HC Deb 12 May 1899 vol 71 cc503-35

Considered in Committee.

(In the Committee.)

MR. BARTLEY (Islington, N.)

said that it seemed to him quite obvious that some steps must be taken to meet the difficulty with regard to the permanent annual charge for the National Debt, for ho thought that it had been put off already too long. The market for Consols was narrower now than it had ever been before, and there was no doubt whatever that the circumstances were daily making the position of affairs more complicated. It was true that they might slide on in the way they were doing for another year or two. It was possible that this might last during the office of the present Government, and the present tenure of the Chancellor of the Exchequer. But to let a difficulty of this sort slide did not seem to him an ideal system of managing finance, and it was no solution of this great problem. It was a rattier remarkable thing that the more the country benefited by growing prosperity and wealth, the greater became this grave difficulty. At the rate they were now going on it was quite clear that persons now living might live to see the day when Consols would disappear in the market, and some arrangement must be made to meet this great difficulty. He would in a very few words draw the attention of the Committee to the circumstances under which the present position had arisen. During the first half of this century they inherited by the great war this great debt, and although constant efforts had been made to reduce it, the total of the debt remained about the same during the first 30 or 40 years of this century. In the year 1836 the debt stood at £853,000,000, and 25 years afterwards, in 1861, it stood at £828,000,000, so that during that long period of 25 years, what with fresh borrowing and paying interest on the debt, the total remained practically stationary. There was no doubt that during the first 60 years of the century the debt was almost looked upon as a permanent thing. It was looked upon as an enormous debt which would always be there, and was never likely to be altered in its circumstances or position. In the year 1861 two very great changes were commenced, which had an enormous effect, and which had led really and truly to the present position of affairs. Both those steps were right steps, and they were the first real effort to reduce the debt. This was largely owing to the efforts of the late Mr. Gladstone, whose example was also followed by the late Sir Stafford Northcote. But in addition to that, in 1861 the Post Office Savings Bank was established, and this had an immense effect upon the position of the debt. During the 40 years that had elapsed since 1860 the debt had been reduced by £200,000,000, for that was the amount of the debt which had been paid off. But in addition to that the Post Office Savings Bank, which began in a very modest and mild manner with a small sum, like all healthy institutions, gradually developed into a great success, and the effect had been that during the 38 years since it was first established, the net amount paid into the Post Office Savings Bank alone had been no less than £123,000,000. All that money had for all practical purpose been used to buy Consols. It was true that some small sums had been used in other ways, but not to any large extent. Therefore, in the 38 years that hail elapsed since these two movements began, no less a sum than £328,000,000 had been withdrawn from the Consol market, so that whereas in 1861 there was at least £750,000,000 of the debt available for any purpose in the market, there was now only £328,000,000, or less than one-half. In 1861, when the Post Office Savings Bank was established, Three per cent. Consols stood on an average at 91¾. But now the 2¾ per cent., which were to be reduced in a very short time to 2½, stood at about 110. The rise in the price of Consols had, of course, been concurrent with the enormous change of Consols in the market. When Consols were under par there was no possible difficulty in carrying out the regulations under which the debt it was reduced, and the Savings Hank money was used for investment. Any number of million at that time could have been bought, and wore bought, at a price which enabled the institutions to go on satisfactorily, and which was profitable to the country. But when Consols had become so very much above par as they were at present, and when they saw the enormously decreasing supply, the position of the Consul market as it affected the Sinking Fund, the Savings Bank, and the other allied funds was altogether changed. Three main points at once cropped up. First of all, there was at the present time an absolute loss upon the Post Office Savings Bank in revenue, ie., at their present price. Consols barely paid their depositors' interest; secondly, they provided at this price absolutely nothing for the Sinking Fund; and, thirdly, the constant purchase of Consols in the limited market was continually forcing up the price against ourselves. They knew perfectly well that there was really no margin of profit for the carrying on of business, and there was no provision at all for what had become a very serious matter, the Sinking Fund. Such being the case, he would like to ask, what was the position under the present Budget? There would be £5,800,000 from the Sinking Fund, in addition to which the right honourable Gentleman would receive about £9,000,000 from the Post Office Savings Bank; roughly speaking, he would receive £15,000,000 in cash, and what was he going to do with it? Of course, he might use a, portion of it in temporary loans, but the fact remained that, owing to the colossal size of the sum, he would have to buy Consols with it during the year—that to say, if he purchased £15,000,000 worth of Consols out of the remaining £350,000,000, he would have to buy one twenty-fourth of the whole of the remaining debt in the hands of the public, next year one twenty-third, the following year one twenty-second, and so on. It was obvious, therefore, that in the next five years he would have to buy no less than 75¼ millions worth of all the Consols remaining in the hands of the public, including the bankers. If he did this, he must raise the price of Consols even higher than it was at present. As a matter of fact, for every million of Consols purchased, there would eventually be a loss of £250,000 to the State. Upon 9 or 10 millions the loss would be no less than £2,500,000. Should the price of Consols rise to 120— it had already been above 113—the loss upon every million purchased would be £150,000. If the Stock Exchange, or tins persons who held Consols, knew that nothing but Consols could be purchased, it was clear that those who held them would attempt in every way to raise the price if they were forced to sell. If Consols went very much higher than 120 or 130 it would be cheaper even to put the money into a box, where it would receive no interest. That being the case, it seemed to him obvious that some stop must be put to the present state of affairs. No doubt some honourable Gentlemen thought that one means of doing so would be to make a change in the Post Office rules to reduce the interest and maximum. But that would not be a complete solution, because although they might reduce the amount of the Post Office Savings Bank deposits to say one-half, they had got nearly six millions coming into the Sinking Fund, and there would still remain 10 millions a year to apply to the purchase of Consols; although that would lessen the evils of the present system, the evil would continue. There was only one possible solution of the problem, and that was to use the money in some other way which would relieve the Consol market and yet be a safe and proper investment. Honourable Members opposite would probably object, but, having this enormous amount of cash coming in, something must be done with it. Nothing could be much worse than the dangers and complications involved in the present arrangement. Therefore, as they must have something of an alternative character, he ventured to put down, the clause standing in his name on the Paper for consideration. He suggested that the whole of the Financial Fund and the Post Office money should be paid into a separate fund, to be called the Accumulating Sinking Fund, the whole amounting to about 15 millions a year. He proposed that none of this money should be used to buy Consols unless Consols should drop to par, which, of course, they would tend to do towards 1893, and they would drop much more under the system of buying the stock in the manner he now proposed. This would take some time, and in the meantime he proposed that the money should be used for three purposes. First of all, he proposed that the money should be lent to India; secondly, to our Crows Colonies; and thirdly, to local authorities. The amount of money lent to India was 4 or 5 millions a year; the amount lent to the Crown Colonies was smaller; but the amount lent to local authorities had been growing very much of late, and was, roughly speaking, about 10 millions. The conditions he attached to the loans were that, first of all, they should be sanctioned by the Secretary of State for India, by the Secretary of State for the Colonies, or in the case of local loans by the Local Government Board. The second condition, to which he attached great importance, was that each loan should be taken absolutely and entirely out of this Fund. There were immense objections to the State subscribing to a loan which was on the market, because it guaranteed to a great extent the security of the loan and it gave a fictitious value to it on the Stock Exchange. The mode of operation would be comparatively simple. It would be very similar to that in connection with the local funds now. The Chancellor of the Exchequer, the Secretary of State for India, the Secretary of State for the Colonies, or the Local Government Board would settle the terms of each loan. There would be no occasion to have a definite rule as to detail, but the circumstances would be considered in each case and facilities given as the authorities controlling the loan thought fit. At present the rate at which India borrowed was, roughly speaking, 2¾ per cent. The Crown Colonies had to pay a somewhat higher rate; the rate of the London County Council was 2⅙¼per cent., and the various local authorities paid over 3 per cent. He proposed that the loans should be made at a somewhat less rate of interest than they could be negotiated in the market. He had no doubt some would say that there were great objections to the State lending to India, the Crown Colonies and the local authorities. He acknowledged that there were objections, but they were not nearly so great as the objections to the present system. It seemed to him that, inasmuch as under it the people would get the benefit of a lower rate of interest and the State would save the money now lost in buying Consols, there would be a double blessing. It might be said that the proposed system would interfere with the finances of the City. That might to a certain extent be true, but after all, those 15 millions, which represented a very largo sum when applied to one particular investment, were but a fraction of the amount of money saved in investing in new capital every year in this country. From the accounts published he found that every year about 150 millions of now capital were created, so that not more than one-tenth of the sum would be affected. Another objection raised was that the cheapening of loans to the local authorities might tend to promote extravagance. Although he did not deem it advisable that municipalities should be allowed to embark in too many schemes, still, there were so many works which the spirit of the times required a locality to undertake for the improvement of its district—parks, waterworks, gasworks, electric light works, and so on—that it seemed reasonable, when we had this enormous amount of money which they did not know how to invest, that it should be applied to such purposes. The last objection raised to the scheme was that if there was to be a run on the Savings Bank it would be practically impossible for the loans to be turned into cash. That was quite true; bat he ventured to assert that if there I was a tremendous run on the Savings Bank now—if 20, 30 or 40 millions were withdrawn, and Consols had to be sold to meet the demand—Consols would be practically as unmarketable as the local loans. There were one or two advantages of his system. It would stop the dangerous inflation of the price of Consols and bring them down to their natural price, and it would save the State the enormous loss which accrued through the purchase of Consols under the present system. He fully agreed that this would not solve the problem of what would happen some day when Consols were scarcer and when we hold in the Post Office two or three or four hundred millions; the day would come when that great problem would have to be faced, but this would tend to clear the ground for it. It would tend to make the Money Market, the condition of Consols, and the Sinking Fund safer, and he therefore ventured to submit that the matter was worthy of the consideration of a great Chancellor of the Exchequer. He thought it would be wise, politic, and statesmanlike to end the century with some real and businesslike scheme for solving this great financial question. He begged to move the new clause standing in his name.

