HC Deb 02 April 1900 vol 81 cc959-69

As amended, considered.


On Thursday last, in Committee on the Finance Bill, the hon. Member for North Islington drew attention to the very anomalous state of the law with regard to the exemption from duty of estates of soldiers and sailors. As he pointed out, the estates of private soldiers, sailors, and marines are absolutely exempted from estate duty, whatever the amount of them may be. What is the obvious result of this? At the present moment a number of men of considerable means are serving as privates in our forces in South Africa, and the heirs of any of them who lose their lives in the campaign will be entirely exempt from the payment of estate duty. As the law stands there is no such exemption for the estates of officers and non-commissioned officers. A man who has been promoted on account of good conduct to the place of a non-commissioned officer, or who has for the same reason obtained a commission, loses under the existing law the privilege of exemption. My hon. friend held that this was extremely unfair, and suggested that exemption should be extended to meet these cases. The question was debated for a considerable time in Committee on Thursday, and I think it was felt that the proposal then made went somewhat too far. The hon. Member for the Brightside Division of Sheffield pointed out that there might be cases in which the widow or the children of an officer might be possessed of large means of their own, although the officer himself possessed very small means, and yet by his death they would under the clause of the hon. Member for Islington have obtained an exemption to which, I think, nobody can feel that they are properly entitled. I have endeavoured to see if it were possible to deal with the matter by some addition to the present system under which gratuities and pensions are granted; but on examination and consultation with the Secretary for War I found that it would be practically impossible, for various reasons which I need not detain the House by detailing. This matter is on an entirely different footing, and even in the point of time alone it would have been absolutely impossible to fit any provisions dealing with this subject into the existing system. I therefore propose the clause which stands on the paper—that on the recommendation of the Admiralty or the War Office the Treasury shall be permitted to remit so much of the death duties as the circumstances may seem to justify, provided that in no case shall the remission exceed the sum of £150, which would be the amount of death duty on a sum of £5,000, and that it shall only apply to property going to the widow or the children of the deceased officer. I hope that in its present form the clause will receive the approval of the House. I am sure we are all desirous to do everything that is fair to the relatives of officers who die in their country's service.

New Clause—

  1. "(1) Where any person dies from wounds inflicted or disease contracted, within twelve months before death, while on active service against an enemy, whether on sea or land, and was, when the wounds were inflicted or the disease contracted, either subject to the Naval Discipline Act or subject to military law, whether as an officer, non-commissioned officer, or soldier under Part Five of the Army Act, the Treasury may, if they think fit, on the recommendation of the Secretary of State or of the Admiralty as the case requires, remit, up to an amount not exceeding one hundred and fifty pounds in any one case, the whole or any part of the death duties (within the meaning of sub-section three of section thirteen of the Finance Act, 1894) leviable in respect of property passing upon the death of the deceased to his widow or children.
  2. "(2) This section shall take effect in the case of any person dying since the eleventh day of October, one thousand eight hundred and ninety-nine."—(Mr. Chancellor of the Exchequer.)
brought up, and read the first time.

Question proposed, "That the clause be read a second time."

MR. BROADHURST (Leicester)

This clause is of enormous importance, and under the altered circumstances, with the limitation imposed, it becomes rather difficult to vote against it.


May I intervene in order to explain what I omitted to do just now, that I have had two cases of great hardship before me during the last two months—one affecting the widow of an officer, and the other the relations of a non-commissioned officer.


I quite agree that the right hon. Gentleman has fully redeemed the pledges he gave last Thursday, but I would press him while he is making this concession to go further, and say if he cannot promise some equal advantage to the widows and orphans of private soldiers and sailors. That was a point I submitted to the Chancellor of the Exchequer on Thursday last. I think a private soldier has a right to demand it. I pointed out that this was a now proposal of legislation, and capable of great extension. When the right hon. Gentleman was President of the Board of Trade he had brought under his notice several cases where valuable lives were lost in the endeavour to save others, both in the lifeboat and fishing services. Such cases, I think, are entitled to this concession, and should have it in addition to the amounts which, in one or two cases, the right hon. Gentleman awarded at my instance. All these matters must be taken into consideration. There are many dangerous trades‗miners, sailors, and others are constantly engaged in dangerous work in which enormous numbers of lives are lost, and such cases ought to come within this clause. That is a point we are entitled to urge, but I shall not vote against this new clause, although it does not go so far as I could have wished.

