FINANCE BILL.

HC Deb 09 July 1907 vol 177 cc1449-536

Considered in Committee.

(In the Committee.)

[Mr. EMMOTT (Oldham) in the Chair.]

Clause 19 agreed to.

Clause 20:—

MR. HAROLD COX (Preston)

moved to amend the words in the clause excepting from its application persons whose remuneration does not exceed the sum for the time being fixed as the limit for the total exemption from income-tax. The Amendment was that the sum of£100 should be substituted. The clause provided that every employer when required to do so by notice from an assessor, should give a return of the incomes of all persons employed by him excepting persons whose income did not exceed the sum for the time being fixed as the limit for total exemption. The object of his Amendment was to call attention to the desirability of extending income-tax downwards. He would like to express his gratification at having hoard a Cabinet Minister giving his opinion in favour of graduated income-tax, It was his idea that every man should pay some tax, if he had an income of any sort, towards the expenses of the State. The second point which he wished to press upon the right hon. Gentleman's attention was that the clause as it .stood would enable a great many people who had other property and ought to pay income-tax to evade taxation. He could see no possible objection to his Amendment, and if it were accepted the Government would have the advantage of additional information as to the wages of the more highly paid members of the working classes.

Amendment proposed— In page 9, line 15, to leave out from the word 'sum,' to the end of sub-section, and insert the words, "of one hundred pounds."—(Mr. Harold Cox.)

THE CHANCELLOR OF THE EXCHEQUER (Mr. ASQUITH, Fifeshire, E.)

said he quite understood the hon. Member's view with regard to the larger question. He was not quite sure, how- ever, that he understood the second point. The hon. Member would observe, if he looked at the second paragraph of the section that— This provision applies to all person employed by an employer, except persons who are not employed in any other employment and whose remuneration in the employment, for the year does not exceed the sum for the time being fixed as the limit for total exemption from income-tax.

MR. HAROLD COX

said that, without asking the Chancellor of the Exchequer to alter the incidence of taxation, his Amendment was merely to enable him to get additional information with regard to the wages of the better paid working classes.

MR. ASQUITH

failed to see why the hon. Member fixed the sum at£100.

MR. HAROLD COX

said he did so merely to be on the safe side.

MR. ASQUITH

promised to consider the matter.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

Clause 21: —

*MR. CHIOZZA MONEY (Paddington, N.)

moved an Amendment, the effect of which was to require a declaration of aggregate income from all sources from every person on whom notice was served. He said that the Amendment dealt only with the machinery of the income-tax, but was of the greatest possible importance in connection with any just arrangement of taxation. As the clause stood it was necessary for any trader or any person making any profits, gains, or income in respect of which he was chargeable under Schedule D or Schedule E in the Income Tax Act, 1853, to make a return in the form required by the notice whether he was or was not chargeable with duty. That covered very many cases. In addition the State obtained personal declarations of yearly income-tax from a considerable number of income-tax payers desiring to claim abatement. He supposed the number of declarations might in this way amount to 700,000. As he had already pointed out in a former debate, this number represented a considerable proportion of the income-tax payers. He would also draw attention to the fact that, under the provisions of the present Finance Bill, there was a system of differentiation introduced which was only brought into operation in respect of all such persons as cared to make a declaration that their total income did not exceed£2,000 a year. If they showed Somerset House that their income was under that sum, then they would have the benefit of the lower rate of 9d. instead of 1s. in the£That would have the effect of raising the number of ratepayers making individual declaration from 700,000 to perhaps 900,000. As a result nine out of every eleven income-tax payers or thereabouts would in future be compelled to declare their entire incomes. The effect of his Amendment was to claim an individual declaration from every taxpayer, and he failed to see what could possibly be said against such a plan. On the other hand, however, there was a great deal to be said for it. It was high time we informed ourselves more closely as to the distribution of the wealth of the country from a social point of view and from the point of view of the statesman who desired to acquaint himself with the social meaning and effect of our manifold activities. Such information was well worth having for its own sake. Whenever they attempted to arrive at a just system of taxation they were repeatedly baulked because they could not estimate the distribution of income with absolute accuracy. Whenever an appeal was made for a graduated income-tax they were told that their estimates were illusory, and that there was not sufficient foundation for the statement that the rich were very rich and the poor were very poor. It was high time that they began to address themselves to obtaining more accurate information as to this really very important matter. There was also the injustice of the thing. They went to employers and compelled them to return what, in the great majority of cases, was the aggregate incomes of their employees, whilst at the same time they did not require the employers themselves to return their incomes. Under the new provisions of the Bill, which made a searching investigation even into work- men's incomes, undoubtedly an even greater sense of injustice would be caused than at present existed. He did not blame the Chancellor of the Exchequer for using greater care, on the other hand he gave him his support, but he thought it was time that they made the methods of income-tax calculation more stringent for the rich as well as for the poor. When they had done that they would no longer have to adopt the rough-and-ready methods which necessarily governed our system. At present the Chancellor of the Exchequer could only come to the House and remind the Committee that every 1d. of the income-tax yielded roughly about£2,000,000. That was not enough. They wanted to know the operation of that penny in regard to all taxpayers. He would be most happy to accept any Amendment the Chancellor of the Exchequer might think necessary in connection with the wording of the clause; but, so far as the principle of it was concerned, he urged it upon his attention, and trusted that in the interests of a just and scientific system of taxation he would see his way to accept it.

Amendment proposed— In page 9, line 24, to leave out Subsection(1), and insert: (1) Every person upon whom notice is served in manner prescribed by Section 48 of the Income-tax Act. 1842 (which section relates to the delivery of notices by assessors), requiring him to make a return of his income chargeable to duty under any and every schedule of the income-tax, shall make a return in the form required by the notice, which shall show the amount of his aggregate income from ail sources, whether he is or is not chargeable with duty, and upon what part or parts of such aggregate income, if any, income-tax has already been paid under the income-tax Acts by deduction at the source, and in default shall be liable to a penalty under Section 55 of the Income-tax Act, 1842. Provided that a penalty inflicted in the case of a person proceeded against for not complying with this provision, who proves that he was not chargeable to income-tax, shall not exceed£5 for any one offence." —(Mr. Chiozza Money.)

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

THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON, Tower Hamlets, Poplar)

said he understood that his hon. friend desired, instead of the present system of returns of income when abatements were demanded, that every individual should be required to return the whole of his aggregate income. He thought his Motion was a little premature. If the Chancellor of the Exchequer had this year seen his way to propose something in the nature of a graduated income-tax or a super-tax, then the proposal of the hon. Member would have been necessary, because it would then clearly be essential that every taxpayer should return the whole of his income; but until they had the opportunity of considering the question of a super-tax he did not see that any advantage would be gained by the proposal. It would lead to a good deal of irritation and would be of no administrative advantage to the Department, who, under the Bill as it stood, would obtain all the returns they required for the purpose of assessing and imposing the income-tax. There was no necessity for the proposal either on pecuniary or administrative grounds, and he was afraid the Government could not accept it. His hon. friend had based his proposal chiefly on the ground, that it would give interesting and useful statistics to future Chancellors of the Exchequer and to students of finance like himself. He agreed that it would do so, and he agreed also that they were at present groping in the dark in regard to many of these matters. They had not the statistics and the information with regard to the fortunes of taxpayers, which were no doubt very useful, but he did not think they would derive sufficient benefit to warrant their imposing the proposed additional burden on the taxpayers. The Bill was intended in some cases to simplify the returns and to obtain more adequate returns, but his hon. friend had not been able to show there would be any pecuniary or administrative benefit for his proposal, and he was afraid they must oppose it and ask him to postpone it until some more opportune season of dealing with the question.

MR. S. T. EVANS (Glamorganshire, Mid.)

said he was sorry on various grounds to hear the speech of the right hon. Gentleman. He did not follow that it was at all necessary to show that there would be any advantage to the Exchequer from having returns made, but as a matter of fact, there would be considerable benefit, because not only was it clear that it was morally right to compel everybody to make returns when they already compelled nine out of ten, but, if they did so, they would be able to put their hands on a great deal of income which escaped taxation at the present time. The Income-Tax Committee reported that, in their opinion, personal declaration of total net income should be compulsory, and that it would be of great value, not merely for statistical purposes, but also in preventing evasion and avoidance of full assessment— Compulsory personal declaration from each individual of his total net income in respect of which taxation is payable is expedient, and will do much to prevent avoidance of payment of income-tax. He knew the words "in respect of which taxation is payable" limited the matter to some extent, but he was on the point whether any profit would result to the State from calling from the returns, and he thought it was perfectly clear, if they did make it compulsory upon everybody to make the returns, they would be able to seize a great deal of assessable income which now escaped altogether. The right hon. Gentleman had said the returns would cause a great deal of irritation; but why, when they were already irritating 700,000 taxpayers, should they decline to irritate the 200,000 taxpayers at the top of the list? It might be some irritation to trades people to have to make returns of their incomes, but the people whose incomes were not returned at all were those who had their own accountants and to whom it would be no trouble whatever. He absolutely failed to understand why they should not compel those people to make returns when they were already irritating 700,000 taxpayers. There was no doubt that the motive which actuated the 700,000 taxpayers to make the returns was that of securing abatements, but the object of the Exchequer was to ascertain the proper amount of income-tax that people ought to pay, and, if that could be done by the application of the screw in the one case, surely there was no reason why the screw should not be applied in the other. He submitted that the Chancellor of the Exchequer might even now adopt the recommendations of the Committee so far as they went and accept the proposal of his hon. friend, which went further than the Committee, in order to put himself on sound ground. If the Chancellor next year was going to apply his energies—as no doubt he would—in further improving the law in regard to the income-tax, he ought to seize the opportunity now, and next year he would not be groping about in the dark. If these compulsory returns were made, he would know what amount of money was available, and probably he would find that the amount was so large that he would be prepared to adopt the recommendations of the Committee with regard to a super-tax. This was an essential part of the perfecting of the machinery of the income-tax laws. The Chancellor had gone a long way in that direction, but he was a little diffident when he drew the line at this point, and he hoped that the right hon. Gentleman would even now adopt the proposal of his hon. friend.

*MR. ASQUITH

said he could assure the hon. and learned Gentleman and his hon. friend who had proposed the Amendment that he did not at all accept or assent to many of the arguments which came from them with regard to its being inquisitorial and offensive to require compulsory returns of this kind. It was very possible they might come to it before they were very much older. He would be glad, however, if on the present occasion his lion, friend did not press his Amendment. It was not quite correct to say that it carried out the recommendations of the Income-tax Committee. The hon. Member for Paddington knew that.

*MR. CHIOZZA-MONEY

I did not say so,

MR. ASQUITH

said it went a great deal further. The real utility of it would be that it was a necessary preliminary to a graduation of the income-tax in the upper scale—that was to say, to the imposition of a super-tax. He was sure that it was with that object that his hon. friend proposed the Amendment as part of the general scheme which he had seriously adumbrated in regard to future requirements. It was a coherent part of that scheme, but, as he explained in intro- ducing his Budget, without any prejudice whatever to future action as to the super-tax, he did not find himself in a position to give any definite decision as to the graduation of the income-tax. Therefore as he thought the steps they were taking at present by the earlier clauses would bring in a great deal of income which otherwise would not have been brought in, he hoped his hon. friends would be content with raising the question. He assured them that he would give most careful attention to this subject next year.

*MR. EVERETT (Suffolk, Woodbridge)

wished to support the Amendment. Many hon. Members felt that the Budget did not give sufficient relief to the poor, and unduly favoured the rich. By accepting the Amendment the Chancellor would get information from the rich which might prove a very valuable asset to the Treasury in future years in dealing with them. When such a large number of people were being required to make returns of their full incomes there seemed very little reason for refraining from asking the same from the very few at the top. At least it would not hurt those individuals. Most of them were probably in the habit for their own gratification of jotting down once a year the figures us to their income and perhaps capital too. Knowledge as to the incomes of all would be very valuable knowledge for the Treasury to possess. This Budget continued to take hard cash from the pockets of the poor. He hoped his right hon. friend would not flinch at asking for returns of the amounts of their incomes from the rich.

MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)

inquired whether the Chancellor of the Exchequer could give them any estimate of the amount of additional revenue which he expected to derive under this clause.

MR. ASQUITH

replied that he was afraid it was impossible, because these were people many of whom ex hypothesi had not made a return before. He hoped it would be large but he could not say the amount.

Amendment negatived.

Question proposed, "That Clause 21 stand part of the Bill."

SIR F. BANBURY (City of London)

explained that having been engaged in the Scottish Grand Committee, he had been unable to be present in the House, and found his Amendments had been passed over. [Cries of "Order."] He knew he was out of order, but this was a very serious matter for Members of both sides of the House, and therefore he called the attention of the House to it.

MR. ASQUITH

said he was very sorry, but it was not his fault.

Clause 21 agreed to.

Clause 22: —

Amendment proposed— In page 10, line 15, to leave out the words, by surveyors."—(Mr. Asquith.)

Amendment agreed to.

MR. ASQUITH

said he proposed to move now an Amendment which would give satisfaction to his hon. friend the Member for Sutherland, as it carried out the intention of an Amendment which the hon. Member had on the Paper to the effect that this clause should not be retrospective. He himself thought it was desirable that they should not go back on the past, and he proposed to add at the end of the clause the words which appeared on the Paper in his name. This was a considerable concession, but on the whole he thought it desirable to make it.

Amendment proposed— In page[10, line 25, at the end, to add the words '(3) Nothing in this section shrill affect proceedings for the recovery of fines or penalties incurred before the commencement of this Act, or extend the time during which any assessment may be made or amended, or a charge may be made on any person in respect of income-tax charged under any Act passed before the commencement of this Act."—(Mr. Asquith.)

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

*MR. MORTON (Sutherland)

thanked the right hon. Gentleman for the concession. No doubt the words of the right hon. Gentleman were better than his own Amendment. He hoped the proposal would carry out the wishes of those who were interested in the matter in the City, and at whose request he had brought the matter before the House.

Question put, and agreed to.

Clause, as amended, agreed to.

Clause 23: —

MR. COURTHOPE (Sussex, Rye)

moved the omission of Subsection 1 which repealed Section 133 of the Income-tax Act of 1842 and Section 6 of the Revenue Act, 1865, which provide for the reduction of assessments or the repayment of duty in certain cases where the profits of the year of assessment fall short of the sum on which the assessment has been made. He complained that while the clause contained provisions with respect to computing profits upon an average of three years, the right hon. Gentleman was abolishing the provisions under which a man who made a bad year could get allowance for it in regard to income-tax. He wished to put this case to the Chancellor of the Exchequer. If the present Government remained in power for three years and then went out of office, how would the right hon. Gentle man like it if the authorities of the day said to him: "For three years you have been receiving an income of£5,000 a year in your official capacity; now you are out of office and have nothing, that does not matter—you must still pay an income-tax on your average income of the last three years?" Would the right hon. Gentleman like that?

Mr. ASQUITH

Suppose I made a little more?

MR. COURTHOPE

said that would go into the average of the three years following and increase the right hon. Gentleman's average. He wished to deal with the case of the man who made an assessible income for three years and then made no more. He asked the Chancellor of the Exchequer to put himself in his position and realise what his feelings might be. Surely the man had a right to re-open the question. He thought it would be as well to get rid of the subsection and leave the law as it now stood. No doubt the Chancellor of the Exchequer would say that under the present system a man might re-open the figures in regard to a bad year, yet he got the benefit of a good year. Still the Exchequer got the benefit of that in the working out of the average, and between the income-tax payer and the revenue authorities there was no injustice whatever in the present system. Although in individual cases one man might gain and another lose a little, on the whole the system worked well, and he did not think the right hon. Gentleman could bring forward any argument in favour of the repeal of these sections. He begged to move.

Amendment proposed— In page 10, line 26, to leave out Subsection (1)." —(Mr: Courthope.)

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

MR. SYDNEY BUXTON

said the Committee must remember that the system of averages, which was not in question now, was introduced for the benefit of a certain number of persons who paid income-tax under Schedule D, and did not apply to other individuals. That, concession, as he took it, was granted to traders because they could not tell exactly year by year what their income would be. and it was intended to work in such a way that at the end of a man's business career, so to speak, he would have paid exactly what he would have paid had he been able to ascertain his exact income year by year. So that it was really as broad as it was long. It was now the system, and what they required was justice for the State. At the present time the income-tax payer took the average of the three years previous to that on which he was assessed and paid on that. But if in the course of the current year, the one on which he was assessed, he had made a less profit than upon the previous year, he was entitled to re-open his assessment and to substitute the profit of the current year for that of the first year of the average and pay on the average of the three years, including the bad current year. The result was that there was a reduction in the average, and to that extent he paid less income-tax. It was a difficult matter to explain, and if permitted he would illustrate it by a concrete case. Let the Committee assume the case of a trader who, in the three years upon which the average had been taken, had made£20.000 in the first year, £10,000 in the second, and£30,000 in the third. £60,000 in the three years-giving an average of£20,000 a year, on which he was assessed for the year of assessment. But if in that year he only made a profit of£10,000, he was allowed to re-open his assessment and substitute for the£20,000 in the first year the£10,000 of the current year, which reduced the total figures for the three-years to £50,000, or an average of£16,600 a year. He would pay on the£16,600) and thus derive a material benefit.. The individual in that case not only got the benefit of paying on the lower year of profit on the average, but that bad year came in four times, whereas the£30,000 year only came in twice instead of three times. He contended that in justice to the State each year's profit should come in for three years, so that a man should pay on his actual profits for the three years, because the Committee must remember that the Crown had now power to re-open the assessment and take a year of a greater profit in order to obtain a larger tax. He therefore did not think the hon. Gentleman was quite right in assuming that the State had the same benefit as the individual. The Act was not only unjust as between the State and the individual, but it was also unfair as between individual and individual, because the amount of relief obtained depended almost entirely on the difference of the profits in what was called the current year and the profits of the first year of the averages, and exclusively upon the profits of the current year falling below the profits of the first year, which were to be taken out. He would illustrate that by taking the case of three firms, each of whom made for three years£10,000 a year. The first firm made £15,000 the first year, £5,000the second, and£10.000 the third. In the current year the profits of that firm fell to£5,000. They appealed to the assessor and took their first year as£5,000, instead of£15,000, and reduced their average from£10,000 to£6,660, thus obtaining relief of income-tax on£3,330. The second firm made in the first year £5,000, in the second£15,000, and in the third£10,000. They also made a profit of only£5,000 in the current year, and inasmuch as that profit did not fall below the profit of the first year, they got no benefit. The third firm made£6,000 in the first year, £12,000 in the second, and£12,000 in the third. In the current year they made a profit of£5,000, which they substituted for the£6,000 in the first" year, but the total amount for the three years was£29,000, or an average of£9,666, and therefore they received relief only in respect of£333. He hoped he had made it clear. If they took three firms in the same period of four years making identically the same profits, and if they took advantage of the protection which the Act of Parliament afforded, one firm got a reduction of the income-tax on£333, and the other got a reduction on£3,333. It appeared to him that there was something radically wrong in the section, and that if they were to do justice it was time that they made some alteration in it. He had endeavoured to show that as between the Crown and particular individuals it was unfair to the Crown. As between the individuals themselves it was grossly unequal and unfair, and the deductions that might be obtained under Section 133 were purely a matter of luck. It might be that a very small reduction of profit might lead to a large deduction under the section. In regard to cases of hardship, he had endeavoured to point out that they had already been dealt with, and, from what he knew, he could safely say that the Board of Inland Revenue who had to deal with this matter and the Inland Revenue Commissioners were never severe in hard cases. Their inclination was always to treat such eases with the greatest consideration. They had the power to do so under this section, and if that section were swept away the power would still continue with them. He hoped, therefore, that this recommendation of Lord Ritchie and his Committee would be acceptable to the House of Commons.