New Clause— The Treasury shall open a special account, to he called the Accumulating Sinking Fund, into which all moneys received from the repayment of the terminable annuities created under Section 14 of this Act shall he paid, and also any balance that may from time to time remain from the permanent, annual charge for the National Debt as provided in Section 13 of this Act. The Treasury shall also pay into the Accumulating Sinking Fund all or any portion of the moneys received from the post Office and Trustee Savings Banks not required for current uses of the Savings Banks. From the Accumulating Sinking Fund the Treasury may purchase consolidated stock in the open market in such quantities as the Treasury may approve, provided the price so paid is at or below the price of par, and may tend on terminable annuities or for fixed periods to India, to the Crown colonies and to local authorities such sums and at such rates of interest, as the Treasury may from time to time approve. Provided that—

  1. "(a) Each such loan has been approved either by the Secretary of State, for India, the Colonial Secretary, or the Local Government Board; and
  2. "(b) The whole of each such loan shall lie taken by the Accumulating Sinking Fund, the terms of the loan being such that no part of each such loan is or ever can be held by any other person or authority other than the Accumulating Sinking Fund without the written authority of the Treasury."—(Mr. G. C. T. Bartley.)
brought up and read the first time.

Motion made and question proposed— That the clause be read a second time.


I am not at all disposed to blame my honourable friend for having brought this subject before the Committee. It is a subject of great importance, and one to which I know he has given very great attention. Certainly his remarks more than corroborate what I ventured to lay before Parliament as to the extreme difficulties surrounding the investment of Savings Banks deposits owing to the high price of Consols. But, Sir, I trust the Committee will not lie disposed to enter upon any lengthy debate upon the Sinking Fund, and for two reasons. In the first place, I think it must be clear to all of us, including my honourable friend, that it would be impossible to deal with this great question within the limits of his clause, which I do not like to criticise, because I believe lie has only placed it on the Paper in order to call attention to the matter. My honourable friend's object appears to be to abolish the terminable annuities set up by this Bill, and no longer to continue the purchase of Consols with the repayments of capital made from time to time, but to invest those repayments in loans to India, the Crown colonies, and to local authorities. In fact, my honourable friend's proposal is that instead of paying off our own debt, we should pay other people's debt, and in that way build up a fund which we should hold until Consols come to par, and we are able to redeem Consols with that fund. But, Sir, we may not be able to realise the sum so built up. I have already I stated that the Indian Government, to my knowledge, would not be willing to borrow money in this way from us with the obligation of paying us at a fixed time. Therefore, Sir, I must say that so far as I am at present advised, I do not think the proposal of my honourable friend is at all feasible with regard to the Sinking Fund. I think it would be much better to go on with our present system of cancelling Consols through terminable annuities, and not to attempt to deal with the Sinking Fund in the manner my honourable friend proposes. My honourable friend then turns to the Savings Bank deposits, and suggests that in future they should be invested in loans to local authorities, the Crown colonies, and India. I would venture to point out to the Committee that, as a matter of fact, at the present time we do invest those deposits in loans to local authorities through the Local Loans Fund, which is guaranteed by the Consolidated Fund. Only two years ago Parliament agreed to a reduction in the rate of interest charged on such loans, so that they are now made on terms which have proved very much more attractive to local authorities than before. I am now examining the terms on which these loans are made with a view to see if we cannot make them still more attractive. I confess I see no reason, except, perhaps, on the ground of some local interest which may be better imagined than described, why towns like Liverpool or other great towns in the country should prefer to go into the money market for loans. I think the Committee will see, as far as the use of Savings Bank deposits in loans to local authorities is concerned, it may be done, and is being done, through the machinery I have described just as well as it would be through the machinery proposed by my honourable friend. He also proposed that Savings Bank deposits should be lent to the Crown colonies. Well, I have a Bill before the House which I hope will become law this year, by which, through machinery similar to that of the Local Loans Fund, loans may be made to the Crown colonies under proper safeguards. India has the power to borrow on her own account. But I see no reason why the same process should not be extended to India. It is a perfectly fair subject for consideration whether, in the case of India, the National Debt Commissioners may not be authorised to lend direct to India. But I would venture to point out to my honourable friend that I have already undertaken that certain inquiries should be made, and I would suggest that this is the way, and the only way, in which this question can be usefully approached. Although I daresay competent opinion upon it may be very valuable, further discussion now would lead to no practical result, because nobody—not even my honourable friend—desires that this clause should be adopted in an Act of Parliament.

