§ Again considered in Committee.
§ *MR. BOTTOMLEY (Hackney, S.)
said the object of the Amendment he desired to submit to the Committee was to extend the period of the time-limit from fourteen to twenty-one years. He was aware that by the Resolution of the Committee last night the principle of the time-limit was no longer before them, and he would endeavour to avoid 635 any discussion of the matter from that point of view, but he was encouraged to move the extension of the period by the fact that the Prime Minister had more than once intimated to the House that Clause 1, fixing the reduction period, did not necessarily govern Clause 3. The grounds upon which he asked the Committee to say that the time-limit in the clause was too short were, first, that the whole thing had been thrown on the trade by way of surprise, and secondly, even if that point failed, it was impossible for any prudent trader interested in this trade to make adequate provision for the redemption of his licence within the proposed period of fourteen years. As to the first point, it was frequently contended that whether the time-limit was fourteen or twenty-one years, or any other period, the trade had been fully warned, that some time-limit would probably be enacted, and in the discussion of a subsection which occupied the time of the Committee the night before, he ventured to indicate, so far as the chief champion of that view was concerned, it was a novel point of view for him to take. He wished to say especially after a word or two with the right hon. Gentleman, that nothing was further from his desire than to impugn the absolute integrity and good faith of the right hon. Gentleman the Member for the Spen Valley, and he accepted without any reservation his personal assurance that, whatever might have appeared in the City Oracle in the way of financial answers, he was not primarily responsible for it, although he was responsible. But when the right hon. Gentleman said that, he could not help asking the Committee what would be said of a licensed victualler charged with allowing intoxication on his premises, who pleaded that, owing to pressure of work, he had overlooked the man. He would ask the right hon. Gentleman to extend the same generous consideration and allowance to the members of the trade as he asked for himself in this particular matter. It was said that the trade and the investing section of the public had been warned that some kind of time-limit was imminent, and in proof of this, the Member for the Spen Valley called attention last night to the fact that in 1891, about the 636 time of Sharpe v. Wakefield, an institution was established called the Licences Insurance Corporation. If he inadvertently did an injustice to that Corporation when he said it was not doing the flourishing business which was anticipated, he apologised. He was misled again by the right hon. Gentleman's journal, because he found that when that company was being offered to the public, and when the right hon. Gentleman, it was said, knew very well, and every licensed victualler ought to have known very well, that the danger was imminent, and of the pressing necessity of insuring against losing his licence, the right hon. Gentleman's journal said—In our opinion, the idea of the Licences Insurance Corporation is a good one, but whether the company will ever secure the business for which it caters we cannot say.He thought that quotation justified the view which he took at that time, and which the right hon. Gentleman himself took, that there was no imminent danger. When the hon. Member for Tyneside was speaking last night, he interrupted him to say that he had established by quotations from the right hon. Gentleman's journal that he had held out to the public that brewery investments were intrinsically sound. The hon. Member had called his attention to the fact that he had not done so, and, therefore, simply for the purpose of keeping good faith with the Committee, he desired to read one quotation, typical of many others, in the general answers—Brewery Shares.—We should hold these shares. They represent very sound property.He only mentioned these matters in aid of his argument that, even at the time of Sharpe v. Wakefield, subject to good behaviour and the requirements of the district, the expectation of the renewal of a licence was a thing of which any Court of equity would take cognisance, upon which any ordinarily prudent trustee could invest money, and which, as a matter of fact, did lead to the investment of an enormous amount of capital by perfectly innocent people. After Sharpe v. Wakefield and up to the time the Act of 1904 was passed the average annual number of licences disallowed was thirty-two. Therefore it was obvious that whatever discretion the justices had they quite understood 637 after Sharpe v. Wakefield it must be very judicially exercised, with the result that the Act of 1904 was passed under which the man who lost his licence was reimbursed by his fellow tradesmen for the loss of his property. He did not wish to weary the Committee by abstruse calculations as to how far under a limit of fourteen years it was possible for a licensee to redeem his property. He desired to take one concrete and governing case in support of his contention that the time-limit of fourteen years was too short—the case of the last of the licences sold by His Majesty's Government. He thought there could not be a stronger argument submitted to the Prime Minister than that he should be able to show that the licence recently sold by the Government to a purchaser in the open market, which, under the operation of this clause, must go in fourteen years, must of necessity involve a very heavy financial loss on the purchaser. It was said, yesterday, by the Secretary of State for War, that the purchaser of the "Coach and Horses" was thoroughly satisfied with his bargain. He had in his hand a circular, dated 12th March, 1908, which had been issued by the purchaser, and in which he complained bitterly that, within a few months of paying his £10,000 to the Government, this "confiscation Bill," as he discourteously called it, was sprung upon him. This was how the purchaser dealt with the question of the time-limit, and if any member or supporter of the Government could answer his argument, he would be quite prepared to withdraw his Amendment.I assume £10,000 to have been the reserve placed upon the property at the sale, as there were bids against me to that amount. … The Government must have known their intentions, when they fixed their reserve and accepted the full market value of the property as licensed premises, of introducing (less than six months later) a confiscation Bill, which, if passed into law, will deprive my company of at least three-fourths of the amount they duped me into paying. I have had this property valued, minus the licence, by three of the principal firms of valuers in Portsmouth, with the following results.He gave the names of the valuers, and their figures were £2,500, £1,950, and £2,000—giving an average of £2,150 as the value of the whole of the land, with the bricks and mortar. In the common division of brewery 638 holdings, one-third ordinary shares, one-third preference shares, and one-third debenture stock, the investment would work out as follows: £3,333 6s. 8d. ordinary shares, £3,333 6s. 8d. preference shares, £3,333 6s. 8d. debenture stock. With a time-limit as proposed in the Government Bill the whole of the ordinary shares would disappear, the whole of the preference shares would disappear, and, accepting the mean valuation at the figure quoted, £1,183 6s. 8d. belonging to the mortgage debenture stockholders would also be lost. The futility of the contention that the capital value of the licence could be written off in the time-limit suggested in the confiscation Bill is self-evident. I am able to prove that the profit secured by rent and trade on this investment is 3¾ per cent. It would be impossible to write off the capital value of the licence as assessed by the Government in any time-limit.He would not read the peroration with which he concluded, because it was not quite suitable for a business argument, but here was a case of a man acquainted with the trade purchasing, at a price fixed by the Government, a licensed property, and by the operation of this clause passed within a few months of the completion of that purchase they had this solemn statement by the purchaser, which, unless it was confuted by the Prime Minister, meant that of necessity he must lose two-thirds of the purchase price, of which he was to make a present to the Government who sold him the property. That was one case. The purchaser there represented a brewery company. He would take one other case, which was the case of a publican. Quite recently a man with whom he was acquainted, and who owned two large licensed houses in London, died. Upon his applying to the solicitor to the estate he was told that the following was the effect of this Licensing Bill. One of the houses was held on a lease of which there was an unexpired term of thirty-seven years to run, at an annual rental of £150. That house was valued for the purposes of probate at £29,000, and the present mortgage upon it was £37,455. The other house was valued for probate at £17,000, and the value of the mortgage was £26,000. The valuer told him that but for the present proposals of the Government the valuation of the goodwill of the two houses would have been increased to the extent of £25,000, and further, that if this time-limit of fourteen years prevailed it would be impossible 639 to