§ SIR WILLIAM BRAMPTON GURDONreported from the Committee of Selection;
†Colonial Preference.—That this House regrets that His Majestiy's Government have declined the invitation unanimously preferred by the prime ministers of the Self-Governing Colonies to consider favourably any form of Colonial Preference or any measures for closer commercial union of the Empire on a preferential basis.542 That they had added the following Member to Standing Committee A: Earl of Ronaldshay.
§ SIR WILLIAM BRAMPTON GURDONfurther reported from the Committee; That they had discharged the following Member from Standing Committee A (in respect of the Petty Sessions Clerks (Ireland) Bill): Mr. Attornoy-General; and had appointed in substitution (in respect of the Petty Sessions Clerks (Ireland) Bill): Mr. Solicitor-General for Ireland.
§ SIR WILLIAM BRAMPTON GURDONfurther reported from the Committee; That they had added to Standing Committee A the following fifteen Members (in respect of the Petty Sessions Clerks (Ireland) Bill): Mr. Sloan, Mr. Wolff, Mr. Hugh Barrie, Mr. Crean, Mr. Flynn, Mr. Liddell, Mr. O'Shee, Mr. Reddy, Mr. Power, Mr. Farrell, Mr. Glendinning, Mr. Sheehan, Mr. Moore, Mr. Harrington, and Mr. Ffrench.
§ SIR WILLIAM BRAMPTON GURDONfurther reported from the Committee; That they had discharged the following Members from Standing Committee B (in respect of the Telegraph (Money) Bill and of the Evidence (Colonial Statutes) Bill): Mr. Burns, Dr. Macnamara, and Mr. Solicitor-General; and had appointed in substitution (in respect of the Telegraph (Money) Bill and of the Evidence (Colonial Statutes) Bill): Mr. Buxton, Mr. Runciman, and Mr. Churchill.
§ SIR WILLIAM BRAMPTON GURDONfurther reported from the Committee; That they had added to Standing Committee B the following fourteen Members (in respect of the Telegraph (Money) Bill and of the Evidence (Colonial Statutes) Bill): Mr. William Redmond, Mr. Smyth, Mr. Gibbs, Mr. Austen Chamberlain, Mr. Meysey-Thompson, Mr. John Rutherford, Mr. Steadman, Mr. Hamar Greenwood, Mr. Lyulph Stanley, Mr Harold Cox, Mr. Chiozza Money, Mr Marnham, Mr. Bennett, and Sir Frank Edwards.
§ Reports to lie upon the Table.
543§ Considered in Committee.
§ (In the Committee.)
§ [MR. EMMOTT (Oldham) in the Chair.]
§ Clauses 5 and 6 agreed to.
§ Clause 7:—
§ *MR. H. H. MARKS (Kent, Thanet)moved to amend the clause by extending the composition for stamp duty under the Stamp Act of 1891 "to policies of insurance or indemnity against liability incurred by employers in consequence of claims made upon them by workmen who have sustained personal injury." His object was, he said, to give to the Commissioners of Inland Revenue the same power of accepting composition for stamp duty on employers' liability policies as they had in the case of other accident policies. The Workmen's Compensation Act had largely increased this class of insurance, and the question was one, therefore, of wide interest. The state of the law on the matter was not altogether clear. In 1898 it was decided by the Courts that contracts to indemnify against employers' liability were not policies of insurance against accident within the meaning of Section 98 of the Stamp Act of 1891, and it was held, therefore, that they were subject to an agreement stamp of 6d. instead of the 1d. stamp of a policy. The Finance Act of 1899 by Section 11 provided that the provisions contained in Section 98 of the Stamp Act of 1891 in reference to the expression "policy of insurance against accidents" should extend to and include policies of insurance or indemnity against the liability incurred by employers in consequence of claims made upon them by workmen who had sustained personal injury, when the annual premium on such policies did not exceed £1. It seemed, therefore that these policies were not generally within Section 98, and even if the power of composition for the stamp duties, which was given Section 116, did apply to these policies when the premium was not over £1, it did not apply to policies where a higher premium was paid. His point was that if the companies could compound for small policies they ought to be allowed to compound for larger ones, and 544 his desire was to put insurance under the Workmen's Compensation Act on a level with insurances against other forms of accident.
§
Amendment proposed—
In page 3, line 21, after the word 'property,' to insert the words 'to policies of insurance or indemnity against liability incurred by employers in consequence of claims made upon them by workmen who have sustained personal injury.' "—(Mr. H. H. Marks.)
§ Question proposed, "That those words be there inserted."
§ THE CHANCELLOR OF THE EXCHEQUER (MR. ASQUITH,) Fifeshire, E.said the Amendment would not give effect to the intention. At present a policy of insurance against employers' liability upon which the premium did not exceed £1 was subject to a penny stamp, and was therefore within the composition clause; but when the premium exceeded £ the policy did not come within the ambit of the clause, and would not do so without an Amendment of the Stamp Act itself, which the hon. Member had not proposed. That, however, was a technical objection. On the merits of the case he confessed he saw no reason for extending the law beyond its. present scope. A policy on which the premium was £1 would insure an employer against all contingencies of injury to six servants, and this more than covered an ordinary household. Why should a policy on which the premium exceeded £1, and which was intended to apply to cases where there were more than six servants, enjoy special privileges He quite agreed it was right in regard to the smaller policies, but he saw no-reason for extending the scope of that provision.
§ MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)thought the right hon. Gentleman would agree that when the State imposed the obligation under the Employers' Liability Act which necessitated the taking out of a policy of insurance by A for the benefit of B, C and D—such policy being in fact the only security that B, C, and D would enjoy that which Parliament intended for them—no obstacle should stand in the way of the discharge of that obligation, but that on the contrary everything 545 possible should be done to lighten A's task as far as possible. No doubt where the premium was large the stamp duty was material. It was true that for domestic servants the premium was small, but to cover casual employment such as the charwoman and the window cleaner a minimum premium was required bringing the amount beyond £l. He had recently made an insurance of this nature.
§ MR. ASQUITHNot costing more than £1 annual premium?
§ MR. AUSTEN CHAMBERLAINsaid his impression was that it was more, and that the reason was that he expressly provided that the policy should cover the case of people called in to clean windows— a much more dangerous employment than ordinary domestic service.
§ MR. ASQUITHsaid that was an interesting question, no doubt, but the clause only applied to policies issued by newspapers. If, however, the hon. Member for Thanet would withdraw his Amendment the question might at a later stage be raised in the larger form.
§ MR. AUSTEN CHAMBERLAINWill the right hon. Gentleman himself undertake to consider this question on the ground of public policy? We have passed an Act of Parliament which is intended to confer certain rights upon employees, the great bulk of whom are in the service of small employers and therefore cannot be assured of the benefits which Parliament intended to give them unless the employer does insure.
§ MR. ASQUITHI will consider it, but I cannot pledge myself what the result of the consideration will be.
§ *MR. H. H. MARKSIn view of the promise of the right hon. Gentleman, I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clause 8:—
§ MR. HARMOOD BANNER (Liverpool, Everton)moved an Amendment to permit proxies executed abroad, and 546 allowed by this clause to be stamped in this country after execution, to be stamped by any person with an adhesive stamp within thirty days after it has been received in the United Kingdom. He thanked the Chancellor of the Exchequer for bringing in the clause, which would be of considerable advantage to shareholders who desired to exercise their influence over investments they had made in this country, and the object of his Amendment was to make this more simple and easier than was the case at the present time. He thought he was right in stating that under the clause as it stood proxies coming to this country would have to be taken to the authorities and stamped with an impressed stamp, which he thought was quite an unnecessary proceeding. It would be quite sufficient and would both add to the income of the Exchequer and to the facilities of shareholders abroad who desired to exercise their influence over their investments, if it were made possible on receipt of proxies from agents abroad to put an ordinary adhesive stamp upon them within thirty days after receipt in the United Kingdom. It was undoubtedly a fact that the investments of foreigners in limited liability companies in this country were increasing enormously, and we ought to do everything we could to enable these foreigners to follow their property, because they added to our income-tax and to our wealth. Furthermore, when they sent their money across to this country they had a right to exercise their own judgment and opinion whether the directors were acting badly or well. The very fact that these proxies would have to be sent to the Stamp Office to be stamped was a decided deterrent to the person receiving the proxy. On the other hand, the mere addition of a 1d. stamp to the proxy, to be spoilt when affixed, would meet all the requirements of the Bill and greatly add to the facilities of shareholders.
§
Amendment proposed—
In page 3, lines 29 and 30, to leave out the words ' in accordance with Section 15 of the said Act,' and to insert the words 'by any person with an adhesive stamp within thirty days after it has been first received in the United Kingdom.' "—(Mr. Harmood-Banner.)
§ Question proposed, "That the words proposed to be left out stand part of the clause."
547§ MR. ASQUITHsaid that the sole object of of the clause was to facilitate the use of proxies by shareholders and persons interested in companies residing abroad. The proxy could be sent by shareholders from abroad without any stamp, but the Government thought it right to apply the ordinary provisions of the Stamp Act upon arrival of proxies in this country, and require that a proxy should be stamped within thirty days of its arrival. If a proxy were stamped with an impressed stamp they would always be able to define whether or not such proxy had been stamped within the prescribed time, but if some adhesive stamp were affixed there would be no evidence whatever to show when it was stamped. The necessity of an impressed stamp was a very slight burden to impose upon those interested, and he thought they would take pains to see that the period of thirty days was not exceeded before the affixture of the stamp. He hoped the hon. Member would withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clause 9—
§ MR. HARMOOD-BANNER,in moving an Amendment to provide that the capital duty in the case of a reconstructed company should only be chargeable on the additional capital brought in, said he did not think the clause went quite far enough. It merely included loan capital, and what his Amendment intended to do was to include share capital within the benefits of the clause so as to facilitate reconstruction under the Companies Act, 1862. He thought there was no reason why shareholders should be unduly penalised when a company was reconstructed. He did not make any request or suggestion with regard to the transfer of old capital to a new company, but he thought the Chancellor of the Exchequer might fairly accept the Amendment whereby equal benefits would be conferred on share and loan capital. He knew a good many companies with a capital of nearly two millions which had been registered abroad because of the stamp duty to be paid on reconstruction, representing a loss of some- 548 thing like £5,000 to the Government on capital duty.
§
Amendment proposed—
In page 4, line 16, at end. to add the words — (3) Where it is shown to the satisfaction of the Commissioners that the share capital of a company which it is proposed to register under the Companies Acts, 1862 to 1900, is to be issued in pursuance of a scheme of reconstruction under section one hundred and sixty-one of The Companies Act, 1862, of a company registered under the Companies Acts, 1862 to 1900, the capital duty of five shillings per centum, imposed by The Finance Act, 1899, shall only be chargeable to the extent that the share capital, or any part of it, of the company to be registered is under the scheme to be paid up wholly or partly in cash.' "—(Mr. Harmood-Banner.)
§ Question proposed, "That those words be there added."
§ MR. ASQUITHsaid that he doubted whether this was a proper place for the hon. Member to introduce his Amendment. The clause they were dealing with applied to the statutory corporations of the country. He did not think that the hon. Member's Amendment was really cognate to the subject matter of the clause. He was, however, rather disposed to agree with him that there was some substance in the contentions he had raised, but it would be extremely inconvenient, to say the least of it, to introduce such an Amendment into the clause. If he would allow him to do so, he would give the matter full consideration, if he had the opportunity of introducing another Finance Bill, in connection with the larger question of share capital as distinct from loan capital, and limited companies as compared with other companies.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clause 10:—
§ MR. AUSTEN CHAMBERLAINsaid he did not offer any objection to the clause; he was wholly in favour of it. But he would like to know what amount of revenue was likely to be lost by the series of concessions to the stamp duties, embodied in Part II. of the Bill.
§ MR. ASQUITHsaid the pecuniary difference would be very insignificant.
§ Clause agreed to.
§ Clause 11:—
§ MR. ASQUITHmoved to add a proviso to the effect that where an interest in expectancy has before 19th April, 1907, been bona fide sold or mortgaged, no other duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than would have been payable if the clause had not passed; and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee. He said that he was following strictly in the footsteps of his predecessors. The question was whether the higher rates of estate duty which they proposed to impose by the clause on estates exceeding,£150,000, should apply to cases of reversions which had already been sold or mortgaged. It had been represented to him by insurance companies which were very largely interested in transactions of this kind, that it would be a grievance if, subsequent to a transaction being entered into, the estate duty were raised, and the real profit of the transaction ex post facto considerably altered. He confessed he felt almost coerced into adopting the Amendment by the fact that in the Finance Acts of 1894 and 1900 a similar provision was inserted in regard to past transactions.
§
Amendment proposed—
In page 4, line 38, at the end to insert the words, 'provided that where an interest in expectancy (within the meaning of Part I. of the principal Act) in any property has before the nineteenth day of April, nineteen hundred and seven, been bbona fide sold or mortgaged for full consideration in money or money's worth, then no other duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than would have been payable if this section had not passed; and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee" — (The Chancellor of the Exchequer.)
§ Question proposed, "That those words be there added."
§ MR. AUSTEN CHAMBERLAINsaid he was glad to hear the explanation which 550 the Chancellor of the Exchequer had given them. He was in entire agreement with the decision to which the right hon. Gentleman had come, and he hoped they might see him (Mr. Asquith) and his colleagues acting on the same principle with regard to the rest of their legislation.
§ Question put, and agreed to.
§ Question proposed, "That the Clause, as amended, stand part of the Bill."
§ *MR. HICKS BEACHopposed the clause in order to call attention to one or two points. The right hon. Gentleman in his Budget statement had said that very few of the prophecies made in regard to these duties when they were imposed in 1894 had been fulfilled; that as a result no persons had invested their capital abroad nor had any country houses been shut up. But let the right hon. Gentleman go round the country and see how many houses were shut up or let to strangers entirely owing to the burden of the estate duties. He could mention one house which after its being in the possession and occupation of a family for over 200 years, the present owner had been obliged to let owing to these duties; and that in itself was a great hardship, not only to the life tenant but to the tenants on the estate. But that was not all; he had had to turn off a great many servants from the estate thereby inflicting great hardship on them. Although these duties had increased to such an extent there had been no relief to the agricultural interest, and he certainly thought that if the right hon. Gentleman was going further to increase them he might at least give some further grant in relief of agricultural rates, because the duties had a very far-reaching effect upon agriculture, and the House knew only too well how the rates now pressed not only on the large, but on the small holders. If the right hon. Gentleman had seen his way to give some grant in relief of agricultural rates he would at least have done something to mitigate the effect of these duties. Then also there was the direct effect of these taxes on revenue. The right hon. Gentleman anticipated an increase of £1,200,000 551 from the duties, but owing to the length of time taken to settle up the estates the total increased yield this year from that source would only amount to £600,000. So far as he knew few people objected to hitting a millionaire as hard as they could, but there was one point the right hon. Gentleman had overlooked, viz., that in putting on this surtax on estates of over £1,000,000 in value and increasing the estate duty on estates of over £150,000, in the first place, he was drawing attention to the high pitch to which the duties had risen, and secondly, he was drawing the attention of the people who came into those estates to the fact that if their estate fell below a certain figure in value they would not pay nearly so much. The only result of that would be to make people divide up their estates to a large extent before they died. He believed large numbers of owners of property had already handed over if not the whole of their property, at any rate a large proportion, to their sons, so that when they died and their sons succeeded, they did not succeed to so large a property as they would otherwise have done had the estate duties not been imposed. The result therefore was that the Exchequer, instead of reaping a greater amount of revenue, only derived a small proportion, because the actual estate to which the sons succeeded at the death of their fathers was a comparatively small portion of the entire estate. The Chancellor of the Exchequer by this proposed increase would not increase the actual revenue, because he directly encouraged people to divide up their estates in their lifetime, and also because the steps of graduation were of such considerable length. The right hon. Gentleman went from £250,000 to £500,000, and from that to £750,000, and on to £1,000,000, and then to £1,500,000. Those were considerable stops, and he maintained that by leaving them at that degree the Chancellor of the Exchequer induced people to take steps to divide up their property, so that on their death the estate fell into a lower scale than that to which it originally belonged. For these reasons he believed that the Revenue would derive no benefit from the increased scale of duties, and he therefore hoped the clause would be rejected.