MR. BARTLEY (Islington, N.)

said he agreed with the point which had been made as to persons who lost their lives when endeavouring to save those of others, and could have wished that the general class of case might have been included in the clause. There was, however, great difficulty in safeguarding all these matters at one time, and the new clause therefore ought to be taken as an instalment of what was to come. He thought the clause would meet the various cases fairly well, and the House might leave the details of the working to the Treasury. He thought the clause would be received with great contentment by the community, and that it would do away with the grievance now felt.

MR. MADDISON (Sheffield, Brightside)

said the clause now proposed was a very great improvement upon those discussed on the last occasion, but it had one weak spot, which was that whilst the officers received this consideration the rank and file did not. As a compromise the clause, no doubt, was a very fair one.

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

wished to know whether it was clearly understood that the word "remit" also meant "refund." It was a matter of some importance, as the right hon. Gentleman would see.


A drafting Amendment will put that right.

MR. SYDNEY BUXTON (Tower Hamlets, Poplar)

characterised the proposal of the right hon. Gentleman as a compromise which, although it did not cover all that was desired, went some way in that direction. No one desired to object to anything in the nature of allowances being given, but grave objection was taken to the fact of such a thing being fixed on the death duties. The clause proposed, however, specifically fixed a limit of £150, and he therefore did not oppose it, and he hoped the House would come to a unanimous conclusion upon it.

MR. GALLOWAY (Manchester, S.W.)

urged the Chancellor of the Exchequer to give the Treasury a descretionary power to include property passing to mothers. There were many such cases in which there might be great hardship if this were not done.

CAPTAIN PRETYMAN (Suffolk, Woodbridge)

pointed out that the somewhat acrimonious character of the previous debate on this question arose from a misunderstanding between hon. Members. On the one side it was thought there was a want of sympathy with the officers, and on the other that there was no sympathy to the private soldiers. The new clause had dispelled that misunderstanding, and for his part he accepted it most heartily, and congratulated hon. Members opposite on having come to the same conclusion.


thought the clause put down by the Chancellor of the Exchequer avoided many of the objections which had been raised to the clauses previously proposed. The existing exemption in favour of estates of "common soldiers, seamen, and marines" did not meet the case of the non-commissioned officer, who would get no exemption at all. The clause now proposed would remove this defect, and he thanked the right hon. Gentleman for having brought such a proposal before the House.

SIR HENRY FOWLER (Wolverhampton, E.)

desired to express his concurrence in the way in which the Chancellor of the Exchequer had settled this difficult question, but also to ask one question upon a point which was merely a matter of drafting. He wished to know whether the word "children" would include "grandchildren." It might happen that "children" had predeceased their father, leaving only grandchildren surviving, and in that case would the word "children" embrace grandchildren?


The use of the word "issue" would meet that difficulty.


thought the words of the clause ought to cover those who were drowned whilst on active service. If a man, for instance, was proceeding across a bridge or assisting to bridge a river and got pushed into the water and was drowned, the clause ought equally to apply to him.

Question put and agreed to.

MR. GEDGE (Walsall)

pointed out that the clause as worded would not cover cases where death took place from accident. He moved the insertion of the words "or by accident."

Amendment proposed‗ In line 2, after the word 'contracted,' to insert the words 'or by accident.'"‗(Mr. Gedge.)

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


said he had no objection to insert after the word "inflicted" the words "accident occurring."

Amendment, by leave, withdrawn.

Clause amended, by inserting, in line 1, after the word "inflicted," the words "accident occurring," and by inserting, in line 4, after the word "inflicted," the words "the accident occurred."‗(Mr. Chancellor of the Exchequer.)


said the proposed exemption would not apply in cases where the duty had already been paid. If money once got into the Treasury it could not be got out again. He suggested that words should be inserted which would enable those coming within the scope of the clause to get duty refunded where it had been paid.