MR. AUSTEN CHAMBERLAIN

said he had followed the argument of the right hon. Gentleman, who, he agreed, had proved that which he had set out to prove, namely, that Section 133, which it was proposed to repeal, worked unfairly to the State in certain cases, and unfairly as between individual firms if they compared their cases one with another. So far he was wholly with the right hon. Gentleman. But there was a case which the Postmaster-General had not touched, and one in which it seemed to him that hardship would arise. They were simply abolishing Section 133 without taking any other steps. The Chancellor of the Exchequer left the average system where it was, and therefore he was not concerned to argue the question. The Chancellor of the Exchequer desired to have his revenue as steady as possible, and there was some advantage from the Treasury point of view in the system of averages. But that must be governed by the consideration which the Postmaster-General had put forth, that their object was to take in the long run from the individual what he ought to pay, neither less nor more, and the Treasury objection to the present system was that it took from the individual, in a great number of cases, in the long run, less than he ought to pay, because a good year did not come into the average as often as it ought, whereas a bad year was sure to remain in the average the full length of time. Let them take the case of a business just starting, and which had not a three-years average; as he understood the Postmaster-General, that individual or business would pay on whatever it made; it would not pay more, but it certainly would not pay on less than it had made. In the case of a company or business being wound up, and where the profits had been decreasing for the last few years of the company's life, or the trader's life, he or they would be paying more than they ought to pay unless the Chancellor of the Exchequer could do something to meet the case He confessed that he did not think it was covered; he thought it was a case of hardship with which the Chancellor of the Exchequer might be ready to deal, and he would ask the right hon. Gentleman whether he was prepared to consider it on Report.

*SIR CHARLES DILKE (Gloucestershire, Forest of Dean)

said the particular point which the ex-Chancellor of the Exchequer had just mentioned was dealt with by Paragraph 109 of the Departmental Committee's Report, which came between the two paragraphs contained in this clause. In that paragraph it stated—as the right hon. Gentleman the Postmaster-General had said just now, and with a similar vagueness if he would forgive him for saying so—that the provisions of Section 134 of the Act of 1842, which gave a discretion to the Commissioners, and of Section 23 of the Customs and Inland Revenue Act of 1890, would be a sufficient protection against hardship to any individual. That was very vague. It appeared to rest entirely with the Commissioners of Inland Revenue, and that did not appear to be a very satisfactory way to meet the matter. He thought they ought to have some sort of reply from the right hon. Gentleman. One question which he wished to ask the Chancellor of the Exchequer was what he expected to gain in the way of money by giving up this Section 133, so far as it still remained. The sum lost to revenue by the remaining fragment of the section had been increasing enormously in the last few years. In the interesting Memorandum of the Solicitor to the Inland Revenue, which would be found in the appendix to the Report of the Departmental Committee in 1905, and published last year, it was shown that the amount which would be gained had increased from£152.000 in 1901–2, to£363,000 in 1903–4. That was a very large amount of money, and it was increasing very rapidly, and he would like to know how much the Chancellor of the Exchequer was going to gain; and with regard to the discretion left to the Commissioners under Section 134 of the Act of 1842, and Section 23 of the Act of 1890, affecting actual loss, and also declining business, he wanted to know how far that discretion was exercised and on what lines.

SIR F. BANBURY,

in regard to the question of averages, said the real reason why there was a very strong feeling among traders in this matter was that they were not allowed, if they were making a less sum than in the previous year, to deduct the difference, with the result that they paid a larger sum in a bad year. Under the system of averages matters really righted themselves, and the trader had to say eventually, unless he had a decaying business. He was not dealing with a decaying business or one that was going to be wound up, however; and in the case of a genuine business, which was subject to the fluctuations of trade, he thought those who knew anything about trade would acknowledge that those fluctuations were very much greater than many persons thought. A firm, though prosperous, often made very much less in one year than in another; and the result was that in the event of a bad year the firm in question would have to pay out of their pockets a very much larger sum in that year when they could least afford it. He did not believe there would be any great gain to the Exchequer by the substitution of this system. His point had not been met by the Postmaster-General. The right hon. Gentleman had argued that it was hard upon the Treasury that they could not raise the amount of the profit in an given year if the amount increased the average. Although the argument he used was very clear, it was directed against the system of averages, under which very extraordinary results must occur. It was said that one trader would be benefited more than another, but the question was should a trader be deprived of this advantage in a bad year when it was most inconvenient that he should be obliged to pay on profits which he had not earned; He hoped the Government would be prepared to abandon this clause. If the Chancellor of the Exchequer desired to do a popular thing without hurting himself or the Treasury in any appreciable manner, he would accept this Amendment.

MR. ASQUITH

said the attack which had been made was really one upon the average system. As Chancellor of the Exchequer he believed that he would gain by the abolition of the system. One point against its abolition was that undoubtedly it tended to equalise the estimates made by the Chancellor of the Exchequer. Otherwise he might find in a year of bad trade the amount going down by leaps and bounds, whilst in a year of good trade it might go up in the same way, and that state of things was very undesirable from a revenue point of view. Under the circumstances he thought it was better to retain the system as a safeguard against fluctuation. If they accepted that view, surely the good year and the bad year ought to be dealt with on the same footing. The trader who had a bad year could take advantage of it later, whereas the revenue authorities could not take advantage of a good year. It was a case of "heads I win, tails you lose." As had pointed been out by the Postmaster-General, this clause was one of the recommendations of the Ritchie Committee, and he had simply adopted it. The ground upon which the Ritchie Committee made the recommendation was that what was sauce for the goose was sauce for the gander. In the case which the hon. Baronet the Member for the City of London had suggested the loss would be taken into account in dealing with the three years average. He had been told that the Inland Revenue always allowed this loss to be subtracted from the plus quantities for the purpose of working out the average. That was the practice which was carried on. When that difficulty was got out of the way surely the proposal of the Ritchie Committee was a perfectly fair one. One case which had been mentioned by the right hon. Member for East Worcestershire he thought deserved consideration—he alluded to the ease of businesses which were steadily on the down grade. Undoubtedly that was a case of hardship, and some provision ought to be made for it. He would undertake between then and the Report stage to see if he could introduce some words which by extending the powers given to the Inland Revenue might deal with that case. As for the system being a gain to the Exchequer he did not think it would be so small as had been made out by the hon. Baronet opposite, nor did he think they would realise such a large sum as had been mentioned by another hon. Member. He thought, however, that it would be something substantial, and with the qualification he proposed to make he did not think it would involve any hardship.

SIR F. BANBURY

thanked the Chancellor of the Exchequer for the way the had met them and the explanation he had given about the actual loss through bad trade being allowed.

MR. SAMUEL ROBERTS (Sheffield, Ecclesall)

also thanked the right hon. Gentleman for the statement he had made. The hon. Baronet had correctly stated the reasons why they desired to repeal this clause. Recently traders had been availing themselves of their right of appeal, and the Chancellor of the Exchequer had discovered that he had had large repayments to make. That, how-ever, was no reason why the Chancellor of the Exchequer should receive money on profits which had not been earned, which was precisely what happened in the ease of dwindling businesses. If the right hon. Gentleman brought forward an Amendment in that direction it would go a great way towards satisfying their requirements. Just by way of illustration he would assume a case in which the assessment for 1903 1904, and 1905, was£13,000, £4,000, and£7,000. That gave an average of£8,000. But supposing that in 1906 the profits had dwindled to£1,000, his claim would be as follows: The first year would be cut off, and the assessment would be charged on the average of£4,000, £7,000, and£1,000. He would, therefore, have to pay on£4,000, although he had only made£1,000.

MR. SYDNEY BUXTON

On the other hand he paid on£8,000 when he was making £13,000.

MR, SAMUEL ROBERTS

said the right hon. Gentleman was assuming that his profits were continuous. He himself was assuming that the profits were going down. Therefore, the Chancellor of the Exchequer under the present system was receiving tax revenue from that man on money which had not been earned. When the taxpayer had paid the money he could not possibly get it back. There was certainly a c se for consideration. The pledge given by the Chancellor of the Exchequer would go a long way to meet what he and his friends desired, though personally he would have preferred that the right hon. Gentleman had accepted the Amendment.

*MR. MORTON

said he was aware that there was very great complication in connection with the system of averaging incomes for the purposes of the income-tax. There was a feeling among traders that the new system would be harder on them than the old. He was glad the Chancellor of the Exchequer had promised further to consider the matter and bring up a proposal on the Report stage. If the right hon. Gentleman in reconsidering the matter could see his way to drop Subsection (1) altogether, it would be much better all round. So far as he had been able to calculate he did not think that in the long run the revenue would lose much by the emission of the subsection.

MR. FELL (Great Yarmouth)

said the Chancellor of the Exchequer had stated in answer to a Question that the losses which the revenue sustained in the last three years by repayments had been£300,000, £400,000, and£500,000. The sum last mentioned was for the year 1906. The right hon. Gentleman further stated that it was a growing amount, partly 'owing to its being more generally known to secretaries and others that repayments could be got, and partly owing to a considerable decrease in certain departments of industry after a very active time.

MR. COURTHOPE

thanked the Chancellor of the Exchequer for the important promise he had given, and asked leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

SIR F. BANBURY

moved an Amendment to provide that if a person chargeable with income-tax proved "within twelve months" of the end of the year that his profits or gains fell short of the amount computed in accordance with the Income Tax Acts, he should be entitled to repayment of the amount overpaid. He said the object of the Amendment was to allow a trader reasonable time to ascertain whether or not he had made a profit. It often happened that a trader did not really know "at the end of the year" whether he had made a profit or a loss, and it might be three or four months after the "year of assessment" before he really did know. He begged to move.

Amendment proposed— 'In page 10, line 36, to leave out the word 'at,' and insert the words 'within twelve months of.' "—(Sir F. Banbury.)

Question proposed, "That the word 'at' stand part of the clause."

MR. ASQUITH

thought the adoption of the Amendment would be a hardship on the taxpayer. The words in the section at present were "at the end of the year." Those words had been construed by the Courts, and he would tell the Committee the construction which had been put upon them. "Dowell's Income Tax Laws" contained the following note: — The words 'at the end of the year, do not mean at any time after the end of the year, or, on the other hand, a certain period which the Court is to determine, within which every case must be brought. The section must receive a reasonable interpretation ,with regard to the exigencies of business. The; words mean the shortest time in which it could be done, if every exertion is made that ought to be made. It depends on the particular circumstances in every case. Therefore, a trader at present was given a reasonable time. The Amendment would introduce a less effective provision than existed at present.

SIR F. BANBURY

asked leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clause 24 agreed to.

Clause 25:—

MR. AUSTIN TAYLOR (Liverpool, East Toxteth)

moved to insert words at the end of the clause to provide that the words "actual cost" should include, in the case of second-hand machinery or plant, the cost to a purchaser. He thought the words of the sub-section were a little ambiguous; at any rate certain members of the trading community, particularly the shipping community, had had a little uneasiness about the meaning. If the words of the Amendment "to the person by whom the concern is carried on," were not inserted, it might be held that the purchaser of a second-hand boat or steamer, or second hand machinery of any kind, was debarred from claiming deductions in respect of wear and tear and depreciation, because these deductions were allowed to a previous owner. He was sure that was not the intention of the subsection. He begged to move.

Amendment proposed— In page 11, line 29, after the word 'deductions,' to insert the words ' to the person by whom the concern is carried on.' "—(Mr. Austin Taylor.)

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

MR. ASQUITH

said he doubted whether the Amendment was necessary. There was no intention to charge a second or third buyer the original prime cost. The cost was the cost to the owner, and not the cost to the person from whom he bought. If the acceptance of the Amendment would allay apprehension in the trading community he had no objection to put it in.

Question put, and agreed to.

Amendment proposed— In page 11, line 30, after the word 'cost' to insert the words 'to that person.' "—(Mr. Austin Taylor.)

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

MR. AUSTIN TAYLOR

said that as a final Amendment he would move "to add after the word 'plant,' the words, 'included in that capital cost any expenditure on machinery or plant by way of renewal, improvement, or reinstatement.'" He knew from actual experience that the Income-Tax Com- missioners would allow any reasonable addition for renewal, improvement, or reinstatement upon an old vessel or upon any other old machinery or plant. He spoke of what he was familiar with, and certainly in regard to steamers and ships large improvements and reinstatements were admitted as reasonable additions to capital cost. There was a question whether the capital cost might not include reinstatements and improvements, and it was only with the object of making the subsection quite clear that he begged to move.

Amendment proposed: — In page 11, line 30, after the word ' plant,' to insert the words 'included in that capital cost any expenditure in machinery or plant by way of renewal, improvement, or reinstatement.' "— (Mr. Austin Taylor.)

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

Clause, as amended, agreed to.

Clause 26 agreed to.

Clause 27: —

SIR F. BAN BURY

moved to leave out the words "during the current financial year." The object of his Amendment was to ensure that the sum of£29,500,000, instead of£28,000,000, should be directed to the reduction of the National Debt As the clause stood the addition of£1,500,000 to the Sinking Fund would only last for this year, and he desired to make it permanent. The finances of the country being in the state they were, he believed they ought to make a great effort to reduce the Debt and to increase the Sinking Fund. They did not know what would happen next year or the year after, and there was always the temptation to any Chancellor of the Exchequer to leave the Sinking Fund in order to supply to some Party or section something on which they had set their hearts. He felt certain that it was in the true interests of the country that his Amendment should be accepted, though he knew perfectly well it would not be.

Amendment proposed— In page 12, line 18, to leave out the words during the current financial year." —(.Sir F. Banbury.)

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

MR. ASQUITH

said he and the hon. Baronet thoroughly discussed the question when he raised it on a former occasion. He saw no reason to change the opinion he then expressed. Although he agreed it was eminently desirable that this extra sum of£1,500,000 should this year be applied to the reduction of the National Debt, he thought it was also desirable that the Chancellor of the Exchequer and the House of Commons should have their hands free to deal with the matter as circumstances required in the future.

MR. AUSTEN CHAMBERLAIN

said that much criticism had been levelled against his Party, and there was no subject on which hon. Gentlemen opposite had spoken more strongly than on the necessity for an increased provision for the reduction of the National Debt. The Chancellor of the Exchequer himself on many occasions had declared in very forcible language that it was the first-duty of the Chancellor of the Exchequer to take steps to restore the credit of the country and to make provision for paying off the heavy Debt which had been incurred. What had the right hon. Gentleman done, following upon those brave words? He proposed, as a temporary measure, to devote£500,000 to paying off Debt last year, and again as a temporary meaure to devote £1,500,000 this year. All his brave words and all the flood of talk poured forth by the present majority when they were in opposition had resolved itself into£2,000,000 additional Debt being paid off in two years. The Chancellor of the Exchequer might retort that he was doing something more, because it had already been urged that the Government were ceasing to borrow for naval and military works, and that in that way they were fulfilling their pledges, although they were not making any substantial and permanent increase to the permanent Debt charge. Those Naval and Military Works Loans, however, were in any case coming to an end. As regarded the Naval Works Loans the late Government publicly announced in the House that they did not intend to introduce any new works into those loans, and in particular they stated that they would provide for the Rosyth Harbour and Docks Works out of Votes. Those loans were coming to an end, and it was possible to bring them to an end because of the work done under them. They were never intended to be a permanent part of our financial system. He was not going into the question as to whether the Government of which he was a member used those powers of borrowing too largely or not. It was arguable, and they had often argued it. In any case they recognised that the necessity which had forced them to have recourse to them had been met by the proposals Parliament had sanctioned, and the loans were therefore coming to an end. It was only in regard to naval and military works that the Chancellor of the Exchequer was making any alteration in the matter. He was already proposing to raise £6,000,000 by annuities of exactly the same kind and in the same way for telegraph purposes. He did not think therefore the Chancellor of the Exchequer could claim with any show of reason or fairness that that was what he and his friends had in their minds when they denounced them for making insufficient provision for the National Debt. He did not think he could claim that what he had done fulfilled the expectations which his and their utterances gave, and he was not surprised that his hon. friend desired to make the charge permanent in order that there should be a nearer approximation between the present charges and the old promises of right lion, and hon. Gentlemen opposite.

Amendment negatived.

*MR. HAROLD COX (Preston)

said he had put down an Amendment to delete Clause 27, and he would state his reasons, although he should not press his Amendment. He had a subsequent new clause down for the reduction of the sugar duty from 1st October next. That would cost exactly £1,500,0(10, the increased sum the Chancellor of the Exchequer proposed to devote to the reduction of the National Debt, and he thought it was his duty to help the right hon. Gentleman out of the difficulty in which his new clause would involve him. He agreed as to the importance of Debt reduction. They were all in favour of it, but after all, they should not lose their heads over it. The Debt reduction must bear some relation to the amount of the Debt, and to the national income and the burden of taxation. If hon. Members disputed those propositions, on what principle did they fix the amount of Debt reduction? Why should they fix the additional sum at£1,500,000 rather than£15,000,000, £50,000,000 or even£100,000,000? There must be some reason in the amount of Debt reduction, and the question was what was a reasonable amount? Last year, no less than£10,177,000 was applied to reduction of Debt. That was the largest, sum ever applied in one year to the reduction of debt. This year we were applying £13,500,000 without the extra£1,500,000 involved in the clause. In previous years when we were doing well, we paid off£6,000,000 or£7,000,000 a year, so that this year we were paying off double what we paid a few years ago. without this extra £1,500,000. In order to see whether that was enough let them compare the present figure with the figure on which Sir Stafford Northcote fixed the Sinking Fund. The Sinking Fund then was barely½ per cent. of the total amount of the Debt, and at that time there was no sugar tax, and the income-tax stood at 2d. in the£. In the golden era of prosperity before the war the Sinking Fund was 1.3 per cent. of the Debt, and at that time there was no sugar duty, the tea duty was only 4d., and the income-tax was 8d. In the present year the reductions we should make, without the extra£1,500,000, would be at the rate of 1.7 of our total indebtedness. Therefore, not only was the actual reduction the largest on record, but the rate per cent. was much higher than it had ever been before. The Chancellor of the Exchequer had therefore done extremely well in regard to the reduction of debt. The only other argument for increasing the Sinking Fund was the low price of Consols. That was undoubtedly a strong argument, but he asked hon. Gentlemen not to exaggerate the importance of the opportunity and not to lose their heads over it. What did the low price of Consols mean? It meant that they were a 3 per cent. invest ment, and what he asked was, whether they were entitled to take the money of the poorest people in the country in order to invest it at 3 per cent. for the benefit of posterity. He contended that if they imposed a tax like the sugar tax to raise this money it was not justifiable finance. Let them pay off debt rapidly, but let them not do it at an abnormal rate at the expense of the food of the children of the poor. He put this suggestion before the Chancellor of the Exchequer to show him where he could get the money to halve the sugar tax. If, however, his right hon. friend did not accept the suggestion he should not press it to a division.

