§ Considered in Committee.
§ (In the Committee.)
§ Clause 3:
§ *MR. COURTHOPE (Sussex, Rye)
moved the omission of subsection (1). That subsection really contained the whole essence of the Bill. All the iniquity, as they on that side of the House thought it, of the Bill was concentrated in this subsection. It was so opposed, in his opinion, to common 499 justice between man and man that he could not imagine any moderate-minded man who would support it. He could not believe that the many moderate men who sat on the benches opposite could really in their hearts approve of it. The only class that he could think honestly approved of it would be perhaps the Socialists who denied the legal existence of private property, or the fanatics who might possibly argue that the importance of the end to be acquired justified any means for obtaining that end. In the whole course of this Bill, this amazing offspring of so-called Liberalism, there was no more vicious section than the one whose omission he was now moving. By it the State proposed to rob the individual—he used the word "rob" purposely, because he was sure it was the right one—of property acquired in all honesty and innocence, of property the existence of which the State had always recognised, and the value of which the State had always taxed. By this subsection, at the end of a period of fourteen years, all the value of licences existing at that time would disappear so far as the private owners of those licences were concerned. The value of that loss to the individual was perhaps rather difficult to assess accurately, but right hon. and hon. Gentlemen on the Government benches put it so high as £300,000,000 as recently as 1904, and it had dwindled down in their estimation by various stages till finally, when large figures became very inconvenient, it reached the moderate sum of £65,000,000. The exact figure did not concern him for the moment. It was in any case an enormous mass of property, the existence of which would come summarily to a close at the end of the period if this subsection passed. At the end of that period the applicant for renewal, as it was now called, of a licence would have in the first place to pay full monopoly value for that licence. He would have to give notice of his application, which he had not to do at present; he would have to submit to any fresh conditions that the licensing justices might think fit to impose, conditions to which he was not subject at present; he would not receive any written notice of objection to a renewal, as he now received; the evidence that could be heard against a renewal 500 need not be on oath, and there would be no appeal. All those changes in procedure were, he submitted, imposing a very great hardship indeed on those who conducted the business of licensed premises in this country, but it was not so much with the details of the procedure and the inconvenience of the proposed procedure, as to the financial question that he was concerned. The owners of these licences had to contribute, for fourteen years, or whatever the period might be, compensatior for the extinctions of other licences, and at the end of that time they themselves would be extinguished without compensation at all, and the monopoly value, which they at present rightly and equitably possessed, would lapse into the hands of the State. The monopoly value had been estimated at so large a sum as £19,000,000 per annum. At all events, without in any way connecting himself with the definite figure, he was well within the mark when he said that many millions which were annually the property of the private individual would in future be annexed by this clause and become the property of the State. No possible justification for such a course as this could be found unless the present holders of these licences held them without any legal or moral right. But they had been bought in the open market; they had been bought and sold quite honestly, and as between individual and individual the right of property in them was certainly well established and just. As to the question as between the State and the individual, there again he thought it was clear that the right of the individual to the property in these licences was well established. They had been recognised by the Courts of the country; they had been held as good security for mortgages—mortgages based not on the value of the buildings, but on the value of the licensed buildings. They had been considered good security for debenture issues, issues of stock which had always been looked upon as trust stock, and in which trustees had for many years been in the habit of investing the money placed in their hands. In every possible way the Courts and the Government of this country had recognised the private ownership of these licences, and when he said licences he included the expectation 501 of continuity in such licences. Certain supporters of the Bill would argue, he knew, that the brewers and those interested in them would not be ruined, or suffer so severely by the proposal of this section as some said, because they would be able to establish a sinking fund to pay off their mortgages, debentures, and one thing and another. He was not concerned whether the brewers could or could not keep their heads above water under this proposal. He was opposing it, not because they could or could not afford it, but because it was wrong, and he, therefore, would not attempt to enter into the question of whether these sinking funds could be raised or not. Did the monopoly, as the supporters of the Bill affirmed, in any way to-day belong to the State? He admitted that the State created it, but he contended that the State never held it and never looked upon it as State property. The State parted with the monopoly centuries ago, when they first created it, and he would like in this connection to quote a sentence from the book, "The History of the Liquor Licences of England," by Sidney and Beatrice Webb, whom, he thought, even the right hon. Gentleman the Member for Spen Valley would admit were not likely to put the case of "the trade" too strongly. They, speaking of the period as far back as 1552, said—What was of importance was the fact that Parliament, from the outset, implied that the number of licences was to be kept down to just enough for the supply of the legitimate wants of each neighbourhood, thus creating a sort of monopoly. Moreover, there was no idea of selling this monopoly to the highest bidder, and the justices were, in fact, required to issue their licence without charge.That, he thought, showed that historically the monopoly value was parted with as soon as it was created by the State, and because the State now recognised that it had possibly made a bad bargain, and that it might be so much better off if it had retained that monopoly value in its own hands, the justice of its taking steps to resume, possession of the monopoly value did not follow. What would the Courts of this or any other country say to the private individual who went to them and said: "I made a bad bargain, or my ancestors did centuries ago; give 502 me back what they parted with." He thought the Courts would use the old maxim, vigilantibus non dormientibus lex subvenit, and dismiss the case with costs on the higher scale, and that the country when it had the opportunity would use some such expression and would decline to allow the State to resume possession of a monopoly which it had never used, and which it had parted with for a consideration, to perfectly honest individuals. Another argument that supporters of this clause were in the habit of using was that, because the licence was to come up for annual renewal, therefore it was purely a matter for one year; there could not be any legal expectation of renewal, and it was in the same legal position as an application for a new grant. Surely that was not so. The statutory procedure in the two cases was totally different, as anybody with the slightest experience knew. The difference in procedure was to his mind conclusive proof that every Government recognised now, and had always recognised, the difference between an application for renewal and an application for a new grant. There were many other analogous cases where it would be perfectly futile for any Government to argue that there was no expectation of a renewal, simply because the licence had to come up for renewal each year. How about theatrical licences? Would the Government argue that there was no right of expectation of a renewal of a licence in the case of a licence for a theatre? He thought that was an analogy more on a par with a liquor licence than anything else. The right hon. Member for the Spen Valley was delightful in his choice of analogies, and in his pamphlet he selected the analogy of agricultural tenancies.
§ SIR THOMAS WHITTAKER (Yorkshire, W. R., Spen Valley)
Oh, no. The hon. Member will excuse me; I never selected such an analogy.
§ *MR. COURTHOPE
said he read in the right hon. Gentleman's pamphlet—Property owners usually allow their tenants to continue tenancies from year to year without disturbance, but that does not in the slightest degree vitiate the right of the landlord to terminate one or all of the tenancies at the end of 503 any year, and to impose entirely new terms, and let the houses to new tenants or to decline to let them to anyone.
§ SIR THOMAS WHITTAKER
If the hon. Member looks he will see that the kind of tenant to which I referred was the tenant of a house or shop.
§ *MR. COURTHOPE
said that did not alter his argument. He certainly read them, and he thought most people would read the right hon. Gentleman's words as though they included agricultural land, and he believed they were intended to include agricultural tenancies.
§ *MR. COURTHOPE
reminded the right hon. Gentleman that it was not possible for the landlord to turn out his tenants or impose new terms, and if he attempted to do so, the State compelled the landlord to pay compensation for such disturbance, and the analogy broke down in every possible respect. Perhaps the most striking difference lay in the persons who paid the compensation. In the case of the liquor licences it was the unfortunate licencees themselves; in the case of landlord and tenant it was the landlord, who had disturbed the tenant. At all events, without pursuing this analogy further—[hear, hear]. He was not afraid to do so, but all he would say was that he really thought that the right hon. Gentleman the Member for the Spen Valley must admit by now that he could not get much comfort for his support of this measure from his analogy of landlord and tenant, whether it was the landlord and tenant of a shop or an agricultural tenancy. Another point, and the last with which he would weary the Committee, as showing that the State had recognised the existence of private property in these licences, and their value was, of course, the well-known case of the death duties. He thought everybody in this House was familiar with the Inland Revenue Memorandum of 1890, and he knew perfectly well that when the opponents of the Bill made use of it the supporters of the measure said: "You are quite wrong; you ought not to make use of that; it was 504 withdrawn in 1904." Was it withdrawn in 1904? As far as he could make out the only case they could make for the withdrawal of this Memorandum was that some Home Office Return or Memorandum was issued which, to a certain extent, seemed to have taken its place. But he did not mind whether the Memorandum was withdrawn or not; the practice was not withdrawn and the assessment of licensed premises for death duties was still made up to the present year, on the assumption that the licences would continue during the lifetime of the successor. He did not know whether it was a point of much importance or not, but this Memorandum of 1890 had been reprinted this year, and he obtained a copy from the Vote Office. But he carefully guarded himself from making a point of it, because he did not know whether it could be made, but the fact remained that the practice continued, and how the State or anyone else arguing about the rights given could possibly contend that it would be honest or just as between the State and the individual suddenly to take back the monopoly value upon which the individual owners had been taxed for so long passed his comprehension. There was no doubt that every Government had always recognised the existence of this property and this value. Did not the owners of this kind of property already contribute their full share of taxation to the nation? He found upon looking up the figures that beer alone contributed 5s. 10d. per head of the population.
§ *MR. COURTHOPE
said that alcoholic liquor as a whole paid 15s. 11d. per head of the population, or 27 per cent. of the gross revenue of the State. Whoever might ultimately pay the tax, it came primarily from the liquor trade, and reduced the gross profits of the trade by some £40,000,000 a year. He 505 thought that this class of property—every form of property connected with the sale of liquor—did its full share in providing the State with revenue. Arguments could not be found on that ground for placing an enormous additional burden on the trade. He would not enter into the question of period at all, because he regarded the principle of time limit with concurrent compensation levy as bad altogether, and the evil only varied according to the length of the time-limit. He had not inquired as to the definition of "monopoly value" or whether there ought to be an Amendment of Section 4 of the Act of 1904, or of Section 20 of the Local Government Act of 1888, although he thought the right hon. Gentleman the Prime Minister must have overlooked the fact that a very interesting principle arose in connection with the Local Government Act of 1888, because when the Finance Act of 1907 altered the procedure for the collection of licence duties for local taxation it apparently affected also the question of "monopoly value." Nor had he attempted to inquire at all whether or not certain brewery companies, or how great a proportion of brewery companies, would be ruined if this section found its way into the Statute-book. The point he made was that this clause set up confiscation, by statute, of such a kind that it would strike a serious and fatal blow at public confidence and public security; and that robbery of this kind by the State from the individual within the State was not only discreditable, but that it would place a lasting stain on the national honour. It was because it was impossible, or ought to be impossible, to impose a time-limit upon common honesty between man and man, or State and individual, that he begged to move that this sub-clause be deleted from the Bill.
In page 3, line 9, to leave out subsection (1)."—(Mr. Courthope.)
§ Question proposed, "That the words 'After the' stand part of the clause."
§ MR. LEVERTON HARRIS (Tower Hamlets, Stepney)
asked whether the Prime Minister was now in a position to give a clear definition of the words 506 "monopoly value." This was the first clause of the Bill in which the term occurred, and the whole meaning of the clause depended upon the interpretation put upon those words. He might say "monopoly value" was one of the foundations upon which the whole fabric of the Bill was built. In view of that they were entitled to ask, and to know exactly what the meaning of "monopoly value" was, by what machinery it was to be fixed, and upon what basis "monopoly value" was to be paid. He thought the Prime Minister appreciated the difficulty in which the House was placed by having to debate this Bill without knowing what was meant by "monopoly value," because on the Second Reading the right hon. Gentleman intimated that he would embody a definition. The right hon. Gentleman then, said that whilst he could not give a precise pledge—It may be as well in view of what I have said, that before the Bill emerges from the Committee stage, and I am saying this almost without consultation with my colleagues, and only throwing it out as my own suggestion, to define in terms in the Bill what monopoly value really means.The necessity for this definition had become more and more apparent as the discussion on the Bill proceeded. Although, as the President of the Board of Trade had said, "All the ablest intellects in this country are concentrated on this Bill," they had had a great variety of definitions of the meaning of "monopoly value." The strange thing was that in spite of all the able intellects none of these definitions agreed with the others. It appeared that there was not a single Member who had given a definition who understood what the other definitions meant. The necessity for a clear definition had been fully recognised by other members of the Government besides the Prime Minister. The Home Secretary, for instance, on the Second Reading of the Bill, said—I for my part agree with the suggestion thrown out by the Prime Minister that the insertion of a definition in the Bill will make matters clearer than perhaps they are at present.The hon. and learned Member for Reading also found himself in a maze of doubt, because on the Second Reading he said—We are told, I think by the Prime Minister, that we shall have to define what it means. I hope he will. For myself I do not know 507 whether I have quite apprehended what is intended by the Bill in stipulating for the payment of monopoly value.After all these valuable opinions from right hon. and hon. Gentlemen opposite he did not think anybody would be bold enough to contend that immediate necessity did not exist for some clear definition, to assist them in discussing this clause, of what the Prime Minister and the Government meant by the term "monopoly value." He remembered a scientific experiment being performed by which several rays of brilliant light were concentrated on one spot on a screen. The result instead of being increased illumination was only darkness. The Committee were very much in the same position with regard to this Bill. The result of the concentration of all these brilliant minds on this Bill was that the Committee was left in a dense fog and a deeper obscurity than before. He had taken the trouble to go through several speeches made by hon. and right hon. Gentlemen opposite on the question of monopoly value. He had read six speeches and had found ten definite and distinct definitions, five by the Prime Minister, two by the Home Secretary, one by the Solicitor-General, one by the hon. and learned Member for Reading, and one by the hon. Member for Spen Valley. The Prime Minister had made two speeches, one on the First Reading and one on the Second Reading, and in those two speeches had given five distinct definitions of monopoly value. If they took the first speech of the Prime Minister on the First Reading debate they would find that in that speech the right hon. Gentleman said—What the monopoly value really means is this, when it comes to be analysed. It means what people have been ready to pay, not for a right—there never was any right—but for an expectation, or to speak with strict accuracy for a double expectation. What do I mean by a double expectation? I mean, in the first place, the expectation that the licence once granted would, in the absence of misconduct, be periodically and indefinitely renewed, and, in the next place, an expectation that the justices would not allow effective competition with those to whom they had once granted it.Those expectations were now destroyed, and were no longer to exist; that definition therefore could not hold with regard to the present Bill. He passed 508 to the second declaration by the right hon. Gentleman—The problem to be solved is this. What is the additional rent which a person would pay for the house, with the privilege of the licence, as compared with the rent which he would pay for the house next door, carrying on in that house an unlicensed trade, and not enhanced, therefore, in value by a monopoly price?The right hon. Gentleman there put the definition in the form of a question the answer to which if it were given to him would not be satisfactory. He would put the question the other way. What would be the rent of a year's tenancy, at the end of which the tenant would be turned out, lock, stock, and barrel, into the street without any redress whatever? If monopoly value was to be defined on those terms the value which the Government would regain for themselves would be very small. He passed to the third definition of the right hon. Gentleman—The annual value of the licence is to be taken to be the sum by which the actual annual value of the licensed premises adopted for Schedule 'A.' of the income-tax exceeds the amount which the Commissioners of Inland Revenue determined would be that annual value if the premises were not licensed.That seemed to be a practical, workable definition. It was the difference between two values not particularly difficult to ascertain. But when at last they thought they had got a definition upon which they could rely, in the very next speech which the right hon. Gentleman made, on the Second Reading of the Bill, he threw over the first three and gave a fourth definition. In the course of that speech he said—Measured in terms of rent it means, of course, what this publican tenant, in virtue of his receiving from the State a special privilege, which other classes of traders do not enjoy, would pay, as compared with that which would be given or offered by another tenant engaged in a business in which he was not similarly privileged. And, again, if you consider how the additional rent would be arrived at, it is pretty clear, I think, that it represents roughly, at any rate, the comparative extra profit——the right hon. Gentleman there put it on a new basis altogether, the basis of rent—which the publican can make in virtue of his monopoly, as compared with the other tradesman, each being assumed to bring in, approximately, at any rate, the same amount of capital and to apply to his business the same skill and the same energy and the same enterprise.509 In his fifth definition he said—If that is true—and I think it is, I do not think anybody will dispute it—the monopoly value, measured not as rent but as a lump sum, means the capitalised value of the difference between the licensed and the unlicensed rental of the premises. That is what is meant by monopoly value, I believe, in the Act of 1904—it is certainly what is meant by the Government in this Bill and in connection with this Bill, neither more nor less.To recapitulate these five definitions—they had monopoly value in terms of rent, first of all, additional rent as compared with a house which did not enjoy a licence. They had it, secondly, in the terms of an extra profit that the publican could make; they had it in the terms of an expectation that the licence would be indefinitely and periodically renewed, which was what the right hon. Gentleman told them it really meant. Definition four was the annual difference between Schedule A and the amount of the annual value if the premises were not licensed—that was to be the rule in the Bill; and then they got it lastly in the terms of capital or lump sum.
§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH,) Fifeshire, E.
Does the hon. Member say any one of these definitions is inconsistent with any other?
§ MR. LEVERTON HARRIS
said if any hon. Member could find any consistency in these definitions such as could be accepted in a Court of law in defining the meaning of the Bill, he would be very much surprised. The last definition to which he had referred had the approval of the Home Secretary, who in the same debate, after reading the Prime Minister's definition, gave a definition of his own in order to make it clearer—a positively expert definition. He said—It can be defined by saying the monopoly value is the difference between licensed and unlicensed premises.If anybody could accept that as an accurate definition for the purpose of an Act of Parliament on a matter which was absolutely the most critical in the Bill, and upon which the existence almost of 66,000 licensed premises was going to depend, he was a more careless politician than he would like to be 510 himself. Unlike the Home Secretary, the Solicitor-General refused to accept the Prime Minister's definition of capitalised value—in fact, he repudiated it altogether. He said—We make it impossible under the provisions of the Bill now before Parliament to have a lump sum at all. It is necessary for the licensing justices to fix the monopoly value year by year, and they cannot go any further.Then he gave an example of what would happen with regard to these houses—For the moment I will take the annual value instead of the lump sum. At £4,500 as the average monopoly value, at 4 per cent., you get £180 a year. That is sufficiently accurate for the purpose of my illustration.After listening to the First and Second Reading debates he could very well understand the maze of legal doubt in which the hon. and learned Member for Reading found himself when he made his speech with regard to this term of monopoly value. The Home Secretary, however, wanted to have a second shot in the prize competition, so he gave them another definition. This was Number 8—What would be the ordinary profit on the unlicensed trade? Say 6 per cent. What would be the profit on the licensed trade? That would have to be estimated in the first year, and ascertained from the books in succeeding years.Now they got a new method of arriving at it—Say it was 15 or 20 per cent. Take the difference between the two, allow something for good management and other considerations, as provided in Section IV. of the Act of 1904, and the result is the monopoly value——of course, that was perfectly simple—which may be either capitalised in a lump sum and paid, as in some cases, already, or it may be in the form of an annual payment.Now they had got the Home Secretary throwing in his lot with both the Prime Minister and the Solicitor-General, and he said they might take it whichever way they liked. Definition Number 9 was that given by the hon. and learned Gentleman the Member for Reading. He also did not want to be left out in the cold, and thought he would try his hand at an exposition of what was meant by monopoly value—I understand that to be something in the nature of rent, which he will have to pay for the privilege granted to him. In a case where a public-house is producing a profit of £1,000 511 a year the authorities will not take the whole or anything like the whole of that amount. They will say that having regard to the scale on which they assess the privilege of selling liquor in the district, such a house should pay say, £150 or £200 annually for this privilege.In this definition he left it to the authorities to say, having regard to the scale of the district, what the house should pay. Now the last definition was that of the hon. Baronet the Member for Spen Valley, whose opinion they greatly valued. He said—Monopoly value is distinct from and in addition to an ordinary trade profit. Under the new conditions the brewer will make the ordinary manufacturer's wholesale profit on his beer, and he will make the ordinary reasonable retail profit on his business, and it is only what is beyond and additional to this that is the monopoly value.He was almost tempted to catch the infection and define monopoly value himself. If he had to define it he should say the monopoly value as the Bill was at present was exactly what a person would pay for the monopoly, and neither more nor less. When they asked themselves what would a person pay for a year's monopoly, he thought the sum of money which any publican would be prepared to pay for the tenancy of a house on which he had very likely to spend a good deal of money in fixtures, and from which he might be evicted into the street at the end of twelve months without any notice, without any compensation, and without any redress whatever, would be very small. Could anything really be more absurd than the position in which the Committee found itself? They were legislating for 66,000 public-houses whose future existence depended entirely upon the monopoly value that was to be charged under the Bill, and yet nobody had any idea whatever of what monopoly value meant. He wanted to ask the Prime Minister if he could give them any enlightenment on this profoundly important question.