set aside out of the earnings of this property a sufficient sum to allow any margin whatever for the maintenance of the widow or the education of the children. There was a tragedy in a picture of that kind. He happened to be well acquainted with the family of the deceased man, who died suddenly at an early age. The children were being well brought up and receiving a good education. They were respectable people in every way. The man, by his industry and energy, his vigilance and enterprise in the conduct of these houses, upon which a slur had never been cast, believed he had made provision for his family. Yet he was scarcely dead when the solicitor who had the conduct of his affairs showed that by the operation of this Bill the family had become practically paupers. If a state of things like that could happen, the Government surely could not resist the contention that a fourteen years time-limit was inadequate. He therefore suggested it should be increased to twenty-one years, not because he believed that twenty-one years was sufficient to enable proper provision to be made, but because he thought that possibly a compromise to that effect might be conceded, in which case those persons holding licensed property would be so much better off than they otherwise would be. He had been struck by some very remarkable features of this discussion. The hon. Member for West Aberdeen had made a most interesting speech. He exhibited the spectacle of a stern Scottish temperance reformer championing the brewers. He had pointed out that they had had plenty of time within this time-limit to make provision, and had declaimed loudly on the fact that compensation had been paid in cases where none was due, and that therefore the trade had been deceived. He (Mr. Bottomley) was sure that the trade was grateful to the hon. Member and he hoped that the hon. Gentleman would continue to show the same solicitude when he saw that the trade was likely to be defrauded, whether by the State or by an individual. Then there had been the spectacle of the hon. Member for Tyneside, one of the most cultured agnostics in the country, championing the cause of the Nonconformist conscience. The hon. Member, had referred to him as a distinguished and 640 successful financier. He hoped he might be entitled to claim that description. At any rate, he did not know of any reason why he should not. However that might be, he claimed to be a successful journalist, and he hoped as a journalist he should never select the argument that anything which appeared in his paper appeared there without his responsibility simply because he had not physically and actually written it. The point he wished to make to the Committee was that the right hon. Gentleman the Member for Spen Valley had allowed this temperance movement, as it was called, to become his obsession. Other earnest temperance reformers were in the same position. The again the words "temperance party" were almost an insult. It was certainly an anomaly in the Parliamentary life of this country that there should be a so-called temperance party. He did not think that anyone who was in opposition to this Bill would like to be called a member of the intemperance party. Anybody who took part in this debate, whatever attitude he might take with reference to this Bill, was alive to the evil of intemperance, the opponents to this Bill just as much as the most ardent and enthusiastic temperance reformer. It was a waste of time to tell them about the evil; they could not walk a yard without realising it. But the imposition of a time-limit of fourteen years, and that was why he desired to make it longer, came as a great shock to the conscience of the public. Rightly or wrongly, people had arrived at the idea that some injustice was being done to their fellow-citizens, and no Act of Parliament which gave rise to that idea could obtain the moral sanction of the community. If the Government could concede another seven years to the time-limit, that would be some satisfaction to popular feeling. People would say that the trade had so much longer to protect itself. Not only the trade, but other people who had invested their money in these things—that they also had a better chance of protecting themselves against the effect of this Bill. Fourteen years had been shown to be absolutely insufficient to enable the trade to protect themselves, and therefore they should be given a better chance. It was the organic principle of the articles of faith of the Liberal 641 Party that there should be equality of opportunity and fair play for every section of the population: therefore he begged to move the Amendment standing in his name.
In page 3, line 9, to leave out from the first word 'the,' to the word 'compensation,' in order to insert the words '5th day of April, 1930.'"—(Mr. Bottomley.)
§ Question proposed, "That the words proposed to be left out stand part of the clause."
§ MR. NUSSEY (Pontefract)
said that as he had put a similar Amendment upon the Paper he felt compelled to support the hon. Member for South Hackney, and should follow him into the division lobby. He hoped the Government would see their way to say that this fourteen years was not a hard and fast time-limit which could not be altered. There was a general feeling that there should be some extra time over and above the period of the fourteen years during which the trade had to pay compensation to those whose licences were suppressed in order that those which were left might to a certain extent recoup themselves. This Amendment did not affect the question of the reduction of licences, which, as he understood, was the main principle of the Bill. But the Amendment did affect a very large and valuable class of property held by people all over the country. The value of these licences had been estimated at anything between £95,000,000 and £150,000,000. He was not lawyer enough to be able to say whether licences were actual property or not because their value was based on great expectations which had been formed by the trade. At the same time those expectations were sufficiently good and sound to enable these licences to be bought and sold. In other words, those who bought them knew exactly what their value was and what the state of the law was. The main fact was uncontroverted that if this Bill did not become law these licences at the end of fourteen years would be of very much the same value as they were to-day, bat that if this Bill were passed into law with this time-limit they would be worth nothing. Under the Bill the Government were going to transfer the millions of 642 money represented by these licences from the pockets of the people who held them into the hands of the State. They were told that a time-limit made all the difference, and in a sense of course it did, because it enabled a sinking fund to be formed, during which the trade could set aside a sum of money yearly to meet this vast change in their condition; but he ventured to think that fourteen years was too short a time to enable the trade to do that. If they invested their money at 4 per cent. to raise a certain sum in fifteen years, they had to put away 5½ per cent. of the capital they wished to raise yearly. The trade ought to expect a fair return from the money invested in it, and they might take 8 per cent. as a fair return, and if they had to put away 5½ per cent. of their capital value it would leave them a small return indeed to meet the actual charges on that trade. If they took a twenty-one years time-limit they had a slightly better state of affairs. They were told that these breweries were very rich companies with vast reserves, out of which they could pay these heavy charges. That might be so in some cases, but there were a great many of these houses owned by private individuals, and it did not seem to him really to affect the issue whether they were owned by wealthy brewers or not, because they had to consider whether these charges could be met by a reasonably prudent trader. There was another aspect of the question. A time-limit would immediately affect the market value of the whole of these securities to a very great extent. They were based at present on the expectation that these licences would be renewed, and they were bought and sold as if the licences would be renewed in perpetuity. If they put in a term of fourteen years they immediately dropped the value of those licences by something like 50 per cent. the very first year of their time-limit, and as it went on it would decrease to vanishing point. He would urge that the test of this question was what the ordinary prudent trader could do who had to meet the ordinary trade risks and make the ordinary business profit. He knew that all this class of property had always been subject to fresh legislation and that they should have been prepared to meet 643 fresh legislation, but he did not think it was fair to say that they ought to have been prepared to meet legislation with a fourteen years time-limit. They might say that railway companies ought to be prepared to meet the possibility of all their lines becoming national property, but he thought in this Bill they were putting the case too high against the ordinary prudent trader. It had always been the practice of Parliament not to bring about violent disturbances of property without careful compensation being awarded, and he hoped in this case that course would not be departed from. If this Bill was to become law it would have to commend itself to the ordinary fair man in the street, and it would not do that unless they extended their time-limit to twenty-one years.