MR. ASQUITH

said this question deat with an essential part of the Budget, and therefore he could not accept the Amendment.

MR. AUSTEN CHAMBERLAIN

asked how much new Debt was going to be created during the year by the issue of Irish land stock, local loans stock, and for military and naval works, together with the new liability to be created by the guaranteed loan for the Transvaal. The country were asked to add a new liability to those which it had at present, and to guarantee an amount of£5,000,000 to the Transvaal. They knew what the old liability was, but when they had added that£5,000,000 and others he would like to know what would be the net reduction of the liabilities of the State during the financial year.

MR. ASQUITH

said that the right hon. Gentleman linked together things that were entirely distinct. It had never been the practice to include in the National Debt any sums for which this country was not primarily liable, such as Irish land and local loans stock. For these the British Government had only a secondary liability, incurred in the case of default, and no default was likely. With regard to the primary obligations of this country, he must refer the right hon. Gentleman to his Budget speech. It was impossible at this period of the year to estimate what amount of Irish land and local loans stock would have to be issued before the end of the financial year.

MR. A. J. BALFOUR (City of London)

said he quite agreed that they must draw a distinction between the National Debt properly so called, and the secondary national obligations, but surely everyone would agree with his right hon. friend the late Chancellor of the Exchequer that if they were to discuss the national liability, they ought to deal not only with those liabilities for which they were responsible primarily, but with those for which they were liable in the second case. If they were only to discuss the National Debt proper, they had only to deal with the burdens which they threw upon the market which had a national obligation behind them. This was a very serious question in the present state of the money market. In dealing with the question however, they must, have some regard to the amounts generally coming upon the tax-payer and which pro tanto were like the National Debt and for which the nation was responsible. They might come upon the tax-payer, and they could not ignore any responsibilities which had been or were going to be in the near future undertaken by the Government. This was not the proper occasion to debate the question, and he was not quite sure that he was in order in discussing it, but it was a subject which should be present in their minds in dealing with this matter, and he had no doubt there would be in the near future some opportunity of reviewing the new obligations which the Government were going to undertake.

MR. ASQUITH

pointed out that such a discussion was not relevant to the Question before the House, as this clause dealt only with the National Debt. The total sum available for the reduction of; debt this year would not be less than£15,383,000. Deducting the new loans for telephones, telegraphs, and other purposes, the estimated sum payable in the current year for the extinction of liability would be£13,400,000—a larger sum than had ever before been set aside for the purpose.

MR. AUSTEN CHAMBERLAIN

said the right hon. Gentleman in the figures he had quoted dealt with the gross liabilities of the State, and the other matters to which he referred were clearly part of the gross liabilities of the State, although he quite agreed that as part of the National Debt and qua National Debt they need not refer to them. That brought him to his second observation, the avowed intention of the Chancellor of the Exchequer to increase the credit of the country, but they might be decreasing the Debt of the country in regard to Government Stocks, while they were increasing it in regard to other stocks on the market. Therefore, unless they knew the total they might not be able to tell whether they had increased the credit of the country or not.

Clause 28 agreed to.

*MR. HAROLD COX

moved the following new clause— As from the first day of October, 1907, the duties imposed by Section 2 of The Finance Act, 1901, and by the First Schedule to that Act, shall each be reduced by one-half. He said the effect of the clause would be to halve the sugar duty from 1st October, and would cost this year£1,500,000. In his recent speech he had suggested that this money should be provided out of the addition which the Chancellor of the Exchequer proposed to the Sinking Fund. He did not however press that suggestion because he felt fully assured that they would have enough money to meet the loss. The surplus would probably be far more than sufficient to meet that sum. This proposal therefore was in no way a wrecking one, and in no way destroyed the Budget, because there was money enough to meet the demand. What were the various excuses which were put-forward for the continuance of this tax? The first excuse was that we had not yet paid off the war debt. What did that mean? The war debt, according to the Chancellor of the Exchequer, was calculated at present at£130,000,000, and the war taxation still remaining was£20,000,000 sterling. It was absurd to suppose that that rate was to be maintained until the whole of the war debt had been paid off. The interest on this war debt of £130,000,000 at 2¾ per cent. was about£3,500,000 a year. If they added a sinking fund of the same amount they would still get only£7,000,000 a year. Half the present .war taxes would suffice to pay off the whole of our war debt in eleven or twelve years. He would like to ask who were the men who now suggested that they should keep on the sugar tax to pay off war debt. They were the very men who voted against this tax when it was wanted for the daily expenditure of an actual war. He would not mention their names; they sat on the Treasury Bench. Surely, if it was unjustifiable to put on this tax when money was wanted for a war every day it was still more unjustifiable to keep it on now. He dismissed that excuse therefore as not being substantiated, and he came to the. next one— that halving the duty would not benefit the consumer. The excuse was that if you they halved a halfpenny the benefit to the consumer would be of very little use to him. He could, however, assure the Chancellor of the Exchequer that there were many parts of the country where the farthing was still very much used. There were, moreover, a large number of poor people who buy two pounds of sugar at least at a time, and he knew of village shops where an order for six pounds of sugar a week was a constant one from numerous poor customers. Moreover, the very poor who bought single pounds, if they did not gain in the reduction of the price would gain in quality. If a farthing were taken off the duty the effect would be to postpone the action of the retailer in raising the price one halfpenny or hasten the period when he had to lower it. The sugar trade was worked in much the same way as that of bread. The price of bread was not generally altered by less than a halfpenny at a time, but directly the price of flour was lowered it hastened the fall in the price of bread. The reduction of a farthing would mean the waving of l½d. a week to the labourer who bought six pounds of sugar, and in large and poor families even more was consumed. The third excuse was that the money was wanted for old-age pensions. In this regard the two speeches of the Chancellor of the Ex-chequer did not tally. In his Budget speech the right hon. Gentleman said— I must not permanently impair my sources of revenue in view of the future. That seemed to imply that the right hon. Gentleman desired to keep the sugar tax for old age pensions. On another occasion he gave another interpretation of his words, but it was certain that in the minds of a great many people that was the purpose for which this tax was required. He had not the slightest desire to conceal the fact that he personally was opposed to any system for providing pensions at the expense of the tax-payer. He regarded it as a subsidy in aid of wages, and therefore injurious to the interests of the wage-earners of the community. But assuming they wanted old-age pensions and a subsidy to provide them he still held that the Government was not justified in using the sugar duty for that purpose. Many Members might have promised old-age pensions but the Government did not. They wisely abstained from committing themselves. The Chancellor of the Exchequer said— I never gave, nor, so far as I know, did any of my colleagues on this Bench give, any pledge at the general election on the subject of what is called old-age pension?. But the Government did allow the whole Liberal Party to commit itself to the abolition of the sugar tax. They voted against this tax in the previous Parliament, and their Party was justified in believing that this was one of the first taxes they would abolish. Were they to repudiate that emphatic pledge in order to take up a scheme which before the elections never took concrete shape? If that was to be so. what was the good of any pledges? The difference was fundamental. One thing was definitely and distinctly promised and the other vaguely foreshadowed. They must first carry out the definite and distinct pledge before they took up the vague scheme. If not. what was the value of any pledge? If hon. Members might so lightly repudiate what they so earnestly promised, what became of the doctrine that this House represented the will of the people? From the point of view of political fidelity alone they were bound to make old-age pensions contingent on the abolition of the sugar tax. But that was not the only consideration. The sugar tax was the most vicious of all our taxes. In the first place, it was a tax on the food of the people, and, secondly, it was a tax on the raw material of many British industries. It was also the most useful substitute for alcohol, as temperance Members would discover if they went to India, where everybody was a teetotaller and everybody was a large consumer of sugar. Few realised how many were the industries that depended on sugar as raw material. There was a further objection to this tax, and that was the complication that it involved. This was the consideration which made Mr. Cobden, Mr. Gladstone and Sir Robert Peel anxious to purge the tariff so as to get rid of the multiplicity of taxes which then existed. If hon. Members would refer to the Customs report they would find that all kinds of different articles, from blacking to crystallized ginger, were affected by this tax. He remembered when this tax was first imposed he had in another capacity to consult with different people as to its effect on different trades, and he found in some cases owing to its complications that for weeks and months trades were brought to a standstill because traders did not know what proportion of sugar the articles they sold contained. The tax contained all the disadvantages that a tax could contain, not the least of which was an element of protection. It was impossible to avoid either injustice to some manufacturers or special favour—protection—to others. Either was as bad as the other. Yet this was the tax they were asked to maintain in order to give old-age pensions on what was called free trade lines. A section of the Liberal Party was alarmed lest tariff reformers should outbid them by offering the bribe of old-age pensions in return for tariff reform. He would prefer the Liberal Party not to take part in the dishonest game of bribing the electors with the tax-payers money. But if they did want to play the game they should at least play it intelligently. The main argument of the Liberal Party against protection had always been that they would not tax the food of the people or the raw materials of our industries. But the sugar duty did both. How would they persuade the electors that the sugar tax was supreme virtue and the corn tax intolerable vice? The argument was too subtle. The average man could not see why it was wrong to give a favour to a particular producer at the cost of all the consumers; he could not see that if it was done for one producer it ought to be done for all; and if it was done for all the final result would be that they would be exactly in the same position as before, except that an army of officials would have to be kept to collect the money. They would also have taught the people to trust to what they could squeeze out of Parliament rather than to their own exertions. Even hon. Gentlemen opposite, who were fairly intelligent in most ways, could not understand this important distinction between protective and non-protective taxes, or at least said they did not. Perhaps it would be more polite to say that they had not given sufficient attention to the subject. He was quite sure that the hon. Baronet the Member for the City of London, .if he were to devote to the study of this subject the same amount of ingenuity that he now devoted to other purposes, would very speedily master it; and, in his dreams, he sometimes saw the hon. Baronet, in a regenerate state, patiently coaching the President of the Board of Trade in the elements of political economy. He had said that the subject was difficult. It was difficult to prove to the mass of the electors the rather subtle point involved in the distinction between protective and non-protective taxes. That being so, it seemed to him of the utmost importance, if they wished to preserve free trade, that they should also preserve those clear and distinct arguments that the mass of the people could understand. The people knew what was meant by a tax on food and raw material. Let them preserve those arguments if they wished to preserve free trade, and it was because he wished to preserve free trade that he appealed to the Committee to support the clause.

New clause— As from the first day of October," 1907, the duties imposed by Section 2 of the Finance Act, 1901, and by the first Schedule to that Act, shall each be reduced one-half." —(Mr. Harold Cox.)

Brought up, and read a first time.

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

MR. ASQUITH

said that when he had looked at the Notice Paper and saw the various Amendments put down, he had expected that the hon. and learned Member for the Walton Division of Liverpool, whom he saw in his place, would have had the courage to move on behalf of the Party opposite the clause which had stood on the Paper in his name for he did not know how many days. But the hon. and learned Member, who was not generally afflicted with such shrinking modesty, preferred on the present occasion to retire into obscurity in order to leave to his hon. friend on that side the duty of proposing a clause couched in a very much milder form. They would hear, of course, as the debate developed, what were the views of right hon. and hon. Gentlemen opposite. The sugar tax had been referred to by his hon. friend as a war tax. He thought it was not so introduced; it was introduced by Sir M. Hicks Beach in 1901, not as a war tax, but as part of a general scheme for broadening the basis of taxation. Were the Party opposite now prepared to vote for its repeal? Perhaps they would hear in the course of the debate whether they were or not—whether they were going to send the sugar tax to join the coal tax and the corn tax, in which case the whole of this great experiment of broadening the basis of taxation would have disappeared into the limbo of obscurity. It might be said that this was an Amendment only to reduce, not to repeal. What of that? They knew perfectly well the grounds on which reduction of the sugar duty had been and probably would again be advocated by some of the right hon. Gentlemen who sat opposite. If they were going to reduce the sugar duty, how were they going to make good the gap but by imposing other duties, again broadening the basis, and roping in a few more of the necessaries of life—meat, corn, butter, and the rest of it? He was sure his hon. friend the Member for Preston did not share those views; and they would await with curiosity the explanations of his supporters on the other side. His hon. friend had said something about pledges. As far as he was concerned, or so far as the Government were concerned, their hands were as completely untied by pledges in regard to the sugar tax as they were in regard to old-age pensions. He would recall to the Committee the circumstances of the last general election. The Government were put in office before the election took place, and he, being Chancellor of the Exchequer, had very naturally to speak perhaps more than many of his colleagues on what the financial policy of the new Government was. What was the attitude he took up throughout the election? He would read a quotation from the first speech he made, he believed it was to his constituents— I tell you perfectly frankly that it is absolutely impossible to hope for any remission of taxation until you have reduced the level of expenditure at present prevailing in this country, and until you have made, as it is my intention and hope that I shall make, a better and more adequate provision for the redemption of the National Debt. That was the pledge he had given to his constituents; and he challenged any one in any quarter of the House to find in any speech of his, or, he believed, of any of his colleagues, made at the general election, a promise to deal either with this or any other duty in the way of remission. He never gave any such promise, and never would, and certainly as far as he was concerned they were perfectly free from any pledge. It was said that a number of his hon. friends made pledges in favour of repealing the sugar tax. He dared say they did. He did not suppose there was a man on that side who did not agree with him that the sugar duty was an oppressive and vexatious duty. He assented to almost all the arguments that had been used by his hon. friend. It was a tax on food, and not only on food, but upon one of the first necessaries of life; it was a tax on raw material from which some, not of our most important, but very important industries suffered. He must say he was a little surprised when his hon. friend, of all people in the House, —an able exponent of the most unadulterated and sublimated form of the doctrine of free trade—said that it was not easy to distinguish, so as to convince the electorate of this country, between a tax on sugar which was not protective and a tax on corn which was. He would undertake to say that his hon. friend had performed that task with the greatest possible success from a hundred platforms and was prepared to do it again. He himself had certainly done it—at least he thought he had—not once, but a score of times; and to his mind there was the broadest and strongest distinction in the world, even as among taxes on food, between those which were protective and those which were not. If that were the time and the place he could elaborate that argument with many illustrations; but that was not the time and the place, and he did not want to enter upon what was merely a parenthetical difference of opinion. He entirely agreed with the main current of his hon. friend's argument, that the sugar tax was a bad tax, a tax which ought to be got rid of, and got rid of at the earliest possible moment. He had said so before, he said so now, and he should say so again, and he hoped some day the time would come when he would do more than satisfy the hon. Gentleman in that direction. But what was the clause which his hon. friend proposed? He agreed with what he was proposing, but now that they had gone through the whole of the Budget, now that the Committee had agreed, clause by clause, to every one of the financial conditions of the year—all of which hung together as interdependent parts of a collective whole— now that they had made very considerable reductions for this year in the income-tax, now that they had devoted an additional sum of no less than£1,500,000 for the reduction of the National Debt, now that they had disposed of the whole current revenue of the year, his hon. friend came forward and asked them to incur an additional expenditure of£1,500,000, and proprosed no provision of any sort for making-good the gap. Where was the difference to come from? It would have to be made good, for there would be an actual deficit on the year if they assented to the proposal. They had appropriated the revenue of the year with the general consent of the Committee. When considering general policy he had pointed out that he should much prefer to deal with the sugar tax as a whole than to tinker with it. It was perfectly true, as his hon. friend had said, that sooner or later, and in one way or other, small reductions in duty of this kind, which had no apparent appreciable effect on the price, did get down to the consumer. Yet this process was very slow in its operation, the reduction was very apt to be intercepted and deflected in its course, and the ultimate benefit to the consumer was only reaped after a considerable period of time. He remembered using that as an argument in the Budget speech for not dealing with the sugar duty except as a whole. He agreed that a very small reduction of the sugar duty would benefit some of the powerful interests which had been raising considerable agitation. The agitation had proceeded rather more from that source,, he thought, than from the actual consumers, because it would cheapen the raw material used by those who happened to be producers of what did not fall within the category of necessaries, but what he would call the simpler luxuries of life, which people could do without, or for which they could find substitutes— things for which the raising of the price-would be very apt to curtail the demand. The producers of mineral waters, confectionery, and other things of that kind, would benefit substantially even by a very small reduction in this duty, because it affected their raw material. With regard to the consumer, he did not believe the comparatively minute reduction his hon. friend proposed would, during the current financial year, have any really appreciable effect. His hon. friend had quoted a passage from a speech of his which he said gave rise to the inference—he could not think why—that he looked upon the sugar duty as part of the permanent fiscal machinery of the country. He had said that of the income-tax, but had never said that he looked on the sugar duty in that way. On the contrary, he had made use of expressions which showed that he regarded it rather in the light of a necessary but at the same time a transient evil, one which he could not at the moment do without, because it brought him in£6,000,000 of revenue, but one which he would be only too glad to get rid of when he saw his way to make good the gap. The financial situation of the present year was such that he could not do it, and no financier in his position could. He defied anybody, with the resources, actual and prospective, at his disposal for making the Budget of this year, to have produced a scheme by which the sugar tax could have been effectually dealt with. On the other hand, he had, as he hoped, by putting the income-tax upon a broader and more just basis, and by largely adding to our expenditure on the reduction of debt, paved the way—and he had never represented this Budget to be more than a pioneer Budget—in the years which followed, both for reductions in indirect taxation and for the develpment of a policy of fruitful social reform. They could not do everything at once, and he could only repeat that if this clause were added to the Bill and this reduction, or any other substantial reduction, were incorporated it would dislocate the whole Budget and undermine its very foundation without conferring any appreciable benefit upon the great mass of the consumers. He must therefore adhere to the Bill as it stood. But he did so with the full conviction that the tax was vicious in principle, that it was burdensome in its incidence, unequal in its operation as between different classes and interests, and as such that it ought not to form a permanent part of the fiscal machinery of the country, but as soon as the general financial situation allowed of it, ought to to be reduced, and if possible altogether abolished.