Question put and negatived.

* MR. HUBBARD (Lambeth, Brixton)

said the substance of the Amendment he rose to propose was submitted for consideration on the introduction of the Death Duties in 1894, and had already received a very strong measure of support from all sides of the House. It appealed to the first principles of justice, and he commended it to the consideration of the Government. A good deal of the legislation of the present day was directed towards inducing the working classes to save, largely against their will, and he could not but think it would be equally advantageous to facilitate saving in the case of the income-tax paying class, more especially when that saving went directly into the pockets of the Chancellor of the Exchequer. It seemed to him desirable to do anything that would diminish the unpopularity of a tax. It could not be doubted that the Estate Duty was felt as a hardship in many cases, and that the severity of the incidence was very often met by processes very well known to Members of the House. In two recent cases very large properties had escaped Estate Duty altogether. The chief grievance lay in the fact that it was impossible for a man to make provision for the Estate Duty without the sum being aggregated with his estate. This was altogether an unfair state of things, and it was especially hard when the effect of a man's prevision was only to raise his estate into the next class, and cause the whole to be assessed at a higher rate of duty. He thought the Government would do well to take it into consideration and see whether they could not do something to redress what he believed was an admitted injustice. The principle of the clause had been accepted by very high authorities. In the Debate of 1894 the present Chancellor of the Exchequer supported it in the warmest terms, and though the then Chancellor of the Exchequer resisted the proposal, he intimated his readiness to consider any scheme by which a sum set apart for Death Duties should be inalienable. Having, therefore, accepted the principle, what was the objection to carry it out? It could only be the official one—loss to the revenue. He did not think the question ought to be considered from that standpoint. The greater the loss the greater evidently was the hardship, and the greater the need for remedy. He believed, however, the loss could not represent a very large sum, because probably not more than twenty per cent, of the ordinary taxpayers would avail themselves of the, proposed insurance. But he would go further, and say that he believed there would be actually no loss to the revenue, because the whole essence of his suggestion was that an extra effort should be made by the testator to set aside this sum. As far as he could see, there was no other way in which a man could provide for insurance and escape aggregation. He, therefore, asked the Chancellor of the Exchequer, whether this was not a case of injustice which might be remedied with very little trouble and no sacrifice to the revenue, and whether he could not see his way, both as an act of justice and as an assistance towards carrying out the law, to adopt the clause he had the honour to move.

New Clause— Upon the decease of any person who during his lifetime has expressly provided by insurance or otherwise for payment of the Estate Duty on any property passing at his death, and to that end has appropriated or set apart a sum of money so as to form an inalienable provision for payment of the said duty or any part thereof to the Commissioner of the Inland Revenue, the sum so appropriated or set apart shall not be aggregated with the rest of the estate and shall not be liable for payment of Estate Duty."—(Mr. Hubbard.) brought up and read the first time.

Motion made and Question proposed— That the Clause be read a second time.


My honour-able friend is quite justified in quoting the remarks I made on the subject in 1894, and I have always but the greatest sympathy with the idea, underlying the clause with a view to the encouragement of saving. My honourable friend does not allude to a precedent he might fairly have used, the exemption of insurance premiums from income-tax. Sir, I have looked very carefully into the matter with the desire of making a proposal to the House, but such consideration as I have been able to give to it has not enabled me to make a proposal of the kind. Let me put to the Committee one of the great difficulties in this matter. Of course there must be a loss to the revenue in any scheme of this kind, from the fact that the sum set aside would, under the proposal of my honourable friend, pay no Death Duty, and would not be subject to aggregation with the rest of the property, and no doubt the richest men would take most advantage of the clause if it were adopted. But the difficulty in the matter is mainly this—the impossibility of making any sum of the kind inalienable, as my honourable friend suggests. I will take the case of a man of great wealth who is, we will say, thirty or thirty-five, in the prime of life, and lives to a, great age. When he is thirty-five he may set aside a sum under this proposal for the payment of the Death Duties Long before he dies he may become insolvent. Well, are his creditors to have no claim on the sum set aside?


Not if it were inalienable.


It could not be inalienable, there being nothing upon which Death Duty would have to be paid: and why should the creditors be deprived of their right to a sum set aside to meet a contingency that cannot arise? Take another case. A man may not be insolvent, but he may be very much poorer when be dies than when he set aside his sum. Is the whole sum still to be left inalienable, or merely the sum applicable to the Death Duties on the property he leaves behind him? Take another case. A man may be very fond of his heir, but that heir may die and some distant relative may succeed to the property about whom the owner cares nothing and may desire to make other use of the money than to benefit the successor with whom he has no sympathy. I have mentioned these cases, because they are some of the difficulties in the application of the principle for which my honourable friend contends. After all, I submit to the Committee that it would be perfectly possible for a man if he trusts his heir to do what my honourable friend desires, namely, relieve him of the Death Duties without any alteration in the law at all. Of course the presumption is that he will trust his heir; if he did not trust his heir he would not desire to relieve him of the Death Duties. It is perfectly possible for him now, if he chooses, to make over to his heir a certain sum of money for the payment of the Death Duties which would not be liable to duty or to aggregation. I am quite convinced that if my honourable friend were to consult an astute lawyer he would devise means to carry this out. Although, as I have said, I have great sympathy with the idea, I cannot possibly accept the clause now, because it would involve a considerable loss of revenue and I do not at present see my way to overcome the objections that arise.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

The hon. Member who proposes the Amendment has very truly said that in 1894 I, as Chancellor of the Exchequer, expressed a desire to meet this case so far as it could be met, and everybody must desire, in reference to this tax, to make it as little oppressive as possible. When the suggestion was made in 1894 I stated, as the Chancellor of the Exchequer now states, that it was impossible to deal with insurance alone, for that is only one method by which a man may make this provision. I also said that if it were possible to deal with the matter on the footing of inalienable savings I should be extremely glad. An honest attempt was made to find some method of dealing with the question on that basis, and there was a proposal like to the one made by the honourable Member. I went into the matter with very able assistance, and found all the difficulties which have been alluded to by the honourable Member as to securing these alienable funds. The fact is people are not fond of tying up property in this inalienable manner. There are many instances where it cannot be done, and where it is not likely to be done. Therefore, I can only confirm what the right honourable Gentleman has said. Every effort was made to meet what is certainly a plausible claim, but we at that time were unable to find a method of solving the difficulty. I understand that the Chancellor of the Exchequer has not been more successful since that time, and undoubtedly to deal with the matter in the manner now proposed would involve great loss of revenue.


said that on examining the pith of the Amendment he was forced to side with the Chancellor of the Exchequer in the opinion which he had expressed that evening in preference to the view set forth by him in 1894. He would see that there were immense practical difficulties in the way of the adoption of the Amendment. He sympathised with his honourable friend who had brought it forward, but he respectfully suggested to him that it was not one which could meet the existing difficulty.