§ THE FINANCIAL SECRETARY TO THE TREASURY (Mr. RUNCIMAN,) Dewsburysaid that the death duties had become an integral part of our system and he doubted whether the right hon. Gentleman who last held the office of Chancellor of the Exchequer ever contemplated for a moment reverting to the policy which was advocated in 1894. The proposal that was now made in the schedule was that a larger amount should be paid on the larger estates. The experience of the last few years had been profitable, and he doubted whether any of the fears entertained in 1894 had been realised in actual fact. The distribution of estates to which the hon. Member had alluded might have; gone on to some extent, but even if it had he was not sure that it was an entirely bad policy. That estates should be cut up in that way was not altogether a. disadvantage to the younger generation. But year. after year for the last twelve years the revenue had gone on increasing, and only this year had there been any diminution. The rise had been continuous. The proposed increase began at a very high figure and applied to estates which were not likely to be distributed. The Government aimed at setting hold of estates of over £1,000.000, £2.000,000, and £3,000,000, in value. Such estates were more common to-day than ever they had been in the past; in fact, the Treasury had never known so large a number fall in, as they now found falling in year by year. Those who had an estate of over a million sterling could well afford to pay. He could not admit any of the arguments of the hon. Gentleman.
§ MR. WYNDHAM (Dover)said the only argument of the Financial Secretary was an argument in favour of increasing the scale of graduation, and that was a very valuable argument if once they accepted the death duties as being wholly for the good of the community. But let them cast back their minds, even upon that point, to the long debate which centred round the original proposal of Sir William Harcourt, otherwise they might forget that the principle of graduation had been always combined with the principle of aggregation, and that the recipients of very small bequests from the 553 estate of a multi-millionaire were, as everybody would agree, inequitably taxed by comparison with the recipient of a million or millions. That was not a very important point, still it was a point when the Financial Secretary thought, as that afternoon, it sufficient to say that the death duties had become a permanent and integral feature of our finance. Why had they become a permanent and integral feature of our finance? It was because they had afforded one Government after another considerable sums of money which every Government in the past had needed, and which the present Government needed quite as much as any of its predecessors. Then as to direct taxation, hon. Members opposite had often put forward the plea that they were in favour of retaining the death duties because they thought that some system of equality between the taxpayers was arrived at if they made direct taxation as nearly as possible the same as indirect taxation. ["No, no."] He had heard that put forward; he thought hon. Members would agree that it had been again and again put forward that there should be 50 per cent. of direct, and 50 per cent. of indirect, taxation, and those who proposed it had turned round with an air of impartial justice and asked, "What more do you want?" That was only true generally of the whole revenue, "but it was absolutely untrue of the revenue derived from certain portions of the United Kingdom. He took Ireland as an illustration, where, as a matter of fact, 75 per cent. came from indirect taxation, and only 25 per cent. from direct taxation. What was true of Ireland was true of all the Eastern counties of England, and also of the Western counties, Wiltshire and Dorsetshire. The plea that they were conferring impartial justice on the whole community by deriving half the revenue from direct taxation fell to the ground when they considered the agricultural community. He did not think it could be denied that this form of direct taxation hit the agricultural community harder than the industrial community. So that what was impartial justice according to the view of hon. Gentlemen opposite, was unjust to the agricultural districts according to the view of Members on that side of the House, who held that it was another injustice imposed upon the agricultural community. There was no special virtue in direct taxation as 554 such, and there were evils attaching to it which were unforeseen for a long period and then became apparent. Direct taxation, in common with indirect taxation, was only to be justified if they got the money they needed without injury to the productive capacity and the general welfare of the community at large. The Financial Secretary had claimed that the death duties had enabled the Government to obtain many millions each year for national defence and social reform, and that nobody was a penny the worse; therefore, presumably, it was an ideal form of taxation, because they got the money without depressing the springs of future wealth. He thought the moment had arrived for asking, in no Party spirit, whether all that was as true as it seemed. It was true at first. But what had been going on? Fourteen years ago they would not find a family solicitor or a trustee generally who did not advise those for whom he acted to invest their money in gilt-edged securities—either in Consols, or in securities which rose and fell in sympathy with Consols. Now the family solicitor or trustee invariably gave advice utterly different; and consequently a considerable class in the community with small fortunes of £5,000 or £10,000 invested their money in securities which gave them a greater return. In the old days it used to be said that land did not run away; and the same thing was said of Consols. Nobody was saying that now; it was no longer true; and this was the moment, he thought, to bring that fact before the attention of the Committee This was a change, not a very great change, not a very important change, in the death duties, but it was a change which went still further in the direction which he mentioned. He was not asking the Committee to repeal the death duties; he was asking them not to be so self-satisfied and complacent in regard to the action of the death duties as perhaps both sides of the House had fallen into the habit. of being. People divided up their estates, and. it was the fact that younger sons were now given a security which produced the allowance formerly afforded them. And he would call attention to another fact, a very important one, which they ought not lightly to doubt— that money was being invested abroad at the present moment to an extent for which 555 there was no parallel in the history of the country, and the death duties were one of the causes which produced that result, because 4½ to 5 per cent could be got from foreign investments.
§ MR. ASQUITHHow do the death duties produce that result?
§ MR. WYNDHAMBecause prior to the death duties the family solicitor and the trustee invariably advised the investment of money in Consols or British railway stock. Now they advised investments in South America, Mexico, Egypt, and the Australian Colonies, as well as in industrial enterprises in this country. That was one of the reasons why Consols stuck obstinately at eighty-four or eighty-three; and it was one of the reasons for the universal depression of first-class securities. To that extent there was more to be said for a greater recourse to indirect taxation than many people had recently been prepared to allow.
§ *SIR CHARLES DILKE (Gloucestershire. Forest of Dean)said the argument with regard to the equality of direct and indirect taxation, which was alleged to be common in the mouths of all of them, was one which had fallen from the last two or three Chancellors of the Exchequer, and had never been put before them so strongly as by Sir Michael Hicks-Beach. It had never been accepted in that quarter of the House, among the Radicals below the gangway. While this very small increase of the death duties was proposed here, foreign countries, most of whom raised more money by direct taxation proportionately than we did, France notably, were all increasing the death duties more rapidly than we were; and since our adoption of the graduated scale in 1894, there had been an enormous increase of the graduation of the death duties in rival foreign countries. In France, the death duties were far higher than here, and they were to be increased again by the proposals of the last Budget and the present Budget. In all the States of the German Empire there were not only State death duties but also facultative local progressive death duties. The Imperial progressive death duties were added to the 556 local progressive death duties, and these death duties were increasing at a rate of which that House had little conception. They were also combined with a progressive income-tax, and the tax was used for local purposes, including enormous improvements in Hamburg and all the great cities of Germany, which improvements were being entirely effected out of this income tax and entirely out of direct taxation. If hon. Members opposite, who thought that direct taxation in this country was too high, considered what was taking place in France and Germany, and in Italy above all, perhaps, they would see that, even in countries which were mainly agricultural, and of which the resources were, in a far higher degree than here, agriculture, they would see that they were raising a vastly increased proportion of their revenue, both in Imperial and local taxation, by direct taxation in the forms of a progressive income-tax and progressive death duties. The right hon. Gentleman had spoken of this as an agricultural grievance, a matter in which he followed the mover of the rejection of the clause. It was a direction in which he certainly could not follow the right hon. Gentleman, and on which he desired to hear some more facts from those who took that view. It was perfectly true that the case of Ireland was not an isolated case. It was perfectly true that in many constituencies, his own for instance, they had the Irish grievance, that indirect taxation pressed very heavily on the people there, who paid a larger proportion of indirect taxation than did the country as a whole. How did that help this proposal? Did it not rather help the proposal to reduce indirect taxation?. What was the position taken up by the right hon. Gentleman in the case he put before the House on behalf of agriculture? He suggested that capital was going abroad for fear of the death duties. How he could make that suggestion in face of the fact that the death duties were higher in France and were increasing far more rapidly abroad than they were in this country he could not for the life of him understand. In every foreign country they would find the same statement being made which had been made by the right hon. Gentleman—that capital was being driven out of the country by the death 557 duties. Every foreign country was beginning to see that they had to raise larger sums from direct taxation, and we were slowly following the impulse which was becoming general, and in regard to which this country took a very important step in 1894.
§ COLONEL KENYON-SLANEY (Shropshire, Newport)said he understood the Financial Secretary to say that the Government were satisfied with the result of the death duties and that none of the fears expressed in former years had been realised. He would undertake to say that if they wanted to spell rural depopulation in two words it might be spelt "death duties." Empty cottages were more plentiful in the districts where the death duties had operated most disastrously. In many of the villages in England where large estates had recently changed hands they would find considerable depopulation resulting from the operation of the death duties. Although that might not be a conclusive argument against such duties he put it forward to substantiate some of the doubts expressed in former days. If the desire to put people, back on the land and to maintain happy homes in the villages was genuine and not a political fraud they would recognise that it was the direct consequence of the death duties that those industrial rural communities had been dispersed. In his opinion the Financial Secretary to the Treasury was not correct when he suggested that they were entirely mistaken in their forebodings as to the result of the death duties.
§ THE PRESIDENT OF THE BOARD OF EDUCATION (MR. MCKENNA, (Monmouthshire, N.)said two remarkable statements had been made as to the consequences of the death duties. The right hon. Member for Dover, who said that the exportation of capital was due to these duties, omitted to remind the Committee that foreign investments paid death duties just as much as home investments. So long as that was the case, it would be very difficult to prove that our death duties caused investment abroad. The fact was that trustees now had a much wider range of investment than they had before, and it 558 was the Government of which the right hon. Gentleman was a Member which widened the area. This, amongst other causes, had seriously affected the price of Consuls. The last speaker had attributed rural depopulation to the death duties. Did he, then, date such depopulation from 1894 or show that it had increased more rapidly since that date? On the contrary, the right hon. and gallant Member had not shown that there was any relation between the death duties and rural depopulation. It was true that in rural districts there was now a larger percentage paid in indirect taxation than in urban districts, but it was not shown that rural districts were therefore as a whole taxed too highly. The right hon. Member for Dover had referred to the theory that indirect and direct taxation ought to contribute in the proportion of half and half to the revenue as an accepted theory. That theory was a very valuable theory at a time when the proportions were something like 80 per cent. of indirect and 20 per cent. of direct taxation, and he remembered the time very well when hon. Gentlemen on both sides received with great applause the statements of successive Chancellors of the Exchequer that they were endeavouring to bring this proportion more to an equality. But that did not mean that they were bound for ever to accept equality as their ideal. When there was anything but equality, and the burden of indirect taxation was especially hard, undoubtedly it was a wise thing to aim at equality; but to-day, when the standard was levelled up, it did not necessarily follow that it must stay at equality. No Chancellor of the Exchequer speaking on behalf of the Liberal Party had ever laid it down as an axiom that we ought to have equality between direct and indirect taxation. The only Chancellor of the Exchequer who had stated it positively, as far as he remembered, was Lord St. Aldwyn, who certainly did lay it down as an ideal, but it had never been accepted on that side. He saw no reason why the right hon. Gentleman should now assume that they were bound for all time never to allow direct to exceed indirect taxation. Speaking for himself, if it were possible, he would gladly see all indirect taxation done away with.
§ MR. WYNDHAMYou would have Consols at 40?
§ MR. MCKENNAsaid the right hon. Gentleman had shown no relation whatever between direct taxation and Consols at 40. In an ideal system he thought nothing would be better than to have our whole taxation raised through income-tax and death duties; we should then get rid of all burdens upon trade from which we now suffered—the whole machinery of Customs. But that was the ideal. He did not intend to speak for anybody but himself. He would gladly see an extension downwards as well as upwards of income-tax, rather than any extension of indirect taxation, and he was sure that in the long run it would be found to the interest of the State. They would raise their money far more cheaply than at the present time and with much less interference with business. He protested against the assumption that they were in any way committed to the principle of equality between direct and indirect taxation.