*MR. F. E. SMITH (Liverpool, Walton)

said he had listened to the right hon. Gentleman's speech with astonishment, for he had intimated that there were confronting him fatal financial difficulties having regard to the stage the Bill had reached. He could readily believe that. The right hon. Gentleman had said that no responsible financier confronted with the problem which was before him would contemplate the reduction suggested by the Amendment. He would like, however, to call the attention of the Chancellor of the Exchequer to the fact that their difficulties were by no means novel; whatever difficulties confronted the Chancellor of the Exchequer to-day, so far as either the abolition or substantial reduction of the sugar duty was concerned, equally confronted his predecessor during the last four years. Indeed, he might say that the difficulties in the way of making a change of the kind now proposed were even greater then than they were at the present time. He was asked at the general election, as he believed many hon. Members were asked, whether he was prepared to vote for the abolition of the sugar duty. He was new to the House of Commons and not familiar with the modern criteria for ascertaining the will of the people, which was to be so decisive in these days. He was simple enough to think that it was the proper thing to give an honest answer to the question, and by doing so he placed himself under disadvantages which his opponent did not experience. Having given the best consideration he could to the question he decided that it was not right, and one was not entitled to make electioneering capital by giving explicit assurances, binding upon men of honour, that one would vote for the abolition of the tax. He placed himself in communication with the body who invited him to make a pledge upon the point and he discovered that his answer given in the face of a large working-class constituency was that, although he thought it was desirable that the tax should be reduced if the general financial conditions of the country justified such reduction, he was not so satisfied that they did justify it. That was the answer he gave. The Chancellor of the Exchequer had told them that if the Amendment of the hon. Member for Preston were carried it would dislocate the whole Budget. He would remind the right hon. Gentleman that although he had told them with so great satisfaction that his hands were perfectly clean and that he had given no pledge upon the matter at the time of the general election but had rather indicated that the country could not expect any reduction in the sugar tax, yet the right hon. Gentleman himself voted in that House on the same, stage of the Finance Bill, in 1905, for this very reduction on the sugar tax. Therefore, how futile it was to say that he had never given any pledge on the subject at the general election when he had encouraged his ignorant followers who were making these pledges to recommend themselves to their constituencies by assurances he knew to be false. What were the arguments used by hon. Members opposite on the occasion of the Finance Bill of 1905, and which had been used repeatedly in the course of similar discussions? He did not profess to make himself responsible for the calculations, but they had never been contradicted. Hon. Members on the Front Bench opposite, including the Prime Minister, had voted for the abolition of this duty and they had told the House that if the incidence of the sugar duty were reduced a peasant who earned 18s. a week paid, in reference to the sugar duty alone, and reducing the payment to terms of income-tax, 2.63d. in the . A working man with an income of 30s. a week paid 2.166d. and a man with£1,500 a year would pay .2d. The man with£3,500 a year would pay 157d. and with£20,000 a year .328. He had not checked these figures for himself, but they were put before the House in each successive year, and were received with acclamation by hon. Members opposite, and were largely instrumental in eliciting from them the pledges they had made. The House had heard a great deal about pledges given by irresponsible Members of the Government, but he would like to read the statement made by the right hon. Gentleman the President of the Board of Trade in 1904, who said— Were it not for coming into conflict with the Chair it would be perfectly possible to suggest alternative proposals of taxation even if they were only licence duties. But it was not for the Opposition to suggest alternatives. As it was once said by the right hon. Gentleman the Member for West Birmingham, it was not for the physician to prescribe until he had been called in, and the Opposition were not bound to disclose their remedies until they were in a position to diagnose the complaint. But each tax had to be considered on its own merits. The only way in which Governments could be found to face the alternatives of reducing expenditure was by the House of Commons declaring that an undue burden was being placed upon the people, and demanding that the expenditure should be cut down. All the House of Commons could do was to say, We will not impose additional burdens upon the people, the necessities of the Empire do not justify them; therefore you must find some other remedy by getting the heads of spending departments to cut down their estimates.' The author of these arguments had absented himself with no small discretion from the debate to-day. It was indeed fortunate that although the Government were apparently oblivious of their former views they had on the benches opposite 150 men who could be absolutely relied upon. The pledge given by hon. Members opposite on this point was clear and explicit, for they unconditionally pledged themselves to the following question— The tax on sugar was originally imposed as a war tax when the idea of the Brussels Convention had not been seriously considered; it has since been retained to meet the general expenditure of the country. Are you prepared to vote for the abolition of the duty, and so afford some relief to the public and to the sugar-using industry?" There was no possible misunderstanding about that pledge. There was nothing to indicate three or four years delay and there was nothing to indicate that the claims of social reform might pos pone remission. The question was: "Are you prepared to vote for the abolition of the duty?" In these days of shifting political ideals, and of wide spread opportunism it was refreshing to reflect that they had in the House that day 150 plain, honest men whose word was their bond; men who met the vigilant solicitations of the Patronage Secretary and his subordinates with the simple but sufficient answer: "We have promised, and men of honour keep their promises." Relying upon the pledges they had given he looked forward to tin; enjoyment of meeting these Ironsides in the lobby, and he contemplated with the greatest possible indifference the consequences which the carrying of the Amendment would have either upon the Government or the Finance Bill.

*MR. COWAN (Surrey, Guildford)

said that as one of the noble army of pledge-givers he intended to support the Amendment of his hon. friend the Member for Preston. He opposed the sugar duty because it was a war tax, a food tax, and a tax upon industry. He was one of those who had given a pledge to his constituents in the terms which had been read by the hon. and learned Member for Liverpool. He gave that pledge believing that he was acting in the spirit of that intention of the present Government. On this point he had apparently misunderstood the views of his leaders, but there were 150 other hon. Members who had done the same thing. On every Liberal platform one of the chief complaints against the late Government was that after blundering into an unnecessary and costly war, when hostilities ceased they still retained the war taxes, including the sugar duty. They stated that on every platform, and they understood, and they gave the country to understand, that the Government intended speedily to repeal all the war taxation put on by the late Government. As free traders they all declared for a free breakfast table. How could they have a free breakfast table if they retained the sugar tax? He and his friends objected to the tax because sugar was the raw material of many trades. There had been thousands of workmen thrown out of employment on account of the imposition of the tax. Harrowing pictures had been drawn of the destitution which the wives and families of these men had suffered on account of the retention of the tax. It had destroyed the margin of profit out of which the wage fund came. Promises might be very inconvenient when those who made them were called upon to keep them. He supposed they were chiefly inconvenient because they had an awkward habit of coming home to roost. What did the country expect the Government to do when in power? They were expected to effect economies in the great spending departments, and to broaden the basis of taxation. They were to broaden the basis of taxation by making land pay its proper share of the burdens of the State. But the Government also led their supporters and the country generally to believe that they were going to get rid of all the special war taxation. They made the first step last year with the abolition of the export duty on coal, the only successful fiscal experiment made by the late Government. He wished it had been retained. If it had been retained and the income-tax changes deferred, the people might have been relieved of half of the burden of the sugar tax. He ventured to say that the reduction of the duty by one half would have had an early effect on the price of sugar. He did not think the sugar tax could, justifiably be retained, to pay for old-age pensions. While he was strongly convinced that old-age pensions should be provided by the State, he held that they should come from the general revenue; no special tax should be ear- marked for the purpose. The fund from which the pensions were to be paid should not be contributed to in a disproportionate degree by the poorer classes. No class should contribute to it in any special form. He understood that hon. Members on the other side were going to vote for the abolition of a tax they themselves imposed, as they would vote for anything that would embarrass the Government. He therefore hoped his hon. friend the Member for Preston would not press his Motion provided the Chancellor of the Exchequer would give sufficient ground for the belief that next year he would reduce this tax. Members could then go back to their constituencies as men who had not disregarded their pledges. If the right hon. Gentleman was unable to give more assurance than he had given, and if his hon. friend carried his Motion to a division, he should vote for it.

MR. GWYNN (Galway)

said the Party to which he belonged regarded the sugar tax simply as one imposed for the purposes of a war which was unnecessary and costly. In Ireland they detested and deplored the war on moral grounds just as much as the Prime Minister and the Secretary of State for India detested it. The people of Ireland were forced to pay this tax against their will. He understood that the sugar tax at present yielded something over£6,000,000 a year. That meant that the people of Ireland were paying from year to year more than the whole of the loyalists in the Colonies contributed to the war. They talked of the loyalty of the Colonies, but if in supporting the war they had been imposing on themselves a burden like that which had been imposed on this country their loyalty might not have been quite so great. That was one reason why he and his friends would vote for the reduction of this tax. If the Motion for its complete extinction had not been withdrawn, they would have voted for it. Looking at this as a pioneer Budget, he asked which way it was heading, and he found it was preserving the taxes on tea and sugar, which pressed on the poorest classes in the community. He commended to Labour Members' attention the financial relations between England and Ireland, and said they would find that it was through the medium of such taxes as this that the great robbery wan carried on year by year, and Ireland had to pay two or three millions more than she ought to pay towards the Imperial burden. The poorest men in Ireland paid as much under this sugar tax as the richest, and incidentally it pressed hard upon new Irish industries. Regarding it as flagrantly unjust, he should vote for the reduction of the tax.

*MR. SNOWDEN (Blackburn)

said he would support the Amendment. He did not intend to follow the example of the hon. Member opposite by making a speech in support of the Amendment, and then asking the mover not to press it. He confessed that he did not feel altogether comfortable in being associated in this matter with hon. Members above the gangway. A few days ago the hon. Member for the Walton Division of Liverpool was good enough to express his opinion on the ideas held by Members among whom he (Mr. Snowden) sat, opinions which he described as abominable, detestable, and atrocious. He could never hope to emulate the hon. Member in the picturesque and lurid language he had used, or in his courteous attitude towards opponents, and he would therefore content himself by saying that the hon. Gentleman expressed somewhat their sentiments in regard to the opinions generally held by him and those with whom he associated. It was noteworthy that in the course of his speech he did not give one reason why the Amendment should be supported, and he ignored the fact that he himself was one of the 150 who were pledged on the subject. He thought the whole tone of the speech justified the hon. Member for Guildford in saying that the only motive the hon. Gentleman had in supporting the Amendment was to endeavour to embarrass the Government. He could only suggest that the bringing forward of such an Amendment as this was presumption on the part of hon. Members who themselves were responsible for the tax, which they would never have boon called upon to repeal had it not been for the arrogant Imperialism of the last Government. He supported the Amendment as a tariff reformer, a tariff reformer who wanted a change in the fiscal system of the country, not in the direction of broadening but rather in the direction of narrowing it. He wanted a tariff reform which would not increase the burden of the poor, a tariff' reform which would not make the rich richer at the expense of the poor He wanted to see a tariff reform which would lighten what he held to be the present oppressive burden of taxation which fell upon the poorest of the population. He had two reasons why he supported that Amendment. The first was that the tax was unjustifiable, and the second that an excessive amount of taxation was paid by the working classes of the country, altogether out of proportion to that paid by the richer classes. It had been stated in the course of the debate that there ought to be some equality between the amounts raised by direct and indirect taxation. They seemed not to recognise the great difference in the capacity between those who paid indirect taxation and those on whom the direct taxes were levied. Perhaps he might be allowed to labour that point for a few minutes, but before he did so he would like to remark that the Chancellor of the Exchequer had denied that either he or any of his colleagues at the last election gave any pledge for the repeal of the sugar tax. He had in his possession a leaflet issued by the Liberal Publication Department, and very widely circulated in the constituencies represented by hon. Members opposite, and that leaflet, which he supposed was issued under the supervision and direction of the right hon. Gentleman the present Chief Secretary for Ireland, was headed "How the working man is taxed," and according to the statement made in that the working man with his family paid a tax equal to 1s. 7d. in the£, which was altogether out of proportion to the burden which fell on the richer classes. They knew there were more than two million families in the country whoso total family income was loss than£1 per week. What would be the amount of taxation paid by these two million families reduced to terms of income-tax? If it were 1s. 7d., taking the figures of the publication to which he had referred, upon an income of 30s. it was something like 2s. a, week of income-tax paid by these two million families with an income not exceeding£1 a week. He thought nobody would seriously dispute the statement, that the well-to-do did not pay in indirect taxation on food more than the poorer part of the population. The Chancellor of the Exchequer in this Budget was relieving well to-do people with incomes of£40 a week. What did a family with an income of£40 a week pay in indirect taxation? The Chancellor of the Exchequer was reducing the taxation on£40 a week incomes to 9d. in the pound, and therefore the total amount of taxation reduced to terms of income-tax paid by families under this Bill earning £40 a week was 9¾d. in the pound, whereas under the same Bill a family of four, five or six persons with only£1 a week was paying a tax of 2s. in the pound. That, he submitted, was a sufficient justification for accepting his Amendment, and thereby doing something to lessen this oppressive and unjust burden on the poorest part of the population. Then he had another reason why he urged that it was a matter of urgent necessity. He had spoken of the incapacity of the working classes to pay, and he wanted now to show that that capacity was growing less. Their capacity to pay the sugar lax was not so great as it was at the time the tax was imposed. From 1900 to 1905, in each of these years, according to the official statistics of the Board of Trade, the wages of the working people were going down, and not only was the actual income of the working people less, but the purchasing power of their wages was less too. He had in his possession figures in regard to the cost of a number of necessaries relating to his own constituency in 1899, such as tea, lard, sugar, and one or two other articles, and he found that, comparing prices—the prices of 1899 with the prices of to-day—there had boon an increase in the cost of these necessary articles of 30 per cent. The Chancellor of the Exchequer stated last week, when a Motion was made by an hon. Member in favour of reducing the£2,000 exemption limit to£1,000, that the claim of the income-tax payer was urgent, and that the present scale could not be defended. Surely lie could not defend the continuance, even for another twelve months, of a tax equal to 2s. in the pound upon people with incomes so small that if every penny of it was spent to the best advantage it was quite impossible for them to provide themselves with the necessaries of life. Could he defend the continuance for one twelve months of the taxation of these people at 2s. in the pound and the taxation of people with£40 a week at 9¾d. in the pound? There had been a reduction in the tea duty, but was there a Member of that House who really believed that the advantage of that reduction on tea had gone to the benefit of the consumer? Some hon. Members thought so, it seemed, but the Chancellor of the Exchequer evidently had his doubts about the matter, because over and over again he had stated in that House that he was inclined to think that if they had not received the advantage in a reduction of the price they had got it in hotter quality. Might he put another question to hon. Members? Was there a Member in that House who had detected an improvement in the quality of his tea during the last six months? Let the Chancellor of the Exchequer go about the country addressing mothers' meetings and trying to convince them that they had reaped the advantage of this reduction of 1d. a pound on tea. Let them take the coal tax, that had not benefited the consumer. The result had boon to increase the price of coal to the consumer. He had received a circular that morning which stated that the price of coal was 8s. per ton more than it was twelve months ago. As soon as the Chancellor of the Exchequer last year had made the announcement of his intention to abolish the coal tax, he (Mr. Snowden) mot a coal dealer in the north of England in a largo way of business, and he said the price of coal had already increased 2s. The abolition of the coal tax increased the foreign demand, and taking advantage of the increased foreign demand coal in this country increased in price. Therefore he submitted that, taking what had boon done in tea and coal, they might justly say that so far there had been nothing done since this Government came into office to relieve by a single penny the taxation of the poorest part of the population. He had another reason why he should support this new clause of the hon. Member for Preston. The Chancellor of the Exchequer protested against the construction which had been placed on his Budget speech in regard to what he said about social reform and a "nest egg," but from a leaflet just issued by the Liberal Association for use in by-elections he load that no change was made in indirect taxation, because Mr. Asquith declined to deprive himself of sources of taxation which he intended to use for social reforms; and it was only fair that a part of the cost of old-age pensions should be raised from taxes paid for the most part by the working classes. But if old age pensions were going to be found out of taxes levied upon the working people of England, then they were going to be of no benefit. He wanted this sugar tax abolished this year, and the Chancellor of the Exchequer would have to look elsewhere to find the money for his old-age pensions. Something had been said by one or two speakers who preceded him about the will of the people. Could there be any doubt about what the will of the people was, or the will of the overwhelming majority of the people was on this question? Those who paid only indirect taxation were nine-tenths of the population, and naturally they would be unanimous in supporting a proposal of this sort. They wore there to carry out the desires of their constituents, and they were told that there were 150 Members who were pledged to the policy of the abolition of the sugar duty. Those hon. Members had had no share in framing this Budget, and they had not been asked whether they would like the sugar tax abolished or not. This Budget did not carry out the will of the people. It was simply the will of the Chancellor of the Exchequer, and no doubt having used sufficient "peaceful persuasion" during the last few days the right hon. Gentleman might succeed in imposing his autocratic will upon his followers; but his hon. friend the Member for Jarrow would be able to tell him that this Budget had more to do with the ignominious defeat of the Government candidate than anything else. His hon. friend the Member for Preston had spoken about the difficulty of getting people to understand economic questions, but here was one economic question they could understand. They could understand that the Chancellor of the Exchequer had shown his consideration for those whom in their poverty they regarded as being in affluence, and although the Government would succeed no doubt in defeating this Amendment the matter would not end there, and the will of the people in this matter would ultimately prevail.

MR. STUART WORTLEY (Sheffield, Hallam)

supported the Amendment be- cause he believed this tax was an interference with British industry. That alone was to him a cogent reason for getting rid of it. He admitted he had not comedown to the House prepared with weighty figures to show the bad effect of the tax. The Chancellor of the Exchequer had made it quite unnecessary for anyone to do anything of the kind. The right hon. Gentleman had described this as a bad tax, as a tax which ought to be got rid of at the earliest moment, and had said that he hoped to be able on some future day to got rid of it. While listening to the passionate appeal of the hon. Member for Preston he was reminded of the lady in the garden tearing a flower to pieces slowly leaf by leaf, and saying, "This year, next year, some time, never." If this tax was to go on, in time they wore going to get these old-age pensions which the right hon. Gentleman had so rashly promised. For his own part he was impressed neither by the fastidiousness of the hon. Member for Blackburn nor by any consideration whether it was possible by carrying this Amendment either to provide old-age pensions or other wise to reconsider the Budget. The fact was that the right hon. Gentleman on the main merits of the case had to allow judgment to go by default. He could only coerce the great bulk of his followers. He said. "By carrying this Amendment you will embarrass the Government in a way in which no other Motion will." They (the Opposition) had nothing to do with chat consideration. They would follow the shining example of the right hon. Gentleman when in Opposition. To his mind this was a tax upon food and ought to be removed; it was a tax on industry. It did not allow a free field to British working men in the only market which they possessed. It was a tax which was more worthy to be got rid of than the tax upon tea or the tax upon coal, which the right hon. Gentleman, some of them thought, got rid of with unnecessary levity.