§ *MR. G. D. FABER (York)
said the discussion must indeed be a momentous one, because on the first subsection of the clause depended the absolute fate of some 66,000 licensed properties, and right at the root, base, and foundation of the whole matter lay the question: To whom did the monopoly value in a license belong? Could the supporters of the Bill make out 512 to the satisfaction of the people of the country that the monopoly value belonged to the State? Before Edward VI. there was free trade in the sale of intoxicants. He thought the proposition of the hon. Member for the Appleby Division absolutely erroneous. He had said that licenses were based on prohibition. He joined issue with that. If they searched the archives of the past they would find that the matter began in free trade. Why had the Government of a former day begun to put its hand upon that free trade? The truth was, first of all, that it was for the improvement of the morals of the people. It was found then, and much later under the Duke of Wellington's Act that it did not do to give free trade in the sale by retail of drinks. Therefore, the Government started the licensing system; first and foremost, in order to control the morals of the people, and, secondly, for revenue, which was just as vital then as it was to-day. How many hundreds of millions had the Government got out of the drink trade? They had control of the morals of the people by instituting the practice of licensing, and they had raised hundreds of millions of pounds of revenue. Surely, if that were so, and he ventured to say it was, then the State parted with the monopoly value of licenses for what lawyers called "good and valuable consideration." In return for the regulation and control of morals and revenue, licences were granted, subject to good behaviour, and through that system began monopoly value. That was the origin of monopoly value; it arose out of restriction and revenue. The Prime Minister, in his First and Second Reading speeches, said that the State had got a very small share, an infinitesimal share, of the monopoly value. With the greatest possible respect for the right hon. Gentleman's high position he disagreed with that method of stating the case. The State had got a very large share of the profits derived from the monopoly value.
How had the subject been treated during all these decades? Had anybody until recently ventured to set up the argument that the monopoly value lay with the State? No Judge at any time or anywhere had ventured 513 to set up the proposition that the monopoly value belonged to the State. If they searched the pages of Hansard they would not find that any great statesman until quite recently had ever said that monopoly value lay with the State. He would like, in this connection, to quote the right hon. Member for the Spen Valley, who was "the Bill, the whole Bill, and nothing but the Bill." The right hon. Member in this matter was the shadow behind the throne. He had the greatest possible respect for the right hon. Member's talents and for his genuineness on this question, but he and the right hon. Gentleman looked at the matter from opposite ends of the pole. He respected his views because he meant what he said. In the debate on the Licensing Bill of 1902, when the proposition was made to bring grocers' licences for the first time under the control of the licensing justices, the right hon. Member supported it with all his undoubted powers of argument and of knowledge. He said that—In all licensing matters we have to choose between free trade and no value to the licence, and licence with a monopoly value. This is not a point which applies to grocers' licences only; it is a broad general principle. … These [grocer's] licences are a mere fraction of the total number of licences in the country, and whether or not this clause gives a monopoly value to them matters extremely little. We have given this monopoly value to the great bulk of licences, and to add a few thousand more will practically make no difference.Later in the debate he said—They were told that it would give a monopoly value to these [grocers'] licences. That was inseparable from our policy of restriction. He admitted that the present system of licensing was not good, but these restrictions were better than none at all. Control involved monopoly. It was a choice of evils, but the position was clear. They must either have free trade or control, and if they had control they could not get rid of monopoly.The importance of those quotations was this: How could the right hon. Gentleman now argue, in face of what he said in 1902, that the monopoly value lay with the State?
§ SIR THOMAS WHITTAKER
Will the hon. Gentleman excuse me a moment? The value is given to the licence and not to the licence-holder.
§ *MR. G. D. FABER
said he could not accept that explanation. Did the right 514 hon. Gentleman really contend that his words meant that the value was merely given to the licence and not to the licencee?
§ *MR. G. D. FABER
Why, the two were one and the same. There could not be a licence without a licence-holder. He was once a lawyer, now many years ago, though he had forgotten the little law he ever knew, but he tried not to split hairs. He believed that nine out of ten members of the Committee, if they referred to the quotation for themselves in Hansard, must come to the conclusion that what the right hon. Gentleman meant when he said that this monopoly value had been given to the great bulk of licences was that the State had given it in order to get restriction in return. Therefore, he could not be heard to argue now that the State was entitled to take that value back into its own hands whenever it pleased without paying one farthing. That was his first proposition, that wherever monopoly value lay, it did not lie with the State. His second proposition, in support of which he invoked the aid of the Law Courts and the whole practice of the Executive of this country, was that the value lay with the holder of the licence. It was strange that the course of politics should cause him that day to quote the late Mr. Gladstone in defence of the rights of property. In 1880, Mr. Gladstone—and he put this in the forefront of his argument—said—We ought not to allow our prejudices with regard to this particular trade, or our sense of the enormous mischiefs associated with its working, to cause us to deviate by one hair's breadth from the principle on which Parliament has always acted in analogous cases—namely, that where a vested interest has been allowed to grow up the question of compensation should be considered when such vested interests were proposed to be interefered with by Act of Parliament. What I am prepared to say is neither more nor less than this—that the licensed victualler has the same right to fair consideration that is enjoyed by persons following every other trade or calling which is interfered with by Act of Parliament, and to whom compensation is awarded owing to such interference.That was rather different language from that used by the Chancellor of the Exchequer on 25th May at Edinburgh. 515 What a difference there was between the two right hon. Gentlemen in stating the same proposition. Mr. Gladstone spoke again on the same subject in 1890, but for the purposes of his present argument he could quote Mr. Gladstone's speech of 1890 with just as much point as his speech of 1880. In 1890, having the then recently decided case of Sharpe v. Wakefield in his mind, Mr. Gladstone said that every owner of licensed property must be taken to be aware of the law. He said—I think it is one thing to say the publican has not, and cannot by any possibility have, any claim whatever under the provisions of the law as it now exists in regard to the non-renewal of licences that does not at once carry with it the consequence that if you fundamentally change the character of the law you bring in a state of things which the publican has no means of anticipating.That was why he quoted the speech of 1890 in aid of his argument.
§ MR. ASQUITH
said that in the passage preceding the words quoted by the hon. Member, Mr. Gladstone said that in regard to the question of compensation if a general measure were introduced some arrangement of time might be made to soften the transition. Mr. Gladstone further stated—I am bound to say that I reserve my own discretion upon that subject.
§ [MINISTERIAL laughter.]
§ *MR. G. D. FABER
said he deprecated that laughter. The Government were introducing a change in the law which the publican had no means of anticipating, and by which his position was vitally altered, which was the point laid stress upon by Mr. Gladstone, and he was entitled to full compensation.
When a publican's compensation case came before the Law Courts, was it ever contended that full compensation should not be given, when the property was taken away for some public improvement, because the monopoly value of the licence belonged to the State? Such a ludicrous argument would never be brought forward by anybody. When it came to a question of rating property, did anybody say: "Oh, no! The publican must not be rated as high as this; the monopoly value belongs to the State, and the publican has got to 516 hand it over sometime. Did any rating authority ever try to do anything of the kind? No, because the monopoly value for rating purposes was always included. When they came to the Inland Revenue procedure it was clear and there was no getting out of it, because it was all against the assumption that the monopoly value belonged to the State. The very instructive Instruction issued in 1890 by the Inland Revenue treated licences as a continuing property for the purposes of the death duties and valued them up to the hilt. Then came the Finance Act of 1894, introduced by Sir William Harcourt, which laid down that in valuing property they must take the market value. That did not alter the position. What the Revenue authorities did after 1894 was to value licensed property according to its value in the open market. And now, at the eleventh hour and fifty - ninth minute, they were told that a new set of Instructions in 1900 had altered the position. He denied that altogether. The Revenue authorities were still valuing licensed property according to its value in the open market. They valued it as a going concern. He prayed in aid of his argument the whole course of practice of the Inland Revenue. He would also like to pray in aid a further argument, namely, the action of the Secretary of State for War. What did he do in the matter of the "Coach and Horses"? The "Coach and Horses" was the property of the War Office, and had a reserve price put upon it with the cognisance of the right hon. Gentleman. A Minister of the Crown was supposed to know everything that went on in his Department, and the right hon. Gentleman would know that the "Coach and Horses" had a reserve price of £10,000 put upon it. Sir William Dupree had the property knocked down to him at public auction for £10,000. What he wanted to know was this. Did the right hon. Gentleman sell the monopoly value or did he not? That value had been computed by a competent man at £7,500 out of the total sum of £10,000 paid. If he did not sell the monopoly value, why was the reserve fixed at £10,000, seeing that the house and land, without the monopoly value, were only worth £2,500? If he did sell the monopoly value, he was sure 517 he must have been infinitely sorry for the unfortunate purchaser. From his appreciation of the right hon. Gentleman's character he was sure that his bowels must yearn over this poor unfortunate gentleman who had paid £10,000 for a property which, owing to the Bill now brought forward would only be worth £2,500—
§ THE SECRETARY OF STATE FOR WAR (Mr. HALDANE,) Haddington
As the hon. Member has succeeded in bringing me to my feet, I can assure him that, the purchaser has publicly stated that he is well satisfied with his purchase.
§ *MR. G. D. FABER
Ah ! but no. He was only reading, yesterday, what Sir William Dupree had said. He said he was perfectly satisfied with his bargain if the Government would leave him alone. He would say with all goodhumour that he did not think the right hon. Gentleman ought to have interrupted him without quoting the whole phrase. It was not often that a humble person like himself could get the Secretary of State for War on the horns of a dilemma, and he was not going to let him off. If the right hon. Gentleman knew, as he did know, that the Government were introducing a Bill smashing the monopoly value—transferring it from the individual to the State—was it quite fair to sell that property without saying a word about it? Probably, though, the right hon. Gentleman knew that this Bill had not a shadow of a shade, not a scintilla of a chance of ever becoming law, and that, therefore, Sir William Dupree would come out all right in the end. He, therefore, maintained that he had established a very strong presumption that the monopoly value did not belong to the State, but did belong to the individual. Was it fair or reasonable to put the State into this extraordinary position? Putting the argument at the highest for the State, it was a matter of grave doubt whether the State had any right to the monopoly value at all. Was it right to put the State in that position?—You do it wrong, being so majestical,To offer it the show of violence,518 The Government represented the State and they were turning the State into a common robber. He deliberately used those strong words, knowing as a business man and as a banker, what a prejudicial effect this precedent would have on the security of property in this country. They were allowing the State for the first time in the history of the country to take away the property of the individual and appropriate it without paying a farthing of compensation. Let them not say that they were giving compensation. They were giving none at all. The compensation provided was not found by the State. It was being provided by the wretched individuals whom, at the end of fourteen years they were proposing not only to hang but to draw and quarter. They were going to appropriate without payment, the 60,000 licences odd, remaining at the end of the reduction period and they were not content with that, for under the new proposals put on the Amendment Paper at the last moment, local option was to have an opportunity to fix its tyrannous grasp on all licences left after the reduction period and sweep them out of creation altogether. [Laughter.] He did not think hon. Gentlemen opposite would laugh if they held licensed property. It was the late Sir William Harcourt or some equally wise man who said that one of the faults of the Radical Party was that they were apt to be conscious not so much of their own demerits as of those of other people.
He hoped this subsection would not be allowed to pass into law, for it would produce chaos during the next fourteen years, and a colossal wrong at the end of that period. During those fourteen years they were going to upset the whole licensed trade of the country. They were going to create pandemonium, because human nature would assert itself and everybody would be trying "to get out." Of course, they would get a worse type of man in the public-houses; and human nature being what it was they would get a worse class of house. And why? Because everybody would be trying to get a little bit out of the general scramble. The Prime Minister would agree with him that it would be a very serious matter. 519 The holders of stock in brewery companies were of different classes—holders of debentures, holders of preference shares, and ordinary shareholders. Why, the passing of this Bill into law would necessarily drive all these different classes of shareholders at each others' throats. The ordinary shareholders who control the business, subject to the payment of the fixed rate of interest on debentures and preference shares, would say: "We will not have any sinking fund, because if we do, it will never reach us at the end of the fourteen years; it will be all swallowed up by those in front of us." If he were an ordinary shareholder, and in control of the business, he knew that he would not establish a sinking fund. He would get all the dividends he could during the fourteen years, because otherwise, at the end of the fourteen years he would be left. But would the debenture holder take this "lying down"? No; he would go to the Court and ask for a receiver. Then mark the extraordinary position that would ensue. The receiver might, or might not, conceive it to be his duty to set aside a sinking fund. All the different classes of shareholders would be torn by rival considerations. If the ordinary shareholders had a free run, would they establish a sinking fund for the benefit of the debenture or preference shareholders? There was nothing in the Bill to say that they should do so. He brought forward those considerations to show that they were only at the very beginning of the difficulty. All sorts of complications and injustices which could not have been foreseen by the framers of the Bill would inevitably arise.
He had tried to examine this matter on the merits of the case and on these only. He hoped he had shown to the satisfaction of hon. Gentlemen on his own side of the House, if not of those on the Government side, that by every rule of practice and right the value of the licence lay with the licence holder, and with nobody else.
§ MR. ASQUITH
The question which is raised by this Amendment is undoubtedly one of vital importance, and while I do not in the least complain of 520 the length of the exhaustive speech to which we have just listened, I hope I may be able, in a comparatively short space of time, to put before the Committee that with which indeed they are already familiar, the position of the Government and the supporters of the Bill in regard to this matter. The issue raised by the Amendment is simply this: Whether the principle of a time-limit is sound, politic and just. The question of the length of the time-limit does not arise at this stage. It will be the subject of discussion on later Amendments. The issue raised by the hon. Member for Rye who moved the Amendment and which he quite fairly endeavoured to present, was that no time-limit, however long—it is not a question of duration at all—that no time-limit could be honourably or equitably introduced in legislation of this kind or indeed without violating the principles on which the security of property in this country depends. Very well, that was an easy thesis and upon that issue the division I apprehend will be taken. A good deal has been said in the course of the discussion, and very properly and relevantly said, as to the meaning that ought to be attached to the phrase "monopoly value." Because the essence of the time-limit is that on the expiration of a certain number of years, which I will call x years for the moment, it is the contention of the framers and promoters of the Bill that it is within the right of the State and that it is politic and expedient for the State to resume the monopoly value which the State itself has created in this particular form.
§ MR. ASQUITH
Yes, certainly, without paying for it out of the public funds. That is not a very relevant remark, but as the right hon. Gentleman makes it, I may remind him that I am strictly following the precedent of the Act of 1904, with regard to the source from which the payment is drawn. But that is not my point, I am dealing with the question of time—whether it is fair to say that after the expiration of a certain time it is within the right and is politic and expedient for the State to resume complete property in this monopoly 521 value. What is meant by monopoly value? The phrase is not of our invention. It is taken from the Act of 1904, and I must assume that to the framers of that Act it had some definite intention and intelligible meaning. I quote from the Act, Section 4, subsection 2—Such conditions shall, in any case, be attached as having regard to the proper provision for suitable premises and good manageent, the Justices think best adapted for securing to the public any monopoly value which is represented by the difference between the value which the premises will bear, in the opinion of the Justices, when licensed, and the value of the same premises if they were not licensed.Now, what better definition can you possibly have? Our definition is taken from the Act of 1904, and bears the same meaning with regard to those existing licences with which we are going to deal at the expiration of the time-limit as was in the minds of the framers of the Act with regard to new licences. An hon. Member who preceded me was good enough in the course of his interesting speech—and it must have cost him a good deal of unwelcome labour and perseverance to unearth them—to quote from two if not three speeches of mine no less than five definitions of monopoly value. I am very much indebted to the hon. Gentleman for the pains he has taken. I should not have thought it possible to have expressed five entirely different formulæ conveying exactly one and the same idea. I am most grateful to the service he has been good enough to give to my powers. What are all these definitions? A speaker is sometimes inconsistent with himself and sometimes with the utterances of his own colleagues; but the odd thing is that when the hon. Gentleman, pursuing his researches in this sphere of ministerial dicta, quoted from my right hon. friend the Home Secretary and my hon. and learned friend the Solicitor-General, and added two more links to his catena, they were all identical one with another. [Laughter.] Hon. Gentlemen laugh; but I ventured to interrupt the hon. Gentleman—with courtesy I hope—with what I think was a very relevant question. When he had come to an end of his citations, I said to him: "Will you kindly point out which of these definitions is inconsistent one with another?" and he 522 did not attempt the task, because the more he looked into them the more he found that they were perfectly consistent. There is no mystery about this matter at all. As the framers of the Act of 1904 very well knew, the monopoly value, to use their own phrase, of licensed homes, is the addition to the value they would fetch if they were used for other purposes than the carrying on of the monopolised trade. And that addition must be, in the long run, regulated by the additional profit which the person who tenders himself as the tenant of these premises expects to receive from the user of them in the exercise of the monopolised trade compared to that which he would get as the user in any other trade. It is the very simplest thing in the whole world. The hon. Gentleman thought I was guilty of inconsistency because I had suggested at different times and in different speeches different ways in which that monopoly value could be measured. It can be measured by additional rent; by assessment—the difference for which the premises would be assessed under Schedule A of the Income-Tax according to the purposes for which they were to be used; or by the capitalisation of the difference between the two rents or values as the case may be. Where is the inconsistency or the difficulty of defining the subject matter? It cannot be denied by anyone, and certainly not by any of the hon. and right hon. Gentlemen responsible for the Act of 1904, that that additional value does exist, and that it has been brought into existence by the State by granting the licence to the licence-holder, and that it can be properly described as monopoly value. The hon. Gentleman who has just sat down, with strange confusion of thought says that monopoly value does not belong to the State because you have given it to somebody else. But that is the foundation of the whole matter. I will comment for a moment on the word "given." It is quite true, as my right hon. friend the Member for the Spen Valley has said in his pamphlet, that the State has given to the licence, by the fact that it confers a monopoly, a value of its own, and undoubtedly, as the law now is, persons have been in the habit of considering that having once, for one year, been permitted by the State to enjoy that 523 monopoly value, they are to be allowed to continue to enjoy it for an indefinite period. If it had not been for the expectation created by practice, there would have been no occasion for a time-limit at all. Why have we put a time-limit into the Bill? Simply to meet, not a strict legal or statutory claim—nothing of the kind. In the United States and in our own Colonies they have taken away licences over and over again without notice. We have inserted a time-limit simply because an expectation has grown up round the licence, and we thought it would be, not only ungenerous, but inequitable at once to bring to an end and to resume for the State a monopoly value of that kind. Is it denied that a time-limit is the proper way of dealing with this matter? That is the issue raised by this Amendment, and that is a point which I wish to bring keenly and clearly to the attention of the Committee, because it is the issue on which this matter turns. If what I have said is correct, the issue is this—it is an issue between treating the precarious privilege granted by an annual licence to the licence-holder, surrounded, as it has been in the past, with this atmosphere of expectation—between treating that as a thing which on due notice is terminable and rightly resumable by the State, or treating it as if it were a right of property in the full sense of being established under the law. Are you going to say they are the same thing? [An HON. MEMBER: Yes.] Are you? I hear a rather feeble "Yes." That is the issue raised by this Amendment. [Cries of "No."] We are not dealing here with the question of time or the length of time; but we are dealing with the question whether there should be any time-limit which reason or justice may prescribe as suited to the necessities of the case, and without the payment of one penny of compensation out of public money. Is that denied? It is denied by those who support the Amendment and by the hon. Baronet the Member for the City of London, who has the courage of his convictions, and takes upon himself to say so. Yes; but is that the view of the whole of the responsible Opposition? If they vote for this Amendment I assume it is; but if they do, there must have been some singular 524 revolution going on in the minds of some of them. I am not going back into ancient history, not even so far back as the Act of 1904; but I will read a short passage from the speech of the right hon. Gentleman the Leader of the Opposition on the night this Bill was introduced. On that occasion he said—I have never supposed for a moment, nor did the other authors of the Act of 1904 suppose, that owners of licensed property had a freehold in that particular property; and I can quite conceive that after a term of years during which there was no disturbance you might say, 'You have had time to insure, you have had a security of tenure which is less than freehold, and we give you ample time in which to make the necessary provision for the moment at which the State will resume the licence.'Is that still the doctrine of the right hon. Gentleman? It is not the doctrine of his colleague in the representation of the City of London, or of the hon. Gentleman who moved the Amendment. No, it is not, because the issue is not the duration of the time-limit, but whether the State, after giving a reasonable notice, equitable in all the circumstances and conditions of the case, can or cannot resume its property. We say it can, and my sole object in rising is to put that issue clearly. We say it can, and we evoke in support of that proposal the authority of no less a person than the right hon. Gentleman the Leader of the Opposition. When we come to the later part of the discussion on this clause we shall be prepared to listen to what may be said with regard to our particular proposals as to the length of time. But that is not the issue now before us, and I ask the Committee by an overwhelming majority to decide that the State can and will resume possession of a monopoly which belongs to it.
