it was necessary to move this Amendment was another proof of the statement that the Bill appeared to effect considerable injustice in all directions. If a man succeeded to a property at a great age, it surely must be reasonable that the duty should be paid on a different scale from that enforced when the successor was a young man. Of course, it would be said that the whole principle of the Bill was against the Amendment. He must acknowledge that this was quite true, and it was a point which the Opposition had been fighting all along. The matter did not affect him in any way, because unfortunately he should never succeed to anything, but he thought that the provisions in the Bill ought in some way to be made more fair to those who late in life succeeded to property. It must not be forgotten that the Bill did not wholly apply to rich people. This clause would affect a large number of small persons, who had been severely hit by the fall in agricultural prices and agricultural land—persons who were at one time considered to be well-to-do but who, though they still had to keep up a certain position, were very badly off, and hardly knew how to turn. If two or three of these lives should fall close together, and the taxation was raised upon the value as estimated by this Bill, the result must be disastrous, not only to those who succeeded to the property, but to the people who were employed upon it. Although he did not think there was any chance of the Government giving way upon the point, he was of opinion that it was necessary to enter a protest against the hardship that would be inflicted by the clause, and to bring it before the attention of the country. The only way in which the duty could be met would be by cutting down those items of expenditure which really affected a great number of other persons. Of course, it would be said that men ought to cut off their own luxuries and enjoyments, and no doubt this they would have to do as they had had to do in the past, but when the question arose of having to pay these duties at an advanced age, it was evident that the burden must fall upon those persons who were connected with the estate. He thought, therefore, that some relief should be given when men succeeded to estates late in life. It was for this reason that he endeavoured at an earlier period to secure the adoption of an Amendment, providing that the life interests should be paid upon according to the average duration of life. He thought that to grasp at the duty on the whole principal value in cases where a man was likely to enjoy the property only for a few years or even months was to go beyond what was wise and politic.

Question put, and negatived.

SIR R. WEBSTER

said he had several Amendments to move, with the object of making clear what he thought was the intention of Her Majesty's Government in regard to the clause. He thought that in order to make the meaning clear it should be pointed out throughout the clause that the duty was to be payable in respect of interest and not in respect of an estate or part of an estate. His first Amendment was to leave out from "power" to "circumstances," in lines 5 and 6 of page 9, and to insert "as to."

Amendment proposed, in page 9, line 5, to leave out from the word "power," to the word "circumstances," in line 6, and insert the words "as to."—(Sir R. Webster.)

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

MR. R. T. REID

said, he quite recognised that the purpose of the hon. and learned Gentleman's Amendments was to make the clause clearer, but he could not accept the first of them, though he would be willing to agree to the others.

Question put, and agreed to.

On Motion of Sir R. WEBSTER, the following Amendments were agreed to:—

Page 9, line 7, after "all," insert "or any of."

Page 9, line 8, after "property," insert "or interest."

Page 9, line 10, after "property," insert "or interest."

Page 9, line 12, after "property," insert "or interest."

SIR R. WEBSTER

then proposed at the end of line 12 to insert "and shall give a certificate of such discharge." He said bethought these words had been forgotten in the drafting of the clause. They appeared in a previous clause.

Amendment proposed, in page 9, line 12, at end, to add the words "and shall give a certificate of such discharge."—(Sir R. Webster.)

Question proposed, "That those words be there added."

MR. R. T. REID

said, he did not think these were proper words to insert. Clause 10 dealt with cases in which in exceptional circumstances it was desired to grant a special certificate. The purpose of Clause 11 was to enable the amount deemed to be payable to be assessed. When this was done it would not be necessary to have a certificate. He would ask the hon. and learned Gentleman not to press the Amendment, which was not on the Paper, and which, therefore, he had not had an opportunity of considering carefully.

SIR R. WEBSTER

said, that as to the Amendment not being on the Paper, he would remind the hon. and learned Gentleman that he himself had submitted Amendments in manuscript form. It was proposed uuder the sub-section that where an amount was estimated which was not primâ facie the proper amount it should be accepted in full discharge of all payments of Death Duties. If there over was a charge which should be embodied in a certificate it was this. However, if the hon. and learned Gentleman would not accept the Amendment, he (Sir R. Webster) would have to put it down for a later stage.

MR. GIBSON BOWLES

said, he thought there was no case superior in claim to this for the granting of a certificate. Where such a composition as was here provided was made, it might be for the purpose of clearing up all outstanding claims of paying the duty and selling the estate, but unless they could add this certificate the title would not be complete. Under Section 41 of the Succession Duty Act, as the hon. and learned Gentleman was aware, provision was made for a composition in a certain case—a different case to that contemplated in the clause, it was true—and a certificate was given.

MR. R. T. REID

said, the words might perhaps be inserted if the right were reserved to him to move them out at a later stage if he considered it necessary.

SIR R. WEBSTER

said, it would be much better to have the words in the Bill on going into Report. The draftsman could then see at a glance what consequential Amendments would he necessary, if any.

*MR. H. H. FOWLER

said, the Government desired the draftsman to have an opportunity of considering the case. They said that if on consideration they found that the Amendment was unobjectionable they would assent to its insertion. They could not consent to put the words in now for the reasons the hon. and learned Gentleman had given.

MR. CARSON (Dublin University)

said, the Amendment proposed by his lion, and learned Friend was fair, and ought to be acceded to. As he (Mr. Carson) was anxious to protect the Revenue, he would ask the Government to consider the desirability of putting in a similar sub-section to Sub-section 3 of Clause 10, because if the certificate was to be a discharge in this case it should not be a discharge if any of the incidents mentioned in Section 10 arose.

Amendment, by leave, withdrawn.

Clause, as amended, agreed to.

Clause 12.

SIR R. WEBSTER

said, this clause was one on which the Committee would be glad to hear what were the intentions of the Government. He had put an Amendment down on the Paper to raise in a most convenient form a question as to what the policy of the Government was. The clause, as it stood, in his judgment, was wholly inconsistent with the Bill in the shape it now assumed. He had pointed out in an Amendment— which he was still foolish enough to think would have reduced this complicated scheme to a reasonable shape— how graduation and aggregation might have taken place with reference to the amount of benefit received. By that Amendment the Government would, he believed, have secured as much money as they would get under their own scheme, and it would have been much more easily collected. He had pointed out the inconsistencies of this clause, regarded as the analogue of the Probate Duty. He wanted to know how the Government proposed to deal with the question of settlements and the appropriation of the duties. The clause did not seem to be complete in its present shape, and he therefore moved to insert at the beginning of the clause the following words:— In the case of property which does not pass to the executor as such. He hoped they would have some statement from the Government on the subject.

Amendment proposed, in page 9, line 18, at beginning, to insert— In the case of property which does not pass to the executor as such."—(Sir R. Webster.)

Question proposed, "That those words be there inserted."

SIR W. HARCOURT

said, that at an earlier period of the proceedings he had stated that the Government had a perfectly open mind. It was a question of distribution, and he was quite willing to accept the Amendment.