§ MR. AUSTEN CHAMBERLAINsaid he was not sure as to the relevancy of the remarks of the right hon. Gentleman to the Amendment before the Committee. Those remarks were interesting, and he thought hon. Members would agree with him when he said that he had never heard a more amazing statement from a Minister speaking on the Finance Bill. What was the doctrine he had just laid down? The right hon. Gentleman's position was that they might hold up to the House and the country a theory of taxation, but that they were not to be supposed as in any way committing themselves to the practice of that theory. They were merely using it as a convenient form of argument as long as the system of taxation in force erred more widely than the theory set up. The right hon. Gentleman said that they were not to be held to keep direct and. indirect taxation exactly equal. That was a convenient theory, but if it was good when indirect exceeded direct it was equally good when direct exceeded indirect. The theory was sound or unsound. For his part he believed the theory had absolutely no foundation in fact, and that it was absolutely unjustified by any logical trend of thought. That, after all, was merely a little light on the ethics of policy as it appeared to the right hon. Gentleman, but he made 560 a much more important statement because it was gravely enunciated as a financial principle. The right hon. Gentleman would like to abolish all indirect taxation and raise the whole of the revenue by income-tax and the death duties. He need not say that the right hon. Gentleman was never likely to he in a position —he did not think the right hon. Gentleman ever expected to be—to carry out that aspiration. That was unimportant, but what he wished to direct attention to was the argument by which the right hon. Gentleman sustained the proposition. His argument was that if they could place the whole burdens of the country upon the income-tax and the death duties they would get rid of all the burdens on trade. Did the Committee ever listen to a more amazing statement from a responsible Minister? Did the right hon. Gentleman suppose that one of our present Customs duties, the duty on tea, was a greater burden on trade than a 10 per cent. tax on incomes? A tax on income was as much a burden on trade as a charge on the articles of trade. There was absolutely no difference in that respect. It was only a difference in degree rather than principle between a tax upon accrued property such as the death duties and a tax upon articles of consumption such as Customs and Excise duties. The proposition of the right hon. Gentleman could not be sustained for a moment; he could not quote the Chancellor of the Exchequer in his support, for he had laid down to the House, and rightly so, that a high income-tax was a burden on trade, and that it affected not only the person who directly paid the tax, but indirectly those who were dependent for employment given by the payer of the tax. He thought that to everyone except the President of the Board of Education that proposition would be clear; he hoped that when the right hon. Gentleman had time to give a little more thought to the subject he would see that he could not relieve the burdens on trade by putting the whole of the burden of taxation on the income-tax or the death duties. There are two questions raised by the cause; one was the effect of the increase of the death duties on the revenue, and the other was the effect on the individual. These two questions were 561 quite distinct and had to be treated separately There was no doubt that the death duties had proved a wonderful source of revenue. They had shown wonderful power of expansion, but at the same time nobody who knew the fact would doubt that a good deal of property now escaped death duties which would not have escaped if they had been at a much more moderate level, or if the scale introduced by Sir William Harcourt had never been made. The effect on the whole had been to produce a largely increased sum, but the second effect had been to cause a certain number of people to consider how they could legitimately or otherwise evade payment of these heavy duties. The heavier they made the duties the greater was the temptation of people to evade them if they could. One form of avoidance was that to which his right hon. friend and also the Secretary of the Treasury had referred, namely, donations and gifts. He thought Sir William Harcourt could be quoted in support of the statement that that was a good thing in itself, as a social arrangement, and that they had no reason to regret it. When it was pointed out that this would be one of the effects of the death duties he was proposing, Sir William Harcourt said that if it was so it would be a very good result, and he would not be unhappy at having brought it about. Socially it had been a good result. It did enable a certain number of people in certain circumstances to reduce very much the burden that fell on their estates at their death. It worked very unequally. It was not always that a man could transfer to his heirs within his lifetime. He might die when they were children, and he could not distribute his estate in the same way as he could do if he lived till they were grown up. As long as that process went on it was bad for the revenue, but on the whole, setting the advantage to the community against the disadvantage to the revenue, the advantage predominated. But that was not the only form of evasion which went on. There was a class of securities absolutely untraceable on the death of the owner. There was no security that the death duties would be paid on "bearer" securities except the good faith of the 562 person who owned them. These securities were not very largely held in this country, but those who did hold them were rich people whom the revenue authorities particularly wished to get at. One of the peculiarities of the death duties and one inconvenience in getting an increased contribution from rich people, was that it was always more easy for a man of superabundant wealth to evade and avoid them than for a man of moderate or small means. A man of moderate means had probably to pay up to the hilt. It was only rich men who were able, it might be by legitimate or illegitimate methods, to evade payment of their full share. That process of avoidance would and must, he believed, be hastened and increased by every step taken in the direction of making the burden heavier on those big fortunes. In so far as that process went on, in spit of the increased yield of the duties, it would be quickened by the steps now taken under this clause, and in so far as it went on it would be bad for the revenue. It was natural to expect that that would be so, looking at the analogy of the income-tax and what happened during the war, when it was raised from 8d. up to, at one point, Is. 3d. in the £. If they consulted the Report of the Board of Inland Revenue, or the evidence given before the Committee on the Income-tax, they would find that the immediate result of that great rise was that there was an enormous increase in the number of people who claimed abatements from the tax. That was to say, the number of people who had not taken the trouble to make the claim when it was low did make it when the tax was high. In exactly the same way a number of people who did not go out of the ordinary routine to evade the death duties while they were moderate would set to the task of inquiring how they could evade them when they were made very high. That must have a bad effect from the revenue point of view. As to the other question, the effect upon the individual, he confessed that he did not think it unjust to take a larger share in death duties if they could get it from very rich men with property freely available and easily realisable, especially when that property did not 563 carry with it great obligations which reduced the income apparently available to its possessor. But was that always so with big fortunes? It was so with big fortunes in personalty, but it was not so with big landed estates. There the capital value of the estate was out of proportion to the net revenue which the owner of the estate enjoyed and his obligations not merely legal but moral—obligations which he discharged from a sense of noblesse oblige, family traditions, duty to the estate, and the desire to carry out what his father had carried out before him. These made great inroads on the income apparently available for his own purposes. It was often excessively difficult to turn into cash a portion of the estate which he held. There were cases in which a man might be able to sell a portion of the estate in order to meet the claim, but there were other cases in which they could not easily do that, and he thought the effect of the large duties already imposed had been very hard in some of those cases. He quite agreed with his hon. friends who had already spoken that they had a distinctly bad effect on the economy of certain rural districts; that they turned out of the great houses, sometimes for a few years, and sometimes for many years, those who had the greatest sense of responsibility to the districts in which their families had lived, and put in their places tenants who came to-day and might be gone to-morrow, and who had none of that personal responsibility and care for the life and circumstance of the districts in which their home was temporarily placed. If there was anything in what he had said, the effect was to aggravate the evils of which he had spoken. For his part, though he did not see his way to modify the incidence of the death duties, he had left them as he found them, and he thought that when the Chancellor of the Exchequer was proposing to increase the death duties he should have made an endeavour, while getting more money from those who could afford to pay, to lessen the hardships caused to others less wealthy.
§ MR. EVANS (Glamorganshire, Mid.)said that the debate on this clause had ranged over many subjects, and he was quite sure that they were very much obliged to 564 the late Chancellor of the Exchequer for having pointed out how hard the death duties might be on the landed interest, and how easy they would be on persons who enjoyed personal property! He expressed surprise at the speech of the President of the Board of Education, which, carried to its logical conclusion, would mean the removal of all indirect taxation, such as the duties on spirits, tobacco, and tea and other commodities. He deprecated the discursive and Utopian discussion in which the right hon. Gentleman and others had taken part, and wished to bring the Committee back to something practical. He was entirely in favour of the death duties from the point of view of the landed interest as well as from the point of view of those who had large personal property. Whatever the late Chancellor of the Exchequer might say now, when he was in office, and when he had a large and obedient majority at his back, he did not endeavour to get away from the principle of death duties, or modify them in the sense he had indicated in the debate that evening. He thought the right hon. Gentleman was entirely mistaken in asking the Committee to believe that when the income-tax was increased to Is. 2d. in the £ there was greater evasion than when it was at a lower rate.
§ MR. AUSTEN CHAMBERLAINsaid that what he had stated was that there were many more claims for abatement when the tax was increased. When the tax was comparatively low many persons who were entitled to abatement did not claim it; and he argued from that that if the death duties were made higher there would be attempts to evade them.
§ MR. EVANSsaid he was entirely in favour of death duties both on landed and personal property, as he had said, but his complaint against the Chancellor of the Exchequer was that the right hon. Gentleman had been much too easy in the increase he had made. First of all, he had only commenced his increase of duty when he arrived at £150,000; up to that sum the rate of duty being that established in 1894. Why did he not begin at £100,000, instead of £150,000? And why after £1,000,000, having raised the rate by £1, did he cease to raise the 565 rate. It might have been thought from that point the increase would have been by leaps and bounds.
§ MR. ASQUITHWas not that moderate?
§ MR. EVANSsaid that the extremity of the moderation of the right hon. Gentleman was only arrived at after £1,000,000 was passed. It was a grotesque arrangement. From £500,000 to £750,000 the rate was £9 per cent.; from £750,000 to £1,000,000 it was £10 per cent., and then it might have been expected that the increase would go on. But the scale proposed was from £1,000,000 to £1,500,000, £10 on £1,000,000 and £11 per cent. on the remainder; from £1,500,000 to £2,000,000, £10 on £1,000,000 and £12 per cent. on the remainder; and with every additional £500,000 there was an additional £1 per cent. on the excess over £1,000,000 up to £3,000,000. He wanted to know what particular reason there was for raising the duty by £1 as the estate increased up to £1,000,000 from £750,000, and then stopping short and going into fractional parts. The right hon. Gentleman should have the courage of his convictions and not have been so extremely moderate. Nobody would have complained. The deceased could not complain and the representative of the person coming into possession of over £1,000,000 would have no reason to complain of an increase of one per cent. rather than a fraction of one per cent.
§ SIR F. BANBURY (City of London)said that the right hon. Member for Forest of Dean had stated that the death duties were higher in France than in England, but if France was to be our guide the French system of taxation would have to be followed throughout.
§ SIR CHARLES DILKEsaid that everybody in France now believed that their system of taxation ought to be improved. At any rate, the direct taxation in that country was much higher than it was here.
§ SIR F. BANBURYsaid that what he really rose for was to answer the extra- 566 ordinary statement of the President of the Board of Education. The Chancellor of the Exchequer was to tax profits on trade and also to take death duties. That would make success in trade almost impossible, and it would also make it impossible for some people to succeed to landed property. He did not, like the right hon. Member for Dover, believe that capital was going abroad in consequence of the imposition of the death duties. It had been said quite truly that foreign securities had to pay death duties as well as English, but foreign securities were mostly "bearer" securities, which, although very unpopular in England, were popular abroad, because by means of them the income-tax could be evaded. These death duties pressed heavily upon estates which were divided among a large number of people because, said the right hon. Gentleman, the family always sent for [the family solicitor, who arranged these matters and secured the lowest rate of estate duty. But somebody had to pay it. If a man having eight children left a million of money, each child would receive £125,000, and the estate would be subject to a death duty of 10 per cent. If his brother had £125,000 and only one child his estate would only have to pay 6 per cent. Could the right hon. Gentleman suggest to him in what way the family solicitor being called in would alter that state of things? He admitted that the rise in the death duties was not large; indeed as the sum which would be raised by it was not large, there seemed hardly any necessity to make it at all. Although it was true that the death duties dealt with large sums of money and that, as the late Sir Wm. Harcourt said, people did not like to part with their money during their life-time, still the tendency to do so would be increased if these death duties were raised. People with money were however becoming accustomed to these death duties, and although the desire not to part with their money was ingrained in human nature, it would be a national evil if through legislation they were induced to do so.
§ MR. ASQUITHpointed out that the Statute dealing with the death duties had not been changed by the Conservative Government.
§ SIR F. BANBURYreplied that it was not the habit of the different Parties to change the legislation of their predecessors when they came into office. He was afraid, however, that the Party opposite were going to do so, and therefore in consequence when the Unionists came back to power they would probably have to change some of their legislation. He did not think that capital was going abroad on account of the death duties, but as the change in these duties was only going to bring in £600,000 when the total death duties yielded £14,400,000, he thought it was a mistake to stir up all the old feeling on the subject for so small an advantage. Therefore, in the interests of the Chancellor of the Exchequer, he would vote for the Amendment and against his proposal.
§ MR. ASQUITHwas very much obliged to the hon. Baronet for his consideration and greatly appreciated the tone and temper of his remarks, but he had somewhat under-rated the effect of the change. During the present year it was not safe to estimate for more than £600,000 or £700,000; but when the change came into complete operation, looking at the yearly average of the last ten years, it was likely to bring in about a million and a quarter. He could assure the hon. Gentleman that that sum was a welcome addition to a Chancellor of the Exchequer with not over-swollen resources. He agreed that the scale was open to the observations of his hon. and learned friend; but it seemed to go as far as was prudent at present. If the yield was in excess of their anticipations and it appeared that further steps were not likely to be attended with detrimental results on the accumulation of capital or on the development of trade, he saw no reason why they should not be taken. The low price of Consols could not be attributed to the death duties, for Consols had gone on rising after the death duties were introduced, and had reached their record point and high water mark of 113 or 114 in 1896, some years afterwards. There was no connection either between the death duties and the exportation of capital. The countries to which capital was being exported were countries in which death duties had long prevailed. Death duties 568 had the enormous advantage to the revenue of being much the most difficult duties to evade. Income-tax under the present law, and probably under any improvement they could make in the law, could be evaded to a large extent. Facilities for fraud and concealment and illegitimate interchange of wealth as between man and man were so great, that an income-tax which would operate fairly and justly between all classes of the community was an ideal which could never be fully attained. Death duties, however, were extremely difficult to evade. The only effective way of evasion was by doing what was repugnant to human nature, parting with the possession and control of property in one's own lifetime. Without going into the problem of what was, or what ought to be, the precise proportion between direct and indirect taxation, they had here the most potent instrument yet invented for taxing realised wealth. He was only asking the Committee to proceed on lines which were well justified by experience and suggesting tentatively a step in advance likely to bring a large accession of revenue and to lay the foundations for further advance.
§ MR. J. F. MASON (Windsor)admitted that there was a justification for this clause if it were only applied to personal revenue, but thought the Chancellor of the Exchequer was throwing away an opportunity of rectifying a great injustice now existing on account of the absence of differentiation between the duties on personal and real estate. It was quite a different thing to charge land and to charge money invested in securities. As to the question of evasion he would point out that the opportunities were much larger and could be more easily availed of in the case of personal property than in the case of land. Let them take for example the instances of two men, one of whom succeeded to an estate of £100,000 in land, and the other £100,000 in personalty. The man who succeeded to the landed estate would be lucky if he got an income of £2,000 a year, yet he had to pay his death duties, in order to do which he had very often to borrow money, and had the extra difficulty that he was not able to realise any portion of his estate 569 in order to pay the duty. On the other hand the man who succeeded to the personalty, possibly gilt-edged securities, not only derived an income nearly twice as large as the other man, but also had the advantage of lopping off a part of his estate and so getting rid at once of the death duties and having the remainder settled once and for all. He ventured to think that this was an opportunity which might have been taken advantage of to remedy the injustice by differentiation. He would not have objected to see the estate duty on personalty increased so long as the duty on land was not increased. Land was burdened enough already. He thought in the interests of the community at large and the interests of justice it was most important that the principle of differentiation should be acknowledged.
§ MR. BOWLES (Lambeth, Norwood)said the question before the Committee was not whether we should have death duties or whether it was a good or bad form of taxation, but whether the new form of graduating the death duties proposed by the right hon. Gentleman was a good, useful, and fair graduation. He himself believed that all graduations, with one exception, were really a mistake and wrong, because they proceeded on a principle which was mischievous and unsound. All taxes were disagreeable, but they were necessary, and the principle; upon which we should proceed with regard to them was that if a tax was to be paid it should be regarded by the person who paid it as a payment for services rendered to him by the State. If that principle was sound then the argument was unanswerable that if a man possessed property twice the value of that of his neighbour, the services rendered to him by the State were double those rendered to his neighbour, and therefore his property should be taxed twice as much. That being so, graduation was bad with the exception of the graduation of a tax on the necessities of bare existence. That, however, was not a plea that could be made in this case, because what the right hon. Gentleman was doing did not begin until the estate amounted to £150,000. It was therefore a frank application 570 of the principle that a man ought to pay to the Government not in proportion to what he received, but in proportion to what others had received. There was an ancient principle taught by the Jesuit Fathers of Spain that if one saw a man going to rob a poor man it was a right principle to take the man by the shoulder and point out to him a rich man whom he might rob instead. That was the principle adopted by the right hon. Gentleman. The hon. Baronet the Member for the City of London had pointed out one great injustice of this process of graduation; he would point out another. Suppose that under this scale a millionaire died and left to his butler £1,000. Under the right hon. Gentleman's scale the butler paid 10 per cent., or £100, on succeeding to that £1,000. But reverse the case, and suppose the butler died and left it to his master the millionaire: the latter would only pay 2 per cent. His real objection to the proposal for screwing up the graduation of the death duties was that he believed it would have a serious and bad effect on the revenues. These heavy duties had resulted in evasion and avoidance, and if it was true as the right hon. Gentleman said, that evasion could only be effected by doing what was repugnant to human nature, it showed that these duties were regarded as being so unfair that people were prepared to do what was repugnant rather than to submit to them. The real truth was that all graduation was wrong. But if there was to be graduation, unless the right hon. Gentleman was going to do more harm than good the graduation must be by almost imperceptible steps in order that a man should not know exactly how he stood, and have no temptation to deal with his property. The right hon. Gentleman had adopted the other principle, which would inevitably lead to increasing the temptation of a man to get off the step on which he stood and on to the next below. He would instance the case of a triple millionaire. The first million would pay £100,000, and the other two millions £300,000— in all, £400,000. If he were able to get rid of £2,000,000, he would save three-quarters of the duty. The temptation to such a man to do that was 571 certainly enormous. For these reasons, because it was perpetuating and increasing an injustice, and because at the same time it would bring no real advantage to the right hon. Gentleman's revenue, he considered this a thoroughly bad proposal, and, what was worse or quite as bad in these matters, a thoroughly foolish proposal.