§ MR. A. J. BALFOUR (City of London)
I do not complain of the right hon. Gentleman having quoted a passage from a speech of mine on an earlier stage of this Bill, for I adhere to every word of the passage he quoted. I have, indeed, uttered precisely the same doctrine on public platforms outside the House. I have said it elsewhere as I have said it here, and I believe that what I have said and what the right hon. Gentleman has quoted is absolutely true. Therefore, I do not complain of the right hon. Gentleman quoting those words, but 525 of his having utterly, though unintentionally no doubt, mis-stated to the House what is the issue on which we are going to vote. He says the issue is whether, in certain circumstances, which are not the circumstances which he has stated, you may conceive a sort of time-limit which will not interfere with the just rights of the licence-holders. That is an abstract proposition and I do not feel disposed to quarrel with it. What I quarrel with is not the proposals the Government might have made, but the proposals which they have made. What I complain of is that the Government having taken as the basis of their legislation the Act of 1904, have grafted on it wholly and utterly inconsistent principles making up a confusion the result of which is fundamentally and essentially inequitable, and that quite irrespective of the length of time, whether it be fourteen years or x, or whatever the time was, quite irrespective of the time-limit it is proposed to introduce into the Bill. Let me remind the House of the historical growth of this difficulty. The practice in the last century was undoubtedly that every licence-holder had a secure anticipation—I do not say a legal right—that, in the absence of misconduct, his licence would not be interfered with. On that anticipation money was borrowed, contracts were made, and very large and important businesses were erected. Certain magistrates, exercising what appeared to be a legal right, did, in certain cases, interfere with licence-holders and evict them from their premises, ruining them in the process, without any notice and without any compensation. Those magistrates were acting within their legal rights. I believe it was tried to upset them, but their action was upheld. I do not quarrel over that. What I say is that by that action the magistrates introduced a condition of things into a perfectly legitimate trade which you would tolerate in no other trade in the world. For evils far less than that you have passed legislation through the House of Commons—both Parties have been responsible for it—which was intended to prevent that particular kind of insecurity. It is not merely bad for the individual who suffers from it, but it is 526 bad for the whole management of the trade. We were face to face with that position. The number of licences actually reduced or that had any probability of being reduced, was extremely small under the old system. Why? Because it would be little less than iniquitous to reduce to beggary a perfectly innocent and well-behaved man carrying on a legitimate trade. Therefore, the existing system, as we found it, was not good for the reduction of licences, and it was not good for the cause of temperance. The magistrates were practically hampered in their desire to suppress unnecessary licences. They could not do that without gross and iniquitous injustice. We attempted to deal with that, and we attempted to deal with it in a manner which was not, I think, ungenerous to the trade, which was accepted by the trade, and which, by the consent of all mankind, has produced a very large reduction of licences, and that without any feeling of bitterness, injustice, or hardship in those immediately concerned. When we were passing that Bill which has been more grossly misrepresented by hon. Gentlemen opposite even than my considerable experience of their powers in that direction could have led me to believe, we were constantly told that we were endowing the licence-holders with a freehold. I have constantly at the time the Bill was before the House and since denied that, and I deny it now. I did not think then that we were endowing the licence-holders with a freehold right, and I do not think the Act of 1904 gave them a freehold right. I do not think at this moment that they possess a freehold right, and if anyone will refer to my statements on the Act of 1904, they will see that that was my view then. Anybody who listened to the quotation which the right hon. Gentleman read a few minutes ago will see that that was my opinion on the First Reading of this Bill. It was my opinion then, it has been the same in the interval, and it remains my opinion now. We have to deal with a genuine form of property which is less than a full freehold tenure. I am not here concerned to deny that if you are dealing with a form of property which is less than a freehold tenure you may imagine a term of 527 years after which you may say to these people: "Your rights, which are less than freehold, are now exhausted." I have never denied that, and I do not deny it now. What I deny is that you have the smallest right to compel these people to pay compensation during a period of years to those whose licences are withdrawn, and then at the end of the term of years, after they have been paying this compensation steadily and patiently, allow their property to be taken away. The right hon. Gentleman has wholly mis-stated the issue before us. The issue before us is not whether we are dealing with a trade that has a freehold right to the licence. We are not arguing that point. I do not maintain it, my friends on this bench have never maintained it, and I do not believe anybody behind has maintained it. Do not let anybody go into the lobby thinking that is the issue which we have to decide. We have to decide a much more difficult and important issue, one which touches the rights of a very large class and, I think, a not undeserving class of the community. I beg every Member of the House who supports this Bill to ask himself whether, if you were dealing with Irish tenants or with English tenants of agricultural land, you would venture to argue as you are arguing about this Bill. You advance doctrines absolutely unsustainable in themselves, because the class against which you direct your legislation is an unpopular class. The long controversy about temperance has got so entangled and mixed up with the attacks upon licence-holders that there are vast bodies of men in this country who honestly but surely most foolishly and mistakenly believe they are serving the cause of morality by committing an injustice against a particular class. Those who are going to vote for retaining this subsection are, I am absolutely certain, whether they know it or not, making themselves parties to this iniquitous transaction. I ask anybody how he is going to justify this condition of things. A particular locality requires, and is admitted by all but extreme temperance reformers or fanatics—whichever word you like to use—to require, the services of a public-house. The magistrates give a licence to that public-house, and require the licensee to make very costly changes and 528 alterations in the building in order to fit it for a public object, which the licensing magistrates themselves admit is a public object which ought to be met. Having done that you tell this man, after he has made improvements and spent money—perhaps he has built a house specially suited for this purpose and not specially suited for any other—that henceforth he is to pay to a compensation fund in order that other people's licences may not be taken away without compensation. He admits he has not a freehold ownership of his licence, and contributes to that fund. When he has done that, and acquired all the rights of equity which that process involves, you go to him and say, "You have done an important public service and you will see your neighbour receiving compensation for the licence which will probably be withdrawn from him. Having carried out that public object we have to inform you that at the end of the fourteen years you will be turned into the street. You will be regarded as having no further title to carry on your business, on which you have spent a great deal of capital, on which you have borrowed money, on which you have entered into great obligations, and we consider this quite reasonable and equitable, because, after all, you must remember your tenure is something less than freehold." That I call a derisory statement. If the Government are so incapable of seeing what are the true equities of this situation, if they can make no distinction between the full title I have described for convenience as a freehold title, and that somewhat less but equally sacred title which by the commercial practice and by the practice of the Inland Revenue, and by the practice of the Government themselves when they are selling, regulates the trade, if they cannot see that that kind of property, though less than freehold property, is not less sacred and not less deserving of being carefully safeguarded, they are not fit to govern a great industrial community. I conceive that either the Prime Minister will speak again before this division is taken or that some of his colleagues will take part in the debate. I beg that colleague not to fall into the error which has beset the Prime Minister in his speech. Do 529 not let him deal with an issue on which, I believe, there is no difference of opinion on either side of the House, but with the issue on which there is a difference of opinion. The issue is this. We say it is grossly inequitable, whether the term be fourteen years or any longer period, to require people to pay compensation for the abolition of public-houses, and then at the end to turn them out of their property, to render nugatory valueless improvements which they have made at the demand of the magistrates, and require them to lose not merely the additional property which is given them by the licence, but the property which is involved in the goodwill. Goodwill is a very important factor in the case. A man holding a licence and conducting a public-house may have a property not merely in the licence of the public-house, but in the goodwill which his good management or good fortune has enabled him to obtain. You have no more right to sacrifice the goodwill of a publican than you have to sacrifice the goodwill of a butcher or other tradesman. These are the real issues before the Committee in dealing with this subsection. It is not the abstract question whether licence-holders have or have not a full tenure. The real question is whether the scheme of the Government is by its nature and essence grossly unjust to a deserving body of the community—a body who have as much right to the protection of this House as any other class connected with either the retail or the wholesale trade of the country—its manufactures or its agriculture. For these reasons I shall most heartily support my hon. friend when he goes to a division. This is the crucial point of the Bill. The point has not, indeed, been put by the Prime Minister, but it has been put by my hon. friend. I believe that whether you turn fourteen years into twenty or however you may translate the x of the Prime Minister's speech into numbers, so long as the framework of your Bill remains unchanged so long will that Bill embody a real, substantial, and, I may even say, a gross injustice to those who have a right to fair treatment, honest treatment, the treatment which, whether the persons concerned be popular or unpopular, the Legislature 530 is bound to extend to every single one of His Majesty's subjects.
§ SIR THOMAS WHITTAKER
said that the point which the Leader of the Opposition had made was one which was very familiar to those who were present during the discussion of the Act of 1904. The right hon. Gentleman's great objection was that during the time-limit the licence-holder, the property-holder, would have to contribute to a compensation fund for others. The real fundamental issue was, he (Sir Thomas Whittaker) thought, the amount of security which the licence-holder had in his licence. The phrase the right hon. Gentleman used was that he had a secure anticipation—therefore it was an anticipation or expectation, not a definite right, and an expectation might involve, and usually did involve, doubt and risk. It had always been his (the speaker's) contention that the trade knew the law and the risk—and he contended that they knew the risk was great. The prospectus of the Licence Insurance Corporation, asking for subscriptions, was not issued in 1904, but in 1891, before the benches to whom they had been told the Act of 1904 was due, commenced to take any action. This was a corporation providing a guarantee fund against the loss of licences. They did not establish a Licence Insurance Corporation unless there was a considerable risk. This corporation was not formed by an outside body of financial speculators to exploit the trade, but by the trade themselves. The document contained a list of the directors and founders of the corporation, and they included the representatives of some of the leading breweries—Ind, Coope & Co., Hall & Sons, of Oxford, and others. There was circulated with the prospectus a list of 350 breweries "supporting and welcoming insurance against this risk." People did not insure a freehold. [An HON. MEMBER: "Against fire."] They did not insure the freehold against being taken over. [OPPOSITION cries of "Not yet," and "You will have to in future."] He wished to read what they said in this prospectus. This was the statement of the leading brewers of the country 531 as to the position of the trade and as to the position of the licences. The corporation was formed, as he had said, to provide a guarantee against the loss of licences. How was it welcomed? The prospectus said—A very large number of letters have been received showing that insurance against loss of licence is warmly welcomed by the trade.This did not indicate great security. Another paragraph said—Experience shows that prior to 1891 wherever additional security was procurable it was eagerly sought.These words would indicate that they were insuring something in the nature of an overdue vessel, or something of that sort. Then it said—A licence-holder obtaining a policy will be relieved of the uncertainty which has hitherto been so harassing where large capital has been embarked and is in jeopardy.That showed that the trade, or the 350 brewers, recognised that they were in the presence of serious risk, and that they had a precarious security. [Cries of "No."] If there was not a serious risk, why did they say it was "so harassing"?
§ MR. YOUNGER (Ayr Burghs)
They were insuring against the risk of losing a licence through a breach of the law by their managers.
§ SIR THOMAS WHITTAKER
Oh, no. It is a policy insuring the holder of the licence compensation in case of renewal being refused on the ground of "not required."
§ SIR THOMAS WHITTAKER
They insured against all risks, but that was one of them that was put forward. He would take the first paragraph of the prospectus—In consequence of the judgment of the House of Lords in Sharp v. Wakefield, and of the risks now incurred of non-renewal of license, this corporation has been formed to insure and guarantee compensation to licence-holders for loss incurred in the event of non-renewal.It was that which harassed them, and it was that against which they wanted protection. It was after that they saw 532 230 breweries registered as companies, and it was during three years prior to that, while the case was still going on, that eighty-six more were registered-Then the public came in; they knew the risk, and the statement which he had quoted proved that they knew it. Now when the public were asked to come in, and when they put the prospectuses of their breweries before the country, were they equally frank? Did they tell the country that they were harassed? But they said something more in this document—Experience shows that wherever additional security is procurable, it is eagerly sought, and commands remunerative rates. It is, therefore, unquestionably only a matter of time for licensed property to become almost unnegotiable, unless additional security offered by such assurance is added.They knew the risk, and it was a great risk; they knew that these licences were precarious. The Leader of the Opposition had made a great point of the injustice, as he alleged, of levying compensation, and then, at the end of the time, that the licence-holder should get no benefit from it. There were many methods of insurance. They might insure against a temporary risk, or a contingent risk; and what was provided here was that daring fourteen years the licence-holder should be secured in his holding of the licence, or should be compensated for such portion of the term as he lost. But he was not to have both the run and the compensation. He insured against the risk during that time. The right hon. and learned Gentleman opposite, who was Solicitor-General in the late Government, had properly described this as compulsory mutual insurance. If everybody had taken advantage of this Licence Insurance Corporation there would have been no necessity for the Bill of 1904; but they did not, and very probably could not avail themselves of the scheme. This prospectus showed, with the approval of 350 brewers, that it was the right and duty of the trade itself to provide its own insurance, and the Act of 1904 simply made that right and duty compulsory, and they were compelled to insure. They were to have their fourteen years run, or compensation for such portion of it as they lost; they could 533 not have both, and there was no iniquity about that. Let them go back to the basis of the whole thing. The hon. Member for York had gone into the history of the matter, and had referred to the Act of 1552, the object of which was, he said, to secure control. He agreed. But how was it done? By the power to control and to suppress or take away the right to sell; to prevent anybody and everybody from selling. That was the right given to the justices, the right "to do away with" houses, that being the expression used. That was the origin of our licensing system, the power of suppressing—the power to take away the right to sell. The moment they did that they began to create a value. If that power were exercised freely, they gave a value to the licence and the more it was exercised the greater the value to those who obtained the privilege. By that means they interfered with the original object of the licence; that was, they interfered with their power of control. Their difficulty had arisen from the fact that these licences had become valuable in the market; they were valuable in the market because it was difficult to get them, and because, in the interests of the public, only a few were granted. Therefore, the exercise of this power interfered with the exercise of the very control which the hon. Member correctly stated was the object of the establishment of our licensing system. The object of this Bill was to restore to the nation the efficient control which it had lost through that process. The hon. Member had referred to the raising of revenue. It was a long while subsequent to the commencement of the licensing system that revenue was derived from licences, and there was not a great deal now. The revenue was from liquor and not from licences. But the hon. Member had developed a very ingenious theory out of this, namely, that it was a bargain; that if they paid, they were to have something in return. Where was the bargain recorded? Where was the document, where the deed, where the Act? It did not exist. There was no bargain.
§ SIR THOMAS WHITTAKER
There was no equitable bargain about it. The licence was granted for twelve months and no longer. That was the bargain. The hon. Member said they had given a monopoly value to the licence. Yes, by their very policy of restricting the number of houses, which gave a value to the licences; but they did not give that value in the sense of its being the permanent possession of the licence-holder. It was true that it was a valuable privilege, and they granted it for one year; they did not part with their permanent possession of it, any more than the landlord of a dwelling house when he let it to a tenant for a period parted with his permanent ownership of the property. They had created the value by restricting the number of licences, but by so doing they had not parted with their right of control; it was that point of control that they wanted to recover now, and they could only recover it by getting rid of that monopoly value which had grown up, and those who had it ought to be very thankful they had hold it so long. In reference to the argument that the Inland Revenue for purposes of valuation took the market value, it had been pointed out again and again that the Department did not go into the method by which market value was arrived at. It did not justify it, it did not defend it.
§ SIR E. CARSON (Dublin University)
The Inland Revenue lay down that they are to take into consideration in valuing that the licence will last in the case of a leasehold through the whole length of the lease or for ever in the case of a freehold.
§ SIR THOMAS WHITTAKER
Oh no; the last Memorandum issued in the time of the right hon. Gentleman's own Government laid down nothing of the kind. It was ascertained whether the property was leasehold or freehold, and then the market value of the licence was obtained. The Inland Revenue never justified a market value; they were never heard to say that it was too high or too low. If brewers and publicans in their reckless struggle for licences had inflated values 535 it was their responsibility, and theirs alone. Illustrations were numerous of other kinds of property which were inflated to an artificial value. If the holders died the death duty would have to be paid on that value, but that did not mean that the Inland Revenue justified or defended or guaranteed it. The mover of the Amendment said the licences had been bought and sold and the State had no right to touch them. What did the licence holders buy and sell? They bought and sold a licensed property with a locus standi for renewal, or an expectation of renewal and nothing more. There was nothing more to sell. A man could not sell what he did not own. He did not own the licence for any time after the year. If they had given absurd prices it was their own fault. It was said that the State parted with the monopoly value centuries ago, but it never parted with anything of the kind. It gave the licence for a twelve month and no longer. When did the State make the bargain? Where was the record of it? The mover of the Amendment claimed a freehold, and laid stress on this point, that the procedure with regard to renewals was different from that with regard to new licences. But it was purely procedure. The power of the justices was perfectly clear. The procedure was different in the ordinary tenancy of an ordinary house with regard to a new tenant, from what it was with regard to a tenant in possession who had to have so much notice. But that did not invalidate the landlord's right to give a tenant notice and get rid of him and take possession of the property. On this point of procedure, as between renewal and a new licence, Lord Justice Fry said—Nothing to my mind is more plain than that the exercise of the discretion is one and the same, with regard to the persons who keep and the persons who are about to keep, public houses. No distinction is drawn between the two classes, but their existence as separate classes, if you like, so to say, is recognised. The jurisdiction and the power are alike in both cases, and the discretion is alike in both cases.On this Lord Halsbury, in the House of Lords in 1891, said—Now the Acts of 1872 and 1874, which are Acts upon which reliance is placed, do not profess to limit the discretion, but enact certain new procedure, all of which procedure is per- 536 fectly consistent with the preservation intact of the discretion given to the justices.The discretion was absolutely the same, and therefore the point that there was a difference in procedure made no difference whatever as to the discretion of the justices. The hon. Member had referred to agricultural tenancies. If he would only turn to his (Sir Thomas Whittaker's) book which he had quoted he would see that he had referred there to the tenancy of ordinary houses and shops, and it was because he knew there was no right of compensating for disturbance there that he went to a special kind of tenancy where the Legislature had enacted that there should be compensation. Until the Act of 1904 there was no right of compensation for licences. If there had been, why should they have passed the Act of 1904? That Act had to be passed to meet a special case, and his analogy held perfectly good. The real issue was as stated by the hon. Member for York—how were they to recover their control?
§ SIR THOMAS WHITTAKER
By paying people for having bought what others had no right to sell—an annual licence the renewal of which had to be annually applied for, which involved the possibility of its non-renewal. The nation had a right to have its control restored. It could not be deprived of its rights and powers because some people had recklessly speculated in licences.
§ *MR. BOTTOMLEY (Hackney, S.)
said the Prime Minister had not done justice in this matter to his unique power of exposition and analysis. He had told them that this was an academical discussion as to whether a time-limit was defensible, and he addressed the question to the Opposition whether or not that was so. But the Prime Minister forgot to look at the subsection which they were discussing. The question before the Committee was whether subsection (1) should be omitted, and subsection (1) provided that at the end of fourteen years all the results of a time-limit should accrue. Therefore they were not discussing a time-limit in the abstract, but a time-limit of fourteen years, after which period every licence was to become 537 the property of the State. He desired also to refer to the phrase which so often fell from the lips of the Prime Minister as to whether or not it was within the right of the State to resume the monopoly which the State had created, but it had been paid for up to the hilt, it had been charged an annual rent for, and had been taxed to the extent of some £40,000,000 a year in one way or another. They heard of passive resisters who were reluctant to pay rates and taxes in respect of Acts of Parliament of which they did not approve, but they had yet to hear of a conscientious teetotaller who sent a little conscience money to the Chancellor of the Exchequer because he declined to recognise for his own benefit this iniquitous condition of the law. He had listened very attentively to the speech of the right hon. Gentleman the Member for the Spen Valley, who was to a large extent the real author of the measure. Should he incorrectly summarise it if he said it was this, that there had never been any property in a licence, that there had been at the utmost an expectation of renewal and nothing more, that even before 1904 there was no reason why justices should not reduce licences to their fullest desire, that the 1904 Act was quite unnecessary, and that although it was passed for the purpose of removing what was conceived by many to be an injustice, and although the entire financial burden fell upon the trade, it was still a fraud upon the community in some way, an immoral Act which this new Parliament was entitled—setting, he thought, a very dangerous precedent—to repeal almost before the ink in which it was printed was dry, thus inviting every subsequent Parliament, which came with a large automatic majority, to wipe out any legislation which had been passed by its predecessors, simply to appease a noisy section of its own supporters? The right hon. Gentleman, taking that view of the law, said that in 1891, so fully was the risk of the trade recognised, that the Licence Insurance Corporation was formed, and he had read portions of the prospectus—he said advisedly portions of the prospectus. He saw that prospectus before the right hon. Gentleman because he saw it before it was printed. The genesis of that corporation was this, that 538 because everybody at that time thought Sharpe v. Wakefield had put a new aspect upon the position of the licensed victualler, whilst excitement was great in the trade in consequence of the House of Lords judgment, it was thought to be a reasonable thing that if there was no secure tenure in any kind of licence there should be formed an insurance corporation to protect licence-holders against the contingency of non-renewal of their licences. The right hon. Gentleman did not tell them that, so little did that view come to be generally accepted as the judgment came to be better understood, the corporation did practically no business.
§ SIR THOMAS WHITTAKER
I should like to put the hon. Member right. The corporation was formed before the decision of the House of Lords, and has done considerable business and is doing it now.
§ *MR. BOTTOMLEY
said the prospectus was written shortly before the decision—he was a little incorrect there—but when it was perfectly certain what the judgment of the House of Lords was likely to be. At any rate, it was after two other decisions in the First Instance Court and the Court of Appeal, and when Sharpe v. Wakefield was occupying very much the minds of the licensed community. As regarded doing business, he had heard of companies formed for one object doing business of a totally different character when it found that its original object did not appeal to the public. If the right hon. Gentleman told him seriously that the Licences Insurance Corporation was doing large business to-day in insuring licences per se he made a revelation which was absolute news to him. He wanted now to come to closer quarters with the right hon. Gentleman. He said that in 1891 there was no change in the law, that every man knew the law before and after 1891, and that a purblind public had invested its money in brewery enterprises and the trade had dishonestly shifted on to the shoulders of the public the security which they held. How long had that been the view of the right hon. Gentleman? If there was one man in the City of London more than another 539 who was instrumental in spreading the theory amongst investors that licences were a secure investment even after Sharpe v. Wakefield, it was the Member for Spen Valley. He had had the privilege of a personal acquaintance with the right hon. Gentleman for many years past, and their first difference was in connection with a Local Parliament where the right hon. Gentleman wrecked his Cabinet by the introduction of a licensing Bill. Consequently he had kept his eye on him ever since and to-night he hoped to get "evens" with him. In 1891 and a short time before, the right hon. Gentleman occupied a very distinguished and responsible position as editor of a daily financial paper, and in that capacity he gave advice to the investing public as to the best security for their money. He had recently spent some little time in the British Museum looking up the advice given by the right hon. Gentleman in that now defunct organ of public opinion. If he could show that in 1891 the right hon. Gentleman thought licences were a secure and attractive investment, he thought the right hon. Gentleman ought at least to tell them what had happened since that time to change his view, and perhaps he would be willing to withdraw his opprobrium upon the purblind public who had invested their money in breweries. On 2nd July, 1891, he found the Member for Spen Valley telling a reader who sought his advice—In Guinness's brewery you have a good investment.