Question put, and agreed to.

MR. R. T. REID

moved to leave out, in line 19, from the word "may," to the word "be," in line 20, the words proposed to be left out being— Without affecting the amount of Legacy or Succession Duty on any Legacy or Succession.

Amendment proposed, in page 9, line 19, to leave out from the word "may," to the word "be," in line 20.—(Mr. R. T. Reid.)

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

MR. R. T. REID

moved to omit Subsection (a).

Question, "That Sub-section (a) stand part of the Clause," put, and negatived.

SIR R. WEBSTER moved, in page 9, line 28, after "who," insert— Being accountable for or authorised or required to pay the estate on any property.

Question, "That those words be there inserted," put, and agreed to.

MR. BYRNE (Essex, Walthamstow)

thought the words of Subsection (b) carried more than was intended by the Government. As it literally stood, it would include a right to go against the person entitled to any sum charged on such property. He would be quite satisfied if the Solicitor General would look into the subject.

MR. R. T. REID

was understood to say that he had frequently stated that the duty was not payable upon any property except that which would pass at the death. Anybody who had a charge upon the will or settlement made by will would contribute towards the Estate Duty. He would look into the matter.

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

Clause 13.

MR. KNOX (Cavan, W.)

moved, after the words "thirty-three," line 36, to insert "thirty-five and thirty-six." He said the object of the Amendment was to restore the old law, by which, in the case of properties of a gross value under £300, a duty of 30s. only was imposed. The Bill, as originally drawn, would have increased the duty to £3, which would have been a heavy burden on small estates.

Amendment proposed, in line 36, after the words "thirty-three," to insert the words "thirty-five and thirty-six."—(Mr. Knox.)

Question, "That those words be there inserted," put, and agreed to.

MR. R. T. REID

moved to insert the word "gross" instead of the word "net" in the sentence "where the net value of the property, real or personal." He said, the responsible administrative officers had found that if a net figure were inserted instead of a gross figure as the measure of the conditions in which the section was to apply many deductions would have to be made, and the machinery available was not satisfactory for the purpose. Later he would move to alter £1,000 to £500 as a consequential Amendment.

Amendment proposed, in page 9, line 41, to leave out the word "net," and insert the word "gross."—(Mr. R. T. Reid.)

Question proposed, "That the word 'net' stand part of the Clause."

MR. CARSON (Dublin University)

said, he desired to express to the Government the thanks of many persons interested in this provision for the manner in which they had listened to their representations. The Chancellor of the Exchequer had had numerous deputations, even from Ireland, and he had met them with every consideration.

SIR W. HARCOURT

said, the Government were originally very anxious, as far as they could, to give relief to the small estates. It was then represented to them that "£1,000 net" might not represent what was commonly known as a small estate. A large estate with heavy incumbrances would come in that category. Therefore, he had consented to substitute for the "£1,000 net," as originally in the Bill, "£500 gross," that being the sum which the Revenue officials could properly deal with, and he was glad to find that the gentlemen who had waited upon him with regard to this matter had accepted that proposal as a fair settlement. The object, therefore, of this Amendment was to carry out that alteration in the Bill. In addition to that, the Government proposed that estates under £300 should only make a single payment of 30s. as at present. He was very desirous that that principle, which was originally introduced in 1881 by his right lion. Friend the Member for Midlothian as a relief to the small estates, should be moderately extended, and they had extended it to estates up to £500, estates between £300 and £500 being required to make only a single payment of 50s. He hoped that the difficulties which were reasonably feared would be removed by this Amendment.

MR. GRANT LAWSON

expressed the opinion that the Amendment would operate harshly in the case of small estates. They had in the Act of 1881 a definition of what "gross" meant as compared with "net." The gross value of an estate in Clause 33 was said to be the value without any deductions for debts or funeral expenses. In the case of an estate of the gross value of £1,000, if they took off the debts and funeral expenses they might bring it down to £100 in actual value, on which a fixed duty of 50s. must be levied, so that the person who succeeded to it would be paying 2½ per cent, on the value he received. By Clause 14, if a man received £100 he would only pay £1, but the Amendment would have the effect of making persons succeeding to estates such as be had mentioned pay 50s., the amount appropriate to a value of over £500. It seemed rather hard that small properties should have increased duties put upon them by this Amendment.

MR. KNOX

said, that a case where the gross value was £1,000 obviously would not come under this clause at all. It would only apply to cases where the gross value was under £500, and, therefore, where the net value was £100 the duty would only be £1.

MR. GRANT LAWSON

remarked that if a man received £100 he would pay £1; but if the gross value was £500, reduced by debts and funeral expenses to £100, there would be a fixed duty payable of £2 10s.

SIR W. HARCOURT

said, the Government did not contemplate that. If it were the case it ought to be met, and if the hon. Member would put down an Amendment it should be considered. That certainly was not the intention of the Government, and as at present advised he was of opinion that the Amendment would not have that effect.

MR. BARTLEY

said, it appeared to him that to meet certain difficulties an alteration was to be made which must mean that a larger taxation would be required of smaller estates than was originally proposed in the Bill. He would point out that the net value might very often be very much less than the gross; therefore, really, what many persons had been looking to would not take place, and small estates up to £1,000 would really not derive the benefit that was anticipated under this Bill. Under the present Amendment small estates varying from £500 to £1,000 must pay more than was originally contemplated in the Bill.

MR. GIBSON BOWLES

said, these little estates were not to be charged with the Estate Duty, but the charge was to be replaced by fixed duties levied under the Act of 1881. He must say that in many respects this was an advantage, because, as he had previously pointed out, under the guise of a reduction of duty there really was, under the system originally presented in the Bill, a considerable increase of duty on smaller amounts, as, for instance, £300. As the Bill now stood without amendment, whereas the present duty would be a fixed sum of 30s. under the Bill, in the case of a widow it would be £3 instead of 30s. He thought, therefore, this Amendment was in the right direction, only he warned the Solicitor General that these smaller estates brought in large sums to the Exchequer. He did not know whether the Government were fully aware of what they were doing by letting off these small estates. Seventy per cent, of the number of estates which came in for the charge were estates of under £1,000, and the amount was £13,700,000; therefore, when they came to exempt estates under £1,000 they were rather running a risk. He did not believe hon. Gentlemen opposite realised how much they were going to give up by it. His firm conviction was that, instead of getting more duty out of the system established by the Bill, they would probably get less—perhaps at least £1,000,000 less—and therefore he warned the Solicitor General to be careful how far he proceeded in the diminution of the duty on small estates.

Question put, and agreed to.

On Motion of Mr. R. T. REID, the following Amendment was agreed to: — Page 10, line 1, leave out "or," and insert "and."

MR. R. T. REID

moved, in page 10, line 3, to leave out the words "one thousand," and insert the words— Five hundred pounds, but where the gross value does not exceed three hundred pounds the fixed duty shall be thirty shillings, and where the gross value exceeds three hundred pounds the fixed duty shall be fifty shillings.