§ LORD WILLOUGHBY DE ERESBY (Lincolnshire, Horncastle)agreed that some of the pictures which were conjured up when the proposal as to these duties was made in 1894, had not been entirely fulfilled; at the same time he was of opinion that, of all the people in this country, the most heavily taxed were the men who had inherited large landed estates, and who, certainly, for three or four years had practically to pay out the whole of the income to meet the death duties. Several cases had occurred where undoubtedly great reductions had been made in establishments in the country, with the result that large numbers had been thrown out of work. Moreover, there could be no doubt that it had been found impossible to carry on the work of the estate, to build cottages for small holdings, and to effect other improvements, owing to the economies which the landowner was compelled to exercise in order to meet the death duties. During fourteen years there had been no change in these duties, and people had been able to make provision for paying the amount which fell due to the Treasury at their death, so that their relatives should not be left in an impoverished state. Arrangements had been made, either by life insurance or by other methods, by which the death duties could be met without incurring hardships on the heir. But this proposal to increase the death duties must instantly cause a great feeling of insecurity in the minds of those who had accumulated capital in this country. He did not anticipate, from the Chancellor of the Exchequer's speeches and public acts, that they were likely to have any Bills introduced which, as he had said in his speech that day, would have the effect of stopping the accumulation of capital in this country or have any detrimental effect on trade. He believed, however 572 he might differ from him on many subjects, that the right hon. Gentleman would take the greatest care that no proposal which would have such an effect was made. But when they heard the speeches of some hon. and right hon. Members, especially that of the right hon. Gentleman the Minister for Education, that the present proposal did not go far enough, he thought it must be perfectly apparent to everybody that it might be the thin end of the wedge, and that in future, whenever a Progressive Government was in office and they wanted money, they would increase the death duties. The consequence would be seriously to decrease confidence in this country as to the holding of property in any form. It would be a serious thing for our trade and prosperity if security and confidence were to be shaken and capital removed. After all, it was not a brave expedient, whenever a million or two was required, immediately to tax the rich people. It was believed by hon. Members opposite that wealth carried with it great power; but that was not the fact. He was rather disappointed when he heard the Chancellor of the Exchequer say that he did not consider the proposal made on this occasion to be final in any way. He was perfectly certain of one thing, that once it got about that whenever the Chancellor of the Exchequer wanted money he would raise the scale of the death duties, it must lead to a great feeling of insecurity. He knew that the answer of hon. Gentlemen opposite was always that there was no difference between real and personal property, and that it was perfectly easy for a landowner to meet the death duties by borrowing money on his estate. He had some experience in these matters, and he knew that if anything could be done to make the condition of agriculture worse, and consequently the condition of rural districts, it was to encourage landlords to raise money on mortgage and encumber their estates. It meant that an estate was tied up, and that either nothing could be done to ameliorate the condition of the people living upon it or the whole thing was handed over to trustees who would try to bleed the rural district for the 573 greatest amount possible. The Chancellor of the Exchequer should carefully consider whether he ought not to make some definite statement that day to the effect that, having gone so far in this direction it was not intended to go any further. Under the old scale of death duties it had been possible, as he had said, for persons to make arrangements by which to meet them, but if, whenever a million or two was required, this cowardly policy, for that was what he called it, of raising the scale of the death duties was to be resorted to, then persons would not be able to make such arrangements, and estates would become encumbered throughout the length and breadth of England, a result which would have a most disastrous effect on the rural districts of the country.
MR, W. REDMOND (Clare, E.)said he occupied a somewhat detached position, as he belonged to neither of the two great Parties. He was often lost in amazement at the tactics pursued in that House by Parties when they took office and when they were in opposition. The whole of that afternoon a series of attacks had been made on the death duties by hon. Gentlemen above the gangway on the Opposition side of the House. To listen to their speeches one would imagine that if they had the opportunity they would not allow half an hour to elapse before they abolished the death duties, and brought relief to the poor long-suffering millionaires of the country whom they represented. But everybody knew that during the whole time the Unionist Party were in power, they had never in all the years since the death duties were enacted, said as much against them as they had said that afternoon. They had every opportunity when they were in power of undoing the great work of Sir William Harcourt, but the idea was so popular with the working people of the country generally that they never attempted in the slightest degree to interfere with it. But now that they were in Opposition they lifted up their voices in the most piteous manner about the woes of the millionaires and the iniquities of the death duties. He read somewhere in a newspaper not long ago of a man who had visited the House of 574 Commons. He was rather an irrverent person, because he said there was a good deal of "humbug" in the place. When asked what he meant by that, he said that when a Party was in opposition they invariably saw all sorts of evils in things to which, when they were in power, they never had any objection whatever. The whole thing was somewhat hollow and insincere, and it was made all the more so when they had such a speech as that which had been delivered by the late Chancellor of the Exchequer. The right hon. Gentleman had delivered an attack upon the proposed change in the graduation of the death duties, and yet when he was Chancellor of the Exchequer he never made the slightest attempt to undo the Act of Sir William Harcourt, and had never uttered a single word, so far as he knew against the system. But, free from office, he came to the House, and drew a picture, sufficient almost to bring tears to one's eyes, of the tremendous sufferings which had been endured by the wealthy classes of the country. The ex-Chancellor of the Exchequer had drawn a picture which had really touched him very much, when he spoke of representatives of ancient families, the old aristocracy of the country, being obliged sadly and sorrowfully to close the ancestral halls and go away, because they could not live there with the dread of the death duties over them—with the horrible result that some new rich people came along and installed themselves in the ancestral homes of the aristocrats of England. If that was the result of Sir William Harcourt's death duties, it was very terrible indeed. But he thought that if the people were aware of it at all, it was not until they were informed of it by the right hon. Gentleman. He had criticised the Chancellor of the Exchequer gladly because he had not removed the tea duty, but he thought the proposal they were now discussing was the very best thing in the budget. The general wish of the country was that they should go further and put a great deal more on the death duties. He asked the Committee to imagine at the beginning of this century hon. Gentlemen defending the enormously wealthy people of the country and declaring that they 575 ought to be relieved of a reasonable share of taxation. In other parts of the world the death duties were much heavier. The evidence given before the Committee on Income-tax, of which he was a member, showed that the taxation of the wealthier persons abroad was heavier than in this country. He would have thought hon. Members would be ashamed to come down to the House and whine about being asked to pay a reasonable amount of taxation towards the revenue of the country. The time would come when a much heavier burden would be put upon those who had amassed enormous fortunes. At the present time there was too great a proportion of taxation placed upon the extremely poor. It was a most astounding thing that the people who were continually complaining about taxation were the very wealthy, and those who paid with the least murmuring were the poorest part of the population. He hoped the Chancellor of the Exchequer in his Budget next year would go further along this path and make those persons who had so much surplus wealth pay more than they did at the present time towards the revenue of the country.
§ VISCOUNT TURNOUR (Sussex,Horsham)said the hon. Member for East Clare had complained that the Opposition on this question held different views from those they expressed when in office. He did not pretend to have the same knowledge of constitutional history as the hon. Member, but he would find what he complained of was true of every Parliament throughout the world, and it would probably be true of a Parliament in Dublin when the hon. Member himself might be Chancellor of the Exchequer. If by using that argument the hon. Member intended to do a kindness to the Party in power he could not possibly have done them more harm. He had risen to contradict the hon. Member's statement that the rich men in other countries were much more heavily taxed than in England. Surely the hon. Member in his constitutional researches had overlooked the case of America, where rich men were not so heavily taxed as in this country, where the income-tax was practically non-effective, and where the duties paid by 576 rich men were much smaller than in this country. The opposition to the clause was directed against a graduated scale of death duties and the point was whether such duties were or were not advisable. Nothing which had been said in the course of the debate had given the Committee any ground for supporting the right hon. Gentleman in his proposal to graduate the death duties. He did not believe that the proposal would have the effect which the right hon. Gentleman imagined and he hoped the Committee would reject the clause.
LORD BALCARRE (Lancashire, Chorley)said the Financial Secretary to the Treasury had said that, so far as he knew, no evil result had followed from the Act of 1894. He ventured to say that at least one evil result had followed, because, in consequence of that Act and still more in consequence of the extension of it this year, there had been an ever-increasing export of works of art from this country, such as pictures, libraries, plate, and everything in the nature of works of art. This exportation was steadily going on, and the cause of it was very largely the operation of the death duties. The late Sir William Harcourt himself in 1894 admitted that that was the only argument which really affected him in the criticism of his Finance Bill. Sir Michael Hicks-Beach made an alteration in 1896 which to some extent mitigated that evil, but the effect for the last thirteen years had been a constant and ever-increasing stream of works of art out of this country.
§ MR. WILLIAM REDMONDNo.
§ LORD BALCARRESadmitted that that was to some extent a matter of opinion, but he could assure hon. Members that ten years ago there was practically no country in the world which bought works of art from Great Britain except the United States of America. In 1900 competition with Germany became very serious, and during the last four or five years France and Austria and even Spain had been taking part in this competition. Italy, the country from which half our great collections had been taken, was now actually entering the British market as a competitor with other buying countries. As far as he could 577 ascertain, the importation of works of art from the Continent was only about one-fifth of our exports. He was not putting the point on fiscal grounds. Whether i t was directly attributable to the death duties he would not say, but that it was so in the case of fifteen or twenty particular instances he unhesitatingly asserted to be the fact. So far as he could learn, in this country works of art in the vast majority of cases were sold by their inheritors when the death duties had to be paid. There were agents on the Continent who, one way and another, had access to the country houses of this country and had regular records sent to them. He had known cases where gentlemen had received letters from foreign agents acting for foreign buyers offering substantial sums for a whole room. He thought, the country at large was all the poorer for the loss of these works of art. Many of them were in private hands, but there was no country in the world where the public, in these matters had more free, regular, and systematic access to private collections than in Great Britain. It was almost impossible in these death duties to discern the amount realisable from any particular class of property. The Chancellor of the Exchequer had no official information to enable him to give the Committee the figures. If asked what he estimated the net income derived from works of art to be the right hon. Gentleman would be unable to tell them. He himself had made an estimate and his conclusion was that out of the £15,000,000 received during the last highly successful death duties year something like £250,000 was received by the Exchequer entirely on account of works of art. He did not say that that was the exact amount payable on them, but it was almost susceptible of proof that the amount of money so gained by the State was a very appreciable item. He thought the effect of this clause would be to increase the tendency to which he had referred. He regretted that, and he wished that the right hon. Gentleman could see his way to substitute some other system for this particular valuation of works of art. If there was a tax on sales of works of art, it would only be incurred by those who desired to purchase, and it would extend over a vastly greater number of persons 578 than were at present touched. It would reach the foreign buyers, who were far greater in number and more opulent in the purchases than the British buyers, and altogether they would get a larger sum than at the present moment. The constant drain of works of art from this country was sensibly making the nation poorer. He would like that the allocation of the money so received should be given to a greater extent than at present to the National Galleries. Of course the Chancellor of the Exchequer could not allocate the proceeds to particular items in the Civil Service Estimates, but he thought it would be worth while considering later on, in view of the gigantic sum of money received from this particular source in connection with the death duties, whether the art services of the country should not be treated more generously in future.
§ MR. MARKHAM (Nottinghamshire, Mansfield)called attention to the scale set out in the Schedule, and stated that it seemed to him that there were certain classes of property which did not at present pay enough. If a man died leaving a thousand acres of land containing minerals, which land must have a market value in respect of those minerals, the estate only paid duty on the value of the agricultural land.
*THE CHAIRMANI think the hon. Member cannot raise this question on the clause now before the Committee.
§ MR. MARKHAMasked whether it would not be in order to point out how increased revenue could be obtained in the way indicated.
*THE CHAIRMANIt does not arise on the clause now before the Committee, I think, because it does not, as I understand it, affect the alteration of the scale.
§ *MR. GEORGE FABER (York)said that the Chancellor of the Exchequer in some of his remarks had caused him disquietude, because he not only proposed to increase the already heavy death duties which had remained fixed since the Act of 1894 was passed, but had indicated that it was perfectly possible that in future years under certain circumstances 579 those duties would be still further increased. He was sorry that the right hon. Gentleman had thought it his duty to hold out a threat of that kind. Last week for the first time since the right hon. Gentleman entered upon his important office he did hold out a little olive branch of peace which gave encouragement to the capitalist interest of the country. The remarks he made sympathetically last week tended to produce important and beneficent results. Having put a little hope into the capitalists of the country, he now proceeded to hold over their heads a prospective danger in the shape of a threat of increased death duties. If one only looked at it from the point of view of the multi-millionaires there would be a certain amount to be said for the increase, but if they looked to the effect on the whole financial condition of the country it would be seen that capital in the multifarious ways in which it was employed could not operate to the same extent if it was to be further penalised. Employment and capital were so intermingled and interlaced that it was almost impossible to divorce the one from the other, so that when they were considering the effect of heavy death duties on the one they must also consider the result to the other. The Chancellor of the Exchequer proposed this alteration in the law at a most unfortunate time. When Sir William Harcourt introduced his scheme of death duties the income-tax was not at Is. as it was now. With high death duties in operation, together with £20,000,000 of war taxation, it was proposed at this particular and unfortunate concatenation of events to put fresh taxation on capital. Formerly Chancellors of the Exchequer in raising revenue tried to keep an equal and impartial hand between direct and indirect taxation, and the time at which this change was proposed was from his point of view an exceedingly perilous one. When a man died the estate duty had to be paid. There were three ways in which it could be done. It could be paid in cash, or if there was only landed property a mortgage must be raised upon it, or an insurance could be effected to meet it. To take the case he had men- 580 tioned last, that of insuring against the payment of death duties with an insurance office. He himself had heard only last week from one of the biggest insurance companies in the City, that men were constantly coming into the office for that purpose. That meant in many cases paying out very large annual sums to the insurance offices who were not philanthropists, and would not do business for nothing. It might run into thousands a year. [An HON. MEMBER: Hear hear!] The hon. Gentleman said "Hear, hear," but what was the result? If a man paid this large amount of insurance money he could not spend it on the employment of labour, and thus not only was the rich man penalised but the employment of labour was lessened. To take the second case, that of the landowners who had not got the money to pay the estate duties in cash and who had to raise it by mortgage. In the first place it was not easy nowadays to raise money on mortgage on land at all. Certainly, as a business man, he would be very slow indeed to lend money on land after all the threats that were now held over the heads of landowners. But even if a landowner was able to raise a mortgage, the mortgagee would not lend the money for nothing. The mortgagor would have to pay very considerable interest on the money advanced. The result was that the house was shut up—not in the case of the millionaire, but in the case of a man enjoying only an income from the land of £3,000 or £4,000 a year; employment of labour was cut off and distress was promoted. But let him put the case from another point of view—from the revenue point of view. There must come a stage where the income-tax and the estate duty became competitors with each other, because even Government Departments could not eat their cake and have it. He instanced the case of a millionaire who now paid £80.000 estate duty and under the proposed alteration would be called upon by the Chancellor of the Exchequer to pay £100,000. There would be £20,000 less of capital value on which to levy income-tax in the hands of the successor. The State could not take it in both forms. If the State took the money in estate duties it could not take it on the same money in income-tax.