*MR. S. T. EVANS

said he had waited more or less patiently to hear what the Front Opposition Bench had to say on this matter, and at last he had heard it. He had, however, referred to the Division List of 1901 to see how the right hon. Gentleman voted on the subject when the tax was first imposed. On that occasion a Motion was made by his hon. friend the Member for Northampton that the sugar duty should be treated as a yearly tax, so that each year they could deal with it directly instead of by way of Amendment or new clause. The right hon. Gentleman who had just spoken against the duty as a tax upon the food of the people, and upon industry, helped to defeat the Motion of his hon. friend. They heard a good deal about pledges, but he would ask what about settled convictions, and what about the convictions of the right hon. Gentleman in 1901? The truth was that this present fight was an unreal one. The hon. Member for Blackburn was as usual ungrateful for the gifts offered by the Government. He (Mr. Evans) did not not say that this Government was the best possible Government. He thought it might be better, but whenever gifts did come from them he should accept them and not look upon the donors as Greeks. The hon. Member said the abolition of the coal tax did not benefit the working class, but who was it who agitated for the repeal of that tax if not the working classes in South Wales and elsewhere? Let the hon. Member go down to South Wales and tell the miners and working people there that what they asked for did not benefit them. The hon. Member also said that the reduction of a penny per pound off the tea duty did not benefit the people, but how, if that was so, did he think that the removal of a duty of a fourth of a penny off sugar for six months only would benefit them? What was the meaning of this union of some of the Labour Members with the Tories above the gangway? The motive was, not to take anything off the sugar duty, but a desire to defeat the Government. He would ask hon. Members opposite whether they were prepared to vote for a small portion of the duty being taken off, a portion which only equalled a farthing in the pound, for only six months, for the purpose of turning out the Liberal Government who had promised to give the hon. Members measures which they all desired. Supposing the Government were defeated and the Party opposite came into power, did the Labour Members really expect that they would take off the sugar tax? If this Government were turned out this tax would not be abolished, for Sir Michael Hicks Beach who imposed it distinctly said it was not a war tax, but a tax which ought to take its place and be continued as part of the general system of taxation of the country. He, himself, was quite easy in his mind, because he did not give a pledge with regard to that vote; but, at the same time, if the Government met this Amendment to-day by saying that the sugar tax ought to be a permanent tax—if they repeated the words of Sir M. Hicks Beach in imposing it—then he would vote against them. He believed with the hon. Member for Blackburn that indirect taxation was higher than it ought to be, and he would much prefer putting 2d. on the income-tax this year and abolishing the sugar tax altogether. But the Committee must look at the general fiscal basis upon which the Government were preparing to Budget not only for this year but for years to come. They had already embarked on a readjustment of the income-tax, which was as important to the working classes indirectly as the reduction of indirect taxation was directly. Though it was not his duty to salvo the consciences of others he did not believe that the pledge which had been quoted was intended to mean that those who gave the pledge must vote against the sugar duty whatever the circumstances, or the time, or the result might be. This was an attempt, engineered by hon. Members above and below the gangway, merely to make difficulties among the supporters of the Government, and accordingly he would oppose it.

*MR. STANLEY WILSON (Yorkshire, E. R., Holderness)

said he would like to say a few words in support of the Amendment. He had invariably on every public platform advocated the reduction of this tax. Hon. Gentlemen opposite said the tax was not introduced as part of a war tax, but he thought everybody understood it was. He well remembered the Under-Secretary of the Colonies going down to the country and addressing a meeting of working men, asking them for pure patriotism to give their support to this tax because it was a temporary tax, and they could think when they put a lump of sugar in their tea they were firing a shot at Kruger. The working man was still firing that shot at Kruger, and apparently he would still go on firing it for some years to come. The Chancellor of the Exchequer had, he thought, admitted that the tax was too high at the present time, and he had had two opportunities of removing the injustice to many of the industries of this country which it inflicted. If instead of removing the coal tax—the benefit of which had gone into the hands of the colliery proprietors and not the working men—the Chancellor of the Exchequer had removed this tax, the working classes would have benefited. He admitted that at the present moment sugar was fairly cheap, but what had they to say to the future? The Government had announced their intention of following the fatuous policy of retiring from the Brussels Convention, which in his opinion would cause a great feeling of uncertainty, because before we joined that Convention the price of sugar was subject to the most severe fluctuations. A year hence we might find ourselves under the control of foreign sugar bounties. He could not help thinking that hon. Members on the other side must welcome this new clause, because it gave them an opportunity of carrying out the pledges they gave at the last general election. The Chancellor of the Exchequer and the Prime Minister had his sincere sympathy for the somewhat awkward position in which they wore placed at the present moment. They were men of the highest political morality, and he failed to understand how they could possibly go to their supporters and ask them to break the definite solemn pledge they had given to the electors of the country. There were many hon. Members who had gained their seats by the pledges given with regard to this sugar tax. A man who broke that pledge was not worthy of a seat in that House. If hon. Member's who gave this definite pledge were not going to fulfil it, the question would be asked," When is a pledge not a pledge? and the answer would be, "When it is given by a Liberal Member of Parliament."

MR. MASTERMAN (West Ham, N.)

said it was interesting to listen to a lecture on broken election pledges. He was not one of the 150 Members who had given the pledge about which they had heard so much. He was astonished that there should have been 150 Members on any side to give such a pledge, and he must confess that he did not feel any great sorrow for them. Perhaps they would learn to throw such pledges into the fire the next time they met their constituents—which he believed was an invariable practice of every safe politician. Under existing circumstances he would be compelled to vote with his hon. friend the Member for Preston in this matter. They had heard the hon. Member for Glamorgan trying to explain how absurd pledges were under certain conditions; they had heard him attacking hon. Gentlemen opposite in quite an unjustifiable manner, not for the first time, when they happened to express an opinion which many on that side of the House shared, in favour of such a readjustment of taxation as would press less hardly upon the poorest class of the community. Regarding the Budget as a whole, he could not see how it was possible that Members who had voted for every clause of the Finance Bill could now calmly vote with the hon. Member for Preston for the repeal of the sugar tax. It was not business. But his own past was entirely clear on that matter, because from the beginning he had realised that if they were going to vote for the remission of taxation in certain directions, they would have to vote against the remission of taxation in other directions, and he thought the Chancellor of the Exchequer would at least recognise that he was consistent when he said that he had not voted for reducing the tea tax, and that he had voted against the relief given to earned incomes of under£2,000 a year. They wore all glad that the right hon. Gentleman had taken more money from the rich; he wished the Chancellor had taken a considerably larger amount in death duties, but perhaps the amount of£700,000 which had been estimated would increase to£1,200,000 or£ 1,400, 000 before the year was over. That was a sum which the Chancellor of the Exchequer could use for any purpose.

MR. ASQUITH

Not before the year is over.

MR. MASTERMAN

said that at least there would be a substantial sum before the year was over, and most of them had a strong hope that the rate of mortality might continue and that there would be a very substantial increase on the estimate of the Chancellor of the Exchequer. The right hon. Gentleman had got an extra sum, and honestly agreed with a large number of Members that the taxpayers who most needed relief were those with incomes between£160 and£2,000 a year, and he relieved them of a quarter of their income-tax. He know that this class of voters in the country largely controlled newspapers, and that the class who earned incomes below£2,000 included all the journalists in this country, and the opinion had got abroad, emphasised by statements about the bitter cry of the middle classes, that these wore people groaning under the income-tax, and that they ought to be relieved. He protested against that view. He held first that that class should not be relieved, and, secondly, that the relief which was to be given to them ought to go to the partial repeal of the sugar duty. If he had given a pledge it would not affect him at all; he should vote exactly in that way, and he should not make a pathetic appeal to the Chancellor of the Exchequer to get him out of a difficult position, for which, after all, the right hon. Gentleman was not responsible. It was no good their neglecting the fact that this particular duty pressed with inconsistent hardship upon two classes of the community—the very poor as he saw thorn in his own constituency, and those who had been thrown out of work in consequence of the ruin brought on their industry by two forces, one the Sugar Convention and the other the sugar tax. He was in rather a different position from most Members of that House, because he happened to be fighting a by-election when this question was before the country. The evidence brought before him, especially from East London, was that a number of people had been thrown out of employment owing to the losses which had fallen on some industries in which sugar was a raw material. He did not wish to indulge in pathos, but he did not think the House realised the struggle there was for existence in some of the very poorest quarters of this city—how the poor had to pile up halfpennies and pennies to provide a summer holiday for their children, and the pressure upon them was not to be compared with the pressure on men with£500 or£1,500 a year. He thought he was justified in voting that they should not give the remission of 3d. in the£ to the income-tax: payers, and that the amount should go to the relief of the sugar tax, which was at present left in its full burden. He must honestly confess, however, that he could not follow the position of hon. Members who, either from fear of their constituents or from a wish to vote against any kind of taxation, had up till now accepted every kind of clause in the Budget Bill, and wore now, in an entirely irresponsible manner, going to record their vote in favour of this particular Amendment.

*MR. THEODORE TAYLOR (Lancashire, Radcliffe)

said he was extremely sorry that the Chancellor of the Exchequer had kept on the sugar tax in opposition to which he had spoken again and again in the country. Were it not for the fact that he knew the Chancellor's heart was with him, he would now vote against its continuance; but oven though he disapproved of the tax he was going to vote for his Government. [OPPOSITION and ironical laughter.] Yes, as hon. Members opposite had done in the last Parliament, and it did not he in their mouths to reproach hon. Members on his side for doing the same thing. The Chancellor of the Exchequer had gone as far as he could in the direction of committing himself to the abolition of the sugar tax in his next Budget. If it were merely a question of the merits of the tax he would give a hundred votes against it if he had them. It was the worst possible tax. Whatever might be said about the coal tax, as to which he considered there was same doubt, there could be no doubt whatever that this tax was a burden upon the consumer. All taxes upon articles necessarily imported from abroad wore paid by the consumer in the country to which they came. Of all the really objectionable taxes imposed by a Conservative Government this was the very worst, and yet it was the one still untouched. It was not protective like the corn tax, but it was at a much more burdensome rate. The corn tax and the coal tax had been repealed, and the tea duty had been twice reduced, but the sugar tax still remained, though this was the second Budget of a free trade Government. The non-remission of the sugar tax was in painful contrast to the remission on earned incomes under£2,000 a year. This tax was one on earned incomes under £40 and£50 a year. The Chancellor of the Exchequer had said that he did not think that he could halve the tax, because sugar was not sold by farthings, but he had himself found that it was so sold. He gave the Chancellor of the Exchequer credit, however, for the desire to make only one disturbance in the trades in which sugar was used, and that the best disturbance was that of knocking the tax off altogether. This was the worst possible tax because it must necessarily fall most heavily upon the very poor in proportion to their income. Sugar was a food. He believed that there was more sugar eaten by the children of the poor than the children of the rich. Poor children ate sugar and jam where rich children ate moat. Sugar was, moreover, not only a raw material of many industries, but it was a most essential raw material of an industry that they wanted to cultivate in this country, viz., the fruit industry. They ought to do all that they could to promote the culture of fruit and the manufacture of jam and such articles. The sugar tax was the poor man's income-tax, and in his conscience he could not in any way defend it. It was only on the principle that he would trust the Chancellor of the Exchequer to carry out his promise at a suitable time—that was a time when he was able to afford it, which he hoped would be next year. Did any one doubt that if the tax had yielded£60,000 instead of £6,000,000 it would have been repealed? The real reason why the tax was retained was because it produced£6,000,000. But the bigger the tax the greater the wrong, if it was wrong to tax poor people£600,000, it was ten times as wrong to tax thorn £6,000,000. The extent of the evil was no excuse for the evil itself. The Chancellor of the Exchequer would, be was sure, have been the first to resent the new imposition of the tax. It came within the category of the many things that existed because they were there already. It might be urged as a reason for the continuance of the tax that sugar was cheap in spite of it, but as free traders they objected to going into the question of the price of commodities to be engineered by a Government. It was a bad reason. It was not the business of the Government to make cheap things dear. It was the business of a Liberal Government, at any rate, to make things as cheap as they could. A tax upon an article of large consumption added very considerably to the amount of capital necessary to carry on the trades concerned. This was a tax of 40 per cent. on the market value of raw sugar, and it had been as high as 50 per cent. In those days, when capital was dear because it was wanted in industry, and had been dissipated so much in South Africa, it was not a worthless argument to bring in favour of the abolition of the tax that all the industries using this commodity had had to employ extra capital to the extent of 30 or 40 per cent. without any addition to there. volume of trade. We did not want our system of taxation to cause more capital to be employed in trade without any accompanying advantage. The effect of this shortness of capital was that Consols wore low in price. This surely was an argument which should appeal to the Chancellor of the Exchequer. Such taxes as these actually helped to increase the nation's expenses by raising the rate of interest at, which the State and municipalities could borrow. In opposing the Amendment he was voting not against the reduction of the sugar tax, but for the continuance in office of a Government from whom they had already had great reforms and from whom they were going to have great reforms in the future. If they kept the present Government in power they would have further reductions of expenditure, less indirect taxation, and he hoped more and more direct taxation. Paradoxical though it might seem, he was voting against a reduction of this tax to keep the Government in power in order that the policy of the reduction of taxation might go on, that the poor man's loaf might be kept from taxation, and that they might have temperance, educational and land reform, and all those other reforms which hon. Gentlemen opposite did not like and were doing their best to obstruct. [OPPOSITION ironical cries of "Next year."] He was voting for the continuance of a bad tax for one more year in order that they might keep in office the best Government they had ever had.

MR. SCOTT (Ashton-under-Lyne)

said it was quite true that 150 hon. Members had pledged themselves to the repeal of the sugar tax, and there could not be a greater object lesson as to the policy of the present Opposition in regard to this tax than the fact that 150 such pledges had been given. Those pledges had been given because an industry had been interfered with. A tax which formerly did not exist had been placed upon a raw material used in the confectionery and allied trades. What would be the position of such organisations when they had scientific tariff reform, under which industries came to Parliament to secure subsidies and help for their industries? They would find that almost every Conservative Member of the House would be returned pledged to support and help some particular industry by taxation. Organisations of that kind, which existed for one specific object, did not add to the advantage of politics or the judgment of hon. Members. He was going to support this Amendment, because he believed that the sugar duty could be reduced by a farthing, and that consumers would instantly feel the benefit of the reduction. Speaking with full knowledge of the distribution of this article, he had no doubt that on the very day the duty was reduced by one-half the purchaser in every shop in the country would reap the benefit. When the right hon. Gentleman took a penny off tea twelve months ago, he warned him that the consumer would not get the benefit, and the consumer never had received any benefit from it. He did not think they ought, at the present time, to have entire relief from taxation in regard to sugar. He was one of those who, whilst recognising that sugar was one of the most important foods of the working classes, believed that the working classes were as largely responsible as anybody for the existence of the sugar tax. ft was not advisable that the working classes should get the idea that wars could be lightly entered upon, and that when they were over they would not be expected to put their hands in their pockets to contribute towards the cost. His reason for demanding that this tax should be taken off was not because it hit the working classes, but because it was a tax upon industry. Sugar was the raw material of some of the most progressive industries in this country. Previous to the Brussels Sugar Convention there was no industry in this country that was showing greater advancement, for we were sending to foreign countries increasing quantities of goods of which sugar formed the principal raw material. Those Members of the House who had had the advantage of extensive foreign travel would have noticed in every foreign country English confections and manufactures in which sugar formed the principal part, and those engaged in that industry wore now being seriously affected by this tax. The fruit growing industry had also suffered. It should not be overlooked that in the manufacture of jam sugar formed between 65 and 70 per cent. of that article. Another reason why he objected to the sugar tax was that the country did not got the full benefit of it. The tax was is. 2d. per cwt., but the consumer had to pay 4s. 8d. per cwt., and that showed a considerable leakage. These who dealt largely in articles in which sugar played such a prominent part found that the whole of their business bad been disorganised by this tax. Formerly he used to be able to buy tinned fruits from the other side of America, but the difficulties which were now associated with that trade were very great because they had to arrange a particular thickness for the syrup in the tins. Officials had to be appointed to superintend this business, and the trade was being so much hampered that those engaged in it would not waste their time over it, and wore leaving it to other people with more patience. He would have liked to fix the date at 1st .March, but he recognised that they could not alter the arrangements which had been made in connection with the Budget this year. He was anxious that the expenditure on the social reforms of the future to which they wore pledged should not come out of the taxation of the food of the poor. If the Chancellor of the Exchequer would say that next year when the Government brought forward their social reform programme He was not going to rely on this tax He might be induced to alter the vote which otherwise he would give, but if the right hon. Gentleman did not give that promise, he would be true to the pledges he had given, and to his own personal conviction, and record a vote which he could defend in this House and in the country.

MR. HUNT (Shropshire, Ludlow)

said an hon. Member opposite had stated that the sugar tax was one of the worst possible, but he added that he was going to vote for it. The great bulk of the Member s of the Liberal Party were going to vote for it, and he congratugated them on their courage in view of the fact that sugar was a food and a necessity of the poor. It contained far more nourishment than ordinary white bread. [An HON. MEMBER: No.] That was so, and it was perfectly well known. Sugar was the raw material of many powerful industries in this country. It seemed to him very extraordinary that this extra democratic and much-belauded Government should insist on taxing sugar 30 per cent. more especially as the Chancellor of the Exchequer had stated that an import tax came straight out of the pocket of the poor. On the other hand, there were many millions worth of manufactured goods, as well as expensive food products used exclusively by the rich, allowed to come into the country without paying a halfpenny of duty. That was what hon. Gentlemen opposite called legislating for the benefit of the poor. He believed that hon. Gentlemen who specially represented labour agreed with hon. Members on the Ministerial Benches in this matter. That was a thing which had always puzzled him very much indeed, and he thought that in future it was likely to puzzle the working classes of this country. The imposition of the sugar tax could not give the working people one hour's work or a shilling in wages. That tax was part of the true Cobdenite finance Import duties were imposed on articles largely consumed by the poor, and they produced a revenue of from twenty to thirty millions, while millions of pounds worth of the luxuries of the rich were imported without any tax at all. There were about 200 Members of the Liberal Party in the House who gave the people of the country to understand that they would vote against any tax on sugar. He remembered forty years ago He saw placards in Lancashire bearing the words "Vote for the Liberal Party and a free breakfast table." They had not got that yet, and it did not appear that they were likely to get nearer it for many years under the present system of taxation. Hon. and right hon. Gentlemen would now be able to go back to their friends, the many starving millions, during the autumn months and tell them that provisions were dearer now in spite of the promises made at. the general election that they would be cheaper. They would be able to tell their constituents also that Liberal promises were like pie crust—made to be broken.