§ SIR THOMAS WHITTAKER
My hon. friend is quoting a number of things with which I had nothing to do, with which I had no connection, and over which I had no control, and they are not my answers in any shape or form.
§ *MR. BOTTOMLEY
replied that if the right hon. Gentleman told him, as responsible editor of a great financial paper, he disclaimed responsibility for the financial advice given in that paper, if he exercised so little supervision over the staff, and paid so little attention to what his paper contained, then his authority on Acts of Parliament and upon the history of the licensing question would be seriously imperilled. He would put it 540 in another way and say that in a financial paper, of which the right hon. Gentleman was the editor, one man was told that—In the Guinness brewery you have a good investment which we advise you to stick to.In regard to Spier's & Ponds, the same organ said—There is not the slightest ground for any anxiety.Without going through a lot of instances, it was stated, in regard to the Bodega, that—At the present price they are, in our opinion, extremely cheap.And as for the Gordon Hotels, the advice was—These shares are worth looking after.Then he came to a quotation which was amazing. There was an editorial article on a new issue, and the right hon. Gentleman could not disclaim responsibility for that, and he asked the Committee to listen to what the right hon. Gentleman thought in 1891—The shares of the Star Brewery Company, Cambridge, the brewery business of which has been established half-a-century, and now enjoys a high reputation in Cambridgeshire and the adjoining districts, are about to be offered to the public. We understand that the directorate consists of practical brewers, and that no less than three-quarters of the trade is tied.They were the days when the right hon. Gentleman was carrying on the occupation of a sane, responsible, city man, with responsibility attaching to his advice, and when he was not wearing the mantle of the Party champion of temperance reform. He was in a position of greater freedom and less obligation to the Liberal Party. That showed that even after Sharpe v. Wakefield the Member for Spen Valley held the opinion that licences constituted a very sound security, and although he might disclaim responsibility for the minor items of advice which had been quoted, he could not for the editorial note just read. He had searched every page of the paper edited by the right hon. Gentleman, but had failed to find one word of warning to the investing public that they were putting their money into a highly speculative, immoral, dangerous and problematical security when they were buying brewery and licensed shares. He wanted merely to establish the fact, without going into personalities, that in 1891 the right hon. Member for Spen 541 Valley had assumed, like every other sane man at that time, that subject to good behaviour and reasonable requirements of the neighbourhood the dicta of the Law Lords in Sharpe v. Wakefield would prevail, and no bench of magistrates would, out of mere caprice, deprive a man of his livelihood. He would not speculate as to what had changed the views of the right hon. Gentleman. They had to consider whether, in any event, as the Prime Minister had put it, any time-limit was defensible. They had to consider whether in fourteen years time licences wore to become the absolute property of the State, and whether every man who had invested his capital and labour in licences was to hand them over to the State in the name of monopoly. It assumed that the State was the best person to carry on the business of a licensed victualler. The operation of this Bill would make-every Member of the House a potential licensed victualler. Personally, he had quite enough to do, and was not anxious to add to his obligations and responsibilities the functions of a licensed victualler, and he thought temperance reformers had plenty to do without assuming responsibilities of that kind. The vast army of respectable citizens who owned public-houses and were connected with them were overlooked, and nothing was now said about those who followed the advice of the financial press and invested their money in brewery companies. This was introducing a very dangerous element into the law. They would have another opportunity of reviewing the general principles of the Bill on the Third Reading, and all he asked the Committee now to say was that it was unreasonable, impolitic, and unjust, that at the end of fourteen years every licence now owned by private people should be handed back without any compensation to the State. That was the question at issue, and he was not going to say a word about the general argument, because they all knew the arguments for and against. They knew the question of administration, revenue, and everything else, and so far as the example of the Government went they knew that the Government, in the course of its business, sold a public-house a little while ago at its full market value, just 542 before introducing this Bill. The War Secretary had told the hon. Member for York that the purchaser was perfectly satisfied with his bargain. He had in his possession a letter from the purchaser in which he said he was perfectly satisfied with his bargain at present, because he was certain that this Licensing Bill would never pass into law, and in that hope he begged to resume his seat.
§ COLONEL WALKER (Lancashire, Widnes)
said that after what had been stated it was desirable that he should give to the House a short history of the Licences Insurance Company. That company was floated by a Mr. Lawson, whose methods of flotation at that time were not known, but they are known now. The Licences Insurance Company was floated and promoted by this man Lawson. His methods were rather peculiar and very clever. He drew into the folds of his prospectus a great many names of brewery companies as founders in his company by leaving with some clerk in the office a founder's share as a present. He then printed the names of the brewery companies on his prospectus. Having got together his board he issued his prospectus and floated the company without any meeting of the board. Seeing that this company was about to be introduced and regarding it as a somewhat dangerous venture, he (Colonel Walker) sought the advice of his co-directors as to whether it would be feasible for someone who was cognisant of brewery business to be on the board of that company. He therefore with the consent of his board got on to the board of the Licences Insurance Company to see what was going to take place. When he got there after the flotation of the company he found it of a very peculiar nature. The methods apparently were that this man Lawson succeeded in floating companies one after another with the money collected and brought in by the previous companies, and the first thing that he desired to do with the monies coming into him so successfully—he (Colonel Walker) did not say it was because he was on the board that he succeeded in getting rather more capital in this company than any other company 543 —was to take that opportunity to float another company. He came to the board and desired them to invest the funds of the company in the new flotation which he was about to bring out. He (Colonel Walker) then saw the nature of the business and he practically took Mr. Lawson by the ears and led him downstairs. He never approached the board again. Having associated his (Colonel Walker's) name with that company he felt bound to see it through. He saw some people with good names and he informed them what he intended to do. He persuaded them to put more money into the company. He persuaded the members of the board to cut down the directors' fees and to invest the money which they held in Government securities. The next step was to engage a good and excellent manager. In the course of time while he remained on the board the business grew and developed into a thoroughly sound commercial venture—the only one ever floated by that man, however, that was alive at the present moment. Having put the company upon an excellent basis and seen it thoroughly established he resigned from the board and retired gracefully.
§ SIR THOMAS WHITTAKER
The hon. Member was not present when I made my speech. I made no attack upon the company. I simply quoted from the prospectus in order to show that at that time the risk was known. I made no comments and I know nothing of the flotation.
§ *COLONEL WALKER
It was entirely a venture of the man Lawson. The company had nothing to do with "Sharpe and Wakefield," nor was it promoted by brewers.
§ MR. MITCHELL-THOMSON (Lanarkshire, N.W.)
said that although the Prime Minister and the right hon. Member for Spen Valley regarded this proposal as the backbone of the Bill, there was not a word about temperance in the subsection from first to last. He mentioned that in order to show that the importance with which the subsection was regarded by hon. and right hon. Gentlemen opposite was not derived from the temperance point of view, but because 544 it represented a purely fiscal transaction. It represented the setting-up of a state of things under which a different fiscal arrangement was to obtain from that which obtained at present. What was this fiscal arrangement? The arrangement was not as might be supposed from the Prime Minister's speech, something vague about a term of years called x, y, or z. It was that at the end of fourteen years licences, for which no compensation had been paid during the currency of that period, were to be taken away by the State, which he might remind the Committee was after all the largest profit-sharing partner in licences at the present moment. He thought the Prime Minister had hardly considered this scheme from the point of view of the unfortunate people on whom its operation was going to fall. He asked the Committee to look at the position of the licence-holder under the scheme of compensation on the one hand and of amortisation on the other, or what the right hon. Gentleman euphemistically called a scheme of double insurance. The right hon. Gentleman the Member for the Spen Valley had drawn an analogy between this scheme and the insurance of a ship. He would point out that if the owner of a ship insured it for fourteen years he would still at the end of the period have the vessel, but under this scheme the holder of the licence would not still have the licence. That was where the fallacy of the right hon. Gentleman's argument was to be found. The Prime Minister might call it double insurance if he pleased, but he could not be surprised if others called it by a more appropriate and shorter title. He thought the Government scheme inexpedient and unjust. On the point of expediency it was said, on the broadest public grounds: "Here is a valuable concession and the State ought never to have parted with it. It parted with it and it is time to resume it, and the State has a right to resume it." That argument was capable of further development to which he did not think the Prime Minister would agree. It was a dangerous course on which to begin if private individuals were to suffer in the present because the State made mistakes in the past, and if they were going to justify the correction of errors by the State in the way proposed, 545 Supposing it had been an error to grant monopolies in the past, why were they to draw the line at one particular monopoly? If they were going to correct those errors by expropriation of individuals now, why stop at the liquor trade? That observation had already occurred to hon. Gentlemen below the gangway. He read the other day in an issue of Justice, a sentence which seemed to sum up the argument which he had addressed to the Committee. That journal said—If it is sound policy to confiscate the property of some brewers in fourteen years why not all the brewers, all the manufacturers, and all the railways at the same time.[Cheers from LABOUR MEMBERS.] Hon Members below the gangway cheered that, but would the Government say that? Of course, they would not; at least, he hoped they would not. As to the justice of the proposal, he reminded the Committee that the highest judicial authority in the land, namely, the present Lord Chancellor, in the course of the licensing debates in 1904, stated that the Bill did give fixity of tenure equivalent to fixity of tenure in land. That was not the view held by the framers of the Bill, but it was the view held by many who spoke from the Opposition side of the House at the time. The right hon. Gentleman the Member for the Spen Valley had stated that a licence was only granted for one year. If that was so, why in the third schedule of this Bill did they look forward to a period of fifty-nine years? He ventured to say that point was worthy of consideration. The Government said they did not want confiscation. Some of his hon. friends, speaking with an intimate knowledge of the facts, had pointed out that the proposals of the Government were neither just nor feasible from the actuarial and statistical point of view, and they had brought facts and figures to show the ludicrous inadequacy of the proposals. What was the answer they got? They only got two answers. One was that there was a compensation scheme, and if that was not sufficient then there was the fact that they had had a warning. He asked was the compensation sufficient? From first to last in the course of the debates there had never been 546 brought forward by the Government any statistical calculations whatever to give any support to that statement. They had been told from first to last that this time limit had been based upon no statistical calculation; that there was behind it no mathematical formulae or inquiry. He thought that that was worth bearing in mind. He noticed that the Under-Secretary for the Home Department, with all his ingenuity in calculating every sum that he could possibly scrape together, could only succeed in making out that the total amount of capital reserve available to meet the loss—which the right hon. Member for the Spen Valley put at £100,000,000—would be £51,000,000. He would not say anything about the morality of the suggestion that it was right to rob a man because a considerable proportion of his property was locked up in his estate. The Secretary of State for War had taken a different line in the country. He had stated at various public meetings that the Government did not want to do anything unfair and were quite ready to listen to any reasonable suggestion. He thought it was a little late in the day for the Secretary for War to say that; it would have been better if the right hon. Gentleman had made some answer as to the amount of money which the War Office got for a licensed house in Portsmouth. He was glad to hear that the right hon. Gentleman was now prepared to say that the Government did not want to destroy the existing licences; but the promise and the performance did not run hand in hand. What the supporters of the Bill wished was the destruction of all value in licences. He would give a quotation to prove that. The present Lord Lochee said in a speech in 1904 that if the Liberal Party had a particle of courage they could defeat the Licensing Bill then under discussion, if it became law. They could defeat it by determining that the duties on all licences should no longer remain at the comparatively small standard at which they now stood; but that they should arrange them so that the value of all the licences would be destroyed. [MINISTERIAL cries of "Hear, hear."] He was glad to hear that some hon. Members on the other side of the House had the courage of their convictions, and were prepared to 547 admit that they wished to arrive at the total annihilation of the value of all licences. But the Secretary for War had no right to go up and down the country saying that the Government were not prepared to take away without compensation anybody's property, whatever shape that property might have. He came now to the last argument of the right hon. Member for the Spen Valley in regard to warning. That had even been suggested by the Prime Minister himself. That was a more curious doctrine than any other put forward by the right hon. Gentleman. According to it, killing was no murder if they gave a man warning before they killed him. He did not pretend to understand that argument. It was perilously near the argument of the buccaneer. But let them see about this warning. The case of Sharpe v. Wakefield had already been sufficiently dealt with by the hon. Member for Hackney from the legal point of view. Was it an accurate statement that these unfortunate licence-holders had been duly and properly warned? The only thing of that kind he could find was the Bill of 1895. But he could not read that as a warning. He was driven to the suspicion that when the right hon. Member for the Spen Valley and other speakers who agreed with him spoke of the licence-holders having had a warning, it was from the general attitude the Liberal Party had taken up in regard to this question. That confession was interesting, and he was not sure that it was not partly true. He was perfectly certain that if this section became part of the Bill it would be regarded by every prudent business man as a warning to set aside a sinking fund against the political vagaries of the Liberal Party.
§ *MR. TOMKINSON (Cheshire, Crewe)
said that the Committee had listened to various speeches from the Opposition side of the House in which hon. Members very forcibly, and in almost tragic tones, had set forth the sad fate in store for those interested in licensed property. He would ask the Committee to consider for a few minutes in a calm spirit what he thought would be the situation at the end of the proposed time-limit. First of all, they knew that compensation was 548 to cease, and that the magisterial discretion as to the refusal of licences was to be restored. By the statutory process of reduction, one-third of the present licences would have been swept away—undoubtedly the worst of the houses and the least profitable. The remaining two-thirds would have a very valuable monopoly. The population would be increased, and the fewer licences would become more valuable than they were before. Again, there would be no compensation levy upon them, and that would be a relief to the trade. The number of licences being so reduced within a proper limit, there would be little or no risk of a further reduction either by Imperial legislation, magisterial decision, or popular control—a risk so small as to be insured against on the easiest terms.
§ *MR. TOMKINSON
said he was describing what would be the situation at the end of the time-limit. There would be the enhanced value of the licences which would accrue to the remaining licences. He understood that the practical form which the payment for the monopoly value of the licence would take, would be that an adequate sum would be paid for the privilege of holding a licence—a payment which hitherto had been wholly nominal. Some hon. Members insisted that that would be confiscation and robbery; but it was only a reasonable thing for the State to ask at the end of fourteen years. He did not know the cases to which the hon. Member for Stepney alluded when he spoke of publicans being turned out of their houses and deprived of their property by this clause. The only cases he knew of this kind were when tenants of tied houses were so treated by brewer landlords. He saw no reason why anyone interested in public-house property should be so frightened as they seemed to be. He asked what was the cause of all those fears about confiscation? They were either not real or largely exaggerated. He would give the Committee an instance 549 for which he could give chapter and verse so that anyone could ascertain the truth and accuracy of his statement. A month ago he was travelling to the town of Nuneaton on business and on his way a Birmingham newspaper was put into his hands containing the report of a sale at public auction of a licensed house in Nuneaton which was knocked down for £10,100. He went to the auctioneer who conducted the sale and asked him if the newspaper report was correct, and the auctioneer said that it was. He asked what were the circumstances and the history of the house, and the reply was that the house was a hotel of no very great value and on which no great amount of money had been spent. Some years ago it had been sold by auction for £4,000, and the purchaser sold it again for £3,600, or at a loss of £400. It had been put up to auction again the previous day and knocked down for £10,100. Then he asked the auctioneer what was the value of the house in itself, apart from the monopoly value, and the answer was £4,000, and that the man had given £10,100 for it with his eyes open, was in the trade, and knew that this Bill was going to pass.
§ MR. PIKE PEASE (Darlington)
thought that the speech to which they had just listened showed that a very large number of Members of the House had not the slightest idea, after the statement of the Prime Minister, what monopoly value was. He had listened to the right hon. Gentleman's speech on that occasion and had read his speeches in the papers, and it appeared to him to be perfectly plain that at the end of fourteen years no man who held a licensed house was to have any interest in the value of the licence itself at all. That, of course, did away with all the arguments as to values put forward by the hon. Member opposite. It was understood some years ago that a time-limit meant that after a certain period the majority of people in a certain locality would have the opportunity of stating whether they would or would not have a public-house in that locality. This Bill was totally different in every respect from that. At the end of a certain period the value of the licence was to belong to the State. Suppose, for example, there were works 550 which employed a large number of men, and there was adjacent to those works one public-house which was worth £10,000 with a licence and about £1,500 without a licence—not an extraordinary case. At the end of ten years, if the licence was to depend on the majority of votes, that house would be worth £10,000, because there would not be the slightest possibility of the majority of the people in that locality wishing to take away the value of the licence. But in this case, at the end of fourteen years, the £8,500 was to belong to the State, and the man would be left with £1,500, the value of the house. He hoped the Government would say if he was not correct in his view of the matter. As to the value of the property which was selling at the present time, it was perfectly plain that the value depended on the opinion of the purchaser as to whether or not this Bill was going to pass into law.
§ MR. MARKHAM (Nottinghamshire, Mansfield)
wished to say a word or two upon a point which did not seem to have been touched on, but which had reference to an injustice to licence-holders. He wished to do this, although he was a strong temperance advocate, because the point had arisen in his division, and not he thought in any other part of the country. In the parish in which he lived an application was made to the bench of magistrates for a licence for a public-house. They fixed the monopoly value of the licence based on the Act of 1904 at £9,000. There was an appeal to Quarter Sessions, and that Court reduced the sum to £8,000. Now the licence-holder to whom they granted that licence had paid into the county funds 8,000 sovereigns, and the Government had no right, therefore, he contended, under the provisions of Section 3, to treat that man as if he were in the same position as an ordinary licence-holder. He came in under the Act of 1904; on the faith of that Act, he paid £8,000 into the county fund, and it would be grossly unjust to ask that a man who had provided compensation for all the other licences in the village—because there were a number of others of very great value—with his £8,000 in the county fund beside the value of the 551 building—£6,000 or £8,000—to pay compensation to the other holders and lose the £8,000.
§ THE SOLICITOR-GENERAL (Sir S. EVANS,) Glamorganshire, Mid
Was that licence granted for seven years?
§ SIR S. EVANS
said that under the Act of 1904 the justices could have granted an annual licence, or they could have granted one for seven years.
§ MR. MARKHAM
said that with all respect to the Solicitor-General, he thought he was wrong in that definition of the law. He was present during the passing of the Act, and although the Solicitor-General and his predecessor on the other side held opposite views on every conceivable point, he did not know of that provision.
§ SIR S. EVANS
read a subsection of the Act of 1904 to the effect that the justices might, if they thought fit, make the grant of a licence annual, or grant a licence for a term not exceeding seven years.
§ MR. MARKHAM
said he was afraid he could not argue the point with the Solicitor-General without referring to the Act, but from what the hon. and learned Gentleman said, they seemed to have acted illegally. At all events they had had £8,000 from this licence-holder on the ground that, as they thought, they were granting him a perpetual licence. That might not be so, and if that was not the state of the law he did not wish to raise the point.