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

MR. GRANT LAWSON

moved to amend the Amendment by inserting the word "net," instead of "gross," in the two instances in which the latter word occurred. He contended that if "net" were inserted there would be a benefit and advantage to small people. They would then only pay duty upon what they got, and would pay but a small duty, because 30s. on a net value of under £300, and 50s. on a net value of between £300 and £1,000, would be a small duty. If the estates were made to pay on their gross value they might be imposing a very heavy tax indeed, because whereas the gross value might be anything up to £500, the net value might be nothing, the estate might be bankrupt, and yet the fixed duty had to be paid. When the owners of small estates found that, instead of getting relief they were only going to have the option of coming under the general rule, there would be a grievous disappointment. Everybody else was to be taxed upon the net value he received, but it appeared by the Amendment that these people were to be taxed at a rate appropriate to the gross value they received, which might be much larger than the net value. He begged to move to insert "net" instead of "gross."

Amendment proposed to the said proposed Amendment, to insert the word "net" instead of the word "gross."—(Mr. Grant Lawson)

Question proposed, "That the word 'net' be there inserted."

SIR W. HARCOURT

I am not sure that that would be in Order.

THE CHAIRMAN (Sir J. GOLDSMID)

I was just going to point that out. In line 41 the word "net" has been struck out in order to insert the word "gross," and, as far as I can see, it seems inconsistent to put "net" here instead of "gross."

MR. GRANT LAWSON

said, that on the point of Order it appeared to him that what they had already passed was the limit at which people might come under the protection of this clause, and they agreed that when people came into an estate of a gross value of £500 they should be entitled to place themselves under the protection of this Clause 13. That was a very different matter from considering what they should be taxed on when they had placed themselves under the protection of this clause. He submitted there would be no inconsistency in saying that those who came into an estate of £500 should come under the clause, and when they had placed themselves under the protection of the clause that they should only be taxed on the net value of what they received.

SIR W. HARCOURT

said, that to meet the Amendment would be to defeat the whole arrangement of the Bill, and to go back again to the evils which they desired to remove.

THE CHAIRMAN

I think the Amendment to the Amendment would be inconsistent with what the Committee has already decided, and therefore I rule it out of Order.

MR. KNOX

did not think the Amendment of the Solicitor General ought to be received in any carping spirit, and it was perhaps the most important yet made in the Bill. The lion. Member for Thirsk said that this concession, inasmuch as it was restricted only to those cases in which the gross value was under £300, was of little value to poor people, and that the provision of a fixed duty would operate harshly upon them. Surely the hon. Member forgot that they had had ex- perience of the working of this provision, so far as estates under £300 were concerned, since 1881. During that time it had proved a most valuable provision for the most deserving class of the poor— those who had small savings and small debts. In Ireland it had been most valuable, especially in the case of the best of the small farmers. He ventured to thank the right lion. Gentleman for the concession he had made, and he thought this concession removed one of the greatest blots on the Bill as first introduced. He thought the hon. Member who had criticised this Amendment forgot that the procedure under this clause was entirely optional, and in any case, when it would seem to the executor more advantageous to go under the general provisions of the law, he could do so; but where the debts as well as the estates were small, and where, obviously, it was to the interest of the executor to proceed under this section, he could do so with small legal expense as well as with the payment of small duty.

MR. GIBSON BOWLES

considered it was unfortunate that the Government had introduced these words "gross" and "net," which did not occur in the Act of 1881. In the previous Act it was the value of the whole that was taken, whereas the words "gross" and "net" were really very ambiguous words. He quite appreciated the intention of the Government, which was to diminish the charge on small estates and have a fixed charge, and he recognised the great amount of risk there was in fixing what they were pleased to call the "gross" sum. As regarded that, he did not at all think it would have quite the effect intended or contemplated. He would point out, however, that they were now introducing three different kinds of property into the Bill when the Bill itself, throughout, contemplated only one kind of property—namely, the bald and naked amount that passed on death after all deductions had been made. This Amendment contemplated two other kinds of property, gross and net. He believed the intentions of the Government were good.

*MR. BUTCHER

said, they had now got to the point where they were not dealing with millionaires, but with poor people. As the Amendment of the Solicitor General stood, a man who came into a net estate of £20 might have to pay 50s., and he would say why. No doubt the first part of the clause left it optional to a man to say whether he should go under the Act of 1881 or not, whereas the Solicitor General's Amendment said that where the gross value did not exceed £300, 30s. should be charged, and where it did exceed £300, 50s. should be charged. There was nothing optional about the Amendment, which was obligatory. What would be the effect of that? Take the case of an estate of the gross value of £500, which was brought down by debts, and so on, to a net sum of £5 or £20. Was not the effect of the Amendment of the Solicitor General to make the duty 50s., and was not that entirely inconsistent with the next clause, which provided that where an estate exceeded £100, and was under £500, the duty should be £1?

SIR W. HARCOURT

said, the hon. Member for York was really answered by the speech of the hon. Member for Cavan, who had pointed out that this system which they were now extending had acted most beneficially in relieving the small owners, and the Government were quite confident that this would continue to he the case.

MR. A. J. BALFOUR

said, there was really no quarrel between the two sides as to the object of the Government with which they both agreed—namely, to give relief to the smaller owners of property, but the question was whether the actual Amendment of the Solicitor General carried out that intention or not? It had been pointed out that if they went to the gross value the net value of a property might be little or nothing, and therefore they ought not under these circumstances to charge any sum, even as small as 50s. The argument of the hon. Member for Cavan was that it was optional with a person to decide whether he should come under the provisions of this clause or under the ordinary provisions of the law. But the Member for York had pointed out that while the early part of the clause was voluntary the words of the Solicitor General would appear to be obligatory. There was no liberty of action left to the 'person to decide whether he should come under the provisions of the Act or should take protection under the clause they were now considering, and, therefore, a great hard- ship might fall upon the small owners of property in consequence of a clause introduced for no other purpose than to give relief. The question before them was not one of principle, but was concerned with the question whether the Solicitor General's Amendment did or did not introduce an element of obligation into this clause which was not to be found under the Bill. That was a point which the Chancellor of the Exchequer had not met.

MR. R. T. REID

said, the Government and hon. Gentlemen opposite meant precisely the same thing. He thought if they looked at Clause 33 of the Act which they incorporated—the Act of 1881—it would appear that this altered scale would only apply on the initiative being taken by the persons themselves. If it appeared there was any real doubt on the point, the Government would take care that their intention was carried out.

MR. BARTLEY

entirely agreed with what had been said as to the great use and importance of these fixed small sums, and he had hoped that the system was to be exteuded more than it was. The Solicitor General had raised the limit to £500, as compared with £300, but the wording of the Bill led him (Mr. Bartley) to believe that it would have been raised to £1,000 net, and he was sorry he had been disappointed in that respect.

Amendment, by leave, withdrawn.