581 He would not of course, carry the argument too far — that there should not be estate duties at all. Of course the Chancellor of the Exchequer might say that there were no outward or visible signs to show that there was any contraction of the estate duty or the income-tax. True, but with the population of the country increasing they must expect some increase, and there came a point where the Chancellor of the Exchequer must look at the estate duty and the income-tax in conjunction, and seriously consider their effect on each other and on the community at large. They would not see the result of undue pressure on capital all at once. The imposition of a heavy death duty on the top of a war income tax was like the Chancellor of the Exchequer squeezing or sucking an orange at both ends. What he wanted to impress on the right hon. Gentleman was the argument from the point of view
§ of the good of the country and not merely from the point of view that the millionaire, who was supposed to be fair game—a daw to peck at and for everybody to laugh at. They were pressing capital too far in this country, and when the mischief was done there was no going back. The time would come when there would be no longer an orange to squeeze, and right hon. and hon. Gentlemen opposite would then repent not having taken the warning of a humble individual like himself.
§ MR. ASQUITHrose in his place, and claimed to move, "That the Question be now put."
§ Question put, "That the Question be now put."
§ The Committee divided:—Ayes, 309; Noes, 89. (Division List No. 260.)
583| AYES. | ||
| Abraham,William (Cork.N.E.) | Burns, Rt. Hon. John | Edwards, Enoch (Hanley) |
| Abraham, William (Rhondda) | Burt, Rt. Hon. Thomas | Edwards, Sir Frank (Radnor) |
| Adkins, W. Ryland D. | Buxton,Rt.Hn.SydneyCharles | Elibank, Master of |
| Agnew, George William | Byles, William Pollard | Ellis, Rt. Hon. John Edward |
| Alden, Percy | Cairns, Thomas | Erskine, David C. |
| Allen, Charles P. (Stroud) | Cameron, Robert | Esslemont, George Brinie |
| Ashton, Thomas Gair | Campbell-Bannerman, Sir H. | Evans, Samuel T. |
| Asquith.Rt.Hon.HerbertHenry | Carr-Gomm, H. W. | Everett, R. Lacey |
| Astbury, John Meir | Causton,Rt.Hn.RichardKnight | Fenwick, Charles |
| Baker, Sir John (Portsmouth | Cawley, Sir Frederick | Ferens, T. R. |
| Baker,JosephA. (Finsbury,E.) | Chance, Frederick William | Fiennes, Hon. Eustace |
| Balfour, Robert (Lanark) | Cheetham, John Frederick | Findlay, Alexander |
| Baring,Godfrey(Isle of Wight) | Cleland, J. W. | Flynn, James Christopher |
| Barker, John | Clough, William | Foster, Rt. Hon. Sir Walter |
| Barlow,SirJohnE. (Somerset) | Coats,SirT.Glen(Renfrew,W.) | Fowler, Rt. Hon. Sir Henry |
| Barlow, Percy (Bedford) | Cobbold, Felix Thornley | Fuller, John Michael F. |
| Barnes, G. N | Collins,Stephen(Lambeth) | Fullerton, Hugh |
| Barran, Rowland Hirst | Collins,Sir Wm. J. (S. Pancras, W. | Gill, A. H. |
| Barry, Redmond J.(Tyrone,N.) | Corbett,C.H(Sussex,E. Grinstd | Gladstone, Rt. Hn. HerbertJohn |
| Beauchamp, E. | Cornwall, Sir Edwin A. | Glendinning, R. G. |
| Beck, A. Cecil | Cory, Clifford John | Glover, Thomas |
| Belloc, Hilaire JosephPeterR. | Cotton, Sir H. J. S. | Goddard, Daniel Ford |
| Berridge, T. H. D | Cowan, W. H. | Gooch, George Peabody |
| Bertram, Julius | Cox, Harold | Grant, Corrie |
| Bethell,SirJ.H.(EssexRomf'rd) | Craig,Herbert J.(Tynemouth) | Greenwood, G. (Peterborough) |
| Bethell, T. R. (Essex. Maldon) | Cremer, Sir William Randal | Greenwood, Hamar (York) |
| Billson, Sir Alfred | Crombie, John William | Grey, Rt. Hon. Sir Edward |
| Birrell, Rt Hon. Augustine | Crosfield, A. H. | Guest, Hon. Ivor Churchill |
| Black. Arthur W. | Davies, Ellis William (Eifion) | Gulland, John W. |
| Boland, John | Davies, M. Vaughan (Cardigan | Gurdon,RtHn.SirW.Brampton |
| Boulton,A.C.F.. | Davies, Timothy (Fulham) | Gwynn, Stephen Lucius |
| Brace, William | Davies,W.Howell (Bristol,S.) | Hall, Frederick |
| Bramsdon, T. A. | Devlin, Joseph | Harcourt, Rt. Hon. Lewis |
| Brigg, John | Dewar, Arthur(Edinburgh,S.) | Harmsworth,CecilB. (Worc'r) |
| Bright, J. A. | Dickinson.W.H.(St.Pancras,N | Hart-Davies, T. |
| Brocklehurst,W. B. | Dickson Poynder, Sir JohnP. | Harvey, A. G. C. (Rochdale) |
| Brodie, H. C. | Dilke, Rt, Hon. Sir Charles | Harvey, W. E. (Derbyshire,N. E. |
| Brooke, Stopford | Duckworth, James | Haslam, Lewis (Monmouth) |
| Brunner,J.F.L.(Lanes.,Leigh) | Dunn, A. Edward (Camborne) | Haworth, Arthur A. |
| Bryce, J. Annan | Dunne,MajorE.Martin(Walsall | Hazel, Dr. A. E. |
| Buckmaster. Stanley O. | Edwards, Clement (Denbigh) | Hedges, A. Paget |
| Hemmerde, Edward George | Montagu, E. S. | Shaw, Rt. Hon. T. (Hawick, B. |
| Henderson, J.M.(Aberdeen,W. | Mooney, J. J. | Shipman, Dr. John G. |
| Henry, Charles S. | Morgan, G. May (Cornwall) | Silcock, Thomas Ball |
| Herbert, Col. Sir Ivor (Mon. S.) | Morgan,J.Lloyd(Carmarthen) | | Smeaton. Donald Mackenzie |
| Herbert,T. Arnold(Wycombe) | Morrell, Philip | Smyth, Thomas F. (Leitrim,S. |
| Hobart, Sir Robert | Morse, L. L. | Snowden. P. |
| Hogan, Michael | Morton, Alpheus Cleophas | Soames. Arthur Wellesley |
| Holland.,SirWilliam Henry | Murnaghan, George | Spicer, Sir Albert |
| Hope,.JohnDeans (Fife, West) | Myer, Horatio | Stanger, H. Y. |
| Hope.W. Bateman(Somerset,N. | Napier, T. B. | Stanley,Hn.A.Lyulph(Chesh.) |
| Horniman, Emslie John | Newnes, F. (Notts, Bassetlaw) | Steadman, W. C. |
| Horridge, Thomas Gardner | Nicholson,CharlesN.(Doncast'r | Stewart-Smith, D. (Kendal) |
| Hyde, Clarendon | Nolan, Joseph | Strachey, Sir Edward |
| Illingworth, Percy H. | Norton, Capt. Cecil William | Straus, B..S. (Mile End) |
| Isaacs, Rufus Daniel | Nussey, Thomas Willans | Strauss. E. A. (Abingdon) |
| Jackson, R. S. | O'Brien,Kendal(TipperaryMid | Stuart, James (Sunderland) |
| Johnson, John (Gateshead) | O'Connor, John (Kildare,N.) | Sutherland, J. E. |
| Johnson, W. (Nuneaton) | O' Doherty, Philip | Taylor,TheodoreC.(Radcliffe) |
| Jones, Leif (Appleby) | O'Donnell, C. J. (Walworth) | Tennant,SirEdward(Salisbury |
| Jones, William(Carnarvonshire | O'Kelly, Conor (Mayo, N. | Tennant,H.J.(Berwickshire) |
| Jowett, F. W. | O'Kelly,James(Roscommon,N. | Thomas, Sir A. (Glamorgan,E.) |
| Joyce, Michael | O'Malley, William | Thomas, DavidAlfred(Merthyr |
| Kearley, Hudson E. | Parker, James (Halifax) | Thomasson, Franklin |
| Kekewich, Sir George | Partington, Oswald | Tomkinson. James |
| Kettle, Thomas Michael | Pearce, Robert(Staffs., Leek) | Torrance. Sir A. M. |
| Kincaid-Smith, Captain | Pearce, William(Limehouse) | Toulmin. George |
| Lamb,EdmundG. (Leominster) | Pearson,W.H.M.(Suffolk,Eye) | Trevelyan, Charles Philips |
| Lambert, George | Philipps,Col.Ivor(S'thampton | Verney, F. M. |
| Lamont, Norman | Philipps,J.Wynford(Pembroke | Wadsworth, J. |
| Lardner, James Carrige Rushe | Philipps,OwenC. (Pembroke) | Walker, H. De R. (Leicester) |
| Law, Hugh A. (Donegal, W.) | Pirie, Duncan V. | Walters, John Tudor |
| Layland-Barratt, Francis | Pollard, Dr. | Walton,SirJohnL.(Leeds, S.) |
| Lehmann, R. C. | Price,C.E.(Edinb'gh, Central) | Walton, Joseph (Barnsley) |
| Lever,A.Levy(Essex,Harwich | Price,RobertJohn(Norfolk,E.) | Wardle, George J. |
| Levy, Sir Maurice | Pullar, Sir Robert | Waring, Walter |
| Lewis, John Herbert | Radford, G. H. | Wason,Rt.Hn.E.(Clackmannan |
| Lloyd-George, Rt.Hon.David | Rainy, A. Rolland | Wason,JohnCathcart(Orkney) |
| Lough, Thomas | Raphael, Herbert H. | Watt, Henry A. |
| Lundon, W. | Redmond,John E. (Waterford | Weir, James Galloway |
| Lupton, Arnold | Redmond, William (Clare) | Whitbread. Howard |
| Luttrell, Hugh Fownes | Rees, J. D. | White. George (Norfolk) |
| Lyell, Charles Henry | Renton, Major Leslie | White. J. D. (Dumbartonshire |
| Macdonald,J.M.(FalkirkB'ghs | Richards,Thomas(M.Monm'th | White. Luke (York. E.R.) |
| Maclean, Donald | Richardson, A. | Whitehead. Rowland |
| MacNeill,John Gordon Swift | Rickett, J. Compton | Whitley John Henry(Halifax) |
| MacVeigh,Charles(Donegal,E. | Ridsdale, E. A. | Whittaker.Sir Thomas Palmer |
| M'Callum, John M. | Roberts,CharlesH. (Lincoln) | Wiles. Thomas |
| M'Crae, George | Roberts,John H. (Denbighs.) | Williamson, A. |
| M'Kenna, Rt. Hon. Reginald | Robertson,Rt,Hn.E.(Dundee) | Wills. Arthur Walters |
| M'Killop, W. | Robertson,SirG.Scott(Bradf'rd | Wilson. Hon.C.H.W.(Hull,W.) |
| M'Laren,Sir C. B. (Leicester) | Robinson, S. | Wilson,Henry J.(York,W.R.) |
| M'Micking, Major G. | Robson, Sir William Snowdon | Wilson,John (Durham, Mid) |
| Mallet, Charles E. | Roche,Augustine (Cork) | Wilson,J.W.(Worcestersh.N.) |
| Manfield, Harry (Northants) | Roe, Sir Thomas | Wilson,P. W.(St.Pancras, S.) |
| Mansfield,H.Rendall(Lincoln) | Rogers, F. E. Newman | Wilson. W. T. (Westhoughton |
| Markham, Arthur Basil | Rowlands, J. | Winfrey. R. |
| Marnham, F. J. | Runciman, Walter | Young. Samuel |
| Mason, A. E. W. (Coventry) | Rutherford, V. H. (Brentford) | Yoxall, James Henry |
| Massie, J. | Schwann,SirC. E. (Manchester) | |
| Meagher, Michael | Scott,A.H.(Ashton-under-Lyne | TELLERS FOR THE AYES— |
| Micklem, Nathaniel | Sears, J. E. | Mr. Whiteley and Mr. J. A. Pease. |
| Molteno, Percy Alport | Seaverns, J. H. | |
| Mond, A. | Seely, Major J. B. | |
| Money, L. G. Chiozza | Shaw, Charles Edw. (Stafford) | |
| NOES. | ||
| Acland Hood,Rt. HnSirAlex. F. | Balcarres, Lord | Baring. Capt.Hn.G.(Winchester |
| Anson, Sir William Reynell | Baldwin, Alfred | Barrie, H. T. (Londonderry, N.) |
| Anstruther Gray, Major | Balfour,RtHn. A. J. (CityLond.) | Beach,Hn.MiehaelHughHicks |
| Arkwright, John Stanhope | Banbury, Sir Frederick George | Beckett, Hon. Gervase |
| Aubrey-Fletcher,Rt.Hon.SirH. | Banner, John S. Harmood. | Bignold, Sir Arthur |
| Bowles, G. Stewart | Harris, Frederick Leverton | Powell, Sir Francis Sharp |
| Boyle, Sir Edward | Hay, Hon. Claude George | Remnant, James Farquharson |
| Bridgeman, W. Clive | Helmsley, Viscount | Roberts.S. (Sheffield, Ecclesall) |
| Brotherton, Edward Allen | Hervey, F.W.F.(BuryS. Edm'ds | Rutherford, W. W. (Liverpool) |
| Burdett-Coutts, W. | Hill, Sir Clement(Shrewsbury) | Sassoon, Sir Edward Albert |
| Butcher, Samuel Henry | Hornby, Sir William Henry | Sheffield,SirBerkeleyGeorgeD. |
| Campbell, Rt. Hon. J. H. M. | Hunt, Rowland | Sloan, Thomas Henry |
| Carlile, E. Hildred | Kennaway, Rt. Hon. Sir JohnH. | Smith,F.E.(Liverpool, Walton) |
| Carson, Rt. Hon. Sir Edw. H. | Kenyon-Slaney, Rt. Hon. Col. W. | Starkey, John R. |
| Cave, George | Keswick, William | Stone, Sir Benajmin |
| Cavendish, Rt.Hon.VictorC. W. | King, Sir HenrySeymour(Hull) | Talbot, Lord E. (Chichester) |
| Cecil, Evelyn (Aston Manor) | Lee, Arthur H. (Hants., Fareham | Talbot, Rt.Hn.J.G.(Oxf'd Univ. |
| Cecil, Lord R. (Marylebone, E.) | Lockwood.Rt. Hn.Lt.-Col. A.R. | Thomson, W. Mitchell-(Lanark) |
| Chamberlain, Rt Hn.J. A. (Wore. | Long,Col. CharlesW. (Evesham) | Tumour, Viscount |
| Cochrane, Hon. Thos. H. A. E. | Lonsdale. John Brownlee | Walker, Col.W.H. (Lancashire) |
| Collings, Rt.Hn.J.(Birmingh'm | Lowe, Sir Francis William | Walrond, Hon. Lionel |
| Craig, Captain James(Down, E.) | M'Calmont, Colonel James | Williams, Col. R. (Dorset, W.) |
| Dixon-Hartland, SirFred Dixon | Mason, James F. (Windsor) | Willoughby de Eresby, Lord |
| Duncan, Robert(Lanark. Govan | Meysey-Thompson, E. C. | Wilson, A. Stanley (York, E.R.) |
| Faber, George Denison (York) | Mildmay, Francis Bingham | Wortley, Rt. Hon. C.B. Stuart- |
| Faber, Capt. W. V. (Hunts, W.) | Moore, William | Wyndham, Rt. Hon. George |
| Fell, Arthur | Morpeth, Viscount | Younger, George |
| Fletcher, J. S. | O'Neill, Hon. Robert Torrens | |
| Gardner, Ernest (Berks, East) | Parker, Sir Gilbert (Gravesend) | TELLERS FOR THE NOES— |
| Gibbs, G. A. (Bristol, West) | Parkes, Ebenezer | Viscount Valentin and Mr. |
| Haddock, George R. | Percy, Earl | Forster. |
§ Question put accordingly, "That the Clause, as amended, stand part of the Bill."