§ SIR F. BANBURY
said the hon. Member for Crewe seemed to hold a different view as to the result of this Bill from that which was held by some other hon. Members who sat on that side of the House, because only a short time ago his hon. friend the Member for West Lanark quoted a speech made a few years ago by Lord Lochee, to the effect that the value of a licence ought to be destroyed altogether. That sentiment was received with cheers in more than 552 one quarter on the other side of the House, but the hon. Member for Crewe had conjured out of his mind a golden state of affairs which was going to exist under this Bill, by which houses worth £4,000 now were to be worth £10,000 or more at the end of fourteen years, and large sums of money were going to be made by the fortunate people who would survive till that moment. Take the statement that £10,000 was given for a house, as his hon. friend had just observed, the value naturally would depend upon whether or not the purchaser thought that this Bill was going to pass into law. As his hon. friend knew, he had had some connection with the City, and his opinion had been asked on several occasions as to what people ought to do who had invested their money in brewers' securities, preference or ordinary. He had stated that in the present depressed state of the market he should keep his stock, not that he thought this Bill was going to make it more valuable, but because he believed there was another place where confiscation would not prevail or be sanctioned. The hon. Member said that between now and the end of fourteen years a certain number of houses would disappear, and the owners of those houses would receive ample compensation, and that if they reduced the number of houses they increased the price of the remaining houses. That was a curious argument to come from a temperance reformer who thought this Bill was brought in to promote temperance. The hon. Member thought the same amount of liquor would be sold. ["No."] Well, the hon. Member's remarks were in the recollection of the House, and he distinctly understood him to say that as the result of certain holders of licences being done away with, additional business would come to the remainder, and, if so, that the remaining houses would be sold for something about the same figure. But his hon. friend forgot altogether that at the end of fourteen years these people would not remain; they were going to be done away with, and they would have disappeared altogether, so that those who remained would have to pay a monopoly value. It was curious what different defences were brought forward for this Bill by different Members, some 553 Members honestly saying it was going to bring about temperance reform, while others said it was going to bring an abounding revenue to the State. That was what the Under-Secretary for the Home Department said, but what would his hon. friend, who was in the City some years ago, if there was going to be an abounding revenue and they were going to supply a sufficient sum to pay those from whom licences were taken away, give for a licence under those circumstances? If they were east of Temple Bar he was sure the offer he would make would be very small indeed. The Prime Minister had said that he (Sir F. Banbury) would consider any time-limit absurd, and that no time-limit was just. The right hon. Gentleman was quite right in attributing that to him, but, of course, when he said no time-limit would be sufficient he was referring to the conditions of the Bill. If the Prime Minister proposed to withdraw the Bill, however, and to say to licence-holders that he would give them fifty years without any conditions whatever, then he would not say that that sort of time-limit would not be possible. There were two points which the Committee had to consider on this particular subsection—one was whether or not the result of this clause would be just, and whether they were dealing with the property of other people in the same way as they would deal with their own property. He was quite sure that hon. Gentlemen opposite did not want to do for the property of others what they would not do for their own. The other was, were they going to establish or promote temperance by this particular form of legislation? The Prime Minister had stated that there was nothing but an expectation in a licence, that the licence was granted for a year, but that there had grown up in the minds of the public an expectation that under certain circumstances, that licence would be renewed. He had a statement in his hand by Sir Ralph Littler, a very prominent lawyer, which bore upon that point. Sir Ralph Littler said that any private individual who went to a Court of Equity and claimed to resume possession of a property after it had been in the possession of someone else for 150 years, no matter how fairly he had it originally, 554 would be told that he could not have possession. He said 150 years because some of these licences were granted before 1817, and many had been in existence for 100 or 150 years. If in the case of ordinary property, which had been in the possession of a man and that man's father and grandfather for 150 years, though the first holder had no right that could be maintained in a Court of Law, the man could not be dispossessed, then on what ground could the Government come forward and say that the State should resume this property because it had made a mistake and should never have parted with it? The thing was absurd. If he bought a house of his hon. friend for £150 which was only worth £50 and thus committed an error of judgment, and he asked his friend to give him back £100, on the ground that he had made a mistake, the hon. Gentleman would not give it. If the State had made a mistake how could they come down now and say: "We have made a mistake. We have allowed people to spend their money in a business which we have legitimised, and we are going to take it back? Because it must be remembered that the trade had been legitimised by the State in granting the licences. No one would suggest that the Government ought to profit by money obtained from an iniquitous business. It was, therefore, inconceivable that anybody should advance the argument that because there was a revenue now to be obtained from this legitimate trade which the State had sanctioned the State should now resume possession of it. It would be exactly the same as if he had made a present to the City of a piece of land as a public park. Would his descendants 100 years hence, when that land had been greatly increased in value, have a right to say that he did not know that the land would become so valuable when he parted with it, and consequently it must be restored to them? Yet that was what hon. Gentlemen opposite were trying to make the State do, and it was because the vast majority of the English people believed that no sane Parliament could possibly pass such a Bill that the value of these houses had not depreciated so much 555 as they would have done if it had been possible for a moment' to believe that this Bill would be passed into law. During the debates in the summer some quotations were made by the right hon. Gentleman from speeches by the late Mr. Gladstone to prove that after the decision in Sharpe v. Wakefield, Mr. Gladstone had rather altered his views on this subject. The right hon. Gentleman had not, however, quoted the whole speech, because Mr. Gladstone went on to say, and this was far more important, that the expressions he used were not directed to the measure then before the House, but to a general and sweeping measure for the extinction of all public-houses. That would seem to show that Mr. Gladstone even after the decision in Sharpe v. Wakefield still held the same opinion. Under those circumstances the Committee was entitled to assume that had Mr. Gladstone been alive he would not have been a party to a measure of this description. What would be the effect of the reduction of licences if that reduction were accomplished in the way it would be if this clause was carried? Was it going to have any effect on temperance? He did not know whether hon. Members had seen the statistics of convictions for intemperance which had been taken out for the county of Middlesex. There it was shown that the proportion of population to licences had nothing whatever to do with intemperance. In one case there there 694 people to a licence, and the number of convictions for drunkenness 8.5. In another there were ninety-four people to a licence, and the number of convictions was 6.7, and the same thing went all the way through the statistics. That was a very striking commentary upon the argument that the reduction of licences was going to affect the question of temperance. He thought the question that was asked in the House recently by the hon. Member for Hackney with regard to the money which was received from the sale of drink showed the true method in which to bring about temperance reform. Example was the proper thing, and the education of the people to the fact that it would be better for themselves and their families if they spent less on drink than they did at the 556 present moment. Temperance reform would not be accomplished by robbing the brewers or the proprietors of licensed houses; and that was what would take place if Parliament passed this clause into law. It was hardly necessary to refer to the prospectus which had been read out by the right hon. Gentleman the Member for the Spen Valley. The answer made by the hon. Member for Hackney and another hon. Member who was not now in the House had been sufficient. But the right hon. Member for the Spen Valley in reading the prospectus had given a false impression to the House. He gave the impression that it was a company got up by the brewers for their own protection. On looking at that prospectus, however, he found that the shareholders in it were the ordinary public, and what had really happened was that a few sharp men of business, seeing that the decision in Sharpe v. Wakefield was not going to injure licensed property thought there was an opportunity of playing on the fears of the people, and of bringing out a company to insure licences at no risk but great profit to themselves.
§ *MR. BOULTON (Huntingdonshire, Ramsey)
said one very important point had been made in the course of the debate, and that was the clear statement of the Leader of the Opposition that licences were something less than freehold. It had been argued a great many times previously by the brewers that licences were freehold.
§ *MR. BOULTON
said the hon. Gentleman had only to go out into the streets and he would see in almost 557 every public-house in London staring placards stating that if this Bill passed, no property was safe. The only inference that could be drawn from that was that licences were private property. They now had it, at any rate from the Leader of the Opposition, that these licences were something less than freehold, but they had also evidence at least from certain of the speeches of hon. Gentlemen opposite, that some of them did not follow their Leader. The mover of the Amendment had stated that these licensed properties had been treated by the Inland Revenue as freeholds, and had quoted, in the course of his argument, the Inland Revenue instructions of 1890. He had those instructions in his hand and he would just read two lines upon which the argument was based. Referring to the assessment of public-houses for the purposes of levying the death duties, they stated that in each case it was assumed that the licence would continue to be renewed. That was the statement which was made in order to support the argument that the Inland Revenue had been in the habit of treating licences as freehold, and that they should continue to be so treated by the State. In the year when that document was issued, the opinion of the Solicitor-General of the Conservative Government, Sir Edward Clarke, was to the effect that licences must be renewed, subject only to misconduct; that the holders had a legal right, when they came to the magistrates for a renewal of their licences, to have that application granted. That was the opinion of Sir Edward Clarke in 1890, when that precious document was issued which gave instructions to the Inland Revenue to value these licences on the basis of continued renewal. Then came the case of Sharpe v. Wakefield in 1891, the year after Sir Edward Clarke gave his opinion. In that case the House of Lords decided that the justices had an absolute judicial discretion to refuse the renewal of any licence. When that decision was given, Sir Edward Clarke admitted that he had made a mistake in his interpretation of the law, which had been decided by the highest Court of Appeal in the country. Then something else happened. The Death Duties Act of 558 1894 was passed, and that Act stated how an assessment of property for the purpose of valuation should be made. In 1904 they had other instructions issued by the Inland Revenue authorities stating what had been, not what was to be, the practice for the last ten or twelve years. These instructions stated that there was no special basis provided by statute for valuing licensed houses for the purpose of estate duty, and that accordingly they came under the general rule applicable to all property. Then it went on to say that the principal value of any property should be estimated at the price which in the opinion of the Commissioners such property would fetch if sold in the open market. In face of that, was it not dishonest to circularise broadcast the instructions of 1890?
§ MR. YOUNGER
I know that in practice the valuations resulting from the second paper are exactly the same as from the first.
§ *MR. BOULTON
asked if the hon. Gentleman would give his authority for saying that. The hon. Member could not produce any authority. He was going to show that he was wrong by producing the authority of the present Chancellor of the Exchequer, as quoted by Treasury officials. After the 1890 instructions were issued the whole position surely was changed by the decision in Sharpe v. Wakefield. That decision altered what was considered to have been the law. What did Mr. Candy, the leading counsel for the trade in that great case, say? Not only Mr. Candy but other permanent trade officials admitted that Sharpe v. Wakefield had seriously interfered with the value of licensed houses. Surely the market was affected by that, and surely after Sharpe v. Wakefield the market value would be something less than that of freehold. Yet the hon. Member for the Ayr Burghs came and said that Sharpe v.Wakefield made no difference in the value of licensed property.
§ *MR. BOULTON
said that if it had increased since then it was perhaps 559 because of the increase in the population. He, however, thought the hon. Member was wrong. So far as his knowledge of the trade went, the value of licensed property had fallen very much. Some licensed houses in his own constituency were not worth nearly what they were twenty or thirty years ago, and that he believed was the case generally throughout the country. By Sharpe v. Wakefield licensees were declared not to be freeholders. The opinion given by Sir Edward Clarke in 1890 when the instructions were issued was not good law, and for the brewers to issue the 1890 instructions, after that decision, and after the passing of the Death Duties Act, was nothing less than a bare-faced and impudent fraud upon the public. He wanted an authoritative expression or statement from the Chancellor of the Exchequer that the practice of levying the tax for the purposes of the death duties was based on the 1904 instructions and not upon those of 1890, and last July he wrote a letter to that right hon. Gentleman asking if he were right in assuming that the 1890 instructions were not acted upon. He got the following reply—I am desired by the Chancellor of the Exchequer to inform you that the Paper of 1890 was issued before Sharpe v. Wakefield was decided by the House of Lords and before the passing of the Finance Act. The Paper of 3rd May, 1904, states the practice followed under the Finance Act.The Chancellor of the Exchequer quoted the practice, and then went on to say—You are correct in your impression that the Somerset House authorities did not act on the 1890 instructions much later than 1891 or 1892, and that the instructions in 1904 were those which had been acted upon for ten years or more.That emphatic declaration, coming from the head of the Treasury, was the highest authority that the 1890 instructions should be disregarded and that the 1901 instructions were the only instructions they should look to. It was nothing loss than dishonest to buy copies of those 1890 instructions wholesale and distribute them throughout the country as the trade had been doing. An hon. Member had quoted a statement from a pamphlet issued by Sir Ralph Littler attacking the Bill, in which Sir Ralph had stated that if a private individual who had allowed 560 somebody else to use his property for 150 years Went to a Court of Equity and asked to be restored to his property he would be laughed at. That was not the case with regard to licences at all. The licence-holders might have had them for 150 years, but they had paid rent to the State and had also applied annually for renewal, a very different thing. If an owner had allowed somebody to use his property for 150 years and had received rent each year in acknowledgment of his rights of ownership, and if he went to a Court of Equity there could be no question that that Court would hand him back the property which belonged to him. That disposed entirely of the suggestion of Sir Ralph Littler. He considered he had established what they had heard declared from the Leader of the Opposition, that licences were something considerably less than freehold.
§ *MR. NIELD (Middlesex, Ealing)
said he had not been able to follow the arguments of the hon. Member. He had sat for many years as a close colleague of Sir Ralph Littler, and there was no man living who had had his experience in the administration of the licensing laws, and who, at the head of the Bar of England, had a greater knowledge of that law. They had listened to a bit of special pleading on the part of the hon. Member, but there were a great many gaps in the information he had vouchsafed to the House. When the hon. Member talked about a statement distributed throughout the country, he supposed he meant a statement issued by the trade and exhibited on licensed premises. The hon. Members said it was a barefaced impudent fraud. He could not help expressing astonishment that such a statement should come from an hon. Member on the other side of the House, considering that the Government's majority was obtained by methods such as the Chinese slavery falsehoods and other fraudulent misrepresentations, equally barefaced and impudent. This was the first time Parliament had attempted to do anything in the direction of confiscation of property, and he hoped it would meet with treatment elsewhere that would prevent, this House turning along, the same road again. It was not a mere question of paying an annual sum of money for an annual permission which might be withdrawn at the end 561 of the year. Had hon. Members opposite never heard of the basis upon which public-houses were assessed? Did they not know that skilled valuers were employed for the purpose of getting at the assessment? Valuers not only went into the broad question of what was to be the mean basis of compensation, or what the premises would let for if used for purposes other than that of a public-house, but they actually went so far as to ascertain the number of barrels of beer consumed during the year, and they based their valuation upon the business done by the publican irrespective of the actual value of the premises. Surely that was putting upon the licensed victualler an additional and very substantial income-tax, which involved not only a very high assessment, but an oppressive payment—because in addition to the ordinary income-tax under Schedule D, and also the payment of his licence duty, the holder had to pay heavily to the poor law and local authorities. In districts where the rates were high—and in some localities they were 10s. in the £—the rates amounted to a very considerable sum. In his own constituency there was a licensed house which had a hall attached, in which not long ago he addressed a meeting upon the Licensing Bill, and he asked if there was any man in the audience who could tell him what the premises were rated at. The assistant overseer, who happened to be present, replied: "£345 a year." He then asked what was the value of the premises for rating purposes, assuming they were used for any other purpose, and the reply he got was "£120 a year." That licence-holder had been paying rates on the difference between £345 and £120 for years. There was also the water rate charged upon the highly assessed rateable value, and these constituted an enormous charge placed upon the trade. Did any hon. Member dispute that those heavy charges which were made annually upon licensed premises where made because the licence was regarded as a permanent factor in the case? The Memorandum of 1890 was not an instruction, as the hon. Member who had just spoken would have the House believe, but merely a Report by the Commissioners of In- 562 land Revenue to the Chancellor of the Exchequer of the basis upon which they had levied the death duties in the past. The way licensed property had been treated by the Board of Inland Revenue clearly showed that they had always regarded premises as being permanently enhanced by the licence.
§ *MR. NIELD
asked if his hon. friend had forgotten that Sections 30 and 31 of the Act of 1872 enacted that the holder of a licence should be entitled to a renewal of his licence unless some objection was taken to it? Had he forgotten that in 1873 the Act was so amended that any person desiring to oppose an existing licence was obliged to give notice in writing to the licensee that he intended to appear at the Licensing Sessions to oppose the renewal, and moreover to give in writing the grounds of his objection? Those provisions were inserted in the Licensing Act which regulated renewals of licences in 1872 and 1873, and the Act clearly stated that a licensee need not apply for his licence unless it was opposed, and then he had to receive proper notice. This was a deliberate indication that Parliament considered that licences should in practice be annually renewed in the absence of any misconduct on the part of the holder. He challenged the hon. Member who had last spoken or any Member of the Government of which he was a supporter to prove that the Inland Revenue to-day, in levying death duties upon persons interested in licensed premises, had abated one jot of the principle on which they went when the Memorandum of 1890 was issued. The hon. Member had quoted from a paper which he said was the instruction of 1890, but which he (the speaker) claimed was in fact nothing of the sort, but a statement of the basis of the then existing levy for death duties on licensed premises. The hon. Member had not mentioned that in the document the Commissioners of Inland Revenue had specifically said in at least two instances that the value of the premises was taken to be the value as permanently enhanced by the licence. Were hon. 563 Members opposite prepared to pay compensation upon the same basis as the death duties had been levied? That was a fair test of their sincerity in this matter. Were they prepared to reimburse publicans upon the same principle as they taxed them? There never was a more absurd statement than to assert that there was anything in this Bill that restored to the justices any discretion; on the contrary they would be fettered as to what they would be able to do after the compensation period had run out. If this Bill became law there would be no licence-holders, and the State would have to put in a receiver to whom the licence would be nominally granted. Under this Bill every licence that survived the compensation period would have to be paid for again as though it were a new licence. The hon. Member for the Ramsey Division said that Sharpe v. Wakefield altered the law.
§ *MR. NIELD
said at any rate he understood the hon. Member to say that the result of Sharpe v. Wakefield made the law clearer.
§ *MR. NIELD
said that Lord Bramwell stated that the Legislature, in passing the Apt, could never have dreamt that any Court would desire to take away a man's livelihood, and therefore they did not put into the Act any express provision that licences should be renewed provided there was no misconduct. What was the law as regarded the ante-1869 beer houses? The justices could not get rid of one of them, however insanitary or unwholesome the premises might be. How were those licences dealt with in this Bill? A compact and a solemn bargain was entered into in this House in 1904, by which it was conceded that the ante-1869 beerhouses should be brought into line and put upon the same footing as ordinary licences upon one clear and definite understanding, viz., that the compensation provided in the schedule of the Bill, and that only, should be the price to be paid for giving up their Parliamentary privileges and surrendering the rights which 564 under the Act of 1869 those ante-1869 beerhouse licence-holders possessed. By this Bill these houses were to be confiscated at the end of the time-limit in the same way as if they never had any Parliamentary privilege at all, as if no Parliamentary bargain had ever been come to. That point alone showed the immoral nature of a Bill which proposed to rip open a Parliamentary bargain without restoring one party to his former position. Was it not an abuse of language to say that the State resumed property in licences, seeing that it never had a property in licences at any time? The State never had any interest in any monopoly value, and those words, which were purely academic and scientific, were used for the first time in the Act of 1904. The State, from the time of Edward VI., had never done anything more than to control the traffic, not in the interest of the traffic itself but in the interest of the State, and in order that these places should be properly conducted. He challenged any hon. Gentleman opposite, however erudite, to give him a phrase from any historical book which went to prove that the State did anything more than attempt to regulate in the interest of the community, the well-being of these houses in order that they should not become an assembly of persons who might be dangerous to the State, as they were in the sixteenth and seventeenth centuries. He joined issue with the Prime Minister altogether when he spoke of the State having the monopoly value, or resuming something which they never had before. He had said that in the Colonies and in America the Government often took away licences, but did he suggest that the conditions under which licences existed in America and in the Colonies, both as regarded taxation of all kinds and fiscal duties in the event of the death of the owner, were on all fours with licences in this country? None of our Colonies would be so unjust as to revoke the grant of a licence if the same payments had been made there as had been made here for many years. Not only had death-duties and local and Imperial taxes been levied in the way he had described, but whenever licensed property changed hands the deed of conveyance was charged with the same ad valorem duty as though 565 it were conveying a freehold, and the amount at which the duty was assessed was not the mere value of the bricks and mortar, but the value of the house as permanently increased by the value of the licence. They paid an ad valorem duty of 10s. per cent. every time they changed hands. The Prime Minister speaking recently at Leeds had stated that the Bill was going to be a remedy for unemployment. It appeared from information furnished to him by one gentleman alone, who was engaged as an architect almost wholly in respect of licensed premises, that to his knowledge the Bill had already caused the abandonment or postponement of works upon which £28,000 would have been spent, quite apart from the fearful loss of wages which would have been paid by builders and contractors. His informant Wrote—We, as constructional engineers, have, of course, suffered severely. Out of the £28,000, our work would really total at about £4,000. Of this amount wages would be by far the larger proportion.".He might safely say that of the £28,000 one-half would have been spent in wages. The indirect loss of wages was still larger since it would have been multiplied in the case of the firms who supplied steel girders, rivets and bolts, besides brick-makers, quarrymen and carriers. From the same source he learnt that a builder, generally engaged on licensed premises, who had from 500 to 700 hands, had owing to the Licensing Bill shut down his yard entirely, and could do no more work. He could multiply this very materially. He had a statement of the wages paid by electricians doing work wholly for licensed premises.
§ THE DEPUTY-CHAIRMAN (Mr. CALDWELL,) Lanarkshire, Mid.
I do not understand that the hon. Gentleman is going much further.
§ *MR. NIELD
said he could very well understand that this was most unpalatable to hon. Members when they saw the unemployed in the streets. When the House was besieged by the un- 566 employed, surely it was most germane to give the House this information as He was about to do when interrupted. One firm of electrical engineers, whose wages were during the preceding year £1,600, paid only £979 last year—a loss of £621 in one small branch. Another firm reported a loss of £9,000 worth of work, of which half would represent wages. A decorator's bill had shurnk from £669 to £268 in a corresponding period of seven months. The figures he had given had been from one source out of twenty similar ones, and he was assured it was quite reasonable to regard this as a fair average of those twenty. The Bill was a disastrous one for the workers. It would increase unemployment. While the State had a right to regulate, it had no right to confiscate, and this clause ought to be eliminated.