Amendment (Mr. R. T. Reid) agreed to.

MR. R. T. REID

moved, in page 10, line 5, to leave out all the words after "section," and insert, as a separate sub-sectiou— (3) Where the net value of the property, real and personal, on which Estate Duty is payable on the death of the deceased, exclusive of settled property, does not exceed £1,000, such property for the purpose of Estate Duty shall not be aggregated with any other property, but shall form an estate by itself; and where a fixed duty or Estate Duty has been paid upon the principal value of that estate, the further Estate Duty and the Legacy and Succession Duties shall not be payable under the will or intestacy of the deceased in respect of that estate.

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

MR. GRANT LAWSON

said, that after the discussion of a quarter of an hour ago he did not quite understand how the word "net" came into the Amendment. It was then said that by bringing in the word "net" they brought into the clause an amount of difficulties which it would be impossible to deal with; and, in fact, the word was ruled out of Order.

SIR W. HARCOURT

said, the word "net," was necessary in order to distinguish between the gross amounts with which the Committee had previously been dealing and the net amounts to which they had now come.

MR. GIBSON BOWLES

pointed out that there would be four different aggregations of property, and three different kinds of property, under the Bill, and it would be very difficult to work all these estates with their different duties. He argued that the proposed exemption from Legacy Duty would be found to work out very strangely. In estates between £500 and £1,000 the successors were to pay the new Estate Duties, and in consideration of that were to be let off without paying the Legacy or Succession Duty. Let the Committee mark how that would work. At present the widow paid no Legacy or Succession Duty; but a stranger on £500 of personalty paid 12 per cent., or £60. The proposed exemption would let the widow off" nothing, while it would let a stranger off 10 per cent. He believed, moreover, that the loss to the Revenue would be a heavy one, although the actual gain to that class of the community that most required relief would be but small.

SIR W. HARCOURT

said, that sometimes he was told he was going to get millions more than he calculated upon, and sometimes that he had over-calculated the probable Revenue by a similar figure. He hoped, however, to find at the end of the financial year that his own calculation—which was founded on the opinion of those who had experience in the matter—was the correct one. He was glad that the hon. Member for Lynn Regis only objected to the proposal on the ground that the Revenue would lose considerably. If that were so, he was quite willing to confess that he would rather the loss should arise in the way proposed than in any other way. The greater part of the Revenue, it must be remembered, was derived from small properties, and it was a just principle, in his opinion, that any relief in taxation that was introduced should begin with proprietors at the lower end of the scale. He believed that 70 per cent, of the properties on which Legacy and Succession Duty were paid were small properties; and yet people imagined that the Revenue was raised on the owners of large properties. The far greater proportion of the Revenue of the country was raised from people who had only hundreds and not from people who had thousands. If, therefore, they were to lose even considerably owing to the exemption and allowance that they were willing to concede to the small owners as set out in the clause he did not think for that reason the Committee ought to object to it.

MR. A. J. BALFOUR

agreed with what the Chancellor of the Exchequer had just said, that neither the hon. Member for Lynn Regis nor any other gentleman on his side of the House made any objection to the relief that was proposed to be granted to the smaller owners in the clause. He would point out, however, that it was not fair to the Committee that the scheme should be finally considered that evening, as the Amendment had been only a short time on the Paper and they had no time allowed them to really go into the matter. He hoped that the points raised would be very carefully considered by the Government before the Report stage. The chief point was that the proposal of the Government was more likely to assist those who required assistance the least, and leave those where they were who required relief the most. Everyone granted that an estate of £1,000 left to the widow required relief more than an estate of £1,000 left to the stranger. The widow paid no Succession and no Legacy Duty, and she was to be left as she now was; but when the Government came to deal with brothers, cousins, and others, in proportion as the scale of consanguinity became more remote the generosity of the Government increased until they came to the stranger in blood, when they open wide their purse-strings. The Government ought certainly to find some other and more equitable method of relief. His hon. Friend the Member for Lynn Regis had worked out the figures in regard to this matter very carefully, and the Government must surely feel that their scheme of exemption required amendment. The Opposition did not quarrel with the proposed exemption, but they felt that the exemption should relieve those who required relief most; that their charity should not be confined to the stranger at their gates and denied to the widow and the children.

SIR W. HARCOURT

said, he understood that the right hon. Gentleman complained of inequality of treatment between the widow and the stranger. That matter would be considered before the Report.

MR. A. J. BALFOUR

Hear, hear!

*SIR J. LUBBOCK

said, there were so many Government Amendments to the Bill that the Committee were really constructing a new Bill, and constructing it in a manner very inconvenient for the Committee, because they were only able to see the Amendments of the Government bit by bit the morning they were asked to discuss them. He thought the present Amendment a most important one. The Chancellor of the Exchequer defended the proposed exemption on the ground that the taxation was mainly obtained from small properties. That was all the more reason why the Committee should be careful of what they were doing in that respect. He should like to point out that, besides the anomaly of the inequality of treatment between the stranger and the widow, there was the further anomaly that they were by this Amendment placing taxation on economy and giving a benefit to extravagance. Take the case of two men who each came into a settled property—it might be of large amount. One man by economy increased his estate to £2,000, or more; it was graduated, and he had to pay Estate Duty; the other lived up to his income and was let off. That constituted a premium on extravagance and a penalty on thrift.

MR. COURTNEY

said, the Chancellor of the Exchequer had defended the action taken in the proposed new clause on the ground of the improper burden of their taxation at present on small people as compared with great. He had always said that was so in respect to indirect taxation. The burden of indirect taxation must necessarily bear more on the poor than on the rich, but the balance was readjusted by direct taxation. He should, therefore, protest against the observations of the Chancellor of the Exchequer with reference to direct taxation. The right hon. Gentleman had said that 70 per cent, of the estates which came within the purview of the Legacy and Succession Duties were under £1,000. That was perfectly accurate; but it showed nothing whatever as to the burden of taxation as between the poor and the rich. The question was not the proportion of estates under £1,000 and above £1,000; but the burden of each separate estate above £1,000. His right hon. Friend had said the same with respect to the Income Tax. Everyone who looked at the Income Tax amounts knew that no reduction could be made on the Income Tax amounts because they did not tax the individual with respect to income, except under one or two Schedules. The incomes of the rich were received under Schedules (A), (B), and (C), in driblets; that was to say, tax was paid on a large number of small amounts. So that the number of small amounts on which the tax was paid must not be regarded as showing the number of poor people who paid Income Tax. He had thought it necessary to interpose at this stage because of the authority attaching to the observations of the right hon. Gentleman, and because, on this occasion, those observations could not be regarded as weighty. The Amendment on the Paper did not go on the lines which had been already followed. They had dealt with gross value that did not exceed £300. That affected small people. They then jumped to estates the net value of which did not exceed £1,000, irrespective of settled property. They might have a millionaire under this provision — a millionaire who might so arrange his estates as to bring himself under the £1,000 limit of personalty. If they were going on these lines they should have dealt with gross and not net amounts, in which case they would be certain of dealing with small people. He thought that the words "exclusive of settled property" should be omitted, because if they were continued they might bring in people with ample revenues who were able to provide for their children, and had never been under pecuniary pressure in any shape or form. Before the Report stage was reached, it seemed to him it would be advisable to reconsider the whole method of dealing with the matter so as to secure immunity from severe taxation of what was, strictly speaking, small estates, and not small portions of the estate of a man amply endowed with fortune.