Clause amended by inserting in line 8, after the word "remit" the words "or in the case of duty paid, repay."‗(Mr. Chancellor of the Exchequer.)


proposed the insertion of the word "mother." He believed the right hon. Gentleman would make the clause extend to grandchildren, and the case of a mother might be more deserving than that of grandchildren. He understood the whole question was one of discretion, and not an absolute instruction. There were cases in which a mother might have been entirely dependent on a son.

Amendment proposed‗ In line 12, after the word 'his' to insert the word 'mother.'"‗(Mr. Galloway.)

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


I hope the hon. Member will not press this Amendment. A mother is not the only person who may have been dependent. A father, a grandfather, or a sister may also be dependent. I do not think we can go beyond the widow.


suggested that his hon. friend and the Attorney General might be reconciled by substituting for "children" the words "lineal descendants or ascendants." There was a very strong case for the father and mother, in spite of what the Chancellor of the Exchequer said. Surely it was very hard that a mother, a father, or grandchildren should not be relieved in the same way as the others.


reminded the Chancellor of the Exchequer and the hon. Gentleman opposite that they came to a friendly understanding last week, when the relief was limited to the widow and children. If they once began to move from the point then agreed upon there would be considerable difficulty.

MR. JAMES LOWTHER (Kent, Thanet)

said the words suggested by the hon. Member for King's Lynn were distinctly limited. They would meet the case of a father or mother, and of a grandfather and grandmother, and also of children and grandchildren, and stop at brother and sisters, cousins, and so on.

Amendment, by leave, withdrawn.

Amendment made‗ In line 13, by leaving out the word 'children,' and inserting the words 'lineal descendants, instead thereof."‗(Mr. Attorney General.)


moved the insertion of the words "or ascendants." The clause included children and grandchildren. They had got them all in the descending line, but surely they should have them in the ascending line. There would not be many of them. It would have the smallest possible effect on the revenue. He trusted the Chancellor of the Exchequer would agree to this.

Amendment proposed‗ After the words last inserted, to insert the words 'or ascendants.'"‗(Mr. Gibson Bowles.)

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


hoped that hon. Members would not agree to this Amendment. He thought this particular benefit ought to be confined to the widow and lineal descendants.

Amendment, by leave, withdrawn.

Amendment made‗ In line 13, by inserting, after the words last inserted, the words 'if the value of the property for estate duty so passing does not exceed £5,000.'"‗(Mr. Chancellor of the Exchequer.)

Clause, as amended, added.

SIR CHARLES CAMERON (Glasgow, Bridgeton)

drew attention to the pro- posal to increase the duty on chloral hydrate, chloroform, collodion, acetic, butyric, and sulphuric ethers, and iodide, bromide, and chloride of ethyl. The increased duty was estimated to produce only an additional £150, and it certainly appeared to be mere pedantry in a War Budget to increase duties on nine articles for the purpose of raising that insignificant sum. Moreover, the duties were increased in a most arbitrary fashion, the increases ranging from 5 per cent. to 28 per cent. He therefore moved to omit from Clause 5 the words enacting these increases of duty.

Amendment proposed to the Bill‗ In page 3, to leave out from line 31 to the end of line 4, in page 4, both inclusive."‗(Sir Charles Cameron.)

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


I quite agree that this is a very small matter as regards the revenue, but whenever the duty on spirits‗with which we are dealing in this clause‗has been increased, these higher duties have been charged on articles into the composition of which spirit enters. It has been the invariable rule in such cases to increase the duty in proportion to the amount of spirits used and the amount by which the duty on spirits is increased. I do not think I should he justified in agreeing to the Amendment, which, although the amount of revenue involved is small, so far as I can judge, is a departure from the regular system. If I agreed to this suggestion the result would be that in regard to these articles foreign manufacturers would be placed at an advantage as compared with British manufacturers. I do not think that would be fair, and I cannot agree to the Amendment.