§ *MR. H. H. MARKS (Kent, Thanet)
said that whatever diversity of views might have been urged in support of the measure, the Committee had been left in no doubt as to the test which it should apply in considering the Amendment now before them. The Prime Minister had told them that in judging of the merits of the Amendment they should consider whether the policy embodied in the clause was sound, politic and just. Nobody who had listened to the debate could have any doubt for a moment that that policy was not financially sound, nor commercially just. Whether it was politic must depend upon the point of view. It might be politic from the point of view of the Party and its exigencies, but he had very serious doubt as to whether it was politic from the point of view of the nation or of its interests. The policy which the clause embodied was that with which they were all familiar, the policy of denying to the licensed trade that it had any claim to compensation when licences were suppressed, upon the ground that there had never been any legal right to the renewal of an annual licence, or any claim to fixity of tenure, but only an expectation. It was surprising to find the delight with which the admission from those benches that an annual licence was not a freehold was received. He did not imagine anybody ever supposed an annual licence was a 567 freehold. But so much had been made of that admission that one was led to imagine that in the opinion of some hon. Gentlemen on the other side of the House there was practically no property if it was not a freehold, and that they might take liberties with the property of anybody, so long as it was not freehold. That was a very striking doctrine. Then a great point had been made of the Memorandum of the Inland Revenue Commissioners in 1890, as if they based on that Memorandum the whole of their contention with reference to property in annual licences. That was only an incident in the case, and although it might be that that Memorandum had not been in effect since 1891 or 1892, it must be perfectly obvious that many thousands of pounds had been paid to the State in respect of that Memorandum during the period it was in force, and with respect to property which, since that time, had been handed down from one to another, property which really was affected by every line of the measure under consideration. Whatever changes had been made in the methods of the Inland Revenue with reference to the taxation of licensed property for death duty, those changes had not been of a very wide-reaching character. Indeed, it was significant to observe that hon. Gentlemen opposite exhibited very little anxiety to answer the challenge thrown out to them as to whether they would be willing to agree to compensation on the basis of the present methods of the Inland Revenue. He had said it was not only on the question of the methods of the Inland Revenue Commissioners that the contention was put forward as to the property value in these licences. In practice, the expectation of the renewal of these annual licences had amounted to a certainty, except, of course, in cases of misconduct. The custom of such renewals had endured for 400 years, and a custom of such antiquity and such a universal custom might reasonably be regarded by many as tantamount to law. It was because that custom had been so regarded that prudent men of business had not hesitated to invest their capital, and the capital of others for whom they had been trustees, in public-houses and other licensed property. An annual 568 licence, which the Prime Minister had described as a precarious privilege, was not an unusual institution in this country. It was not only in the liquor trade that they found the annual licence. The instance had been given of the licence granted to theatres. What man would build a theatre and go to the expense of providing the public with a great institution like that if he did not anticipate that the licence would be renewed in the following year? There were Members of this House who had invested their money in motor cars, for which they got an annual licence. What man would buy a motor car if he had any doubt as to the renewal of the licence next year? There were many Members of the House who ought to be present now, but were away with guns for which they had only an annual licence. In fact, all these sorts of licences had been precarious privileges of one year's duration, but it had been the general understanding that they would be renewed at the expiration of each year. It was not only by the practice of the Inland Revenue Commissioners that a belief in the continuity of the licence had been created. The Courts had recognised the continuity of these annual licences. Time and again tenants for life had been restrained from suppressing licences to the injury, not only of their immediate successors, but even of remote remainder men. The magistrates had recognised the continuity of these licences, and had required publicans to make costly alterations and improvements in the interest of the public whom they served—alterations and improvements which would have been ruinous to the licence holder if he had held his licence for only one year. Local authorities throughout the land had for years recognised the principle of the continuity of these licences in their assessments on public-house property, and in fixing compensation when such property had been taken over for public improvements. It was in his own recollection that the London County Council was particularly generous in that respect, for it paid full compensation on public-house property which it had cleared in the course of public improvements, even when in its zeal for temperance, having paid the price of the licensed property, it promptly allowed the licences to lapse. Trustees had also 569 recognised the continuity of licences by investing large sums in public-house property on the strength of the practical and moral certainty of renewals. What was the justification for the contention that there was no claim for compensation now? It was admitted that there was a claim for compensation in regard to licences which were forfeited within the time-limit period. They had got thus far in regard to the right of compensation. It was only those which survived the time-limit which were to have no compensation at all, and yet it was those which survived that period which would have the best claim. They would of necessity be the best class of houses, for the least desirable would certainly go first. The houses which survived, those which were fittest, would have paid the compensation even for the least desirable houses which had been exterminated. He would remind the Committee that it was not only private rights but equally public policy which was here involved. If a man who was paying during a period of years to a compensation fund for his neighbours, with the certainty that if he survived he would in his time get no compensation at all, what could they expect that man to do in the upkeep of his house? What could they expect that man to do in the way of liberal and effective expenditure upon necessary improvements and alterations? That man, knowing that his trade was doomed and that his days were numbered, would neglect so far as he possibly could every expenditure of money and confine all his energies to push sales to make his money while the little sun left to him still shone. It was really worth while for their temperance friends to consider what would be the state of public-houses at the end of the allotted period. When the new era began these unfortunate licence-holders, after their long and costly experience, would have to pay again the monopoly value which their own capital and labour had created. This would really be taxing the tenants on their own improvements and the taxation would be large in proportion to the expenditure which they had made. The time-limit meant the rejection at the end of the allotted period of all claim to a renewal of licences and all claim to compensation. He did not think that in the course of the 570 debate anyone had pointed out exactly the financial meaning of that, not to the licence-holders but to the innocent investors who had their money in brewery companies. He asked the Committee to consider what a brewery company could do to provide against loss on the part of its shareholders and debenture-holders at the end of the time-limit. He would illustrate this by one case which he had taken from the excellent work by Mr. Pratt, who was a great authority on this point. Mr. Pratt gave the case of a long-established brewery company which traded in beer only, eight-tenths of its output going to tied houses purchased by the company. The average net profit available for dividends on the ordinary shares was £12,600. If the whole of this profit were put annually to a Sinking Fund for twenty-one years at 3 per cent. it would produce £360,000. The sums to be provided for out of such fund would be as follows:—Mortgage debentures, mortgages, etc., £354,000; preference shares, £174,000; ordinary shares (present value), £200,000; pension fund (for 200 employees), £10,000; making a total of £738,000. But inasmuch as the Sinking Fund would produce only £360,000, there would be a deficit of £378,000 in meeting all these items. The shareholders would have gone without dividends for twenty-one years, and all provision for old-age pensions and retiring allowances would be absolutely swallowed up. That was one of hundreds of cases of a similar kind which might be cited. On the authority of Mr. Buxton, Chairman of Truman, Buxton & Company, he stated that securities based on licence values, amounting to £150,000,000, would be rendered practically valueless if the Amendment now before the Committee were rejected. That was the case with regard to the holders of freehold properties; but the case was as bad, perhaps worse, with regard to leasehold properties. There were many cases in this country where the owners of licensed premises had purchased the lease of fifty years, and spent all their capital and all the money they could raise on their credit in building up a great business. He was not speaking now of public-houses or gin palaces, as they had been described. He was speaking of respectable hotels which came under the operation of this 571 clause, because when the reduction of licences took place there was nothing within the four corners of the Bill to show why a distinction was to be made between hotels and mere drinking-houses. In the case of the leaseholder who had invested the whole of his capital in a leasehold property for fifty years he was to have fourteen years in which to provide a sinking fund to save himself from ruin. At the end of fourteen years he would have what he had managed to save, and he would in addition have all the liability for thirty-six years on his leasehold premises and the liability to pay rent calculated on the privilege of a licence which he no longer possessed. He could not help thinking that the case of the leaseholder was worse than that of the freeholder. Of course, it was true that at the end of the period the licence might be renewed. At the end of the period he might have to go on paying a rent, calculated on the value of a licence which no longer existed, and which, if it was to be renewed in his favour, he must pay for all over again, though the business had been built up by his own labour and energy. If that sort of treatment was going to be meted out to licence-holders, how long would it be before it was extended to the holders of other classes of property? He asked the Committee not to lay too much stress on the argument that the expectation of a licence was not a freehold. There was a strong prejudice against men engaged in the licensed trade, but that did not justify this Committee or any Government in imposing upon that class of the community a hardship which they would not be justified in imposing on another class. He earnestly hoped the Amendment would go to a division, and that the Committee would condemn the policy embodied in this clause which contained the essence of the most vicious principle in a wholly vicious Bill.
§ MR. SHERWELL (Huddersfield)
said that the Leader of the Opposition had made a suggestion that afternoon which had been echoed by the hon. Member who had just sat down, that those who, on that side of the House, opposed the present Amendment would associate themselves with a policy and a view which sought to degrade and debase the licence-holders in this country. 572 Whatever might be the case with other Members, he believed he was not open to such an accusation as that. He had never associated himself with any policy or view which might lead to the degradation of the liquor traffic in the eyes of the people of the country. He had fortunately, or unfortunately, been a representative of an independent point of view which exposed him to the unsparing criticism of the licensing trade, and, on the other hand, to the somewhat amiably expressed grief of his many temperance friends. He had never denied, in anything he had ever said or written on the licensing question, the absolute necessity of some practical settlement of the compensation question. In season, and out of season, for the last ten years, he had pointed out to temperance audiences that there could be no great final settlement of the licensing question until our statesmen faced compensation as a matter of practical politics. Nor had he based his plea for a settlement of the compensation question on precisely the same grounds on which it had been sometimes based by hon. Members on both sides of the House. Listening to the speeches delivered in the course of this debate, and reading the speeches delivered during the Second Reading of the Bill, he was struck with the fact that it was commonly assumed that the argument for a time-limit rested on the fact that the Act of 1904 had been passed, and that if that statute had failed to pass no time-limit would have been necessary or inevitable. He was one of those who held that the time-limit was, in practical politics, historically entirely independent of the Act of 1904. He was quite prepared to admit that the passing of the Act in 1904 made some proposal more immediately necessary, but for a generation it had been the one authoritative suggestion for the final settlement of the question of compensation to the licence-holders. As he regarded the matter, he expressed the view of one who had long occupied a perfectly detached position on this question. As he understood, the argument for a time-limit or some settlement of the compensation question, depended ultimately on the fact that ambiguities in the administration of 573 unquestioned laws had led to an expectation which had grown in force and strength for more than a generation, and had for longer than a generation paralysed the reforming energies and the resources of the community. The real argument for a time-limit, or some equivalent suggestion, was that they could not achieve a great licensing reform without it, or make any real progress in dealing with this long-standing and difficult evil. He knew that the view that some form of compensation was inevitable had not been always endorsed by temperance reformers. But no responsible statesman had ever entertained or introduced a licensing proposal involving the carrying out of a practical reform without providing for some sort of compensation to licence-holders. Whatever particular form of settlement could be drawn up, it was obvious that a time-limit was not the only method; and he was not prepared to say that at all times, and, given a perfectly free hand, it was the best. His own, personal view had always inclined to State purchase, he knew that many temperance reformers would not agree with it. He was free to admit that for a long period a time-limit did not seem practical politics as the solution of the question, but public opinion had been shaping for a generation in that direction, and, a time-limit became inevitable after the passing of the Act of 1904. There was another reason why he had personally supported the time-limit, and that was because he had always hoped, and still hoped, that in conjunction with the time-limit and before its expiration it would be possible to devise some financial arrangements by means of commutation by which the progressive resources of the community might be liberated much earlier than would otherwise be the case. Accepting time-limit as the inevitable method of the solution of the question, and the only method which this or any other Government in its place could have attempted, what was the real objection to it? The Leader of the Opposition with perfect consistency had repeated that afternoon a statement which he had made continually in the course of the debates in 1904, that there was no injustice or inequity in a time-limit in itself. He admitted that it was possible 574 to devise a time-limit which would be perfectly equitable in character, but his objection to the Government proposal was that they had no right to make a compensation levy, and then to take away the property from the licence-holder at the expiration of the time-limit. He thought the right hon. Gentleman was confusing in his own mind one form of compensation with another — that to compensate a man after the expiration of the time-limit was to compensate the man twice over. The right hon. Gentleman admitted that a time-limit might be equitable, but not if the trader paid the compensation. The hon. Baronet the Member for the City of London rubbed that in by an allusion to fire insurance, but he thought the hon. Gentleman when he rested his case on the analogy of fire insurance gave it away. The fire premium was paid against a certain risk, but supposing a man paid premiums for five years, he did not complain that he had not had a fire on his premises during that term. He was quite satisfied that he had not had a fire, and that he had paid his premiums for the immunity from the risk of fire during the period.
§ MR. SHERWELL
said that if he had insured against fire and had not had a fire his premiums went to contribute to the payment of the man who had had a fire. He was afraid that the hon. Baronet had not bettered his case by his interruption. After all the question raised by the Leader of the Opposition turned on the fact, who paid the compensetion levy? It was commonly assumed to be, and indeed it was often spoken of as a trade insurance fund, contributed solely by the trade and not by the community at large. The right hon. Gentleman said that a time limit would be perfectly equitable even if they paid by contributions out of the public funds; but would the right hon. Gentleman demonstrate that it was not the community that really paid the compensation levy? There was no fact more generally admitted than that of the long over-due payment to the community in respect of the enhanced value of the licences due to State action. 575 Hon. Gentlemen opposite did not allow for the historical change which had taken place in the character of the licence. When it was first issued, it was issued on free lines; but afterwards considerations of social order led to the imposition of restriction after restriction which had transformed the character of the licence. Parliament, while by its own action enhancing the value of a licence, had never adjusted its scale of taxation to the change in the character of the licence. Hon. Members opposite were now saying that, because Parliament had been remiss in the past, therefore its past remissness should be transformed into a permanent disability. Because for long years they had been charging the licensed trader considerably less than he should have been charged, because of their past extravagant generosity, they were to be penalised from obtaining at any time the payment long overdue. He believed that a good deal of the objections to these proceedings, and to this particular section, arose from the idea—a perfectly mistaken idea—that the trader at the expiration of the time-limit would be required to pay a large sum which represented his goodwill. That was not the idea which he had in his mind. What they desired to bring about was this: a condition of freedom under which the State should be allowed to adjust its scheme of licensing taxation so as to include a proper scheme of monopoly value. [An HON. MEMBER: We do it now.] An hon. Member said they did it now, and he would deal with that point. It was perfectly true that the Bill as now drafted, made a payment for monopoly value, an annual payment for an annual licence or a term licence, but he believed that to be so objectionable a form of monopoly value that he had placed on the Paper an Amendment to deal with it. He objected to the precedent of the Act of 1904. Under that Act we had been receiving large sums in the way of monopoly value for all licences issued under it. And the hon. Gentleman would say that under Clause 4 of that statute no question of compensation could ultimately arise in connection with one of those houses. He doubted that statement at the time; he doubted it to-day. When he looked at payments 576 which had been made for new licences from 1904; when he saw traders having to pay £5,000 down for a new licence, he said that that would cause the expectation of renewal which would constitute a practical embarrassment a few years hence, and he wanted to guard against the recurrence of the compensation difficulty. There was one criticism he would like to make in connection with the present proposal. Whilst he understood quite clearly the end towards which it proceeded, he doubted very much whether the present time-limit proposal would secure the end aimed at unless subsequently there was associated with it some new condition covering the tenure of licences, which would prevent the compensation difficulty or the expectation of renewal. For his own part, he did not think that anything except the institution of some form of public tender, such as proposed by Mr. Bruce, would guarantee the community against the recurrence at some future time of this compensation difficulty. But before he sat down there was one aspect of this question which had not been touched on, but to which he thought it was very desirable to allude. They heard a great deal concerning the injustice of this time-limit proposal. The injustice of it had always been construed to be in the treatment of the licensed trader, but he would like to ask hon. Members opposite whether there was not involved in this time-limit proposal a very distinct and definite injustice to the community at large. What was the price which the community was called upon to pay for this time-limit concession to "the trade"? He did not know whether it had been quite realised by hon. Members on the opposite side the financial price which the country had to pay for this concession of the time-limit. It was obvious that during the whole currency of the time-limit, i.e., for the whole period of fourteen years, there could be no adjustment of licence taxation to the real value of the licence. That was to say, that for the whole period of the time-limit the community must forego any increased taxation on licences. When he remembered the amount which was due from the licensed trade, he realised the amount which the community had to pay for this time-limit. Contrasting this taxation 577 with the taxation of the same trade in other countries, which represented conditions which in all essentials were identical with the conditions encountered here, he began to understand the real price that the country would have to pay for this generous concession to the licensed trade. He did not want to weary the Committee with figures, but he would give them one or two. Take the whole of the towns in the United Kingdom, with a population exceeding 30,000 persons—the average payment by the publican for a licence was £27 a year. Take towns in the United States of America of the same size, and the average payment made by the publican was £147 a year. Let him give another case. London to-day received from its liquor licences £275,000 a year, but if London received for them in proportion to population, the sum received from the publicans of New York she would receive just over £3,000,000 annually. The difference between the yield of the duties on our existing scale of taxation and the yield of the duties on the New York scale of taxation amounted to 1s. 3d. in the £, or nearly half of the revenue which the London County Council received last year by rates. He dared say he would be reminded by hon. Members opposite that while licence taxation in the United States was higher than it was here, the taxation of beer and spirits was lower; but when they made allowances to the full, he could prove, he believed, conclusively to the Committee that the liquor trade in this country was under-taxed to the extent of from £7,000,000 to £14,000,000 annually, and this sum must be lost to the community throughout the whole period of the time-limit. So that if they calculated the injustice to the community in pounds, shillings and pence, it did not rest with the licence-holder, but with the taxpayer of the country. That was one aspect of the question, but there was a more serious element in the price paid for the time-limit than that, and that was that it was inevitable that the efforts of the community must be fettered except in one direction, certainly as regarded all great and comprehensive measures of licensing reform. The community must wait, no matter how great might be its desire for freedom, until after the expiration of the time-limit. 578 The community being called upon to suffer this loss on the one hand, and being deprived of the power to exercise its resourceful energy for fourteen years, when hon. Members used the word "injustice" he said it should be used not on behalf of the licensing trade, but on behalf of the eager, over-ridden citizens and taxpayers.
§ *MR. JESSE COLLINGS (Birmingham, Bordesley)
said there was no man in the House more entitled to be heard on this subject than the hon. Member who had just sat down. He had followed his speech, however, with a great deal of attention, and he was bound to say that he hardly knew his exact position. He was evidently dissatisfied with the provisions of the Bill, and when he talked about the community paying compensation he thought his argument was rather far-fetched, because, however the community might pay, it was the individual who suffered. The hon. Member had also said something about some Amendment which he had put down to carry out his ideas, but they had not to consider what with his Amendment the Bill would be, but what the Bill did without his Amendment, because they knew that no Amendments that he would move would be of any use, because the Government were not likely to accept them. The hon. Member had said very rightly that compensation of some kind was the key of the difficulty. There was very little doubt-about that. The hon. Member also said that statesmen should try to get some solution of that difficulty because it was the real problem; grant compensation., fair compensation, and everything else become plain and bereft of difficulty. But statesmen had not been consulted outside the Government, as they might have been, seeing that it was a question of national importance. It seemed to him that the United Kingdom Alliance had alone been consulted, and that the extreme teetotal party were the authors of this Bill. The hon. Member was also right when he said that the question of compensation was quite as urgent and prominent before the Act of 1904 as it had been since. The hon. Member seemed to lean in one part of his speech towards State compensation, and if hon. Members would accept that then they 579 would show that their first object was temperance. But that was not their first object, which was to punish those connected with the liquor trade. After that they were willing to promote temperance. Why did they not take the example of such men as Wilberforce and his colleagues, who in regard to the slave trade put their cause first, and did not hesitate about compensation? They said that if they could not get rid of it without compensation, let there be compensation. They held that very lightly; but the position of the Temperance Party seemed to be that they loved temperance, but objected to pay for it. It had been said that there should be compensation by way of a time-limit or some equivalent compensation. But equivalent compensation was paying affair price for the trade that had been allowed to grow up. If the State had made a mistake by the creation of this monopoly let the State pay for its mistake. That was the alternative. To himself the debate that night had been rather asad one. He was an old Member of the House, and was very jealous of the morality of their legislation, and the nature of the legislation now before the Committee was calculated to make one sad. One thing he was pretty sure of—the debate that night had killed the Bill. He had no doubt it would pass that House, but it had killed the Bill in the eyes of the country, and it had laid an obligation upon another place to throw out the Bill—laid it upon them by the consideration of the rights of property and of public morality. A great deal had been said of the estimate of the monopoly value, but it did not matter what the value of the monopoly was, the moral question remained the same, and for that reason he was glad that none of his friends had attempted to extend or interfere with the time-limit. It did not matter whether the time-limit was fourteen or forty years—the immorality and the dishonesty remained the same. No exceptions were to be made in cases of those who had bought for value. He would take one instance which was typical of others, the purchaser of "The Coach and Horses." What were they to say of a Government who sold licensed premises for £8,000 or £9,000, monopoly 580 value as it was termed, knowing that they had at the same moment a Bill ready that would make them practically valueless? [Laughter.] Was it a laughing matter? He hoped the standard or morality had not fallen so low that they would laud in the Government an act which in a private individual would be scouted by all right-thinking people. And what about the pre-1869 licences? Where was the common honesty of including them in the general plunder? The monopolies possessed by railways, electric, gas, and water undertakings were the creation of Parliament just as were licences, and if the shareholders in them were treated as they proposed to treat the brewery shareholder, the monstrous injustice would become apparent. Nobody was safe. He saw in the Bill the beginning of a Socialistic movement which might be extended to any form of property. In fact, it was more Socialistic than the ideal of the Socialists with regard to the land as expressed by one of their most eminent leaders. They would take landed property it was true, but they would give the landlord a term of three lives, which generally extended over a long period. The Government only gave a term of years. The Prime Minister and many of his supporters had constantly referred to this as a brewers' Bill. But it was only a brewers' question in a minor degree. It is a question of a large section of the community. He had recently received a letter from a small tradesman which pointed out that this man had invested his savings in brewery shares, and relied on his investments for his old age. What right had the Government to take away from that man his investment? He was receiving 6 per cent. Suppose he had invested £100 and invested the £6 a year that he received from his shares at 3 or 3¼ per cent. as a sinking fund. At the end of fourteen years he would just get back his £100. If his necessities compelled him to spend that £6 he would lose his capital at the end of fourteen years. In either case he was robbed. There were tens and hundreds of thousands of men and women who had invested their savings in brewery shares, and what right had the Government to take away their property? Hon. and right 581 hon. Gentlemen opposite might call it insurance. The result showed it to be simple robbery. If such a proposition were put before the country, there was not the shadow of a doubt what the answer of the country would be. In the people of England, whether in their sports, games or in their fights, there was a spirit of fairness. It was inherent in the national character, and if such a proposition was put before them as was illustrated by the instance to which he had referred they would not assent to it for a moment. If this Bill failed to become law, would the Government carry out their word? Would they submit it to the country? If they did the decisions of the recent by-elections would be found to be the simple foreshadowing of the verdict of the country. The United Kingdom Alliance was not in favour of temperance but of prohibition, and even if this Bill passed they would not be content. They would still go on for prohibition. Prohibition was their aim. He did not know a greater make-believe than the United Kingdom Alliance. They had said they were for prohibition, and had opposed every temperance reform from the time of Burke's measure so many years ago, down to the present Bill. They would not be content with this measure. They had been rightly described as the great bulwark of the liquor trade, because they had made all moderate reforms impossible. Sharpe v. Wakefield might be a legal decision, but to his mind there was a higher law even than Sharpe v. Wakefield—the Nonconformist element laughed at that higher law of morality. From the decision of Sharpe v. Wakefield up to the Bill of 1904, there were only thirty-two licences per annum suppressed on the ground that they were not wanted. That was the smallest possible fraction of the whole number; but because there was then an occasional possibility of suppressing single licences they were now confiscating all the licences of the country. That was the argument; but even the decision of Sharpe v. Wakefield was qualified by the words of Lord Bramwell and the Lord Chancellor. These qualifications, if read in connection with the decision, took away from it all the importance which hon. Members opposite attached to it. The clause had been 582 made a question of religion. He saw that the hon. Member for the Skipton Division of Yorkshire said that those who believed in it were on the side of heaven and that those who did not were on the side of hell. These were his words. He did not believe he would dispute them.