MR. GIBSON BOWLES

said, there was one thing he did not quite understand. The proposal provided for a net estate of not exceeding £1,000 exclusive of settled property. Then it was provided that further Estate Duty should not be paid, and this was only payable on settled property.

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

Question, "That those words be there inserted," put, and agreed to.

Clause, as amended, agreed to.

Clause 14 (scale of rates of Estate Duty) stood as follows:—

14. The rates of Estate Duty shall be according to the following scale:
Where the Principal Value of the Estate	Estate Duty shall be payable for every full sum of £100, and for any fractional part of £100, over £100, or any multiple thereof at the rate of
	£	£
Exceeds	100 and does not exceed	500	One pound.
Exceeds	500 and does not exceed	1,000	Two pounds.
Exceeds	1,000 and does not exceed	10,000	Three pounds.
Exceeds	10,000 and does not exceed	25,000	Four pounds.
Exceeds	25,000 and does not exceed	50,000	Four pounds ten shillings.
Exceeds	50,000 and does not exceed	75,000	Five pounds.
Exceeds	75,000 and does not exceed	100,000	Five pounds ten shillings.
Exceeds	100,000 and does not exceed	150,000	Six pounds.
Exceeds	150,000 and does not exceed	250,000	Six pounds ten shillings.
Exceeds	250,000 and does not exceed	500,000	Seven pounds.
Exceeds	500,000 and does not exceed	1,000,000	Seven pounds ten shillings.
Exceeds	1,000,000 and does not exceed	—	Eight pounds.
The rate of the further Estate Duty where the property is settled shall be 1 per cent. for every full sum of £100, and for any fractional part of £100 over £100 or any multiple thereof.

MR. BARTLEY

said, he desired to move an Amendment to substitute a new scale. He had put down two scales on the Paper. He could not move both, but he moved the first, and possibly it would save time if the Government would announce their intention of accepting one or other of them. The point was this: According to the clause there was a sharp change in the amount of duty payable, the sudden increase being largest at the bottom of the scale. On an estate which did not exceed £500 the Estate Duty was £1 per cent. Directly it exceeded £500 and up to £1,000, the whole estate had to pay £2 per cent. Thus, an estate worth exactly £500 would pay £5, but one worth. £501 would not pay £5 5s., but would pay a sum over £10; similarly, an estate of £1,000 would pay £20, but one of £1,001 would pay £30, and so on. Wherever there was a rise in the scale a great jump would take place, not only in the duty payable, but on the whole scale from the beginning. He would impress on the Committee that this seemed an unfair way of calculating the Estate Duty, and if the Chancellor of the Exchequer resisted the Amendment the effect would be that the effort of the possessor of an estate would be to prevent it from reaching a certain point of value. Wherever the estate was in value near one of these fictitious dividing lines, every effort would be made to prevent it crossing the line. If the Chancellor of the Exchequer were to accept the scale proposed in the Amendment, of charging at the same rate on any fractional excess, it would be fairer and there would not be the same inducement to keep down the value of an estate at a critical point. He had worked out several cases under his Amendment. The proposal would operate in this way: Taking an estate

Where the Value of the Estate	Per Centage.
Exceeds—	£	£
Exceeds	100 and does not exceed	500	One pound for every full sum of £100, and for any fractional part of £100.
Exceeds	500 and does not exceed	1,000	One pound for the first £500, and two pounds for every further full sum of £100 or fractional part of '£100.
Exceeds	1,000 and does not exceed	10,000	One pound for the first £500.
			Two pounds for the second £500; and
			Three pounds for every further full sum of £ 100 or fractional part of £100.

of £40,000, on the scale laid down in the Amendment the duty would be £1,560, as compared with£1,800 under the Bill; on an estate of £120,000 the duty would be £5,825, as compared with £7,200; on an estate of £500,000 the duty would be £31,635, as compared with £35,000. There was a difference here, but it would be observed that the greatest proportion in difference was at the bottom of the scale; but, while he admitted that on the face of it there would be a certain loss to the Revenue, such loss would be largely, if not entirely, made up by the fact that there would be no inducement to keep the amount, possibly fictitiously, a little below the right margin. If a man knew that the addition of £1,000 to the value of his property would increase the duty A per cent, on the whole estate, the tendency would be to try and keep the estate below that figure. If the Chancellor of the Exchequer did not see his way to accepting the first scale—though, that was a fair one—perhaps he would assent to the second, which, though drawn on similar lines, was rather more favourable to the Exchequer. The Chancellor of the Exchequer could hardly think it fair or right that if a man's estate was simply £1 more than that of another it should have to pay more than double in Estate Duty. It might 'be that in all these schemes and systems of taxation anomalies and hard cases were not to be avoided, but at any rate the Committee should do its best to reduce them to a minimum. It could not be considered fair that, owing to the Chancellor of the Exchequer's scale, a man who had saved only £500 should leave his family more at death than the man who had saved £501.

Amendment proposed, in page 19, line 17, to leave out from the word "scale," to the word "The," in line 36, in order to insert,

Where the Value of the Estate	Per Centage.
Exceeds—	£	£
Exceeds	10,000 and does not exceed	25,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000; and
			Four pounds for every further full sum of £100 or fractional part of £100.
Exceeds	25,000 and does not exceed	50,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £15,000; and
			Four pounds ten shillings for every further full sum of £100 or fractional part of £100.
Exceeds	50,000 and does not exceed	75,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £15,000.
			Four pounds ten shillings for the next £25,000; and
			Five pounds for every further full sum of £100 or fractional part of £100.
Exceeds	75,000 and does not exceed	100,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £15,000.
			Four pounds ten shillings for the next £25,000.
			Five pounds for the next £25,000; and
			Five pounds ten shillings for every further full sum of £100 or fractional part of £100.
Exceeds	100,000 and does not exceed	150,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £15,000.
			Four pounds ten shillings for the next £25,000.
			Five pounds for the next £25,000.
			Five pounds ten shillings for the next £25,000; and
			Six pounds for every further full sum of £100 or fractional part of £100.
Exceeds	150,000 and does not exceed	250,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £25,000.
			Four pounds ten shillings for the next £25,000.
			Five pounds for the next £25,000.
			Five pounds ten shillings for the next £25,000.
			Six pounds for the next £50,000; and
			Six pounds ten shillings for every further full sum of £100 or fractional part of £100.
Exceeds	250,000 and does not exceed	500,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £25,000.
			Four pounds ten shillings for the next £25,000.
			Five pounds for the next £25,000.
			Five pounds ten shillings for the next £25,000.
			Six pounds for the next £50,000.
			Six pounds ten shillings for the next £100,000; and
			Seven pounds for every further full sum of £100 or fractional part of £100.
Exceeds	500,000 and does not exceed	1,000,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £25,000.