*MR. CHARLES ROBERTS (Lincoln)

said he would not attempt to follow the hon. Member for the Ludlow Division.

MR. HUNT

Nobody over can.

*MR. CHARLES ROBERTS

admitted that he was utterly unable to deal with the devious ways of tariff reformers on this question. He was not one of those whose names appeared on the list of l50 Members pledged against the tax. He did not think he could have supported the Chancellor of the Exchequer if they had been asked to vote for the sugar tax as a permanent part of the finance of the country, but the right hon. Gentleman had not asked them to do so. He fully agreed with all that had been said as lo the badness of the tax, and the Chancellor of the Exchequer had been careful to invite them to vote for it only as a temporary tax. He joined in the, appeal to the Chancellor to got rid of it in a later year. There were two circumstances which reconciled him to the temporary inconvenience of the tax. In the first place the action of the Government in reference to the Sugar Convention had, to some extent, lightened the burden of the sugar-using trades. It was obvious that the sugar-using trades would find the area of supply enlarged by the action of the Government in declining to penalise bounty-fed sugar. That would tend to reduce the price of sugar. The second reason which reconciled him to the temporary continuance of the tax was that it had effects which were not at first sight seen. The Committee had been invited to consider the question of sugar from the point of view of temperance reform. The brewing industry was one of the largest users of sugar, the quantity last year amounting to 2,746,615 cwts. The only point against the abolition of the tax was the effect that under present circumstances it might have on brewing, and He would ask the Committee to follow out what would really happen if the sugar tax were abolished. They would make a present of£600,000 a year to the ob/ trade. He did not grudge them the money; He did not grudge anybody the profits if they could reconcile it with their consciences to take the profits of that trade, but under the present working of the law these profits would be at once registered in an increase of licence values. They could capitalise that extra profit of £600,000 a year at ten years purchase, which was the practice of the Inland Revenue Department now. Thus the abolition of the sugar tax mount the raising of licence values in this country by£6,000,000. That meant that they restricted still further the amount of the reduction of licences, which was already partial, limited, and tentative. That was an indirect and unexpected result of the abolition of the tax. lie trusted the Chancellor of the Exchequer would bear in mind that any reduction of any impost on the brewing trade was at once registered in increased licence values and pro tanto restricted the power of the licensing authorities to got rid of superfluous or undesirable licences. Thus at the same time that they abolished the sugar tax they must raise the licensing duties, and therefore his point was that He could reconcile himself to the temporary continuance of a bad tax on condition that when, as He hoped, in subsequent years the Chancellor of the Exchequer swept this bad tax away, he would supply its place He believed this point was a very real one, and He commended it to the attention of the Financial Secretary to the Treasury, that the abolition of the sugar tax should be accompanied by the raising of the licence duties lie should vote only for the temporary continuance of the tax, but these were reconciling considerations in which he comforted himself under the present circumstances.

MR. RICHARDSON (Nottingham, S.)

said he had noticed while sitting there that every speaker had commenced by making a confession. Therefore, to be consistent, he would state openly that in spite of the fact that He had given a promise to vote for the reduction of the sugar tax he intended that night voting for the Government. If he could have found no reasons for taking that course before coming to the House that day He would have found sufficient ground for it in the combination of the two leaders by whom this Amendment was being engineered. To follow the lead of the hon. Member for Preston in conjunction with the hon. Member for Liverpool was bound to incur disaster. The real reasons why he took that apparently paradoxical course were these. In the first place, the Amendment of the hon. Member for Preston was an unreal Amendment; there was no reality at the back of it. He could have imagined what were the reasons that would have induced the hon. Member for Liverpool moving the Amendment, but as a matter neither of principle nor of policy could He understand the course taken by the hon. Member for Preston. If it were wrong, as a political principle, to tax sugar to the extent of 4s. 2d. per cwt. surely in principle it was wrong to tax it to the extent of 2s. Id. He was not then going to combat any of the statements made by any of the hon. Members who wore going to vote in favour of the Amendment, because he was a firm believer in every one of them. He believed that the sugar tax had been and was now an iniquitous and wicked tax, not merely one that bore very heavily upon the industries connected with the sugar trade, but also struck a blow at labour, besides placing burdens grievous to be borne upon the very poor. One of the advantages that would probably be secured by this debate was that it would teach the Opposition a lesson or two in the principles of free trade. He argued this point to show that He was a firm believer in free trade. Lot them take, for instance, this very article as the raw material of the confectionery trade. Previous to the imposition of the sugar tax, 100 bags of sugar roughly speaking cost£100. After the tax was placed upon the article 100 bags of sugar cost£140. The price of the manufactured article, a necessity, immediately went up about one third, from 30 to 40 per cent. and this had the effect of restricting and limiting the output. Hence the manufacturers' profits were forthwith reduced. But how did this affect labour? Employment, they must remember, always wont with the turnover of goods and not the turnover of cash. 100 bags of sugar now cost£140 instead of£100, but although there was nearly half as much again cash capital required, there was only the same number of men employed in the manufacture of 100 bags. How did that affect labour? It affected it in this fashion. There were three factors in the production of this manufactured article of confectionery: the manufacturer, the capital and the labour. As soon as the manufacturer found he was paying nearly half as much again for his sugar he naturally went to his landlord to get a reduction of his rent to meet expenses. His landlord would say he had plenty of competitors and he could not reduce the rent, and his banker would not reduce the interest charged. The only other factor he could apply to for reduction of expense was labour. If the number of workmen were reduced or the hours they worked were reduced it must seriously affect wages, and in families with small and limited wages the reduction of income was a great consideration. He would vote for the remission of the tax but not at the dictation of men who openly preached in favour of food taxes. He was convinced that the sugar tax was not a permanent tax but a temporary expedient. The direct result of carrying the Amendment would be the dislocation of the Budget as a whole and probably the resignation of the Chancellor of the Exchequer. It was because he believed it the new principles embodied in the Budget, and also because the Chancellor was honest and sincere in his statement, that he would not be a party to the destruction of the Budget, nor would he help to drive out of office a man who was entitled by his achievements to stand in the forefront of Chancellors. There were some who scarcely believed in the right hon. Gentleman's honesty or ability to carry out what he had promised, but he would refer them to the right hon. Gentleman's speech in introducing the Budget where he made a distinct promise in reference to old-age pensions. The right hon. Gentleman said in that speech— But this I do .say, and I wish to shy it with all the emphasis of which I am capable, speaking for the whole of my colleagues who sit upon this Bench, that in the sphere of finance we regard this as the most serious and most urgent of all the demands for social reform, and that it is our hope—I will go further, and say it is our intention—before the close of this Parliament, yes, before the close of the next Session of this Parliament—if we are allowed to have our way—to lay firm the foundations of this reform. He believed that the Chancellor of the Exchequer had the Government at the back of him. Prime Minister and Mem- bers were alike sincere in their promise. They had the ability to carry out that great reform. He, personally, was one of those who had perfect faith in the Government. He knew there were those who had not faith in the Government intentions, and he deeply deprecated the remarks which had been made with reference to the Labour Party on that side of the House, and their attitude towards the Government. Whatever some of the other Members of the Labour Party might think of the Ministry and of the Prime Minister, one who stood at the head of that Party—one whose absence and its cause they all deplored (he referred to the hon. Member for Merthyr Tydvil) —had written of the Prime Minister in the Labour Leader of January 4th— I have a profound distrust of Party-newspaper eulogies of Ministers or 'coming men,' but in common fairness I must say 'C.B.' has earned, and fully deserves, all the praise heaped upon him. He seems to be mellowing with age and really desirous of effecting some useful social legislation. Of one thing I have convinced myself of, namely, that where the Liberal performance falls short of the promises, the blame will not rest with 'C.B.' With those sentiments he cordially agreed, and it was because that night they had a choice of one of two good courses, that he intended to vote for the Government. The working classes hi; represented and to whom he belonged placed so high a value on old-age pensions that in spite of the pledges given he was quite sure they were prepared to forego the abolition of this tax for another year in order that: the worn-out veterans of the working classes might have that long-denied reform. As the son of a village worker he could tell the House that all his uncles and aunts—eight in number—all respectable working people, who lived to between the ages of sixty-five and seventy, with the exception of one, had to receive parish relief before they died. When he saw such a thing as that, did the Committee suppose he was going to sell the birthright which belonged to him for that miserable mess of potage?

MR. HEMMERDE (Denbighshire, E.)

said He was one of those whose names appeared on a list of signatories of a certain pledge, He was under the impression He never gave it, but if he did not it was not because he was not prepared to give it. But in any case he did not understand how it was argued that the men who signed that particular pledge were bound to vote against the Government on the Amendment under discussion. That pledge was given to men outside the constituencies and in general terms, and was not directed to any particular time at which they should vote for the abolition of the sugar duty. No one would have signed such a pledge if what had been suggested now as the interpretation of that pledge had been suggested then. The pledge he had given in respect to the sugar duty, if he had given a pledge at all, was understood on both sides as an expression of sympathy with those who desired the abolition of the tax. It was not a binding pledge to vote against the tax at the first available opportunity. He did not feel called upon to vote against the Government. The debate had been useful in that it had called forth a clear expression of opinion on the balance between direct and in- direct taxation. In his opinion, that balance had never been kept in the past, and he could not see how it could be argued that it had. It was obvious that for years the poorer classes had been overtaxed, that the indirect taxation hit them more hardly than any other class, and the balance to which the Chancellor of the Exchequer had referred had not existed. Personally, he was in favour of: the abolition of both sugar and tea duties, and he would be greatly disappointed if the Government went out of office with out abolishing them. He was more than disappointed, and it was opposed to the general view among the Party, that the sugar duty was to be relied upon as the basis for old-age pensions. He did not know that the Chancellor of the Exchequer was relying on that, but if he was he should not regard it as being consistent with one pledge the right hon. Gentleman had given. The question before them was not whether the sugar duty should he repealed; they had to weigh the differences. Too little weight was given to the alternatives. Supposing the right hon. Gentleman did abolish the sugar duty, whence would He obtain the revenue now derived from this source? If the Chancellor of the Exchequer had determined to abolish the sugar tax He would have had to resort to some other source of revenue. He had given very sufficient reasons why he should not increase the licence duties. It might be obtained from an increase of the income-tax this year. He had graduated it downwards but not upwards, and in his Budget speech had expressed some doubt as to whether it could be graduated upwards in at all a satisfactory sense. He (Mr. Hemmerde) was quite prepared to wait until the right hon. Gentleman had completed his investigations on that subject before calling upon him to graduate the income-tax upwards. There was another source of revenue, namely the land. A year ago the Chancellor of the Exchequer said the question of the taxation of land values was occupying his most earnest attention, and the question was, could the right hon. Gentleman have imposed this year, to take the place of the sugar tax, a tax on land values? If that had been possible he would have voted for it at once, and a revenue from that source would have enabled them to dispense with the sugar duty. But the valuation system of this country was absolutely chaotic, and nothing had been done by the Government since it had come into power to lay a basis for land valuation. There had been a great deal too much delay in bringing in the Land Valuation Bill, but he believed that had it been brought in at the earliest possible moment it would still have been impossible to put a tax on land values which would have resulted in a revenue this year. So that resource was closed to the right hon. Gentleman. He might have increased the death duties more than lie had done, and it was a matter for regret that he had not. But if the right hon. Gentleman was contemplating raising more money by means of either death duties or land monopolies, it would be undesirable to increase the death duties now if they were to come off a year or two hence. He thought these points were all relevant to the discussion to-night. The question was what they were to do with the sugar duty. He was not prepared to vote for it year after year. He regarded it as an odious tax; that the man who had only£1 a week paid a larger tax on that in-come than any other person in the country. Added to the fact that it was a food tax was the fact that it was also a tax on raw Material, and one which lent itself to unfair argument in the mouths of the tariff reform Party. It was a bad tax, but he did not sea that the right hon. Gentleman had had a fair chance to deal with it, having regard to the fact that he had had to frame a second Budget within twelve months of coming into office in succession to the most extravagant Government of modern times. It was, therefore, unreasonable to ask him to repeal this duty at the earliest possible moment, but it was reasonable to tell him that they could not go on voting for it year after year, and that it would be a gross violation of all their pledges to base old-age pensions on a food tax of any kind. Had there been in his opinion a real opportunity of abolishing this tax altogether he would have voted for the Amendment, but as, in his opinion, there had not been any such opportunity he thought they must possess their souls in patience for a little while. It was not imposed by the Party opposite as a war tax, but for broadening the basis of taxation, and right hon. Gentlemen opposite always broadened the basis of taxation by placing it on the shoulders of the poor. He had no doubt that his having spoken for and voted in favour of the Government would be used against him in his constituency, but He gave his vote with confidence because they owed it to the electors to do everything they possibly could to establish the finances of the country on a firm basis. It was easy to say that this tax should come off first—but when the Chancellor of the Exchequer was engaged in overhauling the question of income-tax, dealing with the question of land values and land duties, and the whole question of the finance of the country, it was not the moment to take it off. And they would not be doing their duty to their constituents if at this moment they did anything to show the people of the country that their confidence in the Government was at all shaken.

MR. R. DUNCAN (Lanarkshire, Govan)

thought the Amendment should have the support of the Committee for the reason that the sugar tax was admittedly a tax upon food. The question was whether a food which was so generally used was unduly taxed or not. He thought that it would be admitted by all who considered the question that it was much too highly taxed, with the result that an impossible price was put upon it. The effect of raising the price was to diminish consumption. It also stimulated certain industries which, although they flourished, did not flourish in a manner altogether healthy, because they had had au undue advantage which other industries had not. He did not regard the sugar tax as an iniquitous tax, but he certainly thought that at its present height it was exorbitant and should be reduced, and wise finance would reduce it. The Chancellor of the Exchequer had asked the proposer of the Amendment what He proposed in exchange for this tax, and that being so, it would not be out of order to say that as an alternative there could not possibly be any harm in remitting the duty entirely on sugar produced by our Colonies whilst keeping a duty upon that which came from foreign countries, thus give a little advantage to those who lived under our flag. If the Colonies were attacked by the arms of one power we should be prepared and proud to defend them, and he saw no reason for not defending them from the fiscal operations of those countries. He would support the hon. Member for Preston.

*MR. MADDISON (Burnley)

said that in this debate some Members had been haunted by pledges. As far as he was himself concerned he had denounced the sugar tax before he was asked for any pledge. They believed as free traders that our system could never be in any way what they wanted while the necessaries of the people were subject either to revenue or to protective duties. But really the youngest politician in the House must be aware that any pledge which was given- was bound to be subject to rational conditions. There was no man in the House who had said that he would vote for the repeal of the sugar tax in the first or the second session; he had declared against the principle of the tax, and would give effect to that declaration on the first opportunity. But he had also learned in his little way as a politician that He was more or loss in the hands of a Government, and so was everybody else.

*MR THORNE (West Ham, S)

No.

MR. MADDISON

Well, everybody but anarchists. He could imagine his hon. friend even becoming that as a luxury, but the ordinary being was more or loss in the hands of a Government. Those of his hon. friends opposite who wore Socialists would have some kind of government. He rather thought that his hon. friend had got beyond government.

MR. THORNE

I may some day.

*MR. MADDISON

He had always thought that the path to anarchy was through Socialism. Some hon. Members appeared to treat the House as though it were a debating society. ["Hear, hear"] He was very glad that his hon. friend agreed with him. He submitted that in this discussion they were not debating the merits or demerits of the sugar tax so much as the Budget as a whole. At a very curly stage of the Budget was the time to make a determined stand, and not upon the present occasion; and the Amendment, whether it was successful or net, would do nothing to repeal the sugar tax. Did anybody in that House really believe that, if the supporters of this Amendment were succesful—there was no danger of it—it would promote the repeal of the sugar duty? ["Yes."] He thought that hon. Members were not really serious when they said that it would. Therefore, He was going to vote, without any apologies and without any qualms of conscience, but in a businesslike way, in support of the Budget, though it was by no moans perfection. There never would be a Budget that was perfection, because there would never be a Government that was perfection. But, taking the Budget as a whole, it was in his opinion distinctly a good one and was in the interests of the workpeople of the country. They had to think not merely about the sugar duty; they had to think about the reduction of the Debt, and although he knew very little about high finance, he knew sufficient of it to be aware that the reduction of the Debt was not merely valuable for capitalists, but that it ought to and must have a beneficial effect on industry and therefore upon the working classes as a whole. This Budget contained a magnificent reduction of the Debt, and in that the Chancellor of the Exchequer had shown a good deal of boldness. He wished the same courage had been put into increasing the death duties and in other direc- tions. Involved in their vote that night was the£2,250,000 sot aside in the Budget for old-age pensions; and he ventured to think that this provision was a landmark in the history of the question, because it was the first time that in any Budget provision had been made by which a nucleus of old-age pensions was formed. Therefore, the vote which they wore to give that night was a substantial and not a flimsy one; it was not merely a Party vote. So far as he was concerned he would yield to none in his dislike of the sugar tax, which at once penalised the consumer and the producer, a tax which made food dearer and which increased the price of raw material. There was literally nothing to be said for it. For himself He would not place old-age pensions on food taxes. He would not help old age at the expense of the young; but although these were his strong views, he would venture to say that if they were to put it before working men and ask them whether they would have old-age pensions or the sugar tax, he was quite certain that they would choose old-age pensions and prefer to keep the sugar tax on. For his part he would refuse to base old-age pensions on any such unjust and oven cruel basis as a tax on such a useful food as sugar. He had the greatest respect for his hon. friend the Member for Preston, who had always the courage of his opinions, and whoso views he often shared, although he thought he often showed a strange lack of proportion. The Amendment was put forward as an alternative by one who was opposed to old-age pensions; its mover asked them in the name of the policy of anti-old-age pensions to vote for the Amendment; and his chief supporters on the other side of the House wore protectionists, tariff reformers and preferentialists, or whatever they liked to call themselves; so that the Amendment rested on hostility to old-age pensions and free trade. The Budget began a big reform so far as the National Debt was concerned, and by voting for the Budget he was quite sure that they would be doing that which was in the best interests of social reform.