§ *MR. JESSE COLLINGS
asked hon. Members to fancy the noble Lord the Member for Marylebone and the Leader of the Opposition going to hell because they opposed the Bill, and further to imagine the hon. Member for the Spen Valley and the hon. Member for Appleby in heaven — in some suburban villa there—petitioning for a gramophone so that they might listen to the cries and groans of the brewers and of the two hon. Members he had just named. It was too ludicrous. The hon. Member for the Skipton Division had two roles in the House, one was to prevent the labouring classes from getting a glass of beer, and the other was to prevent the labourer from having a bit of land to cultivate. That was how he had distinguished himself during the time he had honoured that Assembly with his presence. An hon. Member had asked a question about the reduction of licences under some form of compensation. Under the Act of 1904 in three years from 1st January 1905 to 1st January, 1908, there were nearly 4,000 licences extinguished, and the progress of extinction was progressive because in 1907 there were nearly 1,800 extinguished. If that had continued for fourteen yeas, they would have had about 20,000 licences extinguished. Did the hon. Member call that a small reduction?
§ *MR. JESSE COLLINGS
said the hon. Gentleman spoke of some compensation by which licences might be reduced, and here was a means that did not need a farthing of public money. This reduction had gone on, and the licences suppressed were the very kind 583 they wanted to see extinguished. The judgment of the magistrates had enabled them to weed out those which were not satisfactory, and if the process were continued for fourteen years, they would have nearly 20,000 carefully selected licences suppressed. The Prime Minister said that that was not adequate. He wanted 30,000. But those 30,000 were to be done away with without any discrimination whatever. The 1904 Act, therefore, had been an excellent Act for the suppression of licences. He was amused by the temperance societies. Some years ago the Member for West Birmingham and himself went to Gothenburg to examine the system there, and on their return the Member for West Birmingham introduced a measure to enable communities to buy licences. Who opposed it? Those represented by the right hon. Gentleman opposite. Their favourite phrase was: "We won't touch the accursed thing." But now, when they could get the licences for nothing, they were quite willing to touch the accursed thing, in fact, they were eager to do it. There was one other point. The question had been argued from the point of view of the brewery companies, but hon. Members knew there were scattered up and down the country hundreds and thousands of public-houses which butlers, and other men-servants had taken. It was a small thing, but there were thousands of them. What right had they to go and rob them? They told them they were first going to put a tax upon them to extinguish their neighbours and then at the end of fourteen years they were going to extinguish them too. Would anyone get up and defend that sort of thing? There had been no defence. He quite recognised that Members liked to be loyal to party feeling, but when it became a question of honesty, surely there ought to be a number on the other side of the House who would refuse to be party to such a nefarious scheme as was contained in. the Bill, or else give them some reason why they were a party to it. In some religious communities they had what was called a satisfying minister. When the old minister did not please them he was replaced by this satisfying minister. After a few weeks of him, they prayed Heaven to get the old one back. 584 The present was the satisfying Government and the country was saying that it was tired of it and wished to have the old one back.
§ *MR. J. M. ROBERTSON (Northumberland, Tyneside)
said he had no desire to follow the right hon. Gentleman in his somewhat delicate theological speculations, but he would like to say that, if hon. Gentlemen opposite took up the position of resenting some of the invective proceeding from that side of the House, then they should modify their own language. The right hon. Gentleman who had just sat down had spoken of the Bill as a measure of robbery. He did not know what the theology of the right hon. Gentleman was or where he expected, in his theology, robbers to go, but he would suggest that, after using such expressions, they could only reasonably expect countervailing invective from the supporters of the Bill. The right hon. Gentleman first denounced the statement of an hon. Member on that side of the House that the supporters of the Bill were for the cause of good, and those who opposed it were for the cause of evil, and then he proceeded to apply the word "robbery" to the Bill. ["Hear, hear."] Did hon. Members opposite claim a monopoly of malediction as well as other monopolies? In spite of the number of interesting and able speeches in this debate there were some important matters raised in the discussion on the theory of property on which he proposed to offer a few comments. The right hon. Gentleman had drawn an analogy between the case of a railway and a public-house. He said the railway was a monopoly, and he asked if they claimed they could take it away after a certain number of years as they proposed to do in the case of the public-house. Supposing the State did as he had no doubt it would ere long, take over the railways, it would, he presumed, do it on a valuation of their plant and stock; and, if any railway should be in the position of being able to present a claim for a monopoly value over and above that, it would be the particular duty of the State to give facilities for the creating of another railway for the destruction of that monopoly value. The two things were absolutely contrary 585 in character, and no such claim would ever be set up in the case of the railways. The right hon. Gentleman was particularly indignant over the case of the "Coach and Horses." He seemed to have given to the purchaser a quantity of sympathy the purchaser had not at all desired.
§ *MR. J. M. ROBERTSON
asked how in that case the right hon. Gentleman could condemn the Government. The real issue in the matter was this: The Government claimed that the limit they allowed was a limit which made any purchase of a licence at recent values still capable of being reasonably liquidated within the time-limit, and, if the purchaser paid a price that could not be balanced by fourteen years use, then he was a party to a general form of error which the Government could not be supposed to detect. He bought at the market value, and the market value was the basis of the time-limit proposed. Another hon. Gentleman opposite actually compared public-house licences with motor-car licences. They were told that if they took away public-house licences, they could equally take away motorcar licences after fourteen years. Was it suggested that motor-cars were limited by the issue of licences in the public interest? Some quotations had been made from speeches by Mr. Gladstone on the question of compensation. It happened that Mr. Gladstone, in his youth, was at one time ill-advised enough to accept the argument then current among Protectionists to the effect that the duty upon corn represented a contract between the State and the landed interest, and that the State having kept the tax on for a number of years had practically entered into a bargain with the landed interest that the tax would be continued and, therefore, that the State was bound to respect that bargain. In later years, however, he was sure Mr. Gladstone would see that that position was indefensible; but hon. Members opposite with their extraordinary notions of analogies would have no difficulty whatever in carrying the argument of analogy to this extent. If 586 they ever got a tariff they would have created, by their own argument, a vested interest which the State would not have the right to take away. The phrase "vested right" had been used again and again. One speaker had spoken of a certainty, although it was elicited in the course of the debate that the Licences Insurance Corporation actually spoke of the precariousness of the whole matter and admitted that there was nothing in the nature of certainty, and that licences were likely to be taken away as not required. There had been some mystification which he proposed to clear up. The hon. Member for South Hackney undertook to convict the right hon. Gentleman the Member for Spen Valley of contradiction. But supposing the right hon. Gentleman had written the passages that had been quoted, they were perfectly consistent with the argument of the right hon. Gentleman on the Second Reading of the Bill, when he contended that despite temperance legislation a large number of breweries were still good investments. That was a view which would be endorsed by any City man to-day.
§ SIR THOMAS WHITTAKER
Perhaps I may be allowed to interpose for a moment. I had hoped that when the hon. Gentleman was speaking I made it clear to the House not only that I did not write any of the passages which he quoted, but that I had no control over them and no responsibility for them. I do not wonder at the misapprehension of the hon. Gentleman; but it is not necessary for me to explain my own private relations in the matter beyond saying that my connection was not one which involved any control over or any responsibility whatever for those portions which the hon. Gentleman read.
§ *MR. J. M. ROBERTSON
thought that that disposed of the personal aspect of the matter. The hon. Member for South Hackney now professed to have quoted a passage, which represented that some writer or other, not the right 587 hon. Gentleman the Member for Spen Valley, as having said that all breweries were sound investments. Not one of the passages he read could bear such a meaning. Hon. Members opposite were particularly gratified by the hon. Gentleman's argument in regard to the effect produced upon the drink trade by the famous decision which, according to some speakers, made a great trade newly secure, and to others newly insecure. The hon. Member began by telling them that the corporation for insuring licences was started orignally because of the disquietude created by the Sharp v. Wakefield decision. A little later on in his argument he triumphantly pointed out that the right hon. Gentleman, like all other sane men, just after that decision, realised that there was no ground for disquietude. These two perfectly contradictory arguments were welcomed opposite. The hon. Member went on to say that the corporation did very little business, the argument being that it was found that either there was nothing to insure or the publicans had become newly satisfied that they were secure and not insecure as they had supposed. They had the actual figures showing the business done by the Licences Insurance Corporation. It began in 1893 and it stated then that it had insured £3,000,000 worth of licences; in 1897 it claimed to have insured £12,000,000 worth; in 1898, £25,000,000 worth; in 1899, £30,000,000 worth; in 1900, £40,000,000; 1901, £50,000,000; and in 1903, £60,000,000 worth. They had heard of politicians who thought in continents, and there were financiers who thought in billions. It was a ground on which he did not feel at home.
§ *MR. J. M. ROBERTSON
I have no doubt my hon. friend knows a great deal more about stage armies of that description than I do. It was from the hon. Gentleman that the suggestion came that this corporation, insuring in one year £60,000,000 worth of licences, and compensating in one year 399 houses insured for £396,000, was a stage army. He (Mr. Robertson) really 588 did not understand these high matters of finance, and the insinuations made concerning this corporation came from the hon. Member and not from him; but he preferred to regard those figures, coming from a corporation associated with such an honourable trade as the drink trade, as standing for honest finance and honest business. He thought such figures, drawn from public financial records, were better evidence than even the personal authority of so distinguished a financier as the hon. Gentleman. One or two words more on the aspect of the political theory of property. It was quite true that there were forms of property which were not freehold, and still were secure forms of property so far as they went; and it might be interesting to consider some of these forms of property as throwing some light on the ethics of political life. Let them take the case of patents. An inventor made an invention, for which the State gave him protection for a certain number of years only, after which the invention, which was the fruit of his brain, should be free to be copied by any man. Observe how they dealt here with the right in the invention, which might be a very great boon to mankind, and strictly limited it. Supposing that the patentee said this was robbery, and asked for a perpetuity of control, would hon. Members opposite give it him? Let them take the case of copyright. An author and his heirs had a copyright in his book for a number of years, and then the State abolished the monopoly profit from the sale. Was there any robbery there, or would hon. Members opposite ever propose greatly to lengthen the period of copyright? In the case of a man holding a farm and paying a certain rent, did hon. Members opposite recognise on his part any claim grounded upon a reasonable expectation of continuity? Reasonable expectation must be discussed on the basis of the commonsense of the nation at large. The commonsense of the nation at large was not to be found in the public-house. He was no temperance fanatic, but he was making a statement, the commonsense of which was known to the more thoughtful of hon. Members opposite. The reasonable expectation of which they had heard was simply the expectation of commercial egoism raised to the very highest 589 pitch. That could never be a basis for legislation for a democratic community. What was the example of other communities of the Anglo-Saxon race? Everyone of them would regard the House of Commons in dealing with the drink trade as quixotic in its generosity. All the protectionist Colonies and the United States, to which Members were so apt to point as the great models in the higher political science, would never dream of according to it half the concessions which were being offered in this Bill. On these grounds he supported the clause.
§ MR. WYNDHAM (Dover)
said the hon. Member for Tyneside opened his animated and interesting speech by promising the Committee that he was going to advance some new arguments in favour of the position challenged by the Opposition. He created a legitimate expectation, but he had disappointed the Committee, because his speech travelled precisely upon the same lines as the speeches of hon. Members who had preceded him, notably that of the hon. Member for Huddersfield. His speech was made in order to prove that it was just to take away the property which had accrued in licences under existing circumstances, and in conjunction with the new circumstances which this Bill introduced. It was contended not only that this would be just, but also that it would be a very lucrative thing for the State. That practically had been the burden of the speeches made by hon. Members opposite. It was strange that though they were going to be asked to decide upon the crucial question of the Bill, not one speech from the. Government side had yet discusssd it. The last speaker had not attempted to justify the imposition of a time-limit in existing circumstances, still less in conjunction with the other propositions in the Bill. They did not believe it was true that those who had an interest in the licensed trade were not paying a fair and proper contribution to the expenses 590 of the State. If it were true, let them impose higher licences, though they held that that would be unjust. But the time-limit under existing circumstances, and in conjunction with other provisions in the Bill, would inflict an injustice, would destroy the good they sought, and would do nothing in the cause of morality. The Prime Minister had asked them to say whether they were opposed to any time-limit of any length. That was not the question which the Committee had to decide. They had to discuss whether it was just to impose this fourteen years time-limit in view of the historical facts which led up to the Act of 1904, and of the other provisions of this Bill. They thought it was not just, and even if there was a new untapped source of revenue to be discovered by those pioneers of finance, they would not touch it, because they would be making themselves parties in an act of injustice. The Prime Minister said it was just, because there were two elements in the property which he proposed to tax: (1) The expectation that the licences would be renewed, and (2) the expectation that the licensees would not be subjected to unlimited competition. But there was a third element in this property—the good-will which the licence-holder created by his business capacity. It all depended upon that third element, without which the other two had no value at all. So far as the expectation of continuity was concerned, they were not giving a boon to these men by giving them that expectation, but were merely providing them with what was provided to all others in all other trades by the State. If they destroyed this expectation, they destroyed the value which the man had added by his own business capacity, and in destroying that value they destroyed the private property of the single licence-holder, and, in the case of tied houses, the property of all those who had invested their money in breweries. Therefore, the proposal was not just. The Prime 591 Minister had dwelt on the second element, that the competition was not unlimited; but if they destroyed the expectation of continuity, they reduced the value of the second element, whatever it might be, to the point of insignificance, and if they carried the other provisions proposed they would extinguish it altogether. The fact was that they could not make this metaphysical trisection of the problem. Property in licences existed in the fact that it was going to be enjoyed in the future as at present, in the business capacity of the holders of licences, and in a minor degree in the fact that they were not exposed to cutthroat competition. If all those three elements hung together then he thought he had proved the second question he had put as to whether what was now proposed was just. He contended that it was not just. As to whether they were going to secure abounding revenue for the State, he believed that the amount of booty would be infinitesimal. When that had been urged in the country, it had been thought sufficiently ingenious to reply: "How inconsistent it is to say that we are going to rob a number of honest investors and, on the other hand, that we are not going to transfer any new and abounding revenues to the Exchequer." There was no inconsistency. They were going to destroy property and not appropriate it, and to those who owned it there was no difference if the Committee was invited to act in the capacity of savages or of brigands.
§ MR. WYNDHAM
did not know that an act ceased to be an act of robbery when the property to be conveyed had been deprived of all its value. The third question was far more important than the 592 second: Would this promote the morality of the country, supposing it were just and lucrative? If they had any time-limit, whether of fourteen or forty years, they were deliberately casting a shadow of opprobrium on the whole of this trade. Then they were surprised if they were able to describe it, as they wished to do, as shady—they made it as disreputable as they could. In the interest of the morality of the country they ought to seek to make the public-houses places of social recreation and honest enjoyment, and he defied any man to do that who voted for a time-limit. They could not expect that public-houses would be better regulated if they placed them under a ban of censure in this way. If the annual licence was to be really an annual licence then they made it absolutely necessary that the licence-holder should make as much money as he could uot of it in that period. Public-houses in this country were not drinking shops. [Cries of "Oh."] Some of them were, but that was because they had proceeded in the past with too little regard for the best feelings of those men who conducted them. The public-houses were the only places where large numbers of the people could meet and exchange their words of wisdom, and Parliament had no right to make these places of social intercourse a form of shame to those who frequented them. Hon. Members had their comfortable homes and their clubs. If they had no such opportunities of meeting their fellowmen in reasonable circumstances of amenity and good will, they would become strangers and outcasts of their race. That was not a quotation but an application of the words of a man long since dead, the Lord Chancellor, Sir Thomas More, who laid it down that unless he found time at his meals to meet his family and his friends he would become a stranger in his own house. If Parliament denied to the working 593 classes the only equivalent open to many of them to such opportunities as were open to those better off, they would make them not only strangers in their own houses but strangers in the land of their birth.
§ *MR. J. M. HENDERSON (Aberdeenshire, W.)
said he did not rise to discuss the question of the time-limit. He understood the Leader of the Opposition had admitted the principle of it. He understood that the only point which the right hon. Gentleman made was that at the end of the time-limit it was proposed to take the monopoly value while in the interim the licence-holders would be contributing to the compensation fund. There was something in that view if compensation was to be paid on the principle on which it had hitherto been paid, but he submitted to the Committee that they would have to settle some reasonable and proper method of compensation other than the present system. Hitherto under the Kennedy judgment compensation had been computed on a vicious principle. He would give to the Committee a few figures which had come under his own notice, and which he thought ought to be brought to their notice when they were considering this question. Compensation was frightening hon. Members on the opposite side of the House—the compensation which would have to be paid during fourteen years, and the monopoly value which would have to be paid at the end of the fourteen years. The point he wished to make was this, that the licensing magistrates throughout the country had hitherto been putting an exaggerated construction on compensation and an equally exaggerated estimate on the 594 monopoly value. How did they arrive at the compensation under the present system? He would tell the Committee a personal experience. A client of his lent a publican £500. The house was in the City of London, and absolutely untied. The publican could not pay the interest or principal, and the result was that a receiver was put in possession. The receiver tried to sell the house, and he had not been there a month until he told the lender that he was losing money every day. The house was offered to brewer after brewer, and it was put up to auction, but a purchaser could not be found, and before long the debt on the place had jumped from £500 to £1,100. Would it be believed that that man got £1,000 compensation for the business, though it had been losing money every day? He could not believe that the Leader of the Opposition ever meant that anything of the kind should take place under the Act of 1904. The Kennedy judgement said that they had to give a man the "market value." When people talked of "market value" they talked very much in the air. There were certain things for which there was a market value, such as railway stocks, grain, iron, steel, and many other things in which there was buying and selling every day, but there were many things in which there was absolutely no market value. To use the term "market value" was to use a misnomer. The only market value was what a place would fetch at an auction. The house referred to was put up to auction and it was offered all round, and there was not a single bidder. [An HON. MEMBER: Was there a reserve price on it?] There was no reserve price. What happened? The man's solicitor manœuvred to leave the house scheduled for compensation. He 595 would tell the Committee how it was done. Of course an astute brewery broker
|Cost of conversion||150||0||0|
|Loss on Fixtures||180||0||0|
|Beer Trade: Barrels—average for 2 years||88|
|Profit per Barrel 12s. = £49 4s.|
|Twelve years purchase||590||8||0|
|Bottle Beers: Dozens—average for 2 years||169|
|Or 3½ barrels, at 12s. = £2 2s.|
|Twelve years purchase||25||4||0|
|Spirits: Gallons—average for 2 years||139|
|Profit per gallon 3s. = £20 17s. 10d.|
|Twelve years purchase||250||4||0|
|Wine: Dozens—average for 2 years||8|
|Or 16 gallons at 3s. per gallon = £2 8s.|
|Twelve years purchase||28||16||0|
§ Could anything be more monstrous? Although there was a loss on the house every day it was open, the magistrates gave him £1,000 compensation.
§ *MR. J. M. HENDERSON
It did not matter from whom it came; it was a swindle anyhow. But that was not the worst of it. The rent of the house was £125 a year, and the landlord came forward and said: "You are taking away my licence. I cannot let the place at £125. I can only let it for £85." They gave him a thousand guineas, and when he got that compensation, the occupier, having been advised that this was a very good house in a warehouse district, said to the landlord: "You have had your compensation. I will take a lease from you for the remainder of the
§ made up the figures, and this was how he arrived at the valuation.