§ *MR. CLOUGH (W. R., Skipton) Yorkshire,
said he supposed that, this Amendment having been moved by the hon. Member for South Hackney, the Amendment in his name would naturally go overboard. His Amendment was to reduce the time-limit to twelve months instead of extending it to twenty-one years. He was opposed to compensation in any shape or form for the liquor traffic. He was not one of those who thought the liquor traffic was a gigantic charity organisation carried on for the moral, intellectual, and spiritual benefit of widows and orphans. He held more the opinion of the late Lord Randolph Churchill that it was a devilish and destructive traffic, and for that reason he was not prepared to vote for compensation either in the way of hard cash or money to be provided by Parliament, and if there was to be a time-limit twelve months was long enough for him. He was quite aware that the Act of 1904 had given them to some extent a vested interest, but they never had one before then. They knew they never had one. If they took the first Licensing Act of any moment, that of 1828, they would find it laid down by Lord Brougham that the licensing justices had absolute discretion. They could renew the licence of a house that had been conducted, and badly conducted, for only twelve months, and they could refuse the licence of a house that had been conducted for fifty years 644 and had been conducted well. That was proved up to the hilt by the celebrated case of Sharpe v. Wakefield. If they had to have a time-limit, one extending beyond one year was too long for him. The time-limits of the past had been expended by now. The Royal Commission of 1899 (Minority Report) recommended a time-limit of seven years. Those seven years had flown and two others along with them. In 1893 the Bishop of Chester introduced a Bill into the House of Lords, and he suggested that five years notice should be given to the licence holders that after the expiration of that time they would be annual licences, but since that Bill was introduced, in addition to the five years, another ten years had flown. In 1876 the right hon. Gentleman the Member for West Birmingham proposed that they should have compensation to the tune of five years purchase on the average annual profit. Since then not only had the five years flown, but twenty-seven years as well. In 1871 Mr. Bruce proposed in his Bill a time-limit of ten years, and since then there had flown in addition to the ten years twenty-seven years. Therefore he submitted to the House that for the Government to come along at this date and put on the top of all those warnings and proposals another time-limit of fourteen years was altogether more than met the necessities of the case, and he would appeal to the Government that they were setting a very dangerous precedent in compensating expectations. The hon. Member for Tyneside yesterday said that the late Mr. Gladstone had once fallen into the pit of thinking that all the landowners should have compensation for the abolition of the corn laws because of their expectations, and they would have the same thing when they came to deal, say, with education. Now that the denominational schools had been thrown on to the rates would they not want compensation for expectations when they took them off? Notwithstanding all that, when the Chairman put the Question from the Chair, he would be so inconsistent as to vote "that these words stand part," and he trusted an overwhelming majority of the House would put the reduction period in the Bill at fourteen years, and that the Government would set their faces like a flint so 645 as not to allow the other House to extend the period by one day.
§ *MR. CHARLES ROBERTS (Lincoln)
said there were two points involved in this Amendment. The mover said he moved it because of his zeal for temperance reform. He did not question his zeal, but he was postponing the most valuable temperance reforms in this Bill from fourteen to twenty-one years. He should express his zeal for temperance reform in some better way than that. His other point was a question of whether the liquor sellers were really able to write down their capital within the period of fourteen years without suffering excessive loss, and he instanced the case especially of the "Coach and Horses." He said that fourteen years was a shock to the consciences of the British public, and that twenty-one years would relieve their feelings; but surely that was a somewhat vague method of treatment. He had heard from the benches on the other side that this was a question of actuarial discussion, and the right hon. Gentleman the Leader of the Opposition said it was the sort of question on which no bishop dared express an opinion. In this discussion let them then get a closer grip with the facts and have some more definite statements than the mere case of the "Coach and Horses." There were two points in that case, one being that no sufficient notice of the intentions of the Government were given to Sir William Dupree, but he thought there was. Statements of Members of the Government could be quoted during all the months preceding the purchase of that house. They were recorded in the liquor trade papers, and it was common knowledge, but that was a small point; they knew it very well.
§ *MR. CHARLES ROBERTS
said they knew, in the words of the Home Secretary, that—No solution of the question could be satisfactory which did not ultimately effect the transfer of the licence value, or the monopoly value; the Government were pledged to deal with the question at the very first opening of the next session.That was on 7th June, 1907, and it was taken into account by the Brewery 646 Debenture Holders Committee. Member after Member of the Government during 1907 and also in 1906, had repeatedly stated that they were going to deal with a comprehensive measure of licensing reform. That must have been present in the mind of Sir William Dupree.
§ MR. YOUNGER
What about the promise of the Prime Minister that there was to be no confiscation or injustice?
§ *MR. CHARLES ROBERTS
The Prime Minister said there was to be no confiscation or injustice, but he went on to say—What would amount to confiscation was a matter on which opinions would probably differ.He had a letter of Sir William Dupree which he had studied, and, in the first place, Sir William said in reference to the "Coach and Horses," that he had no grievance over the purchase. The actual words were—My only object was to show that six months before the introduction of the Bill, the licence was sold by the Government for £7,500."Under the law of value existing at the time of the purchase," he had no reason to be dissatisfied with the purchase, and, in fact, if he had wished to get rid of it, trade competitors would have been very glad to relieve him of that purchase.
§ *MR. CHARLES ROBERTS
They were elections in which the other side polled a minority vote during the time that the Licensing Bill was before the country.