Where the Value of the Estate	Per Centage.
Exceeds—	£	£
Exceeds	500,000 and does not exceed	1,000,000	Four pounds ten shillings for the next £25,000
			Five pounds for the next £25,000.
			Five pounds ten shillings for the next £25,000.
			Six pounds for the next £50,000.
			Six pounds ten shillings for the next £100,000.
			Seven pounds for the next £250,000; and
			Seven pounds ten shillings for every further full sura of £100 or fractional part of £100.
Exceeds	1,000,000 and does not exceed	1,000,000	One pound for the first £500.
			Two pounds for the second £500.
			Three pounds for the next £9,000.
			Four pounds for the next £25,000.
			Four pounds ten shillings for the next £25,000.
			Five pounds for the next £25,000.
			Five pounds ten shillings for the next £25,000.
			Six pounds for the next £50,000.
			Six pounds ten shillings for the next £100,000.
			Seven pounds for the next £250,000.
			Seven pounds ten shillings for the next £500,000; and
			Eight pounds for every further full sum of £100 or fractional part of £100.

Question proposed, "That the words 'where the principal value of the estate' stand part of the Clause."

*SIR W. HARCOURT

I am aware of the objection the lion. Member refers to—namely, that wherever you have a considerable interval or jump from one scale of duty to another the persons who are at the bottom margin appear to pay a good deal more than those who are at the other end of the scale. But that is an inconvenience with which we are already familiar in that part of our taxation, which is subject to jumps of this kind. Take, for instance, the Income Tax, and the £400 limit. A man just below the limit pays about £9, while at £405 he pays £13 10s. True this is an inducement for a man who has just over £400 a year to endeavour to make his income, say £399, but that cannot be helped. I will give another instance. In the case of the Probate and Estate Duty, a man with property amounting to £10,010 pays, under the existing duty, £404. If, however, the amount of the estate is £9,990 he pays £300 Probate Duty; that is to say, a difference of £20 in the corpus makes a difference of £100 in the amount of the duty paid. Therefore, it is not in this scale that the difficulty arises for the first time. No doubt people may endeavour to get just below rather than just above a margin in the scale; but it must be borne in mind that the Government had taken care in this scale not to rise on a very rapid gradient of duty. After £10,000 we only rise by stages of a½ per cent. I do not see how the difficulty the hon. Member has pointed out is to be avoided if you are to have what is so essential in these cases—namely, a simple scale. The hon. Member opposite has produced a rival scale, and recommended it for our adoption. But it is too elaborate—too iutricate—and—what is a very important argument with me—it would produce much less money than the scale we ourselves propose. I do not suppose that fact will weigh so much with the hon. Member as it does with me. Admitting the inequalities the hon. Member has pointed out— and which I have shown exist in our present system of taxation—I fear for the reasons I have given we must adhere to our scale.

COMMANDER BETHELL

said, the great advantage of his hon. Friend's proposal was that it modified the great jump in the Government scale, and to that extent it was more fair in its operation than the Chancellor of the Exchequer's scale. It would make some difference to the Exchequer so far as he had worked it out; but, on the other hand, it would make a person who had an estate feel that he was being treated much more fairly than if he was under the Govern- ment scale. Such a man would be much less likely to endeavour to evade the higher scales under the scale in the Amendment than under that in the Bill. The scale of the Amendment would by no means remove the inequalities of graduation; still, if the lion. Member saw fit to divide the Committee on it he should vote with him, as ho thought it would give the greatest advantage to people with the smallest fortunes.

MR. GRANT LAWSON

said, the right hon. Gentleman the Chancellor of the Exchequer had said that the proposed scale was intricate. If the right hon. Gentleman would glance at the Succession Duty Act of 1853 he would see that two-thirds of the pages of that Act consisted of scales of figures in themselves decidedly intricate. As to the proposal of the Government, its effect in certain instances would be that the man who died best off would leave a less sum to the beneficiaries than the man who was worse off. If a man died and left an estate of £49,990, the duty on that estate would be 4½ per cent., or £2,250; whereas the estate of the man who died worth £50,010 would pay 5 per cent., or £2,500 10s. The poorer man of the two would thus leave a larger amount to be divided amongst his relatives.

SIR W. HARCOURT

That, as I showed, happens now under the existing state of things.

MR. GRANT LAWSON

said, the fact that there were anomalies existing was no reason why fresh and greater anomalies should be created. He had applied his hon. Friend's scale to the same figures, and he found that the estate of the man who left £49,990 would pay £1,920, so that the Chancellor of the Exchequer would be slightly the poorer, but the other estate of £50,010 would only pay £5 more, which would make the estate of the man who was supposed to die richer larger than the other, and there would not be the ridiculous state of things which he had shown would exist under the scale in the Bill. And what would be the effect of adopting the more rational scale? There would not be the great fights which were to be anticipated when they were getting near a step of graduation. These fights would not only be with the Inland Revenue Commissioners, but among the beneficiaries themselves. Each man account- able for duty would be fighting against the others as to whether they had not raised their estimate £5 or £10, thereby involving the whole estate in an extra amount of duty. There would be a great battle raging for ever with the Inland Revenue Commissioners. The Commissioners were said to have boasted that they had never been into Court on a question of value; but when such great prizes were to be won for the Chancellor of the Exchequer under this Bill, as a half per cent, on a large estate, the Commissioners would not consider that they were doing their duty if they did not go into Court, and try to shove the estate up to the highest possible grade in the scale. For the sake of peace among the beneficiaries, and peace between the executors and the Inland Revenue authorities, he hoped his lion. Friend's more equitable scale would be adopted.