MR. DALZIEL (Kirkcaldy Burghs)

thought that most hon. Members would agree that the debate had been most useful) and was one which they hoped would not be unfruitful in its results. It was a most interesting feature of the debate that, although it had lasted a considerable time, not one of the speakers from beginning to end had defended this sugar tax. He thought that marked a most important step in the controversy, and that even if there was nothing else, and there was no division, those who were in favour of the abolition of the sugar tax might well be satisfied. Whatever the result of the division might be there could be no doubt that the fate of this tax was sealed. The House was unanimously in favour of its abolition. There had not been a single word, even from the Opposition side of the House now, in favour of the tax. When on previous occasions they moved this Amendment, and when he had moved it himself, hon. Members opposite had voted them down. To-night he presumed they were prepared to vote for its abolition. He welcomed their conversion, he was glad to have their support, and He hoped for their assistance and the assistance of hon. Members on his side of the House at the proper time. There could be no hon. Member who represented an industrial constituency who was not anxious to see the repeal of this tax; that He thought went without saying. He was not included in the notable 150. He believed the pledge which those hon. Members had given was in reply to a request from a particular centre that they should state-their policy in reference to this particular matter. He thought that when many of their friends became older Members of Parliament they would not be so eager to pledge themselves to an outside agency. For himself he was not ready to reply to any secretary of a particular association which had an object to promote. Hon. Members opposite had spoken about pledges, but what about their pledges in the last Parliament? What about the pledge they gave in regard to old-age pensions, which helped them to get into power? The least that was said about pledges on the other side of the House the better. Hon. Members who had given pledges must explain their own position. He had not given any pledge on this subject, but he was quite as anxious as any other hon. Member to see the abolition of the sugar tax. They had been asked to look at this question from the point of view of the Budget as a whole. Personally he shared most sincerely the expressions of regret that, although up to the present they had had two Liberal Budgets, there had not been that recognition of the pressing demands I of the poorest of the people which they all desired to see. He hoped that when the opportunity presented itself the poorest of the people, who ought to be the first consideration of any Government, would be remembered in the next Budget. What they had to consider was the quickest way in which they could obtain the abolition of this tax. Could they attain this object more quickly by following the leadership of the hon. Member for Ludlow, or the hon. and learned Member for the Walton Division of Liverpool? Had thy any guarantee from the Opposition that their policy in regard to this tax had been altered? Hon. Members opposite remained perfectly silent in regard to that question, almost as silent as they were about free trade in the last Parliament. If the Government were defeated upon this Amendment would they be any nearer I the abolition of this tax? They had to face immediate contingencies, and the defeat of the present Government would moan that the Leader of the Opposition would be called upon to form a Government, and, judging from past experience, no doubt the right hon. Gentleman would stick to office as long as he possibly could. Consequently, they had to fall back upon the promise of the Chancellor of the Exchequer that he would at the earliest possible moment do what he could in the direction of reducing this tax The speeches which had been made in this debate, and the statement made by the Chancellor of the Exchequer, plainly indicated that it would be a very short time indeed before this tax was abolished.

MR. T. L. CORBETT (Down, N.)

was unable to congratulate Radical Members upon their courage. One hundred and fifty Members opposite gave a definite pledge to vote against the sugar tax on the first opportunity. ["No."] That evening would show how they redeemed their election pledges. When was a pledge not a pledge? When it was given by a Radical Member of Parliament to his constituents. He would remind those Members who now said they would wait until next year of the Spanish proverb, "The street of to-morrow loads to the city of nowhere." He had never before listened to a debate so hollow, the only exception being the earnest speeches of hon. Members below the gangway, and the equally earnest speeches made from the Opposition side of the House. He wished it to be brought homo clearly to the people of this country that there were 150 Members of the House who had given a solemn pledge on this question which they were going to break that night.

MR. C. DUNCAN (Barrow-in-Furness)

said they were going to have a very peculiar division, and the House might well be called the home of inconsistency. He had himself made a pledge, and meant to stick to it, for he believed that sincerity was a quality that would go a long way in this country. Those who wore members of the Labour Party could claim that they were sincere, for, although they were going to vote against the Government, they would remain practically the only free-traders in the House. It was most inconsistent of the Government to take off some of the income tax from people who had from£20 to£40 per week, while retaining £6,000,000 of sugar tax, which fell on the poorest classes. He disagreed with that reduction of income-tax. He had to pay income-tax, and was delighted to pay it; he did not grumble at a Is., and would not mind paying a 2s. tax if sonic of the outstanding social questions could be settled. He was one of those who desired to see some betterment of the condition of the people of the country, and he was prepared to pay his share towards bringing that about. If the sugar tax wore kept on it would be an empty affair to set aside£2,250,000 for old-ago pensions. It could not be very encouraging to those who at the last election voted for free trade to find that a free trade Government was still keeping taxes upon the breakfast table. This was a very inconsistent attitude, and the sooner they got this tax taken off sugar the better it would be for the future prospects of the Government.

MR. J. M. ROBERTSON (Northumberland, Tyneside)

said He desired to associate himself with the view taken by the hon. Member for East Denbighshire on this subject. They were all agreed that the sugar tax should be abolished, but it was impossible to try to get rid of it in the manner suggested by this Amendment. The effect of reducing the sugar duty would simply be to put further difficulties in the way of obtaining old-age pensions. It had been said by the hon. Member for Blackpool that the abolition of the coal tax had entirely failed to benefit the mass of the working classes. He and others rather regarded that tax as a restraint upon trade, and voted for its abolition in order to free trade The benefit that had followed was enormous, and the whole of the mining population of the North who had demanded the repeal of the tax had found it had operated in the interests of trade. The Chancellor of the Exchequer did well in taking off the coal tax. The fast that the sugar tax was a tax in restraint of trade was the main point of the argument for taking off the sugar tax, and he rather suspected that the Chancellor of the Exchequer, if he had to go over his two Budgets again, would take off the sugar tax first, inasmuch as it was a restraint on certain manufacturing trades, while the tax on tea was not. The experiment of reducing the tax on tea having been made with the best intentions, and with the hope of benefiting the poor consumer, the position at the present juncture made it clearly impossible to take off the sugar duty without absolutely stopping the beginning made in the way of providing old-ago pensions. He deprecated the remark of the hon. Member for the Kirkcaldy Burghs, that pledges were given in the heat of the moment. He hoped that no Member of the House would offer such a plea as that for not giving his vote in accordance with his pledge. He refused to give pledges to any cause He did not believe in, but He trusted that He should not be so confused in his politics as not to know whether he believed in a principle or not. He had during his life as a journalist and politician pointed out breaches of pledges by the Party opposite, but he would not taunt any man with a breach of pledge except it was one lasting the whole Parliament for which he might be elected. He had given a pledge to vote for the abolition of the sugar duty. But in giving that pledge He reserved to himself the right of deciding the time when he should give effect to it. He was not bound to redeem the pledge the first time the question of the sugar duty was raised. If the Government showed no disposition in the course of a whole Parliament to repeal the tax, then he should feel compelled to vote against them. But to vote against them that night would mean not the removal of the sugar tax, but the postponement of old-age pensions. He meant to vote in such a way as would tend to secure the repeal of the tax, but to vote for the Amendment would really be an evasion of the pledge he had given. To vote for the mere gratification of hon. Members opposite, whose sensitiveness on matters of pledges was simply notorious, was a thing which he would not attempt to do.

*MR. CHIOZZA-MONEY

said he was one of those who had given a pledge in favour of the repeal of the sugar duty, and he stood there to say that he was quite prepared to give that pledge again that night and to give effect to it by his vote. He thought the members of the Party with which he was associated would have searchings of heart before they could vote for the continuance of a tax which they had denounced for a good many years. It was not merely that an enormous majority had been returned to that House in direct opposition to the taxation of food and raw materials, but the same Party had also for years advocated what had been called the "free breakfast table." Why had they boon opposed to taxes on tea and sugar? It was because the taxes on these articles were poor men's taxes. They pressed conspicuously on the poorest of the poor, Indeed, if one desired to fashion an instrument of taxation which would press heavily on the poor man, he could imagine no article better for that purpose than sugar. It was unnecessary for him to denounce the sugar tax at this stage. It had been roundly denounced by the Chancellor of the Exchequer himself, not only while he was out of office, but in the course of the debate. He would point out that while the sugar tax had been denounced by the Chancellor of the Exchequer, it had been maintained, while the income-tax, which the Chancellor did not denounce, had been reduced. That was the gravamen of the charge which he had to make. The Committee had been implored not to regard the sugar tax as an isolated thing, but to regard the Budget as a whole. It was because he regarded the Budget as a whole that he was opposed to this tax. In the Budget regard had been had to the well-to-do classes. The sugar-tax meant 16s. or 17s. a year to every family—an amount that was keenly felt by the working class in towns, and by agricultural labourers in the country. On the other hand, the differentiation of the income-tax meant to a man who had£200 a year a gain of only 19s. Even the lower middle classes would gain more by the repeal of the sugar duty than by his right hon. friend's scheme of differentiation of income-tax. The abolition of the sugar tax would mean a gain to seven-eighths of the entire population of the country, whereas the proposals in the present Budget conferred benefit on a very small number indeed. The trade agitation against the tax was reasonable; it was not a demand for a favour, but a demand for the removal of a disability that should never have been imposed on manufacturers. Capital to the amount of£40,000,000 was invested in trades for which sugar was a raw material, and 250,000 people were employed. The effect of the tax was shown by the fact that a firm who made a profit of£13,000 in 1900, in 1904–5 incurred a heavy loss, while another firm, with a capital of over£1,000,000, made a profit of£58,000 in 1000, and in 1905 only£1,000. It was an unjust tax, representing from 30 to 10 per cent. on the cost of material. Any trade which had that special disability imposed upon it would be justified in appealing to hon. Members not to continue the tax. They were told that they ought to remember the claims of social reform, and especially old-age pensions in connection with this matter. Old-age pensions were important, but he would appeal to the Committee to remember that, after all, the greater lumber of people born in this country lever lived to be old at all. Of the 1,250,000 people born during one year in the United Kingdom not 250,000 would live to be sixty-five or seventy pears of age. The reason for that would be found in returns relating to the conditions of life in the towns, and especially n the slums. It was due to under feeding, and many other evils which he could mention. There were hundreds and thousands of people who would be injured by the imposition of taxes on food. Important as old-age pensions might be, it was still more important to remember the young, and to leave untaxed one of the chief foods of the young. The Committee had been told that the passing of the Amendment would cause the dislocation of the Budget. He ventured to point out that it would do nothing of the kind. The passing of the Amendment would involve a loss to the revenue of only£1,500,000. The Chancellor of the Exchequer had already £600,000 in hand in the first quarter of the present financial year. There was no question what ever but that the whole of this£1,500,000 would be realised in connection with the present financial year. Even a larger sum would be realised, and that meant that so far as that Amendment was concerned hon. Members need not fear that by passing it the Budget would be dislocated. Apart from that he ventured once wore to appeal to the right hon. Gentleman to make a definite promise for the future. Those of them who felt bound to keep their pledges and to vote for this new clause would be the first to rejoice if the right hon. Gentleman would make them a promise to do something to reduce this tax next year. They had not had that promise, and it was simply because of the indefinite character of the language used that He had ventured to inflict these words on the Committee even at the eleventh hour.

MR. W. E. HARVEY (Derbyshire, N.E.)

said he should not take up the time of the House except to make a few remarks with regard to the question that had been raised with reference to the coal tax. If anybody was entitled to speak in that House on the coal tax it was the men who represented mining divisions and the interests of mining life; and he ventured to say that there was never a greater unanimity in any one trade of this country than there was in regard to the repeal of the coal tax.

*THE CHAIRMAN

This is not a question of the coal tax, but of the reduction of the sugar tax.

AN HON. MEMBER

On a point of order; I submit that you allowed the hon. Member for Blackburn to speak about the coal tax.

*THE CHAIRMAN

It is not in order to make a speech only or principally about the coal tax. The hon. Member for Blackburn dealt with it incidentally in a general argument about the sugar tax.

MR. HARVEY

said, with regard to the sugar tax, that the present Chancellor of the Exchequer did not put it on, and they on that side of the House were not responsible for the war, nor for the sugar tax, which had been imposed by the other side, and if there was one thing that pleased him in the Budget, it was that as an Englishman the Chancellor of the Exchequer recognised the duty of paying back, which some of them believed after all was a good old English custom. It was very easy to contract debts; it was very easy to put the responsibility of paying them back upon other people's shoulders; it was very easy to ask posterity to pay for what they ought to pay themselves, but He was one of those who believed that the working men were willing to pay off their debts, and when they were told that the relief that was given to taxation in another direction had done no good, and—he would not like to misrepresent the hon. Member for Blackburn—that the coal tax had done nobody any good at all

MR. SNOW DEN

I said the repeal of the coal tax did not affect anybody in his capacity as a taxpayer.

MR. HARVEY,

continuing, said there had never boon a tax repealed that had benefited the miners of this county more than the repeal of the coal tax. He would go further, and say that of the 46,000 miners in his county, two- thirds of them wore stopped a. day and a half a week owing to the coal tax, but when it was repealed they worked full time, and their wages had been considerably increased. He wanted to say- that the hon. Member for Blackburn, if he understood him aright, infer red that 8s. had been put on the price of coal. If he did say so, he (Mr. Harvey) was there to say that the average selling price of coal in the United Kingdom

*THE CHAIRMAN

again called the hon. Member to order.

MR. MARKHAM (Nottinghamshire, Mansfield)

said that at the last election he gave no pledge to his constituents as he was unopposed, but he would like to say that when he was first returned to that House, long before any fiscal proposals had been put forward by the hon. Member for West Birmingham, he gave a definite pledge that he would never at any time while a Member of that House vote for any taxes on the necessaries of life, and he had accordingly during the seven years he had been a Member on every possible occasion voted against all taxation of the necessaries of life, including sugar and tea. That night he was accordingly going to vote for the Amendment. Hon. Members on that side of the House had been excusing themselves for the course that they were going to take. 80 far from being one of the 50 Members, he had never joined any association of the sort in question in his life, but pledges no doubt had been given by hon. Members on that side of the House; they were given during the general election on every Liberal platform, and the cry was "No taxation on the necessaries of life." [OPPOSITION cheers.] He was very glad to hear those cheers from free-trade Members of the Opposition, because unfortunately hon. Members on the other side of the House who were going into the Lobby with him that evening, did not go on any conviction of the rights or wrongs of the case, but simply to put the Government in a difficulty. So far as certain Members sitting below the gangway were concerned, their view also appeared to be to hamper the Government of the day on every possible occasion. It had been said that in voting against the Government that evening they were playing into the hands of the right hon. and hon. Gentlemen opposite. But he would ask what would happen if the Government were defeated? The Prime Minister would, as Prime Ministers had done before, come down to the House and move a vote of confidence in the Government, and he would be the first to support it. If the Government did not then put a duty on sugar the Chancellor of the Exchequer could then turn his attention to other sources of revenue. For instance, to take the trade in which he himself was engaged, the coal industry, mining royalties might be taxed But having pledged himself to vote for the abolition of the sugar tax He felt bound to record his vote for the Amendment. Such a vote could have only a good effect, as when the Chancellor of the Exchequer came down to the House next year to make his statement he would know that there was on that side the strongest possible fooling that the tax must go.

SIR CHRISTOPHER FURNESS (Hartlepool)

said he recognised that the House was now ready to vote, and he would not detain thorn long, but however largo or however small the majority of the Government might be he thought the debate had been a very important one. He recognised that in the lectures they had received as to political morality it had been, however, a very hollow debate, and he would like to state his position. He would not have risen to state his views but for the fact that one of the Members of the Labour Party had challenged them to produce a single item of the Budget which had benefited a single consumer. The hon. Gentleman had said that the removal of the coal tax did not benefit the consumer or the taxpayer; but the removal of that impost had had the effect of increasing the wages of many people engaged in work in his own constituency. He thought the time had arrived when the country should consider the question of old-age pensions. He was in favour of old-age pensions and also of the removal of every unnecessary tax on articles of food and the necessities of life, and it was for that reason He intended to vote for the policy of the Chancellor of the Exchequer. It had been one of the greatest pleasures of his life to create at his own works a pension fund which enabled many men to conclude their lives in contentment and in peace. While he was in favour of the abolition of the duty on sugar, and in favour of old-age pensions, they could not expect any responsible Chancellor of the Exchequer to get up in his place and promise old-age pensions at once. Such a declaration at the present juncture would reduce the national security and lower still more the price of Consols. They were told that Consols wore now equal to a 3 per cent. investment, but it was more than that, and for the Chancellor of the Exchequer either to-day or later on to make a promise that he would remove the sugar tax and bring in a system of old-age pensions would affect the credit of the country. Therefore, He said the Chancellor of the Exchequer had acted wisely in continuing this tax, and whether or not his name appeared on the paper of those who had pledged themselves to vote for its abolition was not a serious matter, because He was looking at the Bridget as a whole. The national finances ought to be put in proper order, and it was a serious matter to those engaged in the trade and commerce of the country that that should not he done. It would be a serious matter, however, if the Chancellor of the Exchequer were to make such a rash promise as to remove the tax, and at the same time promise old-age pensions. He therefore intended to vote with the majority that evening. Whether that majority was large or small one thing was clear, namely, that there were always those who wore ready to leave the responsibility to the Government, and if they wished to arrive at a right conclusion they need only investigate the condition of the trade of the country which was caused entirely by the demoralisation which had taken

place in late years. He should support the Chancellor of the Exchequer.

Mr. HARWOOD (Bolton)

said that all those who wanted to get rid of this tax ought to vote for the only Chancellor of the Exchequer who had promised to get rid of it. [OPPOSITION cries of "But he has not promised."] The right hon. Gentleman had gone as far as he could. It would be unparliamentary and against House of Commons etiquette for a Chancellor to make a definite promise so long before his Budget to remove any tax. They had heard a good deal about the morality of pledges. What was the meaning of a pledge? It did not mean that they wore to give a vote in a particular way. The electors of this country were sensible people, and those who hated the sugar tax wanted them to take the course which was likely to get rid of it soonest. That course was to support the right hon. Gentleman.

Question put.

The Committee divided: —Ayes, 175; Noes , 312. (Division List No. 272.)