MR. HOARE (Norwich)

supported the Amendment, which involved a question in which he took very great interest. It seemed to him very hard that if a man by his thrift endeavoured to provide for the payment of his Death Duties he should be fined for so doing, for that was exactly what it came to. If an estate was worth a little under £50,000, and he made provision for his Death Duties, his estate would be fined nearly £400; in the next scale, nearly £600; in the next, over £1,000; and in the next, upwards of £15,000. Having always endeavoured to encourage thrift, he thought that the House ought in this ease to try in every way to further the cause. The injustice complained of required a remedy, and he was glad that his right honourable friend the Chancellor of the Exchequer stated that he was prepared to consider it. He knew that there were great difficulties, but he hoped that the right honourable Gentleman's ability and experience would enable him to overcome them.

* MR. SPICER (Monmouth Boroughs)

said he had intense sympathy with the principle of the Amendment, and he was extremely glad to hear that the Chancellor of the Exchequer was willing to look into the matter again. He seemed to him to argue the question almost entirely from the standpoint of those families who made their property over to their eldest sons. He thought the present system came with far greater hardship upon those classes of society where the property was usually divided equally amongst the different members of the family, and he could not think that the difficulties which had been referred to both by the Chancellor of the Exchequer and the late Chancellor of the Exchequer could not be dealt with by some of the able advisers that there were at the Treasury. He quite admitted some of the difficulties, but it seemed to him that the proposal gave them a legitimate way of providing for Death Duties, and was a contrast to the illegitimate of evading the Death Duties which, if they were rightly informed, were now being made use of by some of the great families of the land—an action which, he ventured to say, had created a feeling of very deep resentment. These great families maintained their position very largely because they had administered their estates on the principle of noblesse oblige; but if once it came to be realised by the mass of the people that those classes were trying to evade their fair responsibilities to the State, it would create a feeling of bitterness which would not end there. He, for one, looked forward with real concern upon those who had carried out these practices, because he believed they were acting distinctly against their own interests and general welfare. The plan proposed seemed to suggest a legitimate way of trying to meet the difficulties, and he trusted the Chancellor of the Exchequer would find, with the able assistance he had at the Treasury, some method by which those who wished to make provision in the way proposed might do so without loss to the State, and, at the same time, to the advantage of those who came after them.

SIR R. T. REID (Dumfries Burghs)

remarked that neither in the debate of 1894 nor during the present debate had any honourable Member suggested a method by which provision for meeting the Death Duties could be made inalienable. There must be a fund which the testator could not alienate, and which his creditors could not alienate, and which at his death must be exclusively applied for the purpose of paying off the Duty. There was, indeed, no way of doing it unless the Chancellor of the Exchequer himself opened an insurance office, and received premiums against the payment of the duties. The consequence of that would be that if a man died leaving nothing, the Chancellor of the Exchequer would be entitled to keep the premium. In that sense, and in that sense alone, could they make any inalienable provision. Otherwise, if the Amendment passed, it must remain a dead letter.

* CAPTAIN PRETYMAN (Suffolk, Woodbridge)

said he had consulted several experts on the question, and he found that the difficulties of making provision for the sum inalienable were insurmountable. The right honourable Gentleman who had just sat down had said that there was no other way available than by the Chancellor of the Exchequer opening an insurance office. When the Chancellor of the Exchequer was in a generous mood there was one simple way of doing it, namely, when the duty was assessed on the property, and before the duty was actually charged, to deduct the sum payable as duty from the corpus on which the duty itself was payable.

* MR. MOULTON (Cornwall, Launceston)

said that the case which had been mentioned of a person with an estate of £48,000, who, through saving enough to pay the Death Duties, was fined because the estate was raised to over £50,000, was an illustration of the fact that there must necessarily be some difficulty and injustice when a hard and fast line was drawn between the incidence of one rate of taxation and another. The question was whether they should allow a man by any arrangement in his lifetime to shield a portion of the property which he left to his heirs from the Death Duty.


said that in view of the promise of the Chancellor of the Exchequer to look into the question, he did not propose to press the Amendment to a Division. He did not think the arguments which had been brought forward against his proposal were by any means unanswerable, and he failed to see any insuperable difficulty in making the fund inalienable. If the right honourable Gentleman went into the question with a real desire to redress what he believed was a recognised grievance, he would find a way out of the difficulty.

Motion by leave withdrawn.

MR. LLOYD MORGAN (Carmarthen, W.),

on behalf of Mr. Lawson Walton (Leeds, S.), moved the insertion of the following clause:— The provisions contained in Section 98 of the Stamp Act of 1891 in reference to the expression 'policy of insurance against accident' shall extend to and include policies in insurance or indemnity against liability incurred by employers in consequence of claims made upon them by workmen who have sustained personal injury, when the annual premium on such policy does not exceed £1.


I will accept the proposal.

The clause was read a second time and added to the Bill.


in moving a I new clause repealing certain sections of the Act of 1894, said he did not intend to touch upon the principle of the Finance Act of 1894, in the discussion of which they had spent some happy mouths, though he might remark that one-tenth of the estates that paid the duty paid nine-tenths of the old duty, and that under the Act one £500 might pay thirty-seven times as much as another. The effect of the Act was beginning to be seen. It had disappointed everybody, and nobody more than his right honourable friend the Member for West Monmouth, since the Act had not produced anything like the sum anticipated. Allusion had been made to evasions by highly-placed persons. It was a case of "diamond cut diamond"; but, after all, he did not call them evasions, but avoidances of the Act, which the Act allowed. But that portion of the Act which had always seemed to him to be particularly small, foolish, unnecessary, and indefensible was the Settlement Estate Duty. It was unnecessary for him to read the clause he proposed. It touched nothing else in the Act but this duty, and did not infringe the principle. The Settlement Estate Duty produced but an infinitesimal part of the total Estate Duty. The total Estate Duty for the year amounted to £15,600,000, and the Settlement Estate Duty produced only £330,000, or one-forty-sixth of the total Estate Duty. Moreover, according to the Report of the Inland Revenue Commissioners for 1894–95, the Settlement Estate Duty gave rise to a great number of difficult questions productive of greater complication than any other provision of the Finance Act of 1894, and remarkable testimony was given on the part of those whose duty it was to carry the Act into effect. It was largely because of these difficulties and complications that he proposed that the Chancellor of the Exchequer should relieve himself of the burden of collecting the tax, more especially as it produced relatively so small an amount. He was afraid the Settlement Duty was imposed primarily on account of the animosity of the right honourable Gentleman the Member for West Monmouth, who made a set against settled property. If they looked into the Act, however, they would find that settled property, instead of being at a disadvantage, was, compared with other property, at a very great advantage. He had heard remarks about knocking the bottom out of the Act. There were, however, cases where there was bottom in the Act, and where the Chancellor of the Exchequer and the Law Officers had endeavoured to put a false bottom in. In proof of this there was the Beach case. This matter was of great importance. The total amount involved in settled property was 41 millions out of 274millions, or nearly one-sixteenth. The whole of the Estate Duty was 12 millions, while the duty on settled property was two millions. In consequence of the decisions which had been given as a true interpretation of the Act, they would find that all of the Estate Duty of two millions was imperilled besides the Settlement Duty of £300,000. The Settlement Duty was supposed to guard the revenue and afford compensation, but the cases proved that it was no guard, while the compensation was inadequate. He ventured to implore the Chancellor of the Exchequer—though he did not suppose the right honourable Gentleman would agree to it—to abolish Settlement Duty.