§ *MR. CHARLES ROBERTS
I am taking the votes of the years' elections altogether, and that is a fact. Continuing, the Member said in reference to the contention that the licence value of the "Coach and Horses" was worth £7,500, and that the site and structure were worth £2,500, Sir William Dupree said he was only getting 3¾ per cent. on that purchase. That, frankly, was incredible. He was a member of a compensation authority, and he knew quite well that if Sir William was only getting 3¾ per cent. on the purchase the licence value could not be £7,500. Either he had got at least £900 (£750 from trade and £125 from rent) in which case the licence value was worth £7,500, or else the value of the licence was only £3,750; or else if he was getting 3¾ per cent. from rent and profit together the value of the licence was £2,500. That was the utmost any trade valuer would give him; no trade valuer in his senses would value at a higher price if that was all Sir William was getting. He took it that he had got £900 a year at least, and therefore, £7,500, was the market value. Under the Kennedy judgment he must be making £900 a year out of his wholesale property, otherwise the licence would not be worth that. Therefore, he had £900 to play with. The hon. Member for Aberdeenshire had stated on the previous night that these values were being compensated on the basis of ten years purchase, and therefore during the period of fifteen years it was possible to pay 5 per cent. on capital, and at the same time write off the whole of the capital value. If he had to write off the whole of that £7,500, then out of the profits he was making he could pay himself 5¼per cent. on the whole capital—6¼ per cent. on the ordinary shares, 5 per cent. on the preference shares, and 4 per cent. on the debenture stock, and yet get back the whole of the capital at the end of the term. That really depended on the arithmetical ratio which had been established under the Kennedy judgment. Any licence value which could be justified under the Kennedy judgment, must have corresponding to it a return of 10 per cent. annual profits. This meant that the whole of the licence value could be paid off in fifteen years with a return of 5¼ per cent. on the whole capital. That 648 was one justification which might be fairly made for fixing the time-limit. They had many appeals to actuarial experts on the other side, but what he had to complain of was that the real facts were very rarely given in individual cases, the names of which they had the utmost difficulty in getting. The hon. and learned Member for the Walton division in his first reading speech said he would give them "the names, figures and calculations" of fifteen brewery companies. The hon. and learned Gentleman had supplied the names in such a way that he could only identify one, that of the largest of the number, and he was still waiting for the calculations. He thought the hon. and learned Gentleman had not treated the House quite frankly in this matter. He profoundly distrusted the actuarial calculations of trade experts. He had seen in the Compensation Courts that they always claimed as much as they could get for their clients. They perhaps got half of what they claimed, but unless one was in a position to check their figures, and go into the cases of the individual companies, one could not trust those actuarial experts. In regard to the fifteen brewery companies, the hon. and learned Member for the Walton division had placed their licence values at £22,127,651. But his answer to that was that the hon. and learned Gentleman would not give him an opportunity to go into the individual figures, except in one case, that of Watney, Coombe, Reid & Co. The hon. and learned Member had placed the total values of the licences belonging to this company at £7,728,621; but this must be exaggerated, because the total capitalisation of Watney, Coombe, Reid & Co., in its market valuation, fell to £6,356,916 in 1907. As he could not get the names of the individual companies, he could only say that the hon. and learned Gentleman had put the licence values of all the fifteen breweries at £22,127,651. If that was so, then, under the Kennedy judgment, there must be £2,217,000 of annual profits corresponding. This would allow 5 per cent. on the total licence values, and repay the whole of those values by 1923. If there was not that amount of annual profits, then the licence values were over-estimated and inflated. There must be that amount of annual profit to correspond to the values, under 649 the Kennedy judgment. He would refer to one other case, that of Messrs. Wethered & Co., who lately wrote a letter to The Times saying they were prepared to allow the Government to send any expert to test their figures, and they would place all information at the disposal of the Government expert. All he could say was that Thomas Wethered & Co. seemed to be in a very flourishing condition. He would be very glad indeed if they would allow him to send in his expert, and he accepted their challenge. The company had paid 27 per cent. in 1902, and although their dividends were going down a bit, yet they were still pretty well up. On the average they had paid 20 per cent. from 1902 to 1906. They could pay 4 per cent. interest on debenture stock, 5 per cent. on preference shares, and 10 per cent. on ordinary shares, and yet he found by the 1906 balance sheet that there was left over for depreciation and sinking fund a sum which would replace, by 1923, a capital of £240,000. He found that all the public-houses, freehold and leasehold, belonging to this firm when it was registered in 1899, were valued at not more than £150,620. That included the site and structure, besides many cottages and some land. It was obvious that this firm could make proper provision by 1923. The monopoly value to be taken by the State in 1923 was only a small portion of the licence value. When he said small, he did not think it could be put higher than half of the licence value, which was the capitalisation of all the profits made in the house. Therefore he did not see that it was necessary to write off the whole of the licence value at the end of the time-limit because there would still be profits made out of the sale and manufacture of beer and spirits. The wholesale profits would continue to be made, and there would be capital value corresponding to those. The monopoly value could only be a portion of the licence value, for the licensees and wholesale traders must be able to get their ordinary profits at the expiration of the time-limit, in fact, they would get the profits which they would obtain if there were free trade in drink. Therefore, it would only be necessary to write off, not the whole but half of the licence values, and that would be enough. If 650 that were so Sir William Dupree would have to write off only £187 10s. a year and he would still be able to get a sum approaching 8 per cent. on the total investment, and if he was prepared to be content with 3¾ per cent. he thought he was very well off.
§ *MR. CHARLES ROBERTS
That really involved the whole question whether there was to be a time-limit or not. He admitted that the time-limit did mean a loss, but it was a loss which they might fairly ask the trade to prepare for, seeing that it was occasioned by the fact that at last, after long years of waiting, they asked that the value of the monopoly should be reserved to the State which the State had got a right to to-day. Taking the market values as they stood to-day, there was time for the liquor traders to write off these values and still leave themselves reasonable profits. What he had been saying was confirmed by what was said by Mr. Cripps, in 1904. He was the author of a standard book on. "Compensation," and he said as Member of Parliament for Stretford in this House—If they introduced a twenty years' time-limit, the first effect would be not to diminish the amount to the householders, but to give them an unfair amount of compensation to which they were not entitled to at all.At present they were being compensated on the basis of ten years' purchase, or a fifteen years' run. If they introduced a twenty-one years' time-limit the first effect would be to give a compensation not on ten years' purchase, but on fifteen years' purchase—that was, not on the basis of a fourteen years' run, but on a twenty-one years' run; thus they would raise the whole standard of compensation by 50 per cent., and pro tanto they would have to raise the compensation levy, or else they would lower the rate of reduction in the number of licences. That was a very serious point to be borne in mind. Though this question was not raised by this particular point, it had often been suggested that the reduction period should take place after fourteen years, and that then there should be a close 651 time. That would have a very pernicious effect from the point of view of temperance reform. That close time, during which there would be entire security to the trader, was, he felt convinced, a time which would mean deterioration of the conduct of the trade, because the greater the security of the trade, the worse had always been its conduct. All the facts were in favour of that. The Leader of the Opposition had, as one of his most cherished illusions, the doctrine that they must give security to the trade so that the conduct of the trade should be satisfactory. The history of the beer-houses, which had absolute security of tenure, when the brewers, if they had chosen, could have introduced the Continental café system, showed that that time was one of growing demoralisation, a time when things went backward in England, and it was not until control was re-established by the Government of 1869 and 1872 that they turned the corner and made progress. He looked with great suspicion and distrust upon this proposal for a seven years close time. So far from it being a shock to public opinion in the country, he had found it exceedingly difficult to defend the length of the time allowed in the Bill. Might he remind the Committee what the precedents were. Take the case of the Church of England Temperance Society, which had a Bill in 1893, backed by the Bishop of Manchester, imposing a five years time-limit. Cardinal Vaughan in 1891 advocated a five years time-limit.