AYES.
Abraham, William (Cork. N.E.)	Chamberlain, Rt Hn J. A. (Worc.	Gardner, Ernest (Berks, East)
Acland-Hood, Rt. Hn.Sir Alex.F.	Chaplin, Rt. Hon. Henry	Gilhooly, James
Alison, Sir William Reynell	Clough, William	Gill, A.H.
Arkwright, John Stanhope	Clynes, J. R	Glover, Thomas
Ashley, W. W.	Coates, E. Feetham (Lewisham)	Gordon, J
Aubrey-Fletcher,Rt.Hon.Sir H	Cochrane, Hon. Thos. H. A. E.	Gretton, John
Balcarres, Lord	Collings,Rt. Hn.J. (Birmingh'm	Gwynn, Stephen Lucius
Balfour,RtHn.A.J.(City Lond.)	Corbett, A. Cameron (Glasgow)	Halpin, J.
Banbury, Sir Frederick George	Corbett, T. L. (Down, North)	Hardy, Laurence(Kent, Ashford
Baring, Capt. Hn. C.(Winchester	Courthope, G. Loyd	Harrison-Broadley, H. B.
Barrie, H. T. (Londonderry, N.)	Craig, Charles Curtis(Antrim, S.	Hay, Hon. Claude George
Beckett, Hon. Gervase	Craik, Sir Henry	Hayden, John Patrick
Bignold, Sir Arthur	Cretin, Eugene	Hazleton Richard
Boland, John	Cullinan, J.	Hemsley, Viscount
Bowles, G. Stewart	Cut-ran, Peter Francis	Henderson, Arthur (Durham)
Boyle, Sir Edward	Douglas, Rt. Hon. A. Akers-	Hill, Sir Clement(Shrewsbury)
Bridgeman, W. Clive	Du Cros, Harvey	Hills, J. W.
Bull, Sir William James	Duncan, C (Barrow-in-Furness	Hogan, Michael
Burdett-Coutts, W.	Duncan, Robert (Lanark, Govan	Hornby, Sir William Henry
Butcher, Samuel Henry	Faber, George Denison (York)	Houston, Robert Paterson
Campbell, Rt. Hon. J. H. M.	Faber, Capt. W. V. (Hants, W.	Hudson, Walter
Carlile, E. Hildred	Fardell, Sir T. George	Hunt, Rowland
Carson, Rt. Hon. Sir Edw. H.	Fell, Arthur	Jenkins, J.
Castlereagh, Viscount	Field, William	Jowett, F. W.
Cave, George	Flavin, Michael Joseph	Joyce, Michael
Cavendish, Rt. Hon. Victor C. W.	Fletcher, J. S.	Kenyon-Slaney, Rt. Hon. Col. W
Cecil, Lord John P. Joicey-	Forster, Henry William	Keswick, William
Kilbride, Denis	Nicholson, Wm. G. (Petersfield	Seddon, J.
King, Sir Henry Seymour(Hull)	Nield, Herbert	Sheehan, Daniel Daniel
Lamb, Edmund G. (Leominster	Nolan, Joseph	Sheffield, Sir Berkeley George D
Lane-Fox, G. R.	O'Brien, Kendal (Tipperary Mid	Smith, F. E. (Liverpool, Walton
Law, Andrew Bonar (Dulwich)	O'Connor, John (Kildare, N.)	Snowden, P
Lea, Hugh Cecil (St. Pancras, E	O'Connor, T. P. (Liverpool)	Stanley, Hon. Arthur (Ormskirk
Lockwood, Rt. Hn. Lt.-Col. A. R.	O'Grady, J.	Starkey, John R.
Long, Col. (Charles W.(Evesham	O'Kelly, James (Roscommon. N	Staveley-Hill, Henry (Staff'sh.
Long, Rt. Hn. Walter(Dublin, S)	O'Malley, William	Summer bell, T.
Londsale, John Brownlee	O'Neill, Hon. Robert Torrens	Talbot, Lord E. (Chichester)
Lowe, Sir Francis William	O'Shaughnessy, P. J.	Thomson, W. Mitchell-(Lanark)
Lundon, W.	Parker, James (Halifax)	Thorne, William
Lyttelton, Rt. Hon. Alfred	Pease, Herbert Pike(Darlington	Thornton. Percy M.
Macdonald, J. R. (Leicester)	Percy, Earl	Turnour, Viscount
MacIver, David (Liverpool)	Power, Patrick Joseph	Valentia, Viscount
Mac Neill, John Gordon Swift	Randles, Sir John Scurrah	Walrond, Hon. Lionel
Macpherson, J. T.	Ratcliff, Major R. F.	Walsh, Stephen
MacVeigh, Charles (Donegal, E.)	Rawlinson, John Frederick Peel	Warde, Col. C. E. (Kent, Mid)
M'Hugh, Patrick A.	Redmond, John E. (Waterford)	Wardle, George J.
Magnus, Sir Philip	Redmond, William (Clare)	White, Patrick (Meath, North)
Markham, Arthur Basil	Remnant, James Farquharson	Wilkie, Alexander
Marks, H. H. (Kent)	Richards, T. F.(Wolverhapmt'n	Willoughby de Eresby, Lord
Mason, James F. (Windsor)	Roberts, G. H. (Norwich)	Wilson, A. Stanley (York, E. R.)
Masterman, C. F, G.	Roberts, S. (Sheffield, Ecclesall)	Wilson, W. T. (Westhoughton)
Meagher, Michael	Robertson. Sir G. Scott Bradf'rd	Wortley, Rt Hon. C B. Stuart
Meysey-Thompson, E. C.	Roche, Joint (Galway, East)	Wyndham, Rt Hon. George
Middlemore, John Throgmorton	Ronaldshay, Earl of	Young, Samuel
Mildmay, Francis Bingham	Rutherford, John (Lancashire)	Younger, George
Money, L. G. Chiozza	Rutherford, W.W. (Liverpool)
Mooney, J. J.	Salter, Arthur Clavell	TELLERS FOR THE AYES— Mr.
Moore, William	Sassoon, Sir Edward Albert	Harold Cox and Mr. Cowan
Morpeth, Viscount	Scott, A.H.(Ashton under Lyne
Muntz, Sir Philip A.	Scott, Sir S. (Marylebone, W.)
NOES.
Ainsworth, John Stirling	Bryce, J. Annan	Davies, W. Howell (Bristol. S.)
Allen, A. Acland (Christchurch)	Buchanan, Thomas Ryburn	Dewar, Arthur (Edinburgh, S.)
Armitage, R.	Buckmaster, Stanley O.	Dewar, Sir .J. A. (Invesness-sh.
Ashton, Thomas Gair	Burns, Rt. Hon. John	Dickinson. W. H. (St.Pancras,N
Asquith, Rt. Hon. Herbert Henry	Burnyeat, W. J. D).	Dickson-Poynder, Sir John P.
Asbury, John Meir	Burt, Rt. Hon. Thomas	Dobson, Thomas W.
Atherley-Jones, L.	Buxton, Rt. Hn. SydneyCharles	Dunn, A. Edward (Camborne)
Baker, Sir John (Portsmouth)	Byles, William Pollard	Dunne, Major(E. Martin(Walsall)
Balfour, Robert (Lanark)	Cams, Thomas	Edwards, Clement (Denbigh)
Baring, Godfrey (Isle of Wight)	Cameron, Robert	Edwards, Sir Francis (Radnor)
Barker, John	Campbell, Bannerman, Sir H.	Elibank, Master of
Barlow, Sir John E. (Somerset)	Carr-Gomm, H. W.	Ellis, Rt. Hon. John Edward.
Barlow, Percy (Bedford)	Causton, Rt. Hn. Richard Knight	Erskine, David C.
Barran, Rowland Hirst	Cawley, Sir Frederick	Essex, R. W.
Barry, Redmond J.(Tyrone, N.)	Chance, Frederick William	Esslemont, George Birnie
Beale, W. P.	Cheetham, John Frederick	Evans, Samuel T
Beaumont, Hon. Hubert	Cherry, Rt. Hon. R. R,	Eve, Harry Trelawney
Bellairs, Carlyon	Churchill, Rt. Hon. Winston S.	Everett, R. Lacey
Belloc, Hilaire Joseph Peter R,	Cleland, J. W.	Faber, G. H. (Boston)
Benn, Sir J. Williams (Devonp'rt	Coats, Sir T. Glen (Renfrew, W,)	Fenwick, Charles
Benn, W.(T'w'r Hamlets, S. Geo.	Cobbold, Felix Thornley	Ferens, T. R.
Bennett, E. N.	Collins, Stephen (Lambeth)	Ferguson, R. C. Munro
Berridge, T. H. D.	Collins,SirWm.J.(S.Pancras, W.	Fiennes, Hon. Eustace
Bertram, Julius	Corbett, CH (Sussex, E. Grinst'd	Findlay, Alexander
Bethell, SirJ. H. (Essex, Romf'rd	Cornwall, Sir Edwin A.	Foster, Rt. Hon. Sir Walter
Bethell, T. R. (Essex, Maldon)	Cory, Clifford John	Fowler, Rt. Hon. Sir Henry
Black, Arthur W.	Cotton, Sir H. J. S.	Freeman-Thomas, Freeman
Boulton, A. C. F.	Criga, Herbert J. (Tynemouth)	Fuller, John Michael F.
Bramsdon, T. A.	Cremer, Sir William Randal	Fullerton, Hugh
Branch, James	Crombie, John William	Furness, Sir Christopher
Brigg, John	Crosfield, A. H.	Gibb, James (Harrow)
Bright, J. A.	Crossley, William J.	Gladstone, Rt. Hn. Herbert John
Brodie, H. C.	Dalziel, James Henry	Goddard, Daniel Ford
Brooke, Stopford	Davies, David(Montgomery Co.	Gooch, George Peabody
Brunner, J. F. L. (Lancs., Leigh)	Davies, Ellis William (Eifion)	Grant, Corrie
Brunner, RtHnSirJ. T(Cheshire)	Davies, M. Vaughan-(Cardigan	Greenwood, G. (Peterborough)
Greenwood, Hamar York)	M'Micking, Major G.	Shaw, Rt. Hon. T. (Hawick B.)
Grey, Rt. Hon. Sir Edward	Maddison, Frederick	Shipman, Dr. John G.
Grove, Archibald	Mallet, Charles E.	Silcock, Thomas Ball
Guest, Hon. Ivor Churchill	Manfield, Harry (Northants)	Sinclair, Rt. Hon. John
Gulland, John W.	Mansfield, H. Rendall (Lincoln)	Smeaton, Donald Mackenzie
Gurdon, RtHn. Sir W. Brampton	Marks, G. Croydon (Launceston)	Soames, Arthur Wellesley
Haldane, Rt. Hon. Richard B.	Marnham, F. J.	Soares, Ernest J.
Hall, Frederick	Mason, A. E. W. (Coventry)	Spicer, Sir Albert
Harcourt. Rt. Hon. Lewis	Massie, J.	Stanger, H. Y.
Hardy, George A. (Suffolk)	Menzies, Walter	Stanley, Hn. A. Lyulph (Chesh.)
Harmsworth, Cecil B. (Worc'r)	Micklem, Nathaniel	Stewart, Halley (Greenock)
Harmsworth, R. L. (Caithn'ss-sh	Molteno, Percy Alport	Stewart-Smith, D. (Kendal)
Hart-Davies, T.	Mond, A.	Strachey, Sir Edward
Harvey, A. G. C. (Rochdale)	Montagu, E. S.	Straus, B. S. (Mile End)
Harvey, W. E. (Derbyshire, N. E.	Montgomery, H. G.	Strauss, E. A. (Abingdon)
Harwood, George	Morgan, G. Hay (Cornwall)	Stuart, James (Sunderland)
Haslam, Lewis (Monmouth)	Morley, Rt. Hon. John	Sutherland, J. E.
Haworth, Arthur A.	Morrell, Philip	Taylor, Austin (East Toxteth)
Hedges, A, Puget	Morse, L. L.	Taylor, Theodore C. (Radcliffe)
Helme, Norval Watson	Morton, Alpheus Cleophas	Tennant, Sir Edward (Salisbury
Hemmerde, Edward George	Murray, James	Tennant, H. J. (Berwickshire)
Henderson, J. M. (Aberdeen, W.)	Myer, Horatio	Thomas, Abel (Carmarthen, E.)
Henry, Charles S.	Napier, T. B.	Thomas, Sir A. (Glamorgan, E.)
Herbert, Col. Sir Ivor (Mon., S.)	Newnes, F. (Notts, Bassetlaw)	Thomasson, Franklin
Herbert, T. Arnold (Wycombe)	Nicholson, Charles N.(Doncast'r	Thompson, J. W. H. (Somerset, E
Higham, John Sharp	Norman, Sir Henry	Tillett, Louis John
Hobart, Sir Robert	Norton, Capt. Cecil William	Tomkinson, James
Holden, E. Hopkinson	O'Donnell, C. J. (Walworth)	Torrance, Sir A. M.
Holland, Sir William Henry	Partington, Oswald	Toulmin, George
Holt, Richard Durning	Paulton, James Mellor	Trevelyan, Charles Philips
Hope, W. Bateman(Somerset, N.	Pearce, Robert (Staffs. Leek)	Ure, Alexander
Horniman, Emslie John	Peacre, William (Limehouse)	Verney, F. W.
Horridge, Thomas Gardner	Pearson, W. H. M. (Suffolk, Eye)	Vivian, Henry
Howard, Hon. Geoffrey	Perks, Robert William	Walker, H. De R. (Leicester)
Hutton, Alfred Eddison	Philipps, Col. Ivor (S'thampton	Walters, John Tudor
Hyde, Clarendon	Philipps, J. Wynford (Pembroke	Walton, Sir John L. (Leeds, S.)
Idris, T. H. W.	Philipps, Owen C, (Pembroke)	Walton, Joseph (Barnsley)
Illingworth, Percy H.	Pollard, Dr.	Ward, W. Dudley (Southampton
Isaacs, Rufus Daniel	Price, C. E. (Edinb'gh, Central)	Warner, Thomas Courtenay T.
Jackson, R. S.	Price, Robert John (Norfolk, E.)	Wason, Rt. Hn. E. (Clackmannan
Jacoby, Sir James Alfred	Priestley, Arthur (Grantham)	Wason, John Cathcart (Orkney)
Jardine, Sir J.	Pullar, Sir Robert	Waterlow, D. S.
Johnson, John (Gateshead)	Radford, O. H.	Watt, Henry A.
Johnson, W. (Nuneaton)	Rea, Russell (Gloucester)	Wedgwood, Josiah C.
Jones, Sir D. Brynmor(Swansea	Rea, Walter Russell (Scarboro'	Whitbread, Howard
Jones, Leif (Appleby)	Rees, J.D.	White, George (Norfolk)
Kearley, Hudson E.	Rendall, Athelstan	White, J. D. (Dumbartonshire)
Kekewich, Sir George	Richardson, A.	While, Luke (York, E. R.)
Kincaid-Smith, Captain	Rickett, J. Compton	White-head, Rowland
Laidlaw, Robert	Ridsdale, K A.	Whitley, John Henry (Halifax)
Lambert, George	Roberts, Charles H. (Lincoln)	Whittaker, Sir Thomas Palmer
Lamont, Norman	Roberts, John H, (Denbighs.)	Wiles, Thomas
Layland-Barratt, Francis	Robertson, Rt. Hn. E. (Dundee)	Williams, Llewellyn (Carmarth'n
Leese, Sir Joseph F.(Accrington	Robertson, J. M. (Tyneside)	Williams, Osmond (Merioneth)
Lechmann, R. C.	Robinson, S.	Williamson, A.
Lever, A. Levy (Essex, Harwich	Robson, Sir William Snowdon)	Wills, Arthur Walters
Levy, Sir Maurice	Roe, Sir Thomas	Wilson, Hon. C. H. W. Hull, W.)
Lewis, John Herbert	Rogers, F. E. Newman	Wilson, Henry J. (York, W.R.)
Lloyd-George, Rt. Hon. David	Rose, Charles Day	Wilson, John (Durham, Mid)
Lough, Thomas	Rowlands, J.	Wilson, J. H. (Middlesbrough)
Lupton, Arnold	Runciman, Walter	Wilson, J. W. (Worcestersh, N.)
Luttrell, Hugh Fownes	Russell, T. W.	Wilson, P. W. (St. Pancras, S.)
Lynch, H. B.	Samuel, Herbert L. (Cleveland)	Wood, T. M' Kinnon
Macdonald. J. M. (Falkirk B'ghs	Samuel, S. M. (Whitechapel)	Yoxall, James Henry
Mackarness, Frederic C.	Schwann, C. Duncan (Hyde)
Maclean, Donald	Schwann, SirC. E. (Manchester)	TELLERS FOR THE NOE—
Macnamara, Dr. Thomas J.	Sears, J. E.	MR. Whiteley and Mr. J. A. Pease.
M'Crae, George	Seaverns, J. H.
M Kenna, Rt. Hon. Reginald	Seely, Major J. B.
M'Laren H. D. (Stafford, W.)	Shaw, Charles Edw. (Stafford)

Motion made, and Question, "That this House do now adjourn," —(Mr. Whiteley) —put, and agreed to.

*MR HICKS BEACH (Gloucestershire, Tewkesbury)

moved the following new clause— ''In addition to the deductions of one-eighth and one-sixth allowed under Section 35 of the Finance Act of 1894, there shall also, for the purposes of collection, be allowed the cost of insurance and a deduction for expenses of management not exceeding five per centum of the gross annual value. He said that the result which had just been announced seemed to have come as a surprise to hon. Gentlemen opposite, and, therefore, they might be inclined to accept his very modest Amendment. For a long time past there had been a great deal more income-tax paid under Schedule A than those who were liable were really bound to pay. He was sure that no landlords objected to pay their fair share of the general taxation of the country, but they had come to realise that in the last few years they had been paying, not only their fair share, but a very considerable sum in excess of the amount that they ought fairly to pay under Schedule A. Under that schedule the taxpayer was charged on the gross annual value of his property, save for infinitesimal deductions which were authorsied by the Income-tax Acts, namely, the land tax and embankment and drainage rates. The embankment rates were practically of an infinitesimal character, and did not come into the account of most estates. Thon there was the allowance of one-sixth on buildings and one-eighth on land under the Finance Act of 1894. Anyone who had studied the management and upkeep of estates must recognise that those deductions by no means covered the of cost upkeep and allowed nothing at all towards the expense of management. In the case of two estates he had calculated the amount of the income-tax they had paid for the last nine years. The average rate of the income-tax had been 11.11d. in the £, and on one of these estates the average rate in the pound paid on the net rental without deducting anything for the cost of management amounted to 12.38d. On the other estate for the same period the rate was 13.55d. In other words that meant that the owners of those two estates in the first case had paid during those nine years an excess of 1.27d. in the pound in excess of the not rental, and in the second case an excess of 2.44d. There was another case of a similar estate upon which during the last five years the average rate of the income tax was 12.3d., and the amount paid in the pound on the net rental by the owner