MR. A. J. BALFOUR

Everyone who heard the defence of the right hon. Gentleman the Chancellor of the Exchequer of his scheme must have felt that it was not a very powerful one. The right hon. Gentleman did not in any sense rely upon the theories or equities of the case. He gave them up at once. He said, in regard to the points to which attention has been drawn, "There are unhappy anomalies—they are difficulties incident, unfortunately, to every scale. They are to be found in our present system. We admit these anomalies; we deplore them; but we must submit to them." Well, for my part, I do not feel disposed to submit to them if they can be avoided. Why should we? It is true that under the Income Tax there are jumps in the scale, as there are in the Death Duties, but I do not think any man has ever been prevented from trying to get a bigger income because he would be subjected to a higher proportion of Income Tax; but I can readily believe that, under the present scale of the Chancellor of the Exchequer, a man might easily be deterred from saving beyond a certain amount. He might say, "What is the use of saving more? If I increase my store, the increase may not go to my heirs. Why should I go to the trouble of keeping myself out of the enjoyment of my fortune for the satisfaction of increasing the receipts of the Chancellor of the Exchequer." Some hon. Members may think that there is no material gain resulting from the fact that people save. With these hon. Members I cannot agree. I do not deny that it may be better to have many moderate fortunes than a few large ones; but the question here is not the augmentation of moderate fortunes at the expense of the larger ones, but whether the owners of large fortunes may not think it right to spend more money during their lives, instead of saving for the benefit of their successors and of the community. For my part, I consider that the greatness and prosperity of this country has arisen largely, if not wholly, from its superior wealth, and its superior wealth is largely attributable to the fact that it has always been worth while for people of large means 10 save for the sake of their heirs, if not for their own sakes. I hope the right hon. Gentleman will follow me when I point out that this question of saving is not a question of small fortunes against large fortunes. If a rich man saves it is as important to the community as if a poor man saves. Everything that diminishes the accumulation of capital must diminish the wealth of the country, whether it be invested at home or abroad. A man whose fortune is close to one of the arbitrary limits fixed by the Chancellor of the Exchequer will have no motive for accumulating any further capital. He has nothing to get by it. He had better squander it on his own amusements, so far as he is concerned. I do not know that anyone, whatever their opinions on this Amendment, would consider that a desirable thing. That is a motive coming into operation that does not exist in the case of the Income Tax. No man, I venture to think, was ever prevented from increasing his income by the reflection that next year, if he makes an honest return, he will have to pay not only more Income Tax, but much more than he would have had to pay if he had kept at the other side of an arbitrary division. When you come to accumulated fortunes, and the taxation of capital amounts, a different argument comes into play. I imagine you will not merely have controversies with the Inland Revenue Department, and the various persons accountable for the money which has passed, upon which my hon. Friend has adverted with so much ability, but you will have other motives brought into play which it is not to the benefit of the public that we should encourage or give an artificial stimulus to. Let it be noted that, when the right hon. Gentleman the Chancellor of the Exchequer calls in examples which he has been pleased to follow in these cases, and points out that there are these breaks and jumps, with the anomalous results following referred to, let me observe that the whole matter is greatly aggravated from beginning to end by the principle of aggregation. That principle must have been a curse to the draftsmen of the Bill, and will be a curse to the officers who have to carry the Bill into effect. As I have said, the difficulties inherent in any scale of duties are aggravated by the fact that Government insists on this principle of aggregation. I do not question now that we have to have a system of graduation. That was decided at an early stage of our proceedings; but, in Heaven's name, let us attempt to find a scale which will not carry with it evils not absolutely inseparable from aggregation—accidental accretions to the system of aggregation which we might avoid if we attempted to do so! What is the evil of complication that the right hon. Gentleman complains of? The evil of the large mass of figures in the Amendment really affects nobody but the printer. The difficulty of dealing with this scale would be nothing compared with the other problems the Inland Revenue have to solve. There can be no difficulty in deciding what the estate has to pay, however elaborate be your scale. The Government have not taken measures to avoid obscurity and complication in the general drafting of the Bill. The Government have made this Bill more difficult to understand than any other Bill ever presented to Parliament, and therefore we ask the Government to adopt a scale of graduation in place of their own, which, while it may add a little to the length of the Bill, will not make the Bill more complex or more difficult to understand or administer, but render it far more just to the taxpayer, to the beneficiary, and to the public, and less fruitful of difficulties which will lead to litigation. There may be objections to the scale proposed by my hon. Friend, but I regret that the Government have not set themselves to work to find some method of carrying out their own principles, be they good or bad, without carrying in its train consequences which the Chancellor of the Exchequer has himself admitted may produce evil results—results that may lead to the defrauding of the Revenue, if not to great injustice in individual cases, and which may lead to endless difficulty, controversy, and litigation.

SIR W. HARCOURT

The greater part of the right hon. Gentleman's remarks have been addressed to the subject of graduation and aggregation. He has said that the scale in the Bill will induce persons not to save money.

MR. A. J. BALFOUR

I was obscure. What I meant was that if a man has a fortune, say of £990,000, there is a positive premium in the Bill for him not to add a single sixpence to that fortune. I speak not so much in the interests of the man as in those of the community at large, who benefit largely by the accumulation of capital, and this Bill will not encourage it.

SIR W. HARCOURT

I have more confidence in human nature than to believe that in such a case as that mentioned by the right hon. Gentleman a man would be induced not to add to his capital merely because the Chancellor of the Exchequer would thereby get a hundred or two more of that money.

MR. BARTLEY

£2,500.

*SIR W. HARCOURT

In the case of a man with £9,990, I do not think he would be restrained from adding another £20 to it out of consideration for the Exchequer. You may put your hypotheses as much as you like, but human nature operates in cases of this kind. But I will not argue on theory in this matter any more. I have said what I have to say on that. I have done my best, through the Inland Revenue authorities, to ascertain what the loss to the Revenue would be if either of the scales proposed by the hon. Member were adopted instead of that in the Bill, and it is estimated that the loss, even on the scale more favourable to the Revenue, would amount to £600,000 or £700,000. I cannot afford to lose such a large sum as that. If the Committee adopted the scale I should have to alter the graduation, and might have to go up to 10, or perhaps even to 12 or 15, per cent, to recoup what the hon. Member's scale would take from me. The scale in the Bill is a moderate one, and it will prove far less difficult in administration than the scale proposed by the hon. Member. As to the Bill being complicated, I said at the very commencement that it would be found to be so, because we shall have to deal with all the various complications arising out of the law in England with regard to settled and real property. I have always recognised the complicated character of the Bill, and have stated more than once that the Government have an open mind as to the best way of dealing with the complications attending it. We know that the Bill would require to be closely scrutinised, and hoped to receive assistance from the microscopic examination to which it would be subjected. The Government are convinced that the form of scale we have adopted is the best for administration, and we do not believe that, with the intervals we have fixed and the plan of graduation we have adopted, it will be found to be oppressive to the taxpayer.

MR. WYNDHAM (Dover)

asked what the perfunctory defence of the right hon. Gentleman the Chancellor of the Exchequer really resolved itself into? The right hon. Gentleman appealed to the analogy of the existing law. But he seemed to forget that this principle of graduation had hitherto been administered to testators and the public in homoeopathic doses. The right hon. Gentleman's attitude was like that of a doctor who because his patient had already taken medicine, insisted upon his swallowing dram after dram of belladonna and nux vomica. The right hon. Gentleman would extend the principle of graduation to a much greater extent than it had ever obtained. The right hon. Gentleman said the Bill was already intricate, and he also declared that his system of graduation was simple, and that if the Amendment were adopted he would be compelled to extend the system of graduation. Then, they appealed to him to render the Bill a little more simple and the graduation a little more complex. Do not let them have a pyramid of three steps to climb, but rather easier stairs, which will be accessible to the people of the country.