New clause— The following Sections of the Finance Act, 1894—namely Section 5, Sub-Section 1, paragraphs A and B; and Sub-section 4; Section 10, Sub-section 3; Section 17; and section 21, Subsection 4, so far as they enact or relate to Settlement Estate Duty, are hereby repealed."—(Mr. Gibson Bowles.) brought up and read the first time.

Motion made and Question proposed— That the clause be read a second time.


said that he would not follow his honourable friend all through his argument, but it seemed to him that if all his proposals were carried there would be very little of the Act of 1894 left. But the honourable Gentleman's proposals answered themselves. Settlement Estate Duty was imposed as a compensation for the advantages which settled property enjoyed of paying once only during the settlement. It was only a duty of 1 per cent., and considering the great advantages which settled estate enjoyed, it was right and just that that should be paid.


was not going to say anything more about Estate Duty after what had been said by the Chancellor of the Exchequer. He, however, wanted to say a word on a matter cognate to it. The right hon. Gentleman hail made some observations in regard to the advantageous position occupied by settled property under the Act as it stood. There was no doubt that since the decision of the House of Lords, settled property enjoyed an unduly favoured position. He was one of those who did not agree with the opinion which had been adopted by the House of Lords. It was a very serious thing, not only for the revenue, but also for the cause of just administration. If the decision of the House of Lords remained, and if nothing was done by Statute to alter in some degree the effect of their interpretation of the Act, it would be possible, by a succession of settlements made within a few days or hours of death, for large masses of property in this country to escape the Death Duty altogether—he meant from generation to generation. It was not his business to enter into the feelings of hon. Gentlemen opposite as to the principle of the Act. He knew some thought this a harsh tax. But this was clear, that no Act could go on being administered, and could claim to be a just Act, which was so interpreted that they could have great masses of property constantly escaping the tax, while all other property, mostly of poor people, was subjected to the tax. He could not help expressing the hope that the Chancellor of the Exchequer would see whether something could not be done for the purpose of strengthening the liability of settled property to pay a full share of taxation.


said that in drawing up this provision it had been stated he had been actuated by hostility to settled property. He had never had any hostility to settled property as such. What he had always contended was, that settled property should be dealt with fairly, on the same footing as other property. Up to the passing of the Act in 1894 it had escaped from all liability to which other property was subjected. If they had a community sensitive that a particular form of property—and that property generally the possession of rich people—was dealt with on a different footing from other property, they would have that feeling of dissatisfaction that arose from unequal and unfair taxation. The intention of the additional Settlement Duty was a compensation for a very great concession that was made to settled property. He had no hesitation in saying that it was an experiment in compensation, and it was an extremely useful one. He had now come to the conclusion that the compensation was not half high enough, and that any change that was to be made should be in the direction of bringing settled property into line with the rest of the property in the country. He had no doubt that, by the decision referred to, settled property was conspicuously exempt from the burdens on other property, and that in a few years it would have to be done away with. The 1 per cent, duty did not in the least compensate for the exemption which settled property enjoyed with other property.


said, in regard to the new clause proposed by the honourable Member for Lynn Regis, he could hardly follow his curious argument, that because settled property was better off than other property, it ought to he relieved further. However, the right honourable and learned Gentleman opposite had apparently lost his head in regard to this case. He assumed quite unwarrantably that because the decision of the House of Lords had gone against him on the Beach Case it would also be against him on all other points. He hoped there would be cases where the right honourable Gentleman would be more fortunate. If the decision given by the House of Lords implied that settled property could be handed over in extremis, he would support the Chancellor of the Exchequer in an amendment of the law. He absolutely concurred in the opinion expressed by the light honourable Gentleman opposite, that both settled property and other property should be treated equally, but he did not agree with the statement of the right honourable Gentleman that the decision in the Beach case, so far as it went, placed settled property in a different position from unsettled property.


differed from the honourable Gentleman, and he would tell in a sentence why. Under the decision in the Beach case, one of two things might happen. Duty might be escaped by alienation at any moment before death, or at all events, if that were a point which had not been decided, there could be evasion of the payment of duty if the residue of the life interest was sold at its then value, say by a man who was only going to live a week.


said that was a legal point which the right honourable and learned Gentleman was better able to deal with than he was. He took his stand on the broad ground that under the decision of the Beach case, settled property which had been transferred to the next in settlement more than 12 months before death was clear of Estate Duty. They were not entitled to anticipate any other decision until it occurred. Would the right honourable and learned Gentleman tell him that free unsettled property could not escape duty by being transferred 12 months before death?


said he was loth to interrupt. It was perfectly true that free property could be alienated with safety more than 12 months before death. The difference consisted in this, that in order to escape the Death Duty on free property it was necessary to alienate the whole corpus, the whole interest in the property, but in order to escape the Death Duty in the case of settled property it was only necessary to dispose of the remaining part of the life interest, which was a very in significant portion of the entire value.


said he was again sorry to disagree with the right honourable and learned Gentleman on a legal point, but he must again say that the decision in the Beach case did not go so far as that. He held that so far as the Beach decision was concerned the two classes of property were on the same footing. At any rate, if they were not they ought to be. He could not see his way to support his honourable friend's Amendment, but at the same time, as the law now stood he could not think how honourable Gentlemen opposite could maintain that settled property was placed at a greater disadvantage than free property.


said he did not propose to press the Amendment, but if his honourable and gallant friend once opened the door to a revision of the law affecting settled property he would be called upon by honourable Gentlemen opposite to support an increase in the valuation of real property as charged with duty for 17 and 18 years, which the Inland Revenue now got when it was sold, to 30, 40, or 50 years' purchase, which the owner of property often got in a settlement. He begged leave to withdraw the Amendment.

Motion, by leave, withdrawn.


next proposed a new clause for the purpose of removing the present limitation to the aggregation of property. He said that under Section 4 of the Finance Act of 1894, any property in which the deceased never had an interest could not be aggregated. The same section provided that if by any disposition not made by the deceased property passed to another person that should not be aggregated. But, if it passed to the wife, husband, lineal ancestor, or to a descendant, it was aggregated, and Estate Duty charged upon it. This was unjust to the widow and the orphan, who wore unjustly taxed as compared to the stranger. It was that exemption to the exception which he wished to remove by means of his Amendment. He hoped the Chancellor of the Exchequer would see his way to accept it.

New Clause— Section four of The Finance Act, 1894, shall be read and have effect as if after the words 'never had an interest or which' the word 'passes' were inserted; as if after the words 'not made by the deceased' the words 'passes immediately on the death of the deceased to some person other than the wife or husband or a lineal ancestor or a lineal descendant of the deceased' were omitted; and as if all the words after the words 'shall not be aggregated with any other property' to the end of the section were omitted."—(Mr. Gibson Bowles.) brought, up and read the first time.