§ *MR. CHARLES ROBERTS
said they undoubtedly were, except in the case of the Manchester Bill in 1891, under which the proposal was that the total reduction, which was more drastic than that proposed under this Bill, was to take place in the first year. The time-limit originated in the Church of England Temperance Bill, and their representatives before Lord Peel's Licensing Commission, including the Member for North-West Manchester, justified it. The Archbishop of Canterbury's proposal in 1904 for twenty-one years was made only 652 after proposals for a time-limit of seven and fourteen years had been rejected in the Commons. It was proposed, as a last desperate expedient, to get a compromise of some sort into the Bill. He wanted to lay stress on the fact that this proposal was a far more generous one than had been made in any of our Colonies. There had been terms of fourteen years in South Australia and ten years in Victoria, but those were in commutation of a definite statutory right of renewal, and not in commutation of an indefinite expectation of renewal. In Canada and in the United States they had never given a particle of compensation or a month of time-limit. But his main objection to this extended time-limit was owing to its effect on temperance reform. They were asked: Why not make a concession? His answer was because it involved a postponement of all the most important temperance reforms to which they attached importance. Mr. Gladstone's statement had been quoted that he thought the reduction of public-houses, as a remedy, was an imposture. Both his actions and his speeches showed that he said that because he believed the reduction of licences would be of lesser value unless they wound up the monopoly at the same time, Mr. Gladstone said in 1880—At the present, the number of public-houses is enormous. Yes, Sir, but something else ought to be taken into consideration. Why is it that the position of public-houses in this country is lower than it is in any country in Europe? That is the result of the management we have followed, and the number does not in the slightest degree tend to mitigate that statement. I am one of those who see the almost incurable, radical and profound mischief from what is called the publicans' monopoly, and not through any fault of the publican or indeed of anyone. My firm belief is that as long as the monopoly connected with private interests belongs to the trade, you will never have true and efficient police supervision exercised over the public-houses, and without that they must continue to hold the disparaged and unsatisfactory position which they do hold now and have held for many generations.They had waited long enough for real temperance reform in England. Everyone admitted the urgent character of the evils. The Leader of the Opposition had told them they were in the presence of the great and ever-present tragedy of drink, and had spoken on several occasions of the immense importance of 653 grappling with the problem, but no one had done more than the right hon. Gentleman to rivet upon the country and to perpetuate that tragedy of drink which deplored. It was because in this Amendment they were asked to wait for an additional seven years that he implored the Government not to make any concession in this matter. He wished to register his emphatic protest against the lengthening of the time, and to protest against the excessive and inordinate postponement of the day of deliverance which had been too long already delayed.
§ *MR. F. E. SMITH (Liverpool, Walton)
said that many parts of the speech of the hon. Gentleman had caused him surprise, but certainly those observations which he made as to the part which the Leader of the Opposition had played in the history of licensing reform in this country caused him the greatest degree of astonishment. As to his statement that his right hon. friend had riveted the drink trade more firmly upon the people of this country than it had ever been riveted before—he (Mr. Smith) asked himself what importance it deserved, and in order to answer that question, he recalled for a moment some further observations and predictions that were indulged in by the hon. Gentleman and his political friends at the time his right hon. friend introduced the Bill which it was said had riveted the trade on the people of the country. It was stated freely by every opponent of the Bill that it would have no effect whatever in the reduction of licensing, and that it would endow the brewing trade. The Prime Minister said—I predict that this Bill will have no effect in reducing the number of licences, and it will endow the brewers of the country.Was there any Member of that Party who would by reasoned argument repeat those statements? None; and he dismissed the hon. Gentleman's observations on the Bill of his right hon. friend with the remark that there had been no Bill which haddone more for temperance reform if the view of hon. Gentlemen opposite that reduction of licences promoted sobriety was the true one. As to its truth he expressed no opinion, but if indeed that was the fact and it was worth while causing great proprietary disturbance in order that they might reduce the number of 654 premises on which alcoholic drink could be obtained, then beyond controversy that Act which the hon. Gentleman stigmatised as having riveted the drink trade upon the people of the country must be pronounced to have been more successful than any of its prodecessors. He did not in the least complain of the hon. Gentleman saying that any calculations or any argument which he had addressed to the House had no value at all. It was entirely a matter for the opinion of the Committee or ultimately perhaps of the country, but he thought he had some grievance against the hon. Member when he repeatedly stated that on the First Reading he had promised to give something to the House which he had never given it, and that he had been guilty of a breach of faith. The only method of determining whether or not anything which he had omitted to do constituted a breach of faith, was to consider what he had said on the First Reading, which he should imagine the hon. Gentleman had never done. What he said was—This statement that I have deals with fifteen representative companies, and I am quite prepared to give privately to any hon. Member the names of the companies and the figures and calculations which I now offer to the House.He asked the Committee to note carefully the scope of the undertaking which he gave. It might have been that it would be a more useful method of checking the figures which he laid before the House, if he had been able to make a more extended undertaking. In fact those who had given the figures had authorised him to make the undertaking which he had just read out, and he made no other simply because he was not authorised to make any other. The reason he offered to give the figures and calculations was because he realised the unreasonableness of asking the House to recollect figures which occupied about a column of Hansard and which no one could intelligently follow as hurriedly stated in debate. The hon. Gentleman thought it proper to write to the provincial Press, and he (Mr. Smith) only saw the hon. Gentleman's lucubrations by accident. He had totally failed to establish that he had been guilty of a breach of faith. The truth was, of course, that it would have assisted the hon. Member if he had given him access— 655 which he was in no position to do—to the books of every company he had mentioned. That entitled no opponent to state in the House or out of it that he (Mr. Smith) had been guilty of a breach of faith or that the calculations which he had put forward did not possess the value and the importance which he attributed to them.
§ *MR. CHARLES ROBERTS
said he thought the hon. Gentleman had not been quite frank with the House. The matter was a small one, but his complaint was that the figures had been left for months with the impression produced upon everybody that he had had the means of checking them, and was utterly unable to make any reply. He was entirely justified in saying that he was not given—it was not the fault of the hon. Member, but of the companies—the kind of figures in this matter which would be required in any compensation Count and which were necessary to form a real judgment on these calculations.