MR. GOSCHEN

I do not quite understand the defence of the Chancellor of the Exchequer. The right hon. Gentleman says he would lose £600,000 if the Amendment were adopted. How much of that would he lose in the present year? What is it he wants, and for what does he want it? He has laid down some standard in his own mind that he is to produce a certain sum by the Death Duties, but the great increase he expects will arise in future years. He has not told us for what purpose he requires the £2,000.000 or £3,000,000 which he then expects to get. Supposing he loses £600,000, by how much will he be put out in his Budget in the present year? Clearly not £600,000, but only by the proportion of the sum he expects to get this year. I protest against the right hon. Gentleman's attitude when he says, "I expect a certain sum, and intend to get it out of the Death Duties," and offers no further explanation. Does he want the money for expenditure he foresees and estimates, or only for expenditure that he thinks may occur? Never has such a proposal been put before the House. The right hon. Gentleman has told us what the ultimate loss will be, but we do not recognise that he requires the alternative gain; and if he cannot prove that he needs the money for the present year surely it is open to the House to consider whether the scale proposed by my hon. Friend is juster than in the Bill. The right hon. Gentleman has not defended his own scale. He merely says he wants a problematical sum, God knows for what purpose! [Cries of "Oh!"] That is so. Possibly he may not be in Office when this large addition which is to come from the Death Duties accrues to the Exchequer. At any rate, we have never had the slightest explanation of what is to become of the increased millions which are to accrue from this extraordinary scale, and, under the circumstances, I do not think the House of Commons will be much influenced by the prospective loss of the right hon. Gentleman unless it could be shown that it would land us in a deficit. The right hon. Gentleman thinks human nature will be on his side, and that no one will forego an increase of property for the sake of remaining below a particular line on which he will have to pay increased duty. But the right hon. Gentleman forgets that not only may it be a question of expenditure, but a question of parting with money to sons or other relatives during the lifetime of the testator. The Chancellor of the Exchequer is opening the door, as he has done throughout the Bill, to a number of influences which will operate against the Exchequer. Surely human nature, to which the right hon. Gentleman has appealed, will tend to make a man give away during his lifetime so much money as will bring his estate under the scale which the right hon. Gentleman establishes. It is in that sense that the wild jumps of the Chancellor of the Exchequer are against the Revenue and the interests of the Exchequer. The right hon. Gentleman thinks that human nature will not operate in this matter. It appears to me, however, that the Government would be much more likely to secure the Revenue which the right hon. Gentleman desires if there were a more gradual graduation and nothing to foster a desire to get below certain lines which will be certainly fostered by the scale of the right hon. Gentleman. The right hon. Gentleman has not attempted to argue this question. He has done on this occasion what he has done before. He has quoted to us the views of the Inland Revenue—"We shall lose so much money." How have the Inland Revenue arrived at that result? Have they taken into consideration the loss that must result from the desire to remain below a certain line? I feel confident that any system of this kind will defeat its own object. The scale proposed in the Amendment is far more just and equitable than the seale in the Bill, and would produce exactly the same sum.

SIR W. HARCOURT

The right hon. Gentleman asks me, "Why are you raising upon the Death Duties these millions, of which you will only get little advantage during the present financial year?" I desire to give a very plain answer to that question. I should in any event have submitted to the House of Commons a plan which had for its object to equalise taxation upon the Death Duties on all owners of property. That is a reform which, in my opinion, is both necessary and just. Glad I should have been if those millions had been applicable this year to have relieved the people of this country from other taxation which bore hard upon them. I hope, whoever may be my successor, that he will use those millions for that purpose. I wish I could feel confident that those millions will not be wanted for ever-increasing expenditure. If the people and this House should ever come to the conclusion that the vast and growing expenditure has gone far enough; if ever they should put a stop to that which caused the growing taxation, then those millions in the future which the just taxation under this Bill will yield will be available for relieving the people from taxes which unjustly bear upon them.

MR. GOSCHEN

We now see placed before us some prospects which hitherto have been concealed from us. This is the first time that the Chancellor of the Exchequer has stated this view to us, and I am not sorry he has done so. The right hon. Gentleman has put it as though there was to be an equalisation of taxation under this system. How did he defend his argument? It is not equalisation of taxation, but the right hon. Gentleman has introduced a system of graduation which he could not defend upon its merits. The Chancellor of the Exchequer has not been able to show that these jumps are fair. At all events, he has only endeavoured to do so by referring to the Estate Duty and the Income Tax. It is enough for the Party behind him that he should say, "We shall get more money." The right hon. Gentleman has not been candid enough to explain that this graduation scheme was as urgent to personal as to real property.

SIR W. HARCOURT

What I want to say is this: the reform I desired to introduce was au equalisation of the duty upon all property, the graduation upon all property, and an aggregation of the whole. That is the principle upon which the Budget is founded, and the graduation depends on the amount of the jumps and the intervals of rise in the scale.

MR. GOSCHEN

The Chancellor of the Exchequer says this is merely a question of jumps, but he does not deal with it. He does not attempt to prove that the system is fair or just. I ask the Committee whether it is fair or statesmanlike on the part of a Minister in the position of the right hon. Gentleman the Chancellor of the Exchequer to hold out to his Party the inducement, "We shall get so much more money by this scheme for the relief of other taxation, and that justifies the disadvantages of this scale? "I repeat that the right hon. Gentleman is offering a temptation and a suggestion and a bribe which is no justification at all of the methods which he attempts to establish. Of course, we are helpless on this point. Hon. Members opposite outvote us, and the right hon. Gentleman the Chancellor of the Exchequer knows that he need say nothing more to them than that he wants this money in order to relieve taxation, and under these circumstances he is indifferent to all the arguments which are put to him with regard to the injustice of this tax. He does not attempt to meet my argument; in fact, he leaves all our arguments aside. He does not attempt to grapple with them; but he turns round, and upon a general political issue he says, "If you give me the power for which I ask I shall endeavour to relieve taxation." These are not the methods by which his great Leader, the Member for Midlothian, would have met his opponents. If we had had him in the House he would have endeavoured to prove the justice of every position he took up, and he would have engaged in argument and not in appeals to popular passion and opinion. Throughout the discussion on this Bill we have felt the absence of a desire to argue fairly the important questions raised. The right hon. Gentleman, I say, appeals to political passion and popular opinion, and we hear no argument whatever as to what will be in the end best, from a financial point of view, either for the Exchequer or in the interests of taxation for the future.

MR. EVERETT (Suffolk, Woodbridge)

, said he wished to put a question to the Chancellor of the Exchequer. This was intended to be a Budget for the million. Could not the right hon. Gentleman see his way to accept the proposal of the hon. Member opposite in regard to graduation up to £10,000, and recoup the Exchequer what would be lost by increasing the charge on amounts over £1,000,000? It would be a popular way of dealing with the matter.

Question put.

The Committee divided: —Ayes 151; Noes 114.—(Division List, No. 119.)

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again,"—(Mr. A. J. Balfour,)—put, and agreed to.

Committee report Progress; to sit again To-morrow.