Motion made and Question proposed— That the Clause be read a second time.


did not think that such a proposal could possibly be accepted. To his mind it would go much too far, much farther than his honourable friend desired.

Question put, and negatived.

LORD ALWYNE COMPTON (Beds, Biggleswade)

said he had an Amendment on the Paper dealing with Section 4 of the Finance Act of 1894, restricting the exemptions thereby given to non- lineals from the principle of aggregation, and extending certain exemptions to persons taking benefits under separate dispositions. He was perfectly clear as to the injustice caused by these exemptions, but it appeared some doubt had arisen as to what the tendency, or full effect of the words in his proposed Amendment would be. That being so, and in view of the great perplexity of the question, he would postpone the matter until the Report Stage.


said he would be obliged if the noble Lord did so. The proposal on the Paper opened up a most complicated question.


said that the next three clauses, of which he moved the insertion at this part of the Bill, must be dealt with as one; and he felt so strongly on the matter that if he could only get a teller, he should go to a Division. The effect of these three clauses would be to abolish the presumption that was made by the Finance Act of 1894, that everything a man did within twelve months of his death was done in defraud of the Act.


said that that was not done under the Act of 1894; it was done by a former Act—that of 1881.


said that by the Act of 1881 the presumption was applied to personal property during throe months before death; lay the Act of 1889 it was extended to personal property within twelve months of death; by the Act of 1894 the presumption of twelve months was extended to all property whatever, and the right honourable Gentleman could not say this was not done by the Act of 1894. He (the honourable Member for Lynn Regis) must at once admit that the error of persons conceiving this idea of diverting the estate was not due to the right hon. Member for West Monmouth. It was line to the First Lord of the Admiralty, whom he had always considered to be a better sailor than a financier. Originally it was due to Mr. Gladstone, but it was carried out by the sailor-financier. The effect was to assume that every gift made by a person within twelve months of his death was fraudulent, and intended to evade the duty. That might be so, and in such an instance he should not only charge the duty, but, in addition, impose a heavy penalty. But they must show that there was an attempt to evade the Act, when in many cases there was no such intention, and that the gift was made bona fide, and with no idea of impending death. Observe the humour of the thing. Every shilling a man put into the plate at church, every remission he made to a tenant of rent, every little present he made to his wife, say, of a brooch or a ring, every gift of any kind to anybody, was not a gift completed, but was only a gift, minus the duty, until twelve months had elapsed. He could give extraordinary instances of the hardships of this reading of the law. But he would take one connected with this nefarious assumption in favour of the State. If a person left £29,000 of his own, and £20,000 passed on his death, under his father's settlement, and if he made a gift of £5,000 within the year, the total of these sums, £54,000, was aggregated, and the rate of duty was charged at 5 per cent, instead of 3, 4, or 4½ per cent., so that the children paid more on the £20,000 they got because of the £5,000 they did not get. The executor was bound to include in the account every gift made within twelve months—every shilling in the church collection plate, every token of affection, every ring, but he was not bound to pay duty. The liability was put on the donee. The executor was absolutely prohibited from paying the duty except by the request of the donee. If, therefore, the donee had gone abroad, or had spent the gift, the duty was not recoverable from him, and the executor was not liable—in fact, no one was liable. The Act, in fact, was full of injustices, absurdities, complications, and departures from the principle of the Act itself. The only right and just method was to make no presumption either way. He would further point out that the amount of duty was not very large. The amount of inter vivos donations in 1897–8 was £933,000, with a duty of about £45,000, collected in order to maintain the entirely false assumption that everything a man did within twelve months before his death was to evade the Act. He begged to move the addition of the first of his proposed clauses.

New Clause— Section two, Sub-section (3), of The Finance Act, 1894, is hereby amended as follows: The description of property in Sub-section (3) shall be construed as if the words 'more than twelve months before his death' were omitted therefrom. brought up and read the first time.

Motion made and Question proposed— That the clause be now read a second time.

The other two proposed clauses referred to were as follows:— Section two, sub-section (1), paragraph (c), of The Finance Act, 1894, is hereby amended as follows: the description of property marked (c) shall be construed as if the words in section eleven, sub-section (1), of The Customs and Inland Revenue Act, 1889, 'be read as if the word 'twelve' were substituted for the word 'three' therein, and the said description of property shall' were omitted therefrom. Section thirty-eight, sub-section (2), paragraph (a), of The Customs and Inland Revenue Act, 1881, is hereby amended as follows: the description of property marked (a) shall be construed as if all the words in paragraph (a) after the words 'one thousand eight hundred and eighty-one' were omitted therefrom."—(Mr. Gibson Bowles.)


said that his reply to his honourable friend was that as he, year after year, raised this question, and repeated proposals of the

Sullivan, Donal (Westmeath) TELLERS FOR THE AY—Mr.Gibson Bowles and Mr. Alexander Cross.
Aird, John Buxton, Sydney Charles Curzon, Viscount
Allan, William (Gateshead) Caldwell, James Dalkeith, Earl of
Allen, W. (Newe. under Lyme) Cameron, Sir Charles (Glasgow) Dalrymple, Sir Charles
Archdale, Edward Mervyn Carmichael, Sir T. D. Gibson- Daly, James
Atherley-Jones, L. Cecil, Evelyn (Hertford, E.) Davies, M. Vaughan-(Cardigan
Atkinson, Rt. Hon. John Cecil, Lord Hugh (Greenwich) Donkin, Richard Sim
Austin, Sir John (Yorkshire) Chaloner, Captain R. G. W. Doogan, P. C.
Bagot, Capt. Josceline FitzRoy Chamberlain, J. Austen (Worc'r Dorington, Sir John Edward
Balfour,Rt. Hn. A. J. (Manch'r Chaplin, Rt. Hon. Henry Doughty, George
Balfour, Rt Hn Gerald W. (Leeds Charrington, Spencer Douglas, Rt. Hon. A. Akers-
Banbury, Frederick George Clare, Octavius Leigh Douglas, Charles M. (Lanark)
Barnes, Frederick Gorell Clough, Walter Owen Doxford, William Theodore
Barton, Dunbar Plunket Cochrane, Hon. Thos. H. A. E. Duckworth, James
Beach Rt. Hn. Sir M. H. (Bristol) Collings, Rt. Hon. Jesse Duncombe, Hon. Hubert V.
Bethell, Commander Colston, Chas. Edw. H. Athole Dunn, Sir William
Bhownaggree, Sir M. M. Colville, John Elliot, Hon. A. Ralph Douglas
Bigwood, James Compton, Lord Alwyne Fellowes, Hon. Ailwyn Edwd.
Blakiston-Houston, John Cook, Fred. Lucas (Lambeth) Ferguson, R. C. Munro (Leith)
Bond, Edward Cooke, C. W. Radcliffe (Heref'd) Field, Admiral (Eastbourne)
Boscawen, Arthur Griffith- Cranborne, Viscount Finlay, Sir Robert Bannatyne
Brassey, Albert Cruddas, William Donaldson Fisher, William Hayes
Brodrick, Rt. Hon. St. John Cubitt, Hon. Henry FitzGerald, Sir Robert Penrose-
Butcher, John George Curran, Thomas B. (Donegal) Flower, Ernest

same kind, he could do nothing but repeat what he had already said against the proposals. His honourable friend admitted that there might be such a thing as fraudulent attempts to evade the Acts, but he said that we ought to discover that by some kind of divination. He did not believe that we would ever discover anything in that way. He did not believe that it would be possible to inflict the penalty suggested. Three months was the period suggested, but that was found to be too short, and twelve months was accepted with practical unanimity as the period within which donations might not be made. He believed that if three months were accepted the door would be opened to fraud, and to the evasion of the Act in other ways.


believed that under the clause as it stood every shilling given during the year preceding death would be brought into account. If they accepted his honourable friend's Amendment the door would be opened to a very large number of cases of evasion, and the amount of duty thus fraudulently evaded would be very large indeed.