§ MR. F. E. SMITH
said he did not wish to pursue this controversy, but he did not think the Committee would deny a few moments explanation to an hon. Member to answer a charge of being guilty of want of frankness. It could not be shown that he had been guilty of a breach of faith, because he had never promised the figures to the House. He desired to make one or two observations as to cases in which the hon. Member had been offered the fullest opportunity of testing the calculations offered to the Committee. The hon. Member was familiar with the offer made in the Press by one company that any expert appointed by the hon. Member would be allowed to test by actuarial calculations whether it was possible at the end of fourteen or twenty-one years time-limit for them to make good the losses caused by this Bill. A similar offer was made by Mr. Buxton, but no one had accepted the challenge. Personally he should not vote upon the particular proposal that was before the House, for the reason that to his mind the distinction between a fourteen and a twenty-one years time-limit was utterly immaterial. It was only material in the sense that to some extent it qualified the injustice, which remained an injustice, whether 656 the period decided upon was fourteen or twenty-one years. They fastened upon one principle in dealing with the question of compensation which they said licensed victuallers were entitled to, and that principle was that, if they took away for public purposes what licensed victuallers enjoyed to-day, they should give the market value for it. When he said the market value, he did not mean the freehold value. Nobody ever had contended that they were entitled to the freehold value. The contention that had been successfully put and supported in, the Courts was that a licence at the present day, and had for many years past, carried with it an expectation which was so definite in its character, and in the average of cases extended over so protracted a period, that it was of very considerable value indeed. Their position was that if they were going to take that away for public purposes, the measure of their liability was that they should pay that market value which they would have to pay if that value was local and not national in character. All that Sharpe v. Wakefield did was to say that the magistrates might take away a licence after a particular consideration of the individual case of an individual house. It never said that they might take away licences wholesale; in fact, the then Lord Chancellor most carefully excluded himself from that construction of his words by saying that they were not to be taken generally, but after an examination of the facts of a particular case.
I am afraid the hon. and learned Member is entering into a discussion of the general question. The Amendment deals only with the duration of the time-limit, the Committee having already, on the Amendment to leave out subsection (1), determined the principle of a time-limit.
§ MR. F. E. SMITH
said that when the hon. Member for Marylebone advanced this very argument on the last Amendment the Chairman said it would be in order on this Amendment.
I must deal with the matter as it comes before me. The observations of the hon. and 657 learned Member clearly relate to the general question which has already been decided rather than to the subject matter of the Amendment.
§ EARL WINTERTON
said that when the Chairman was in the Chair he led the Committee to understand that on this Amendment it would be possible to have a general discussion of this point.
I was in the House at the time, and there is nothing in my ruling which is inconsistent with what the Chairman said.
§ MR. F. E. SMITH
asked how far any of the calculations hitherto addressed to the Committee had satisfied them that there would be no loss to any of the shareholders whose affairs had been described. He was prepared to accept the three published statements put forward. First of all there was the list of Sir William Dupree, in regard to which the hon. Member opposite had stated that he could not accept the specific statement of fact he had made. If they were going to deal with the statement of a man so highly respected in the commercial world as Sir William Dupree in that summary manner, there would be no difficulty in disposing of any objections. In the cases he had cited, was it contended that ordinary shareholders, under the fourteen years time-limit, would be able to protect themselves, under any circumstances, against loss? Was there anybody who could produce the affairs of any company which would show that in any case the ordinary shareholders would be able to recoup themselves in fourteen years? If that could not be done, then the Amendment must open up the broad question as between fourteen and twenty-one years, and as to what justification there was for interfering with the livelihood of persons who had invested their money in the way they had done under the law. No answer had been given to that—a matter for most serious consideration. Surely it was clear under these circumstances that no case had been made out for interfering by legislation wholly novel in its character with the savings of persons who had been encouraged for generations to make investments 658 of this kind. While a limit of twenty-one as compared with fourteen years was undoubtedly more indulgent, it bore no relation at all to any compensation based on the principle of market value, and therefore was almost as unacceptable as the original proposal. No allow ance of years that did not actuarially correspond to the market value of the licences would meet the legitimate expectations of those who had been encouraged by generations of legislation to make investments in licensed property.
§ *MR. RIDSDALE (Brighton)
said that in this matter it was necessary to view the trade as a whole and not the instances of particular licensed houses. They could not otherwise gauge accurately what the trade were going to suffer. In this case the position was that during the period of fourteen years the Bill provided that one-third of the trade was to be shut down without compensation. [Some cries of "With compensation."] No, it was without compensation, for the trade as a whole was to compensate part of itself. Out of some 97,000 licensed houses they were going to shut down 32,000, and the trade, as a whole, was not going to be compensated. What position was it in to put up a sinking fund in order to replace the loss that was going to accrue to it at the termination of the time-limit, whatever that time-limit might be? It was very difficult to ascertain exactly what was the sum that they had got to make provision for. They were going to have the monopoly value taken away from them at the end of that time. Nobody in the House and nobody outside the House was agreed exactly as to what this monopoly value was. Then they were going to have local option thrust upon them, so that those houses which would remain after they had compensated one-third of their number, the two-thirds, would be paying the compensation levy during this time, and would then have to face the question of the payment of the monopoly value, and also to face the absolutely indeterminable risk whether the country generally would adopt a scheme of local option and shut down their business altogether. Let them take the case of an ordinary brewery. He had looked 659 through the list of breweries and they usually divided their capital into, say, one proportion of ordinary stock, one proportion of preference stock, and two proportions of debentures. Let them take a brewery company doing a fair business, earning, say, 5 per cent. on the whole of the capital involved in the business. What was the fair amount it should set aside out of its earnings in order to meet the contingencies imposed by this Bill? What amount could a trader afford to put by? If he put by a quarter of the whole of the money returned by his business he was putting by as much as he could reasonably be expected to do. If he did agree to put by 25 per cent. of the whole of the profits after paying the ordinary working expenses, how would that work out in the case he had just put before the House, where the ordinary capital was one quarter, the preference capital a quarter, and the debenture capital one half of the total capital of the company? The debentures were paying 4 per cent., and the preference shares 5 per cent. He had postulated the concern as earning 5 per cent. on the whole of the capital, and to provide a sinking fund to recoup some of the capital, and to meet some of these emergencies at the end of the time-limit, 25 per cent. of the whole profit was to be set aside. Therefore, an ordinary shareholder in a brewery of that description, who had been earning a dividend of 7 per cent. before this Act came into operation, would, after it had come into operation, have to accept a lower dividend. He was suggesting that 25 per cent. of the whole profit of the company should be set aside in order to make a sinking fund. How did that work out in figures? Twenty-five per cent. of the total profit meant that the ordinary shareholder would have to put by 5 per cent. and reduce his dividend from 7 per cent. to 2 per cent. That was a very severe drop for him; but if he agreed to put it by, what proportion of