§ The Committee divided:—Ayes, 315; Noes, 82. (Division List No. 261.)
587| AYES. | ||
| Abraham, William (Cork, N.E.) | Brooke, Stopford | Dickson-Poynder, Sir John P. |
| Abraham, William. (Rhondda) | Brunner, J.F.L. (Lancs., Leigh) | Dilke, Rt. Hon. Sir Charles |
| Adkins, W. Ryland D). | Bryce, J. Annan | Duckworth, James |
| Agnew George William | Buckmaster, Stanley O. | Dunn, A. Edward (Camborne) |
| Alden, Percy | Burns, Rt. Hon. John | Dunne,MajorE. Martin(Walsall |
| Allen, Charles P. (Stroud) | Burt, Rt. Hon. Thomas | Edwards, Clement (Denbigh) |
| Ashton, Thomas Gair | Buxton, Rt. Hn. Sydney Charles | Edwards, Enoch (Hanley) |
| Asquith, Rt. Hon Herbert Henry | Byles, William Pollard | Edwards, Sir Frank (Radnor) |
| Astbury, John Meir | Cameron, Robert | Eli bank, Master of |
| Baker, Sir John (Portsmouth) | Campbell-Bannerman, Sir H. | Ellis, Rt. Hon. John Edward |
| Bakwer, Joseph A. (Finsbury, E.) | Carr-Gomm, H. W. | Erskine, David C. |
| Balfour, Robert (Lanark) | Causton, Rt. Hn. RichardKnight | Esslemont, George Birnie |
| Baring, Godfrey (Isle of Wight). | Cawley, Sir Frederick | Evans, Samuel T. |
| Baring,Capt. Hn.G (Winchester | Chance, Frederick William | Everett, R. Lacey |
| Barker, John | Cheetham, John Frederick | Fenwick, Charles |
| Barlow, Sir John E.(Somerset) | Cleland, J. W. | Ferens, T. R. |
| Barlow, Percy (Bedford) | Clough, William | Fiennes, Hon. Eustace |
| Barnes, G. N. | Coats, Sir T. Glen (Renfrew, W.) | Findlay, Alexander |
| Barran, Rowland Hirst | Cobbold, Felix Thornley | Flavin, Michael Joseph |
| Barry, RedmondJ. (Tyrone, N.) | Collins, Stephen (Lambeth) | Flynn, James Christopher |
| Beauchamp, E. | Collins, SirWm.J. (S.Pancras, W. | Foster, Rt. Hon. Sir Walter |
| Beck, A. Cecil | Corbett, CH(Sussex, E.Grinst'd | Fowler, Rt. Hon. Sir Henry |
| Berridge, T. H. D. | Cornwall, Sir Edwin A. | Fuller, John Michael F. |
| Bertram, Julius | Cory, Clifford John | Fullerton, Hugh |
| Bethel],Sir J.H.(Essex,Romf'rd | Cotton, Sir H. J. S. | Gill, A. H. |
| Bethell, T. R. (Essex, Maldon) | Cowan, W. H. | Gladstone, Rt. Hn. Herbert John |
| Billson, Sir Alfred | Cox., Harold | Glendinning, R. G. |
| Birrell, Rt. Hon. Augustine | Craig, Herbert J. (Tynemouth) | Glover, Thomas |
| Black, Arthur W. | Cremer, Sir William Randal | Goddard, Daniel Ford |
| Boland, John | Crombie, John William | Gooch, George Peabody |
| Boulton, A. C. F. | Crosfield, A. H. | Grant, Corrie |
| Brace, William | Davies, Ellis William (Eifion) | Greenwood, G. (Peterborough) |
| Bramsdon, T. A. | Davies, M. Vaughan-(Cardigan | Greenwood, Hamar (York) |
| Bridgeman, W. Clive | Davies, Timothy (Fulham) | Grey, Rt. Hon. Sir Edward |
| Brigg, John | Davies, W. Howell (Bristol, S.) | Guest, Hon. Ivor Churchill |
| Bright, J. A. | Devlin, Joseph | Gulland, John W. |
| Brocklehurst, W. B. | Dewar, Arthur (Edinburgh, S.) | Gurdon, RtHn. SirW.Brampton |
| Brodie, H. C. | Dickinson, W.H. (St. Pancras.N. | Gwynn, Stephen Lucius |
| Hall, Frederick | Mansfield, H. Rendall (Lincoln) | Sears, J. E. |
| Harcourt, Rt. Hon. Lewis | Markham, Arthur Basil | Seaverns, J. H. |
| Harmsworth, Cecil B. (Worc'r) | Marnham, F. J. | Seely, Major J. B. |
| Hart-Davies, T. | Mason, A. E. W. (Coventry) | Shaw, Charles Edw. (Stafford); |
| Harvey, A. G. C. (Rochdale) | Massie, J. | Shaw, Rt. Hon. T. (Hawick B.) |
| Harvey, W.E. (Derbyshire.N.E. | Meagher, Michael ' | Shipman, Dr. John G. |
| Haslam, Lewis (Monmouth) | Micklem, Nathaniel | Silcock, Thomas Ball |
| Haworth, Arthur A. | Molteno, Percy Alport | Smeaton, Donald Mackenzie |
| Hazel, Dr. A. E. | Mond, A. | Smith.F.E. (Liverpool,Walton) |
| Hedges, A. Paget | Money, L. G. Chiozza | Smyth, Thomas F. (Leitrim, S. |
| Hemmerde, Edward George c | Montagu, E. S. | Snowden, P. |
| Henderson,J. M. (Aberdeen, W.) | Mooney, J. J. | Soames, Arthur Wellesley |
| Henry, Charles S. | Morgan, G. Hay (Cornwall) | Spicer, Sir Albert |
| Herbert. Col.Sir Ivor(Mon.,S.) | Morgan, J. Lloyd (Carmarthen) | Stanger, H. Y. |
| Herbert, T. Arnold (Wycombe) | Morrell, Philip | Stanley,Hn. A. Lyulph (Chesh. |
| Hobart, Sir Robert | Horse, L. L. | Steadman. W C. |
| Hogan, Michael | Morton, Alpheus Cleophas | Stewart-Smith, D. (Kendal) |
| Holden, E. Hopkinson | Murnaghan, George | Strachey, Sir Edward |
| Holland, Sir William Henry | Napier, T. B. | Straus. B. S. (Mile End) |
| Hope, John Deans (Fife, West) | Newnes, F. (Notts, Bassetlaw) | Strauss, E. A. (Abingdon) |
| Hope, W.Bateman(Somerset, N. | Nicholson, CharlesN. (Doncast'r | Stuart, James (Sunderland) |
| Horniman, Emslie John | Nolan, Joseph | Sutherland. J. E. |
| Horridge, Thomas Gardner | Norton, Capt. Cecil William | Taylor. Theodore C. (Radcliffe) |
| Hyde, Clarendon | Nussey, Thomas Willans | Tennant, Sir Edward (Salisbury |
| Illingworth, Percy H. | O'Brien,Kendal (TipperaryMid | Tennant. H. J. (Berwickshire) |
| Isaacs, Rufus Daniel | O'Connor, John (Kildare, N.) | Thomas.Sir A. (Glamorgan. E.) |
| Jackson, R. S. | O'Doherty, Philip | Thomas, David Alfred(Merthyr |
| Johnson, John (Gateshead) | O'Donnell, C. J. (Walworth) | Thomasson. Franklin J |
| Johnson, W. (Nuneaton) | O'Kelly, Conor (Mayo, N.) | Thompson.J.W.H. (Somerset.E. |
| Jones, Leif (Appleby) | O'Kelly,James (Roscommon, N | Tomkinson. James |
| Jones, William (Carnarvonshire | O'Malley, William | Torrance. Sir A. M. |
| Jowett, F. W. | Parker, James (Halifax,) | Toulmin, George |
| Joyce, Michael | Partington, Oswald | Trevelyan. Charles Philips |
| Kearley. Hudson E. | Pearce, Robert (Staffs. Leek) | Verney. F. W. |
| Kekewich, Sir George | Pearce, William (Limehouse) | Wadsworth. J. |
| Kettle, Thomas Michael | Pearson,W.H.M. (Suffolk, Eye) | Walker, H. De R. (Leicester) |
| Kincaid-Smith, Captain | Philipps, Col.Ivor (S'thampton) | Walters, John Tudor |
| Lamb, Edmund G. (Leominster | Philipps, Owen C. (Pembroke) | Walton, Sir John L. (Leeds, S.) |
| Lambert, George | Pirie, Duncan V. | Walton, Joseph (Barnsley) |
| Lamont, Norman | Pollard, Dr. | Wardle, George J. |
| Lardner, James Carrige Rushe | Price, C. E. (Edinb'gh, Central) | Waring. Walter |
| Law, Hugh A. (Donegal, W.) | Price, RobertJohn (Norfolk, E.) | Wason, Rt. Hn.E. (Clackmannan |
| Layland-Barratt, Francis | Pullar, Sir Robert | Wason, John Cathcart(Orkney) |
| Lehmann, R. C. | Radford, G. H. | Watt, Henry A. |
| Lever, A. Levy(Essex, Harwich | Rainy, A. Rolland | Weir, James Galloway |
| Levy, Sir Maurice | Raphael, Herbert H. | Whitbread. Howard |
| Lewis, John Herbert | Redmond, John E. (Waterford) | White. George (Norfolk) |
| Lloyd-George, Rt. Hon. David | Redmond, William (Clare) | White. J. D. (Dumbartonshire) |
| Lough, Thomas | Rees, J. D. | White, Luke (York, E.R.) |
| Lundon. W. | Renton, Major Leslie | Whitehead, Rowland |
| Lupton, Arnold | Richards, Thomas (W.Monm'th | Whitley, John Henry (Halifax) |
| Luttrell, Hugh Fownes | Richardson, A. | Whittaker, Sir Thomas Palmer |
| Lyell. Charles Henry | Rickett, J. Compton | Wiles. Thomas |
| Lynch, H. B. | Ridsdale, E. A. | Williamson. A. |
| Macdonald, J.M.(Falkirk Bg'hs) | Roberts, Charles H. (Lincoln) | Wills. Arthur Walters |
| Maclean, Donald | Roberts, John H. (Denbighs.) | Wilson, Hon. C.H.W. (Hull, W) |
| MacNeill, John Gordon Swift | Robertson, Rt. Hn. E. (Dundee) | Wilson. Henry J. (York, W.R.) |
| Mac Veigh, Charles (Donegal, E.) | Robertson, SirG.Scott (Bradf'rd | Wilson, John (Durham, Mid) |
| M'Callum, John M. | Robinson, S. | Wilson, J.W. (Worcestersh. N.) |
| M'Crae, George | Robson. Sir William Snowdon | Wilson, P. W. (St. Pancras, S.) |
| M'Kean, John | Roche, Augustine (Cork) | Wilson. W. T. (Westhoughton) |
| M Kenna, Rt. Hon. Reginald | Roc, Sir Thomas | Winfrey. R. |
| M'Killop, W. | Rogers, F. E. Newman | Young, Samuel |
| M'Laren, Sir C. B. (Leicester) | Rowlands, J. | Yoxall, James Henry |
| M'Laren, H. D. (Stafford, W.) | Runciman, Walter | |
| M'Micking. Major G. | Rutherford, V. H. (Brentford) | TELLERS FOR THE AYES— |
| Mallet, Charles E. | Schwann, SirC.E. (Manchester) | Mr. Whiteley and Mr. J. A. Pease. |
| Manfield, Harry (Northants) | Scott, A.H.(Ashton under Lyne | |
| NOES. | ||
| Acland-Hood, RtHn.SirAlex. F. | Anstruther-Gray, Major | Aubrey-Fletcher, Rt.Hon.Sir H. |
| Anson, Sir William Reynell | Arkwright, John Stanhope | Balcarres, Lord |
| Baldwin, Alfred | Forster, Henry William | Parkes, Ebenezer |
| Balfour, RtHn.A.J.(City Lond.) | Gardner, Ernest (Berks, East) | Percy, Earl |
| Banbury, Sir Frederick George | Gibbs, G. A. (Bristol, West) | Powell, Sir Francis Sharp |
| Banner, John S. Harmood- | Haddock, George R. | Remnant, James Farquharson |
| Barrie, H. T. (Londonderry, N.) | Hay, Hon. Claude George | Roberts, S. (Sheffield, Ecclesall) |
| Beckett, Hon. Gervase | Helmsley, Viscount | Rutherford, W. W. (Liverpool) |
| Bignold, Sir Arthur | Hervey, F.W.F.(BuryS. Edm'ds | Sheffield, SirBerkeleyGeorge D. |
| Boyle, Sir Edward | Hill, Sir Clement (Shrewsbury) | Sloan, Thomas Henry |
| Brotherton, Echward Allen | Hornby, Sir William Henry | Starkey, John R. |
| Burdett-Coutts, W. | Hunt, Rowland | Stone, Sir Benjamin |
| Campbell, Rt. Hon. J. H. M. | Kennaway, Rt.Hon. Sir JohnH. | Talbot, Lord E. (Chichester) |
| Carlile, E. Hildred | Kenyon-Slaney, Rt.Hon.Col.W. | Talbot, Rt.Hn.J.G.(Oxf'dUniv. |
| Carson, Rt. Hon. Sir Edw. H. | Keswick, William | Thomson, W. Mitchell-(Lanark) |
| Cave, George | King, SirHenrySeymour (Hull) | Turnour, Viscount |
| Cavendish, Rt.Hon. Victor C.W. | Lee, ArthurH. (Hants., Fareham | Valentia, Viscount |
| Cecil, Evelyn (Aston Manor) | Lockwood, Rt.Hn. Lt.-Col.A.R. | Walker, Col.W.H. (Lancashire) |
| Cecil, Lord R. (Marlyebone, E.) | Long Col. Charles W.(Eveshnm | Walrond, Hon. Lionel |
| Chamberlain, RtHn.J.A. (Wore | Lonsdale, John Brownlee | Williams, Col. R. (Dorset, W.) |
| Cochrane, Hon. Thos. H. A. E. | Lowe, Sir Francis William | Willoughby de Eresby. Lord |
| Corbett, A. Cameron (Glasgow) | M'Calmont, Colonel James | Wilson; A.Stanley (York. E.R.) |
| Craig, Captain James(Down, E.) | Mason, James F. (Windsor) | Wyndham, Rt. Hon. George |
| Dixon-Hartland, Sir Fred Dixon | Meysey-Thompson, E. C. | Younger, George |
| Douglas, Rt. Hon. A. Akers- | Mildmay, Francis Bingham | |
| Dunean,Robert (Lanark,Govan | Moore, William | TELLERS FOR THE NOES— |
| Faber, George Denison (York) | Morpeth, Viscount | Mr. Hicks Beach and Mr. Bowles. |
| Faber, Capt. W. V. (Hants, W.) | O'Neill, Hon. Robert Torrens | |
| Fell, Arthur | Parker, Sir Gilbert (Gravesend) |
Question, "That those words be there inserted," put, and agreed to.