§ term and give you £85 or £90 a year. The landlord refused the offer and stated in a letter that the lowest rent which he would accept was £130. The hon. Member for South Hackney had said that it was the trade that paid the compensation. But what had that got to do with the question? They were here to deal not only with the general finances of the country, but to see that there was justice between man and man. Why should struggling publicans, with whom he was entirely in sympathy, be taxed £30 or £40 a year to compensate a gentleman whose business was losing money every day? This vicious system of compensation had been creating an idea of compensation that was altogether exaggerated. He believed—and the Committee would by-and-by come to know it—that the case he had mentioned was not a solitary case. He had in his possesion a list of twelve 597 other houses which were similarly compensated and every one of them was in the receiver's hands. So satisfied was he that 25 per cent. of the present licensed holders were not paying their expenses that he felt sure that, if the compensation was put on a just basis, hon. Gentlemen opposite had really nothing to fear from that source. It could not be right to say to a man: "I will give you compensation for a business which is not paying. He himself would be quite content to do without all compensation. So satisfied was he that at least 25 per cent. of the present public-houses were not paying their expenses, that he would be content if every licensed holder who came for the renewal of his licence was made to produce a statement verified by an Inland Revenue officer of his profits, and unless he could show that he was making a substantial profit his licence would not be renewed. He had read a letter in a Conservative morning newspaper in which the writer stated that, as things were, probably half the public-houses in the country were being carried on at an actual loss. How could it be otherwise? The right hon. Gentleman the Member for South Dublin made in his speech on the Second Reading a most remarkable statement. The right hon. Gentleman used his argument for some other purpose, but he would use it to illustrate what he held to be the case: That a large majority of the public-houses that were to be done away with were not paying the expense of keeping them open. The right hon. Gentleman said that in his village there were 750 inhabitants and four public-houses; and he used that as an argument to show that the more public-houses the less drunkenness. Now, of the 750 inhabitants in the village, only two-fifths 598 were adults, the remaining three-fifths being children, giving seventy adults for every public-house. But there would be some teetotallers or people who never entered into a public-house at all, or ought not to, and allowing for them there was a public-house in that village for every fifty adult inhabitants. He maintained that every one of the four public-houses could not make a profit even if the fifty possible customers to each were all to get drunk once a week. Figures had been quoted as to the value of public-houses. The hon. Member for Kingston, who moved the rejection of the Bill, quoted certain figures of a block of public-houses which had cost the brewers £529,000, and the hon. and learned Gentleman argued that no matter whether a time-limit of twenty years was given the capital could not be replaced. But the hon. and learned Gentleman did not tell everything. He did not suppose that the hon. and learned Gentleman knew even now what were the actual profits on which the brewers gave that £529,000. They had been told of a tenant who said he made £1,000 a year profit for a house for which he paid £10,000. If so, he could with a fifteen years, time-limit lay aside 5 per cent. so as to replace the capital cost of the licence and pay 5 per cent. on his investment all the time. It was said that the Government were attacking the brewers. There was a good deal of confusion on that point. This Bill did not attack the brewers at all. [OPPOSITION cries of dissent.] It did not attack brewers as wholesale manufacturers at all—it only attacked brewers in so far as some of them were owners of tied houses. Very well, he did not know when they bought the houses, or what they paid for them; 599 but if they were to make up their accounts to-day, and if, whatever price they paid for their houses, they would take a ten years' purchase of the profit that the business of the public-house was yielding, they could, in fifteen years, paying 5 per cent. all the time, replace the whole of the capital at 4 per cent. The hon. Member for Ramsgate had referred to a brewery which was earning £12,600. But what was the capital of that brewery? He was amazed to hear it said that the capital was £700,000. The real value of that business was £250,000. When dealing with brewery finance it was no use tolling the House that the capital was so much. What they wanted to know was how much was the profit and fair capital attributable to the ownership of licensed houses. He thought he had said enough to show that it was no use introducing general brewery finance into this question. He had no feeling against brewers, Heaven knew. He had held brewery shares himself, but they had gone. He thought that to adopt the deeply hostile attitude against the Bill which hon. Gentlemen opposite were taking up was a very great mistake.600
did not accept the closure stating that he thought the Committee would soon be ready to come to a decision.
§ VISCOUNT HELMSLEY
said that the hon. Gentleman who had just sat down had made a very interesting speech. The latter part of it was devoted to showing the enormous profits which some public-houses made, and that, therefore, they could put aside reserve capital, while in the earlier part of his speech the hon. Member said that the licence-holders could not make any profit at all. They had all heard of the bloated profits which the brewers made in public-houses and a good deal in the course of the debate about the monopoly value, but he submitted to the Committee that, in those cases where public-houses did not pay because, as the hon Member opposite had just said, there was too keen competition, there was, as a matter of fact, no monopoly value at all, and that, therefore, there was nothing which the owners of those houses owed to the State or which could be taken from them by the State. He did not wish to stand further between the Committee and the division.
§ Question put, "That the words after the word 'the' stand part of the clause."
§ Committee divided:—Ayes, 313; Noes, 117. (Division List No. 261.)603
|Abraham, William (Rhondda)||Astbury, John Meir||Beck, A. Cecil|
|Acland, Francis Dyke||Atherley-Jones, L.||Bell, Richard|
|Adkins, W. Ryland D.||Baker, Joseph A. (Finsbury, E.)||Benn, W. (T'w'r Hamlets, S. Geo.|
|Agar-Robartes, Hon. T. C. R.||Balfour, Robert (Lanark)||Bennett, E. N.|
|Alden, Percy||Baring, Godfrey (Isle of Wight)||Berridge, T. H. D.|
|Allen, A. Acland (Christchurch)||Barker, John||Bethell, Sir J. H. (Essex, Romf'rd|
|Allen, Charles P. (Stroud)||Barlow, Sir John E. (Somerset)||Birrell, Rt. Hon. Augustine|
|Armitage, R.||Barran, Rowland Hirst||Black, Arthur W.|
|Armstrong, W. C. Heaton||Barry, Redmond J. (Tyrone, N.)||Boulton, A. C. F.|
|Ashton, Thomas Gair||Beale, W. P.||Bowerman, C. W.|
|Asquith, Rt. Hn. Herbert Henry||Beauchamp, E.||Brace, William|
|Branch, James||Gurdon, Rt. Hn. Sir W. Brampton||Middlebrook, William|
|Brigg, John||Haldane, Rt. Hon. Richard B.||Molteno, Percy Alport|
|Bright, J. A.||Hall, Frederick||Mond, A.|
|Brodie, H. C.||Harcourt, Rt. Hn. L. (Rossendale||Money, L. G. Chiozza|
|Brooke, Stopford||Harcourt, Robert V. (Montrose)||Montagu, Hon. E. S.|
|Brunner, Rt. Hn. Sir J. T. (Cheshire||Hardie, J. Keir (Merthyr Tydvil)||Montgomery, H. G.|
|Bryce, J. Annan||Hardy, George A. (Suffolk)||Morgan, G. Hay (Cornwall)|
|Buchanan, Thomas Ryburn||Harmsworth, Cecil B. (Worc'r)||Morrell, Philip|
|Burns, Rt. Hon. John||Hart-Davies, T.||Morse, L. L.|
|Burnyeat, W. J. D.||Harvey, A. G. C. (Rochdale)||Murray, Capt. Hn. A. C. (Kincard.|
|Burt, Rt. Hon. Thomas||Harvey, W. E. (Derbyshire, N. E.||Murray, James (Aberdeen, E.)|
|Buxton, Rt. Hn. Sydney Charles||Harwood, George||Myer, Horatio|
|Byles, William Pollard||Haslam, James (Derbyshire)||Napier, T. B.|
|Cameron, Robert||Haslam, Lewis (Monmouth)||Newnes, F. (Notts, Bassetlaw)|
|Carr-Gomm, H. W.||Haworth, Arthur A.||Nicholls, George|
|Causton, Rt. Hn. Richard Knight||Hazel, Dr. A. E.||Norman, Sir Henry|
|Cawley, Sir Frederick||Helme, Norval Watson||Norton, Capt. Cecil William|
|Chance, Frederick William||Hemmerde, Edward George||Nussey, Thomas Willans|
|Channing, Sir Francis Allston||Henderson, Arthur (Durham)||Nuttall, Harry|
|Cheetham, John Frederick||Henderson, J. M. (Aberdeen, W.)||O'Grady, J.|
|Cherry, Rt. Hon. R. R.||Henry, Charles S.||Partington, Oswald|
|Churchill, Rt. Hon. Winston S.||Herbert, Col. Sir Ivor (Mon., S.)||Paulton, James Mellor|
|Cleland, J. W.||Herbert, T. Arnold (Wycombe)||Pearce, Robert (Staffs, Leek)|
|Clough, William||Higham, John Sharp||Pearson, W. H. M. (Suffolk, Eye|
|Clynes, J. R.||Hobhouse, Charles E. H.||Perks, Sir Robert William|
|Cobbold, Felix Thornley||Hodge, John||Philipps, Owen C. (Pembroke)|
|Collins, Stephen (Lambeth)||Holland, Sir William Henry||Pickersgill, Edward Hare|
|Compton-Rickett, Sir J.||Hooper, A. G.||Pirie, Duncan V.|
|Cooper, G. J.||Horniman, Emslie John||Pollard, Dr.|
|Corbett, C. H. (Sussex, E. Grinst'd||Horridge, Thomas Gardner||Ponsonby, Arthur A. W. H.|
|Cornwall, Sir Edwin A.||Howard, Hon. Geoffrey||Price, C. E. (Edinb'gh, Central)|
|Cory, Sir Clifford John||Hudson, Walter||Price, Sir Robert J. (Norfolk, E.)|
|Cotton, Sir H. J. S.||Hutton, Alfred Eddison||Priestley, Arthur (Grantham)|
|Cowan, W. H.||Hyde, Clarendon||Priestley, W. E. B. (Bradford, E.)|
|Cox, Harold||Isaacs, Rufus Daniel||Radford, G. H.|
|Craig, Herbert J. (Tynemouth)||Jardine, Sir J.||Rainy, A. Rolland|
|Crooks, William||Johnson, John (Gateshead)||Raphael, Herbert H.|
|Crosfield, A. H.||Johnson, W. (Nuneaton)||Rea, Russell (Gloucester)|
|Crossley, William J.||Jones, Lief (Appleby)||Rea, Walter Russell (Scarboro'|
|Curran, Peter Francis||Jones, William (Carnarvonshire||Rees, J. D.|
|Dalziel, James Henry||Jowett, F. W.||Rendall, Athelstan|
|Davies, M. Vaughan- (Cardigan||Kekewich, Sir George||Richards, Thomas (W. Monm'th|
|Davies, Timothy (Fulham)||King, Alfred John (Knutsford)||Richardson, T. F. (Wolvrhamp'n|
|Davies, Sir W. Howell (Bristol, S.||Laidlaw, Robert||Richardson, A.|
|Dickinson, W. H. (St. Pancras, N.||Lamb, Edmund G. (Leominster||Ridsdale, E. A.|
|Dickson-Poynder, Sir John P.||Lambert, George||Roberts, Charles H. (Lincoln)|
|Dobson, Thomas W.||Layland-Barratt, Sir Francis||Roberts, G. H. (Norwich)|
|Duckworth, James||Leese, Sir Joseph F. (Accrington)||Roberts, Sir John H. (Denbighs.)|
|Duncan, C. (Barrow-in-Furness||Lehmann, R. C.||Robertson, Sir G. Scott (Bradf'rd|
|Duncan, J. H. (York, Otley)||Lever, A. Levy (Essex, Harwich||Robertson, J. M. (Tyneside)|
|Dunn, A. Edward (Camborne)||Levy, Sir Maurice||Robinson, S.|
|Dunne, Major E. Martin (Walsall||Lewis, John Herbert||Robson, Sir William Snowdon|
|Edwards, Clement (Denbigh)||Lloyd-George, Rt. Hon. David||Roch, Walter F. (Pembroke)|
|Ellis, Rt. Hon. John Edward||Lough, Rt. Hon. Thomas||Roe, Sir Thomas|
|Erskine, David C.||Lupton, Arnold||Rogers, F. E. Newman|
|Essex, R. W.||Macdonald, J. M. (Falkirk B'ghs)||Rose, Charles Day|
|Esslemont, George Birnie||Mackarness, Frederic C.||Rowlands, J.|
|Evans, Sir Samuel T.||Maclean, Donald||Russell, Rt. Hon. T. W.|
|Everett, R. Lacey||Macnamara, Dr. Thomas J.||Rutherford, V. H. (Brentford)|
|Ferens, T. R.||Macpherson, J. T.||Samuel, Herbert L. (Cleveland)|
|Ferguson, R. C. Munro||M'Callum, John M.||Samuel, S. M. (Whitechapel)|
|Findlay, Alexander||M'Crae, Sir George||Scarisbrick, T. T. L.|
|Freeman-Thomas, Freeman||M'Kenna, Rt. Hon. Reginald||Schwann, C. Duncan (Hyde)|
|Fuller, John Michael F.||M'Laren, Sir C. B. (Leicester)||Schwann, Sir C. E. (Manchester)|
|Fullerton, Hugh||M'Micking, Major G.||Scott, A. H. (Ashton under Lyne|
|Gibb, James (Harrow)||Mansfield, H. Rendall (Lincoln)||Sears, J. E.|
|Gladstone, Rt. Hn. Herbert John||Markham, Arthur Basil||Seddon, J.|
|Glover, Thomas||Marks, G. Croydon (Launceston)||Seely, Colonel|
|Goddard, Sir Daniel Ford||Marnham, F. J.||Shackleton, David James|
|Gooch, George Peabody (Bath)||Massie, J.||Sherwell, Arthur James|
|Grant, Corrie||Masterman, C. F. G.||Shipman, Dr. John G.|
|Greenwood, Hamar (York)||Menzies, Walter||Silcock, Thomas Ball|
|Gulland, John W.||Micklem, Nathaniel||Simon, John Allsebrook|
|Sinclair, Rt. Hon. John||Trevelyan, Charles Philips||Whittaker, Rt. Hn. Sir Thomas P.|
|Sloan, Thomas Henry||Ure, Alexander||Wiles, Thomas|
|Smeaton, Donald Mackenzie||Verney, F. W.||Williams, J. (Glamorgan)|
|Snowden, P.||Vivian, Henry||Williams, Osmond (Merioneth)|
|Soames, Arthur Wellesley||Wadsworth, J.||Williamson, A.|
|Soares, Ernest J.||Walker, H. De R. (Leicester)||Wills, Arthur Walters|
|Spicer, Sir Albert||Walsh, Stephen||Wilson, Hon. G. G. (Hull, W.)|
|Stanger, H. Y.||Walton, Joseph||Wilson, Henry J. (York, W. R.)|
|Stanley, Albert (Staffs, N. W.)||Ward, W. Dudley (Southampt'n||Wilson, John (Durham, Mid)|
|Stanley, Hn. A. Lyulph (Chesh.)||Wardle, George J.||Wilson, J. H. (Middlesbrough)|
|Stewart, Halley (Greenock)||Waring, Walter||Wilson, J. W. (Woroestersh, N.)|
|Stewart-Smith, D. (Kendal)||Warner, Thomas Courtenay T.||Wilson, P. W. (St. Pancras, S.)|
|Straus, B. S. (Mile End)||Wason, Rt. Hn. E. (Clackmannan||Wilson, W. T. (Westhoughton)|
|Stuart, James (Sunderland)||Wason, John Cathcart (Orkney)||Winfrey, R.|
|Summerbell, T.||Waterlow, D. S.||Wodehouse, Lord|
|Taylor, Theodore C. (Ratcliffe)||Watt, Henry A.||Wood, T. M'Kinnon|
|Tennant, Sir Edward (Salisbury||Wedgwood, Josiah C.||Yoxall, James Henry|
|Thomas, Abel (Carmarthen, E.)||White, Sir George (Norfolk)|
|Thomas, Sir A. (Glamorgan, E.)||White, J. D. (Dumbartonshire)||TELLERS FOR THE AYES—Mr. Joseph Pease and Master of Elibank.|
|Thorne, G. R. (Wolverhampton)||White, Luke (York, E. R.)|
|Tomkinson, James||Whitehead, Rowland|
|Toulmin, George||Whitley, John Henry (Halifax)|
|Balcarres, Lord||Gardner, Ernest||Nolan, Joseph|
|Baldwin, Stanley||Gibbs, G. A. (Bristol, West)||Oddy, John James|
|Balfour, Rt. Hn. A. J. (City Lond.)||Gooch, Henry Cubitt (Peckham)||Parker, Sir Gilbert (Gravesend)|
|Banbury, Sir Frederick George||Gretton, John||Pease, Herbert Pike (Darlington|
|Banner, John S. Harmood-||Guinness, Hn. R. (Haggerston)||Rasch, Sir Frederic. Carne|
|Barnard, E. B.||Guinness, W. E. (Bury S. Edm.)||Ratcliff, Major R. F.|
|Béach, Hn. Michael Hugh Hicks||Haddock, George B.||Rawlinson, John Frederick Peel|
|Beckett, Hon. Gervase||Hamilton, Marquess of||Renwick, George|
|Bignold, Sir Arthur||Hardy, Laurence (Kent, Ashf'rd||Roberts, S. (Sheffield, Ecclesall)|
|Bottomley, Horatio||Harrison-Broadley, H. B.||Roche, Augustine (Cork)|
|Bowles, G. Stewart||Hay, Hon. Claude George||Ronaldshay, Earl of|
|Bridgeman, W. Clive||Helmsley, Viscount||Rutherford, John (Lancashire)|
|Burdett-Coutts, W.||Hill, Sir Clement||Rutherford, W. W. (Liverpool)|
|Butcher, Sir Samuel||Hills, J. W.||Salter, Arthur Clavell|
|Campbell, Rt. Hon. J. H. M.||Hope, James Fitzalan (Sheffield)||Sandys, Lieut.-Col. Thos. Myles|
|Carlile, E. Hildred||Joynson-Hicks, William||Sassoon, Sir Edward Albert|
|Carson, Rt. Hon. Sir Edw. H.||Kerry, Earl of||Scott, Sir S. (Marylebone, W.)|
|Castlereagh, Viscount||Keswick, William||Smith, Abel H. (Hertford, East)|
|Cave, George||Kimber, Sir Henry||Smith, F. E. (Liverpool, Walton)|
|Cecil, Evelyn (Aston Manor)||King, Sir Henry Seymour (Hull)||Smith, Hon. W. F. D. (Strand)|
|Cecil, Lord John P. Joicey-||Lane-Fox, G. R.||Stanier, Beville|
|Cecil, Lord R. (Marylebone, E.)||Law, Andrew Bonar (Dulwich)||Starkey, John R.|
|Chamberlain, Rt. Hn. J. A. (Worc||Lea, Hugh Cecil (St. Pancras, E.)||Staveley-Hill, Henry (Staff'sh.)|
|Chaplin, Rt. Hon. Henry||Lockwood, Rt. Hn. Lt.-Col. R.||Stone, Sir Benjamin|
|Clive, Percy Archer||Long, Col. Charles W. (Evesham)||Talbot, Lord E. (Chichester)|
|Coates, Major E. F. (Lewisham)||Long, Rt. Hn. Walter (Dublin, S.)||Talbot, Rt. Hn. J. G. (Oxf'd Univ.|
|Collings, Rt. Hn. J. (Birmingh'm||Lonsdale, John Brownlee||Thomson, W. Mitchell- (Lanark)|
|Courthope, G. Loyd||Lowe, Sir Francis William||Thornton, Percy M.|
|Craig, Charles Curtis (Antrim, S.||Lyttelton, Rt. Hon. Alfred||Walker, Col. W. H. (Lancashire|
|Craig, Captain James (Down, E.||MacCaw, William J. MacGeagh||Warde, Col. C. E. (Kent, Mid)|
|Craik, Sir Henry||M'Arthur, Charles||White, Patrick (Meach, North)|
|Dixon-Hartland, Sir Fred Dixon||M'Calmont, Colonel Jamas||Wilson, A. Stanley (York, E. R.)|
|Doughty, Sir George||Magnus, Sir Philip||Winterton, Earl|
|Douglas, Rt. Hon. A. Akers-||Marks, H. H. (Kent)||Wyndham, Rt. Hon. George|
|Du Cros, Arthur Philip||Mason, A. E. W. (Coventry)||Younger, George|
|Duncan, Robert (Lanark, Govan||Mason, James F. (Windsor)|
|Faber, Gaorge Denison (York)||Mildmay, Francis Bingham||TELLERS FOR THE NOES—Sir|
|Faber, Capt. W. V. (Hants, W.)||Moore, William||Alexander Acland-Hood and|
|Fell, Arthur||Morpeth, Viscount||Viscount Valentia.|
|Fletcher, J. S.||Nicholson, Wm. G. (Petersfield)|
|Forster, Henry William||Nield, Herbert|
§ Progress was reported.
§ House resumed, Mr. SPEAKER, in the Chair.
§ And, it being after Eleven of the Clock, the CHAIRMAN left the Chair to make his Report to the House.604
§ Committee report Progress; to sit again To-morrow.
§ Whereupon Mr. SPEAKER, pursuant to the Order of the House of 31st July, adjourned the House without Question put.
§ Adjourned at twelve minutes after Eleven o'clock.