the capital Would be returned in fourteen years at compound interest at 4 per cent., or in twenty-one years at compound interest at 4 per cent? The 5 per cent. on the ordinary shares, or 25 per cent. of the total profits, was equivalent to 660 1¼ per cent. on the whole of the capital in the business, and 1¼ per cent. at 4 per cent. compound interest for fourteen years would replace 23 per cent. of the capital, and 1¼ per cent. at 4 per cent. compound interest in twenty-one years would replace 40 per cent. He respectfully submitted to the temperance advocates in the House that the risks involved in local option at the end of the period—the claim to the monopoly value on behalf of the State and the compensation levy which the people would have to pay during the fourteen years—were not over-compensated by their being allowed to have 40 per cent. in cash put by, and the freehold property in their brewery remaining. He thought twenty-one years might about give them the opportunity to turn round and put themselves in a fair position. He was perfectly clear that fourteen years did not do so, and that the accumulation of 23 per cent. which would be provided by the sinking fund would be a perfectly inadequate provision to meet the emergencies of the situation. He believed it always had been the practice in the past, when it had been found necessary to do anything for the good of the community against the interests of part of the community, to compensate that part generously. In this particular instance they could afford to be generous, even the most extreme temperance Member. For the time-limit was not a temperance matter in any appreciable degree at all. He agreed that the reduction period was a temperance matter, because there they had to determine in what period a certain number of houses had to be done away with. But they must not confuse the reduction period and the time-limit. The two matters were distinct, and this time-limit was a matter more for financial experts than for temperance reformers. He noticed with regret that a great many of his hon. friends with a keen interest in temperance would press for a short time-limit rather than for temperance reforms. Let them take the case of a brewery earning rather more than the 5 per cent. on the whole of its capital. Take a case, in which a brewery earned 7 per cent. on the whole of its capital. That capital was divided as before into one-fourth ordinary, 661 one-fourth preference, and two quarters debentures, the debentures bearing interest at 4 per cent. and the preference shares 5 per cent. In that case the ordinary shares would be getting 15 per cent. Twenty-five per cent. of its whole profits, if put by, would produce a sinking fund of the amount of 1¾ per cent. on the whole capital of the company. If they applied that to a sinking fund of 1¾ per cent. at 4 per cent. compound interest during fourteen years it would recoup 32 per cent. of the capital, a far better return than in the first case. But this 1¾ per cent. on the whole capital must come from the ordinary shareholders. The consent of the ordinary shareholders to provide the sinking fund would be required. What sort of sacrifice had they to make to produce this 32 per cent.? This 1¾ per cent. sinking fund represented 7 per cent. on the ordinary capital, and meant a reduction of the ordinary shareholders' dividend from 15 per cent. to 8 per cent. If they were asked to reduce it they might say: "Oh, no! The directors are appointed by us, the ordinary shareholders, why should we pay this 7 per cent.? If we pay it for the whole of the fourteen years it means 98 per cent. of our capital without added interest and all to replace 32 per cent. of a capital on which the preference holders and debenture holders have a prior claim." They would say: "We will take what we can while we can, and the preference shareholders and the debenture holders can go whistle." That was a situation he did not want to see come about. That was a situation which, if they extended this time-limit, would not come, because they would so allow the incidence of the sinking fund to fall that the ordinary shareholder need not feel it. He suggested that they should put in a period of seven years between the fourteen years reduction period and the period in which the time-limit should become operative. He was sorry that the Amendment of the hon. Member for South Hackney obtained precedence on the Paper, for although it effected a great deal of good there were one or two points it omitted. It did not make any provision for telling the Chancellor of the Exchequer what amount he would come into when the whole monopoly value suddenly devolved upon 662 him. That it would be a large sum they all believed. What it would be he had no information upon himself, and he very much doubted if anybody had. He thought it would have been far better if the hon. Member's Amendment had incorporated a means by which the Treasury would have felt their way gradually as to what the sum might be. It also rather left the trade to face a sudden situation and an enormous claim upon them without themselves being able to adjust the way in which they were to meet the burden imposed. But even if they could not get a graduated scheme he trusted that the general principle of the Amendment would be accepted by the Government and that the trade, after paying compensation levy for fourteen years and being on the rack for that time, might have a certain time in which to say their prayers.
§ EARL WINTERTON
said the hon. Member for Brighton did well to call the attention of his friends who represented the temperance interest to the fact that this Amendment raised hard and dry financial facts, and that it was not possible to discuss it from the point of view of the hon. Member for Lincoln. The hon. Member for Lincoln, and the Prime Minister, speaking on another Amendment, seemed to assume that there was some justification for the proposal of the Government in the precedents to be found in other countries. It had been stated that in America licences had been taken away without notice or compensation. He was anxious to challenge hon. and right hon. Gentlemen opposite on that particular point. He ventured to lay down that there had never been in any country put into legislative operation any system such as that suggested by the present subsection. It was quite impossible under any circumstances to compare the state of things in the United States of America with the situation which had arisen here. In the first place, as hon. Members knew, in the United States nothing like the same value attached to licences as in this country. Neither was there anything like the same expectation of continuity. What had been the result where licences had been taken away? In Colorado, for instance, the people who sold liquor 663 before with a licence now sold it without a licence. [Cries of dissent.] If hon. Members would look into the United States Federal Government statistics they would find that there was not a State in the Union where there had not been as much liquor sold without as with licences. He challenged any hon. Member to show any instance in European countries of any proposals being passed at all equal to the proposals in that Bill.
§ EARL WINTERTON
Neither had any connection whatever with this proposal. The liquor traffic there was on an entirely different basis. The hon. Gentleman could not have chosen a worse example. Norway and Sweden were the most drunken countries in Europe.
§ *MR. LEIF JONES
They were the most drunken countries in Europe, but they got legislation somewhat on the lines of the Government proposals and they are now the most sober countries in Europe.
§ EARL WINTERTON
The hon. Gentleman surely did not want them to believe that what the Government was proposing was the Gothenburg system. He regretted that in the heat of the moment he used what might seem an opprobrious term in regard to Norway and Sweden, but he still said that there was a regrettable amount of drunkenness in those countries. Neither of those countries could be taken as a good example of any system of temperance. The Government had not put forward any reason for proposing the adoption of the system in this country on the ground of popular sanction. The principle suggested in the subsection would never be tolerated by the people of this country. If the country had known at the last election that this was to be the great legislative effort of the present Government when they got into office, he did not believe that the constituencies would have endorsed it. [An HON. MEMBER said it was announced.] In some isolated cases they might have done so. No doubt the people were led away by 664 vague talk, but they were not aware of the wholesale drastic financial attacks on the trade made by this Bill. Before the Committee came to a decision on this subsection the Government ought to give some justification for adopting the altogether novel system which they proposed. As his right hon. friend the Leader of the Opposition said yesterday, the objection of the Opposition was based, not only on the number of years, but on the whole system which they believed to be unjust. While he would vote against the fourteen years time-limit proposed by the Government he could not support the proposal of the hon. Member for South Hackney.