§ Clause 12:—
§ MR. MEYSEY THOMPSON (Staffordshire, Handsworth)said this clause took power to remit payment of the tax in certain cases, and he asked whether it included power to remit in a very hard case such as had come to his notice. The elder of two brothers succeeded to an estate, and long before the estate duties were paid he went to South Africa and was killed whilst fighting for his country in the South African War. Then the younger brother succeeded and another heavy fine had to be paid. He wished to know whether the right hon. Gentleman would take such cases into his consideration, and whether the duties in such a case would be remitted or reduced. A still harder case which had come to his knowledge was that of a man of sixty-seven years of age who succeeded to a life interest in a cottage, and he was naturally anxious to obtain possession and end his days in his own house.
*THE CHAIRMANsaid he understood from the Minister in charge that the points now raised had nothing whatever to do with the clause before the House. Under those circumstatces it would not be in order to discuss them now.
§ MR. ASQUITHsaid he was always glad to consider cases of hardship in their 590 proper place, but this clause had nothing to do with cases of this kind. It was a clause simply to give the Commissioners power to wipe off, as a bad debt, after twenty years, that portion of the tax which had not been paid.
§ Clause agreed to.
§ Clause 13 agreed to.
§ Clause 14:—
§ MR. AUSTEN CHAMBERLAINsaid that, as he understood, this clause was to deal with a temporary state of things, which was fast passing away. He wished to know what was the real object of the clause and how it would work, because so far as he could see there was neither advantage nor disadvantage in it. The matters with which it dealt would average themselves, and the right hon. Gentleman would get the same revenue whether the clause were passed or not.
§ MR. MCKENNAwas understood to say that the reason for the introduction of the clause was very simple. These inquiries as to the past value of a small portion of a large estate were extremely difficult to make. It was, in fact, impossible, to trace back what was the value at the time the duty was paid or payable, and the clause was justified on those grounds.
§ SIR F. BANBURYsaid that as far as he could gather from the explanation given by the right hon. Gentleman this clause was intended to simplify matters, but it seemed to him that it would have the opposite effect. The clause read—
The deduction to be allowed under Section 21 of the Finance Act, 1906, in respect of death duties previously put on property on which duty is payable, shall, instead of being the amount of the duty paid or payable, be the amount which would have been payable on account of the duty if the duty were calculated on the value of the property on which estate duty is payable.To him it seemed that nothing could be clearer and simpler than the introduction of the words "amount paid." As far as he understood, a certain fixed sum was to be paid; and suppose an estate were divided into eight parts?
§ MR. MCKENNAstated that an estate would not be divided into eight parts. It would be subdivided, and that part of the property which had never been valued would be separately valued.
§ SIR F. BANBURYasked on what basis the inquiry was to be made.
§ MR. MCKENNAThe present value.
§ SIR F. BANBURYsaid that if the inquiry was to be made on the present value it seemed to be very hard where the value had decreased. Apparently it appeared to be the case that the object was to make calculations easier on real property. It would not be so difficult on personal property, but this applied to real property, and it certainly appeared to be very hard in that case.
§ MR. MCKENNAIt applies to personalty as well.
§ SIR F. BANBURYsaid there could be no difficulty in regard to personalty, but there was in reference to real property. It seemed to him, in view of the fact that there had been a considerable depreciation of the value of real property, that they would commit an injustice.
§ MR. AUSTEN CHAMBERLAINsaid there was a good deal of force in what the President of the Board of Education 592 said, that these valuations had not been made at the expense of the payer of the tax, and that it would very often be better for him to adopt the proposal under this Act, even if he paid a little more in taxes, because he would pay less in inquiry expenses. But he did not think that that would always be the case, and as he had said before and as his hon. friend had said, it was very hard to make a change of his kind, which would be actually extorting more money against the will of the taxpayer than they had a claim upon him for. He wanted to suggest to the Chancellor of the Exchequer whether he could not make the clause optional, giving the option to the payer of the tax to adopt it or not. In most cases, probably. in order to save the trouble and expense of an inquiry, the payer of the tax would be glad to adopt this, method; but where there had been a serious depreciation and where, therefore, he would be a great loser, the old system would still remain open to him.
§ MR. ASQUITHsaid the point of this clause was that it was a great deal more in the interest of the person who paid the tax than in the interest c f the revenue authorities. Those who suffered the trouble and expense of the present system were obliged to go back and trace the history of a particular bit of property. That had been done by the person claiming the reduction, and it was a very great expense, as experience had shown. He knew the hon. Baronet was always open to argument, and he appealed to him, therefore, not to oppose the clause, as he would do a great deal of injury to a number of people whose interest he was most anxious to promote. As to the suggestion made by the right hon. Gentleman opposite, he would certainly take it into consideration. He could not, of course, be expected to say anything definite until he had consulted his advisers, but he would take into consideration whether there should be this option.
§ Clause agreed to.
§ Clause 15: —
§
Amendment proposed —
In page 5, lines 22 and 23, to leave out the words ' after the passing of this Act,' and
593
insert the words 'on or after the 19th day of April, 1907.' "—(Mr. Asquith.)
§ Question proposed, "That the words proposed to be left out stand part of the clause."
§ MR. AUSTEN CHAMBERLAINAre we to have an explanation of the clause?
§ THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON,) Tower Hamlets, Poplarsaid that under the Act of 1894 all property passing on death was aggregated without regard to the method in which it passed, and therefore property in regard to which a man had full control and full enjoyment, was aggregated with the form of settled property which he had not control over or the full enjoyment of. Thus the latter by increasing the aggregate amount might bring the whole property on to a higher scale of graduation. This was a legitimate grievance and one which the Bill would meet.
§ MR. AUSTEN CHAMBERLAINsaid that in the case of a man with an estate of £4.3,000, as to £5,000 of which he had a life interest, if he left the £5,000 free of conditions to the heir, not putting him in possession of the life interest only, but giving it to him fully, he understood that was to be treated as separate estate, because the man who died had only a life interest in it. That was so, he understood. On the other hand, if the mail who died had had full power over the £5,000, the property would be aggregated. In each case the treatment of the property would be governed by what was its condition at the moment of death.
§ Clause, as amended, agreed to.
§ Clause 16:—
§
Amendment proposed—
In page 5. line 38, after the word 'licences,' insert the words '(including any duty charged under Subsection (1) of Section 8 of The Locomotives on Highways Act, 1896).' "— (Mr. Asquith.)
*THE CHAIRMANThe next Amendment stands in the name of the hon. Member for Lincoln. He proposes to insert after "thereof" in line 5, in page 6, the words—
A fixed sum equal to the amount which was paid into that account as the proceeds of the duties on licences for the sale of intoxicating liquors by retail in the year ending the thirty-first day of March, nineteen hundred and seven, and in addition thereto.I have looked at the Resolution governing this matter upon which the Bill is founded, and it is clear that under its terms it is possible that in certain contingencies the sum payable may be less than what is proposed in the Amendment. The object of the Amendment is to provide that more than is authorised by the Resolution may be paid, and therefore because it may involve an increased charge the Amendment is not in order.
§ MR. AUSTEN CHAMBERLAINsubmitted that what was proposed was not really a new charge. The Resolution made it impossible to alter existing charges, but the Amendment would not. impose any increased charge. All it would do would be to prevent the charge from falling below the present sum. Would it not be in order to move an Amendment of that kind not necessarily founded upon the Resolution but upon the fact that the larger charge was by a Resolution of this House?
THE CHAIRMANI do not think it is quite the case that a larger charge is already in force. What the hon. Member proposes, and what is suggested by other Amendments on the Paper of this kind, is, in my opinion, beyond what the Resolution authorises.
§ MR. ASQUITHsaid that his recollection of the Resolution was that the only thing it authorised was the transfer of a sum equal and not greater or less.
§ MR. A. J. BALFOUR (City of London)said he understood that, by the practice of the House, Bills dealing with money could only be introduced by a Resolution, and when the Bill came under discussion no change could be made in it which suggested a larger charge than the original Resolution. That was the constitutional practice.
595 The Chancellor of the Exchequer had laid down that the Resolution on which this Bill was founded did not merely put a superior limit to the charge but laid down that it should be equal, precisely and exactly. Surely that was binding them by a Resolution which was outside and beyond the ordinary practice. The policy of having a preliminary Resolution was one which was open to question, but it would become a great abuse if they were prevented after the Resolution was passed from diminishing the charge. Was the doctrine to be that a preliminary Resolution could fix the charge at a level which not only could not be increased but could not be diminished whatever the Committee might desire to do?
§ MR. ASQUITHsaid this was not a question of altering a charge, but simply a question of a transfer. All that was authorised by the Resolution was that a sum equal to the amount which would have been left should be the subject of that transfer.
*THE CHAIRMANI think the Leader of the Opposition is absolutely right. It would be quite in order to reduce the amount, but it is not in order to increase it.
§ MR. LEIF JONES (Westmoreland, Appleby)asked if it would be in order to move to add the words, "Provided that this section shall not apply to licences for the sale of intoxicating liquors." That would raise the same point but in a somewhat different form.
§ MR. LEIF JONESAt the end of Subsection 2.
*THE CHAIRMANI do not think that would have the effect which the hon. Member desires. I think the best way would be to discuss this matter on the question that the clause stand part of the Bill.
§ MR. MCKENNApointed out that this clause did not impose a charge at all.
596 All it did was to provide for the transfer of an existing charge from one account to another, and that was governed by the Resolution of the House.
§ MR. AUSTEN CHAMBERLAINsaid this was a substantial point, and could only be raised upon an Amendment of this kind. His hon. friends, for reasons which they had not yet been able to explain, desired that a portion of the transfer which the right hon. Gentleman was proposing should not be sanctioned. There was no question of increasing, or lowering, or even altering the charge. The Chancellor of the Exchequer was proposing that certain sums now payable out of one account should henceforth be payable out of another account. For reasons of his own his hon. friend desired to move that some portion should not be transferred from the old account to the new account. He thought that would be in order, and it was a point which could only be dealt with by an Amendment.
§ SIR CHARLES DILKE (Gloucestershire, Forest of Dean)suggested that the proper course was to wait until some particular Amendment was moved in a particular place, and then it would be competent for anyone to ask for the ruling of the Chairman.
*THE CHAIRMANThe hon. Member for Lincoln did put a particular Amendment to me and I ruled it out of order. The only Amendment on the Paper which is in order at this point is that of the hon. Member for Yarmouth.
§ [THE CHAIRMAN, on being asked again whether the alternative Amendment suggested by the hon. Member for Appleby was in order, said that it was in order from his point of view. He merely suggested that it did not carry out what the hon. Member desired. That was, however, a matter of merits, not of order.]
§ *MR. LEIF JONESmoved to add to Sub-section 2 a proviso "that this sub-section shall not apply to licences for the sale of intoxicating liquors." He had every sympathy with the desire of the Chancellor of the Exchequer to regain control of the sums 597 allocated to local authorities, but he wished to fix the amount to be paid in lieu of the duties on licences for the sale of intoxicating liquors. An effort was being made all over the country to reduce the number of liquor licences, and the proposal of the Chancellor of the Exchequer would tend in the opposite direction.
§ MR. ASQUITHNo.
§ *MR. LEIF JONESsaid that was the effect of the proposal as it stood. The reason why he wanted a fixed sum rather than the present arrangement was that where the justices reduced the number of licences they also reduced the return to the local authorities from licences. Therefore there might be a desire in a locality not to have the number of licences reduced, because by the reduction they lost the. contribution which they would otherwise receive. There was thus a force in operation militating against the reduction of licences, and it was because he wanted to facilitate the reduction that he said there should be no temptation for the local justices not to reduce the number, and that the local justices, who were charged with the duty of reducing licences, should have a free hand to do so without feeling that in reducing the number they would be reducing the sum which came to the local authority for the relief of rates.
§
Amendment proposed—
In page 6, line 7, at the end, to insert the words, 'Provided that this sub-section shall not apply to licences for the sale of intoxicating liquors.'"—(Mr. Leif Jones.)
§ Question proposed, "That those words be there inserted."
§ MR. ASQUITHsaid he did not think the clause would have the effect which the hon. Member attributed to it. Moreover, if the Amendment were carried it would defeat the hon. Member's object. The clause merely left matters exactly as they were and dissociated once for all the revenue contributed by the Imperial Exchequer to local resources from the proceeds of these licences, so that Parliament would be free to deal with these duties in the general interest without 598 diminishing the revenue of local authorities or disturbing the distribution of the Imperial contribution. It was the fixed intention of the Government to deal with this question next year, and the whole object of this clause was to preserve the status quo in the meantime.
§ MR. AUSTEN CHAMBERLAINsaid he did not approach the question from the same point of view as the hon. Member for the. Appleby Division, who looked at it as a matter of temperance legislation. He was looking at it from the point of view of revenue to the local authority. The Chancellor of the Exchequer desired to leave the local authority in as advantageous a position as it would have been in if this clause had not been included in the Bill; but if that were so, if the kind of legislation which they all knew to be desired by the hon. Member for Appleby was passed, and if he could realise the wishes he had expressed in this House in regard to Imperial taxation, he would crush out a large number of licensed houses. In a debate on this very Bill in an earlier portion of the session the hon. Member stated that the object at which he was aiming was the destruction of a number of the smaller houses, which did not pay well, by increasing their licence duty. If this clause did not pass, what the local authority lost by the destruction of the small houses it might gain by the increased duty receivable from larger houses. The local authority might thus be recouped in the increased duty payable by the larger houses, but if the Chancellor of the Exchequer's proposal was carried, all that recoupment would go, not to the local authority which had to lose it, but to the Exchequer. The local authority therefore did stand the real risk of being worse off in consequence of the change which the right hon. Gentleman was making.
§ MR. ASQUITHsaid that supposing they introduced legislation raising the duty the local authority would suffer in exactly the same way if this clause was not in the Bill at all.
§ MR. AUSTEN CHAMBERLAINthought that that depended on the persons to whom they assigned the produce of the 599 increased duties. If they simply, as a matter of licensing reform, raised the duties now, and crushed out the small houses and the local authorities lost the duties on them, they could recoup themselves by the higher duties which they charged on the remaining houses; but if they said, as the Government did say now, that any higher duty should henceforth go to the Exchequer, then the local authorities would in that contingency undoubtedly receive less in consequence of the change which the right hon. Gentleman was making. They would receive the old rate of licence duty.