Question put.

The Committee divided:—Aye, 1; Noes, 164. (Division List No. 142.)

Garfit, William Lucas-Shadwell, William Russell, T. W. (Tyrone)
Gibbs, Hon. Vicary (St. Albans) Macaleese, Daniel Rutherford, John
Giles, Charles Tyrrell Macartney, W. G. Ellison Ryder, John Herbert Dudley
Goddard, Daniel Ford Macdona, John Cumming Sharpe, William Edward T.
Goldsworthy, Major-General Maclver, David (Liverpool) Shaw, Thomas (Hawick B.)
Gorst, Rt. Hon. Sir John Eldon M'lver, Sir Lewis (Edin.W.) Smith, Samuel (Flint)
Goschen, Rt Hn G J (St. George's M'Killop, James Souttar, Robinson
Goschen, George J. (Sussex) M'Laren, Charles Benjamin Stanley, Lord (Lanes.)
Gourley, Sir Edward Temperley Middlemore, Jhn. Throgmorton Strauss, Arthur
Greene, Henry D. (Shrewsbury) Montagu, Sir S. (Whitechapel) Strutt, Hon. Charles Hedley
Gull, Sir Cameron Moore, William (Antrim, N.) Sturt, Hon. Humphry Napier
Haldane, Richard Burdon Morton, Arthur H. A. (Deptford Thomas, Alfred (Glamorgan, E.
Hamilton, Rt. Hon. Lord George Morton, Edw. J. C. (Devonport) Thorburn, Walter
Harwood, George Mount, William George Trevelyan, Charles Philips
Hayne, Rt. Hon. Chas. Seale- Murray, Rt Hn. A. Grahm. (Bute Valentia, Viscount
Hazell, Walter Murray, Charles J. (Coventry) Wallace, Robert (Edinburgh)
Hermon-Hodge, Robert Trotter Murray, Col. Wyndham (Bath) Wallace, Robert (Perth)
Hill, Arthur (Down, W.) Myers, William Henry Webster, Sir R. E. (I. of Wight
Holland, Hon. Lionel R. (Bow) Newdigate, Francis Alexander Wedderburn, Sir William
Holland, Wm. H. (York.W. R.) Nicol, Donald Ninian Weir, James Galloway
Horniman, Frederick John O'Brien, Patrick (Kilkenny) Wharton, Rt. Hon. John Lloyd
Johnson-Ferguson, Jabez Edw. O'Connor, Arthur (Donegal) Williams, John Carvell (Notts.
Johnston, William (Belfast) O'Malley, William Williams, Joseph Powell-(Birm
Jolliffe, Hon. H. George Philipps, John Wynford Wilson, John (Durham, Mid)
Kenyon-Slaney, Col. William Pickersgill, Edward Hare Wilson, John (Falkirk)
Keswick, William Pilkington, Richard Wilson, Jos, H. (Middlesbrough
Kimber, Henry Platt-Higgins, Frederick Wortley, Rt. Hon. C. B. Stuart
Knowles, Lees Pretyman, Ernest George Wyndham, George
Laurie, Lieut.-General Purvis, Robert Young, Commander (Berks, E.)
Lawrence, Sir E. Durning-(Corn Richardson, Sir Thos. (Hartlep'l
Leng, Sir John Rickett, J. Compton TELLERS FOR THE NOES—Sir William Walrond and Mr. Anstruther.
Long, Rt. Hn. Wltr. (Liverpool) Ritchie, Rt. Hon. Chs. Thomson
Lowe, Francis William Royds, Clement Molyneux

said he was afraid it now fell upon him to move one Amendment after another. His next Amendment was to restrict the Exchequer and Audit Act of 1866, which had been superseded by subsequent arrangements made by Parliament. Instead of the gross revenues being paid into the Bank of England a great part of them went to local taxation. It seemed to him an extraordinary thing that such an abuse should have cropped up in so short a time. £9,000,000 was put to this purpose. The appropriations in aid he did not propose to deal with, but that part of the Exchequer represented by the Estate Duties was about £2,500,000 this year. He did not suppose that the Chancellor of the Exchequer would express his readiness to accept the clause, but he did trust that the right honourable Gentleman would say that he would take the matter into consideration and bring to an end a method which only made confusion worse confounded.

New Clause— The Commissioners of Customs, the Commissioners of Inland Revenue, and the Post-master General shall, after the commencement of this Act, notwithstanding any enactment to the contrary, after deduction of the payments for drawbacks, bounties of the nature of drawbacks, repayments, and discounts, cause the gross revenues of their respective departments to be paid at such times and under such regulations as the Treasury may from time to time prescribe, to accounts to be intituled 'The Account of Her Majesty's Exchequer,' at the Bank of England and at the Bank of Ireland respectively, and all other public moneys payable to the Exchequer shall be paid to the same accounts, and accounts of all such payments shall be rendered to the Comptroller and Auditor-General daily, in such form as the Treasury may prescribe; provided always, that this enactment shall not be construed to prevent the collectors and receivers of the said gross revenues and moneys from cashing, as heretofore, under the authority of any Act or regulation, orders issued for Naval, Military, Revenue, Civil, or other Services, repayable to the Revenue Departments out of the Consolidated Fund or out of moneys provided by Parliament. And provided also that the Treasury may transfer from the said Account of Her Majesty's Exchequer to the Local Taxation Account such sums, under such conditions and at such times as are prescribed by any existing enactment to be paid to the said Local Taxation Account."—(Mr. Gibson Bowles.) brought up, and read the first time.

Motion made, and Question proposed— That the Clause be now read a second time.


said that even if the views of the honourable Member for Lynn Regis were right, he did not think, whatever his intention was, that the clause proposed would have the desired effect. He thought that it was premature, and could not accept it.

Motion, by leave, withdrawn.


said the clause which stood in his name was practically identical with a clause which he had moved last year, dealing with an injury which everybody recognised. He did not now propose to move it because the right honourable Gentleman the Chancellor of the Exchequer, had informed him that he had looked into the matter, and though he admitted that there was a hardship, the right honourable Gentleman did not consider that the suggestion which he (Lord A. Compton) had made met the difficulty. He had been encouraged to proceed, the right honourable Gentleman having pointed out that where property passed through many hands in a short space of time a condition of things might arise in which there would be no property at all. He was hopeful, the evil and hardship having been acknowledged, that the Chancellor of the Exchequer would give some explanation and that, if he was not satisfied with the clause as put upon the Paper, he would give some indication upon which a clause might be based another year.