Amendment, by leave, withdrawn.


moved to omit the first sub-section. The history of the clause which this sub-section proposed to omit was exceedingly curious. When the Finance Act of 1894 was before Parliament, the present First Lord of the Treasury on the Second Reading made a very vigorous speech, in which, amongst other objections, he brought forward a very great hardship which the clause referred to was afterwards inserted to prevent. The case in question was that of a man who had insured his life or saved some small amount for the benefit of his family, but who afterwards married a wealthy woman. By reason of his having a life interest, enjoyed perhaps for a very short time, in her fortune, when he died the two estates for the purpose of the duty were aggregated, and by reason of the small property he had provided being aggregated with the larger fortune, his children had to pay a much higher rate of duty, even though they had never had any benefit from his marriage. The Government of the day very carefully considered the matter, and the then Attorney General brought in a clause to meet the case. That was the very clause this sub-section proposed to exclude. Although he had not at all expected the Chancellor of the Exchequer would move to repeal that Finance Act, he had thought after the objections which were again and again urged against it by the then Opposition, the right hon. Gentleman would, at all events where hardships had been shown to exist, do something to remove those hardships. One or two little things had been done in that direction, but here was a case exactly the opposite: a clause put in to meet an admitted hardship was now to be taken out for no reason whatever. He appealed to the Chancellor of the Exchequer not to let it be said that the Government when in power adopted a course entirely different from that pursued in opposition.

Amendment proposed‗ In page 5, line 37, to leave out from the beginning of Clause 12 to the word 'interest,' in line 41, inclusive."‗(Mr. Gedge.)

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


I deny altogether that I have taken up one line while in opposition upon this question and another while in office. This is not my clause, but, in the first place, it is the result of considerable debate in this House; and secondly, it is the result of a very careful inquiry by a competent Committee. I do not think I could take any other course than that of adopting the recommendation of that Committee.


said he fully endorsed what the right hon. Gentleman had stated, although it tended to tighten the Act in some small particulars. They had to recognise the fact that this clause was brought forward in the interests of the taxpayers, and it was a matter of give and take. In the existing proviso in Clause 4 there were certainly some exemptions which were not defensible. They had been referred to in Committee, and he did not think it was necessary to repeat them. There were certain hardships which required correcting, and the object which the Committee had in view was to relieve the taxpayer by removing those hardships. With regard to the specific case of the widow who married again, alluded to by the hon. Member for Walsall, it was one which was very difficult to follow, but he did not think the hardship was a severe one, and the instance given was certainly not a common one. Cases had frequently arisen where the youngest child had to pay, instead of 3 or 4 per cent., as much as 8 per cent., because a different property altogether passed to a different person. That hardship had been repeatedly brought before this House, and had been taken into consideration by the Chancellor of the Exchequer, and it was in removing that great hardship that a very small hardship might have been created in the case to which the hon. Member for Walsall had referred.


said that undoubtedly this clause screwed up the Finance Act. As regarded aggregation, there used to be no stronger advocate of it than the Chancellor of the Exchequer and the Attorney General. It was always felt that hitherto aggregation had been unsatisfactory, and a Committee was appointed to consider the matter. He was very much surprised that the only logical way of dealing with this matter was now going to be rejected in favour of this extraordinary and complicated clause. In reference to this subject he thought that upon a previous occasion they had obtained a concession from the right hon. Gentleman the Member for West Monmouthshire, but now it was going to be taken away from them by a member of their own household. He was afraid that it was the hon. Member for Woodbridge who whispered these hard cases in the ear of the Chan- cellor of the Exchequer, and then the right hon. Gentleman immediately drafted a clause to get rid of these hard eases. We ought to deal with this matter upon settled principles, and not with a view of meeting hard cases. This Act, having gained £40,000 by screwing up, then proposed to give back, not to the same taxpayers, but to somebody else, another £40,000 through the ordinary proviso at the end of the clause. That seemed to him to be a most complicated proviso, because the same property would have to pay two different rates of death duties, and that would add a very extraordinary complication to the Act. The object should be to make the Act less complicated, and ease it down rather than screw it up. He had strong objections to this clause, and he was afraid that if a division was taken he should have to oppose it. He felt a strong objection to this clause on the ground of proprieties of taxation and the difficulties it would introduce into the administration. A Finance Act should be dealt with on settled principles, and not by the introduction of complicated proposals to meet particular cases. The proviso introduced was a most complicated one, and he was sure it would work in a most extraordinary way.

Question put, and agreed to.

Bill to be read the third time To-morrow.