§ MR. ASQUITHSo they would have done if this clause had never been introduced at all.
§ MR. AUSTEN CHAMBERLAINsaid the right hon. Gentleman had altered the system of imposing the licence duty and taken to the Exchequer the whole of the increase of the duty, but he put in this clause in order to set his hands free for that purpose.
§ MR. ASQUITHNot quite. If the law remains as it is all that I shall be able to do is to get the increase. What I do by this clause is to get the whole into the Imperial Exchequer, and the local authority is not put in a worse position by the clause.
§ MR. AUSTEN CHAMBERLAINsaid he agreed with the right hon. Gentleman that it was not the clause that put the local authority in a worse position. He appealed on behalf of the local authorities against what the right hon. Gentleman proposed to do by the clause itself and by the legislation which he had adumbrated. He did not think the right hon. Gentleman had considered the case of the local authority. If he was going to leave them worse off in respect of these licences he thought he ought to make a contribution from some other source.
§ MR. ASQUITHI think so too.
§ MR. AUSTEN CHAMBERLAINThat is a satisfactory answer so far as I am concerned.
§ MR. ASQUITHsaid he thought so, subject to this, without prejudice, that he could not agree that the present system of contribution to local resources was to be regarded as fixed and unchangeable. He thought hon. Gentlemen, opposite did not think it very adequate. It must not be understood that he committed himself to the opinion that the proportionate amounts received by the local authorities must remain as they were now; they might be changed. But he did not intend to diminish the contribution by any provision in this Bill.
§ SIR F. BANBURYsaid he was very much obliged to his hon. friend for introducing this Amendment which he intended to support. The hon. Member had stated that in his opinion the justices would cease their efforts to diminish the number of licences because by doing so they would lose a certain amount of money for the relief of the rates.
§ *MR. LEIF JONESsaid he did not say that the justices would entirely cease their efforts at reduction, but that the present system tended in that direction.
§ SIR F. BANBURYsaid that, of course, the magistrates would do their duty when any case came before them irrespective of what would affect their own or anybody else's pocket. But he was going to support the Amendment for a very different reason from that urged by the hon. Gentleman. His idea was that the Amendment would be an exceedingly good one from the point of view of the interest of the brewer and the publican. He believed that the Chancellor of the Exchequer would like to increase his taxation in the following year and at the same time satisfy his friends by aiming a blow at the brewers and the publicans. But the right hon. Gentleman would be likely to put the result of that blow into his own pocket, and not into the pocket of the local authorities. He was one of those who thought that the brewer and the publican were sufficiently taxed at the present moment, and under these circumstances if the hon. Gentleman withdrew his Amendment he would object, and it would be very pleasant to 601 carry it with, the aid of the temperance party.
§ *MR. HICKS BEACH (Gloucestershire, Tewkesbury)said he supported the Amendment, but not for the reasons stated by his hon. friend or the hon. Member who moved it. If the Amendment were not carried the profits from the increase of the licence duties would go not to the local authorities but to the Imperial revenue. If these duties wore largely increased there would be fewer licences and the contribution to the local authorities would be less than the amount now derived from these licences, because it would be calculated on a diminished number of licences, not at the new scale of duty but at the rate of the licence duty at present in force. Moreover, the Chancellor of the Exchequer by removing this area of taxation from the local authorities was taking away a portion of what the Royal Commission on local taxation had declared to be the property of the local ratepayers and one which could be utilised to give considerable relief to local taxation. And the Royal Commission had specially singled out the licences to hotels, the rate on which they said might be very substantially increased without any great hardship. The local authorities ought not to surrender this property without receiving an assurance that they would receive not only an equivalent grant but an increased grant.
§ *MR. CHARLES ROBERTS (Lincoln)said that he was glad that his friend the Member for Appleby had raised this discussion, but he could not support his
§ Amendment. He agreed with the Chancellor of the Exchequer, and his only quarrel with the right hon. Gentleman—if quarrel it were—was that by this Bill he was not going to do to-day what he intended to do to-morrow. He only hoped that the right hon. Gentleman would carry out in the future what he desired at the present time. The Chancellor of the Exchequer had said that his present proposal was intended to disentangle the local finance from its connection with licences. His objection to the Bill was that it did not do that. The only effect would be an improvement in bookkeeping; and when the Bill became law there would be the same entanglement as existed at present. Still he thanked the Chancellor of the Exchequer for his assurance that the disentanglement would be effected at a later time.
THE DEPUTY-CHAIRMANsaid that the remarks of the hon. Gentleman did not apply to the Amendment before the Committee.
§ MR. LEIF JONESsaid that having received a satisfactory statement from the Chancellor of the Exchequer, he would ask leave to withdraw his Amendment. He might explain that his motive in moving it was entirely in the interest of the local authorities.
§ Leave to withdraw being refused,
§ Question put.
§ The Committee divided:—Ayes, 47 Noes, 234. (Division List No. 262.)
603| AYES. | ||
| Acland-Hood, Rt. Hn. Sir Alex,. F. | Douglas, Rt. Hon. A. Akers- | Rawlinson, JohnFrederickPeel |
| Arkwright, John Stanhope | Duncan, Robert (Lanark, Govan | Remnant, James Farquharson |
| Ashley, W. W. | Fell, Arthur | Richards, Thomas(W. Monm'th |
| Balcarres, Lord | Forster, Henry William | Rutherford, John (Lancashire) |
| Banner, John S. Harmood- | Gordon, J. | Rutherford, W. W. (Liverpool^ |
| Barrie, H. T. (Londonderry, N.) | Haddock, George R. | Sloan, Thomas Henry |
| Boyle, Sir Edward | Harrison-Broadley, H. B. | Starkey, John R. |
| Bridgeman, W. Clive | Hervey, F.W.F.(BuryS.Edm'ds | Talbot, Lord E. (Chichester) |
| Campbell, Rt. Hon. J. H. M. | Hill, Sir Clement (Shrewsbury) | Turnour, Viscount |
| Carlile, E. Hildred | Houston, Robert Paterson | Walrond, Hon. Lionel |
| Cave, George | King, Sir Henry Seymour(Hull) | Williams, Col. R. (Dorset, W.) |
| Cavendish,Rt.Hon. VictorC.W. | Lowe, Sir Francis William | Wyndham, Rt. Hon. George |
| Cecil, Evelyn (Aston Manor) | Lyttelton, Rt. Hon. Alfred | Younger, George |
| Cecil. Lord R. (Marylebone, E.) | M'Calmont, Colonel James | |
| Coates, E. Feetham (Lewisham | Meysey-Thompson, E. C. | TELLERS FOR THE AYES— |
| Dalrymple, Viscount | Muntz, Sir Philip A. | Sir Frederick Banbury and |
| Dobson, Thomas W. | Parkes, Ebenezer | Mr. Hicks Beach. |
| NOES. | ||
| Abraham, William (Cork, N.E.) | Foster, Rt. Hon. Sir Walter | Maggie, J. |
| Abraham, William (Rhondda) | Fuller, John Michael F. | Meagher, Michael |
| Adkins, W. Ryland D. | Fullerton, Hugh | Micklem, Nathaniel |
| Agnew, George William | Furness, Sir Christopher | Molteno, Percy Alport |
| Alden, Percy | Gill, A. H. | Montagu, E. S. |
| Allen, Charles P. (Stroud) | Glendinning, R. G. | Morgan, G. Hay (Cornwall) |
| Asquith, Rt. Hon. HerbertHenry | Glover, Thomas | Morgan, J.Lloyd(Carmarthen) |
| Baker, Sir John (Portsmouth) | Goddard, Daniel Ford | Morse, L. L. |
| Baker, JosephA. (Finsbury, E.) | Grant, Corrie | Morton, Alpheus Cleophas |
| Balfour, Robert (Lanark) | Greenwood, G. (Peterborough) | Murnaghan, George |
| Barker, John | Greenwood, Hamar (York) | Myer, Horatio |
| Barlow, SirJohn E.(Somerset) | Gulland, John W. | Napier, T. B. |
| Barlow, Percy (Bedford) | Gurdon, RtHn.Sir W.Brampton | Newnes, F. (Notts., Bassetlaw) |
| Barnes, G. N | Hall, Frederick | Nicholson, CharlesN. (Doncast'r |
| Barran, Rowland Hirst | Harmsworth, Cecil B. (Worc'r) | Norton, (Capt. Cecil William |
| Barry, RedmondJ. (Tyrone.N.) | Hart-Davies, T. | O'Brien,Kendal (TipperaryMid |
| Beck, A. Cecil | Harvey, A. G. C. (Rochdale) | O'Doherty. Philip |
| Bell, Richard | Harvey,W. E.(Derbyshire, N.E. | O'Donnell. C. J. (Walworth) |
| Berridge, T. H. D. | Harwood, George | O'Malley. William |
| Bertram, Julius | Haslam, Lewis (Monmouth) | Parker, James (Halifax,) |
| Bethell, Sir J. H. (Essex, Romf'd | Haworth, Arthur A. | Pearce, Robert (Staffs., Leek) |
| Bethell, T. R. (Essex, Maldon) | Hazel, Dr. A. E. | Pearce, William (Limehouse) |
| Billson, Sir Alfred | Hazleton, Richard | Pearson, SirW.D.(Colchester) |
| Black, Arthur W. | Hedges, A. Paget | Philipps, J. Wynford (Pembroke |
| Boulton, A. C. F. | Helme, Norval Watson | Pollard, Dr. |
| Brace, William | Henderson, J.M. (Aberdeen, W.) | Price, C. E.(Edinb'gh, Central) |
| Bramsdon, T. A. | Henry, Charles S. | Price, Robert John (Norfolk, E.) |
| Brigg, John | Herbert, T. Arnold (Wycombe) | Priestley, Arthur (Grantham) |
| Bright, J. A. | Hobart, Sir Robert | Rainy, A. Holland |
| Brooke, Stopford | Holden, E. Hopkinson | Raphael, Herbert H. |
| Brunner, J.F.L.(Lancs.,Leigh) | Holland, Sir William Henry | Redmond. William (Clare) |
| Burns, Rt. Hon. John | Hope, W. Bateman(Somerset, N. | Rendall, Athelstan |
| Burt, Rt. Hon. Thomas | Horniman, Emslie John | Renton, Major Leslie |
| Buxton, Rt.Hn.SydneyCharles | Horridge, Thomas Gardner | Richardson, A. |
| Byles, William Pollard | Hutton, Alfred Eddison | Rickett. J. Compton |
| Cairns, Thomas | Hyde, Clarendon | Ridsdale. E. A. |
| Cameron. Robert | Jackson, R. S. | Roberts, Charles H. (Lincoln) |
| Cawley. Sir Frederick | Johnson, John (Gateshead | Robertson. SirG. Scott (Bradf'rd |
| Chance, Frederick William | Johnson, W. (Nuneaton) | Robinson. S. |
| Cleland, J. W. | Jones, SirD. Brynmor(Swansea) | Robson. Sir William Snowdon |
| Clough, William | Jones, Leif (Appleby) | Roche. Augustine (Cork) |
| Cobbold. Felix Thornley | Jones, William (Carnarvonshire | Roe, Sir Thomas |
| Collins, Stephen (Lambeth) | Jowett, F. W. | Rogers. F. E. Newman |
| Collins, SirWm.J.(S.Pancras, W. | Joyce, Michael | Runciman, Walter |
| Corbett, A.Cameron(Glasgow) | Kearley, Hudson E. | Schwann, SirC.E.(Manchester) |
| Corbett.CH(Sussex, E.Grinst'd) | Kekewich. Sir George | Scott, A.H.(Ashton under Lyne |
| Cornwall, Sir Edwin A. | King. Alfred John (Knutsford) | Sears, J. E. |
| Cotton, Sir H. J. S. | Lamb, Edmund G. (Leominster | Shaw, Charles Edw. (Stafford) |
| Cowan. W. H. | Lamont, Norman | Shipman. Dr. John G. |
| Cox;, Harold | Lehmann, R. C. | Silcock, Thomas Ball |
| Cremer, Sir William Randal | Lever, A. Levy (Essex, Harwich) | Sinclair. Rt. Hon. John |
| Davies, Ellis William (Eifion) | Levy, Sir Maurice | Snowden. P. |
| Davies, W. Howell(Bristol, S.) | Lewis, John Herbert | Soames, Arthur Wellesley |
| Dewar, Arthur (Edinburgh, S.) | Lloyd-George, Rt. Hon. David | Spicer, Sir Albert |
| Dewar, SirJ.A.(Inverness-sh.) | Lough, Thomas | Stanger. H. Y. |
| Dickinson,W.H.(St. Pancras,N. | Lundon, W. | Stanley, Hn. A.Lyulph(Chesh.) |
| Duckworth, James | Lupton, Arnold | Steadman. W. C. |
| Dunn, A. Edward (Camborne) | Luttrell. Hugh Fownes | Stewart-Smith. D. (Kendal) |
| Edwards, Clement (Denbigh) | Lynch, H. B. | Straus. B. S. (Mile End) |
| Edwards, Enoch (Hanley) | MacNeill, John Gordon Swift | Stuart. James (Sunderland) |
| Elibank, Master of | MacVeigh,Charles (Donegal,E.) | Sutherland, J. E. |
| Ellis, Rt. Hon. John Edward | M'Callum, John M. | Taylor. Theodore C. (Radcliffe) |
| Esslemont, George Birnie | M'Crae, George | Thomas, SirA(Glamorgan,E.) |
| Evans, Samuel T. | M'Kenna, Rt. Hon. Reginald | Thomas, DavidAlfred(Merthyr |
| Fenwick, Charles | M'Laren, H. D. (Stafford, W.) | Thompson. J.W.H.(Somerset,E. |
| Ferens, T. R. | M'Micking, Major G. | Torrance. Sir A. M. |
| Ferguson, R. C. Munro | Mallet, Charles E. | Ure, Alexander |
| Ffrench, Peter | Manfield, Harry (Northants) | Wadsworth. J. |
| Findlay, Alexander | Mansfield, H.Rendall(Lincoln) | Walker. H. De R. (Leicester) |
| Flavin, Michael Joseph | Marnham, F. J. | Walters. John Tudor |
| Flynn, James Christopher | Mason, A. E. W. (Coventry) | Walton, Joseph (Barnsley) |
| Ward, W.Dudley (Southampton | Whitley, John Henry (Halifax) | Winfrey, R. |
| Wardle, George J. | Whittaker, Sir Thomas Palmer | Wood, T. M'Kinnon |
| Waring, Walter | Wiles, Thomas | Young, Samuel |
| Waterlow, D. S. | Wilson, Hon. C.H.W. (Hull, W.) | Yoxall, James Henry |
| White, George (Norfolk) | Wilson, Henry J. (York, W.R.) | |
| White, J. D. (Dumbartonshire) | Wilson, John (Durham, Mid) | TELLERS FOR THE NOES— |
| White. Luke (York, E.R.) | Wilson, P. W. (St. Pancras, S.) | Mr. Whiteley and Mr. J. A. Pease. |
| Whitehead, Rowland | Wilson, W. T. Westhoughton) |
Bill read a second time, and committed.
§ And it being a quarter past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further proceeding was postponed without Question put.