The following is the clause referred to:— Where Estate Duty shall have become payable on any death by or on behalf of any person in respect of property to which he shall have become entitled on such death, and such person shall die within the space of eight and a-half years from the date of the death on which the duty shall have become payable, such duty (in this section referred to as 'the first charge of duty') shall for the purposes of this section be taken to have become payable by such instalments as are mentioned in section 6, sub-section 8 of The Finance Act, 1894, and if the Estate Duty payable in respect of any property passing on the death of such person (in this section referred to as 'the second charge of duty') shall be a sum equal to or less than the total amount of the instalments then to become due, or which by virtue of this section are to be taken as then to become due, of the first charge of duty (hereinafter referred to as the 'future instalments'), the second charge of duty shall lie wholly remitted; but if the amount of such second charge of duty shall exceed the amount of the future instalments, then the amount, which but for this section would have become payable in respect of such second charge of duty, shall be reduced by the amount of the future instalments."—(Lord A. Compton.)


expressed his thanks to the noble Lord for the way in which he had brought the matter forward, but said the difficulties of his position had precluded him from dealing with the subject. The duties were practically settled upon a system of averages, and any case where hardship was likely to arise would occur after a long tenure, after which there would probably be a series of quick successions. He regretted his inability to deal with the subject at the present time, but there was extreme difficulty in ear-marking the property as the same property which had paid duty before. He had thoroughly investigated the matter, and in a great many cases into which he had enquired, the alterations of various kinds which had been made in the property had rendered it absolutely impossible for anyone to say the property was the same as that which had already paid duty. It could not well be left to the officers of the Inland Revenue to decide whether it was the same property or not. He mentioned these matters for the consideration of his noble friend, with whom he would be glad to communicate.

MR. SYDNEY BUXTON (Tower Hamlets, Poplar)

expressed great satisfaction at the fact that no hope had been held out with regard to the Amendment. He remembered that the proposal was carefully considered in 1894, and it was then found impossible that any proposal could be arrived at which would do justice to everybody. The effect of the clause would be to reduce the Death Duties, from duties falling in at death, to periodical duties, and that appeared to him to be a vital objection. He also considered the clause impracticable. He thought the noble Lord had exaggerated the position when he said that the Death Duties could destroy property. With regard to the remote legatee he should be considered a fortunate person rather than one to whom injustice had been done, because the chances of his coming into the property at all were very remote.


thought that what had to be considered was the welfare of the person who lived on his estates. Nothing, in his opinion, could be worse for the land than the absenteeism that ensued under these circumstances. He had hoped that the right honourable Gentleman would have recognised the substantial justice of the appeal which had been made, and would have given the Committee some hope that he would himself grapple with the question. When the Finance Act was passed, it was attacked on more than one of its details, and more especially upon this detail, and all the right honourable Gentleman had said was that it was not his duty to point out how the hardship should be remedied, but he admitted that the hardship existed. The whole system of Death Duties was extremely difficult to work, and in its initiation was unjust. The revenue which was raised upon these capital values ought to be raised by a very different method.


thought the main question was how to deal with a hardship when it arose. The Committee had been told that this duty was based on a system of averages, but he thought that where a hardship was made manifest it was entitled to be dealt with on its merits.


said the object of the clause he now proposed to move was to give some small relief to the owners of tithe and tithe-rent charges. The reason for its being moved was that it was the only declaration upon which relief could be obtained for a particular class which suffered great injustice under the Bill. The terrible state of things which existed in regard to this had been brought before the House on a number of occasions, but this was a matter of taxation which did come under the Finance Bill. He submitted that the clergy ought to be relieved in the matter of Land Tax. The Government had given assurances that something would be done in the present Session, but the Session was growing old and nothing had been done, though he still had hopes. The Report of the Royal Commission which investigated the matter had shown the position in which the tithe rent owners stood, and showed that they were grossly overtaxed. They could not go on for ever without raising their voices that justice should be done, and he hoped, and felt quite sure, that the matter would not now be long delayed.

New Clause— An assessment of the Land Tax made after the passing of this Act for a Land Tax parish in any year during the continuance of the Agricultural Rates Act, 1896, shall not assess or charge any tithes, tithe rent-charge, or modus payable to any person having the cure of souls within the parish at more than one-half of the annual value at which such tithes, tithe rent-charge, or modus would be assessed or charged if this Act had not been passed: and any amount of Land Tax not collected by reason of this section shall be remitted from the unredeemed quota of the Land Tax for that year."—(Viscount Cranborne.) brought up and read the first time.

Motion made and question proposed— That the Clause be now read a second time.


drew attention to the fact that all those clergy whose incomes did not exceed £160 a year were relieved from Land Tax altogether, whilst those whose incomes did not exceed £400 per annum were relieved to the extent of half the tax. In regard to the particular grievance to which it was desired to call the attention of the Committee, he would only say that a measure dealing with the subject was actually in course of preparation; and, although it would not be in his charge, as it related to a rating matter, he hoped that at no distant date it would be laid before the House.

MR. CARVELL WILLIAMS (Notts, Mansfield)

desired to express the opinion that any attempt to convert the Budget into a Clergy Relief Bill was a matter that should be resisted to the utmost. He thought that the clergy were ill-advised to allow this question to be raised in their name, while at the same time they were making public appeals for aid.

Motion by leave withdrawn.

* SIR SAMUEL MONTAGU (Tower Hamlets, Whitechapel),

in moving the insertion of a new clause, said the object of the first portion of it was to place our traders on an equality with competitors in France and Belgium, where the stamp duty was precisely the same as he wished to see it fixed. In Germany there was no such stamp duty, and in Holland it only amounted to 1d. for any amount. He could not ask the Chancellor of the Exchequer to knock off the tax altogether, but he was confident that city men who traded in bills would be quite content if they were placed on an equality with their competitors in France and Belgium. Twenty or forty years ago the business done by means of these foreign bills was very much greater, They were drawn mainly from India, China, and America against produce.

* SIR M. HICKS-BEACH (interrupting)

I am quite willing to accept the Clause which the honourable Baronet has on the Paper.

New Clause— (1) The duty payable under the Stamp Act, 1891, on bills of exchange drawn and expressed to be payable out of the United Kingdom, when actually paid or endorsed or in any manner negotiated in the United Kingdom, shall, where the amount of the money for winch the Bill in drawn exceeds £50, be reduced so as to be—(a) where the amount exceeds £50 and does not exceed £100, 6d.; and (b) where the amount exceeds £100, 6d. for every £100, and also for any fractional part of £100 of that amount. (2) The stamp duty chargeable under the Stamp Act, 1891, on bills of exchange expressed to be payable at a period not exceeding three days after date or sight shall be 1d., in lieu of the duty now chargeable thereon; and accordingly the first heading, Bill of Exchange, in the schedule to that Act, shall be read as if the words 'or within three days after date or sight' were contained therein, after the word 'presentation.'"—(Sir Samuel Montagu.) brought up and read the first and second time and agreed to.

Bill reported.

Bill, as amended, re-committed, in respect of Clauses 2 and 3, and a new Clause, for Monday next.