§ *SIR J. DICKSON-POYNDER (Wiltshire, Chippenham)
supported the Amendment. Every one of the speeches had been an attack on the principle of the time-limit. It seemed to him that there were three schools of opinion on this subject in the House. There was the school represented by the Opposition; the school represented by his hon. friend who spoke strongly in favour of the fourteen years limit; and the school, with which he desired to associate himself, which believed that while a fourteen years limit would be totally inequitable, a twenty-one years limit would be fair and equitable. He had an Amendment on the Paper which was practically identical with that before the Committee. The Amendment was not his own, but was moved in another place in 1904 by the Archbishop of Canterbury to the Bill of that year. The Amendment was supported then by practically the whole bench of Bishops, by the whole of the Liberal Party in the House of Lords, and by a fair sprinkling of Unionist Peers. His Amendment would not disturb in any way the period for the reduction of superfluous houses; and, therefore, all those who desired to see the reduction of these superfluous houses within the prescribed, time would be able to realise that desire if his Amendment were adopted. It added to the fourteen years reduction period seven years during which a lease should be granted to the surviving houses, and during which period these houses should be exempted from any charge for monopoly value. He thought that 665 the more closely a proposal like his was looked into, the more the trade would see what an advantageous proposal it was in their interests. It might be assumed that before the end of the fourteen years all the redundant houses would be extinguished, and that all those who had survived "the reign of terror" would enjoy an additional profit to that which had previously attached to their houses. He believed that it had been estimated that from 40 to 45 per cent. of the profits of the houses which would be extinguished would find its way into the tills of the surviving houses. He would point out that the surviving houses would be able to conduct their business on a better administrative basis. This proposal, therefore, offered a really fair chance to the trade to readjust its arrangements to the circumstances during the protracted reduction period; and enable them to lay by a sufficient sum of money to meet the necessary liabilities at the end of twenty-one years. Undoubtedly fourteen years would be an extremely short period for accomplishing the double object of finding compensation for the houses extinguished, and providing an insurance against the liability of those houses which survived that process to be extinguished at the expiration of the period. Those two operations being combined during that short period of fourteen years, so far as he could gather from the figures he had obtained, the trade would be put into a very precarious position. Let him give an instance which showed what the difference would be between fourteen years and twenty-one years. He knew of a brewery company which held twenty-one licences. The capital value of these licences, apart from buildings, was £550,000. The net annual profits amounted to £46,160. Allowing £5 a week for remuneration of each licence-holder would give £4,460. Then there would be £40,700 available for interest and sinking fund. Fourteen annual payments to receive £100 at the end of the period would amount to £5 3s. 9d., whereas, if the calculation were extended over a period of twenty-one years it would be £3 7s. 9d. Therefore, it would be seen that the sinking fund required in fourteen years would be £31,280, leaving only 666 £9,420 available for dividend, which came out at 1¾ per cent.; whilst the sinking fund over a period of twenty-one years would be £18,630, leaving for dividend £22,070, which would be equal to 4 per cent. fully. He would give another instance of how severe the treatment would be at the end of the fourteen years' limit. In 1904 the Central Public House Trust Association bought the "Bell Inn" at Kennington. They gave for it £2,200, a perfectly good business transaction as things then stood. The licence value was estimated at £1,850. That was the sum to be wiped out in the course of fourteen years; to do it, they must put aside yearly out of net profits a sum of £125. Now, calculating their not profits at £180, the Association was left with the small sum of £55 for dividend purposes, which on the present share capital would only amount to 1 per cent. If the period was extended to twenty-one years, the Association would be able to pay interest of 4 per cent. to their shareholders. It was impossible to go closely into all the financial intricacies of this very difficult problem; but he was satisfied from all the information he had been able to gather on the question, that an extension of the period from fourteen years to twenty-one years would remove all ground for the allegations of harsh treatment brought against the time-limit system by hon. Gentlemen opposite. Let him make one more point. When dealing with cases like this it had been the immemorial practice of the State to treat a trade affected by any legislative reform in a generous manner. He did not intend to quibble about whether a licence was for a year or not. By practice it had been always a good deal more. Whilst they on that side of the House were anxious to resume to the State the full control of these licences they desired to do it in a just and fair manner. He would give an instance of what he meant. Some years ago the London County Council undertook, under the Housing Act, the Boundary Street clearance scheme at a cost to the ratepayers, not the owners of property, of £270,000, including compensation to all the trade interests in the area dealt with. What he asked for was that the Government should mete out similar justice to the trade affected by the proposals of this Bill. He thought 667 it was the general opinion that if ever this Bill became an Act of Parliament it must contain an extended time-limit period beyond fourteen years. He wanted to see that done in this House. He did not want to see any opportunity given in another place to reject this measure, and certainly he did not want to see an opportunity given to hon. Members opposite of saying that the people of the country had to look to the other House as the custodian of equity and justice. While it might be regarded as a tactical point for the Government to make this concession at a later stage of the Bill, he hoped they would make it now. He knew that he voiced the opinion of many hon. Members when he expressed the sincere hope that the Government and his right hon. friend the Prime Minister would give a careful and earnest consideration to the proposal now before the House, especially when they realised that if this measure was to become an Act of Parliament and a true temperance reform they must treat the trade concerned with greater justice.
§ MR. BARNES (Glasgow, Blackfriars)
said he wished to express the view of his colleagues with regard to this particular Amendment; but before doing so he desired to say a word with reference to the speech of the noble Lord, the Member for the Horsham division of Sussex, who had said that Norway and Sweden were the most drunken countries in Europe. He did not know whether anybody else had used the expression that they were the most drunken countries in the world.
§ EARL WINTERTON
I expressly said that they were the two most drunken nations in Europe, and that statistics proved it.
§ MR. BARNES
said he had had the opportunity of studying the position on the spot in Norway and Sweden. He knew that those countries had adopted legislation not of the character of the measure before the House, but legislation suited to their own conditions and habits, as they were entitled to do. He knew, as a matter of fact, and he had gone into the figures very carefully, that though it was quite true the consumption of alcoholic liquor was still very high in 668 these countries, so far as the liquors coming under the operation of their temperance legislation were concerned, there had been a diminution of the consumption of just about one-half.
§ EARL WINTERTON
said that even now the latest statistics showed that in Christiania the arrests for drunkenness per 1,000 of the population were forty-three, in London ten, in Liverpool, eleven, in Manchester, thirteen, and in Glasgow, eighteen.
§ MR. BARNES
said he had it in his mind that these figures had absolutely no bearing upon the question before the Committee nor on any question of temperance legislation at all. They might have something to do with the police regulations in Christiania and other cities. However, he would not say anything more on that point. What he wanted to state on behalf of his colleagues of the Labour Party was that they felt very strongly on this question of the time-limit, and that they hoped whatever fate was to befall this Bill, it would not be weakened as regarded the time-limit. The Labour Party, having regard to all the notice which had been given to the trade in various temperance legislation proposals for a generation past, and having regard to the fact that time-limits of a much smaller number of years than fourteen had been proposed even from the benches above the gangway—from five years upwards—thought that fourteen years was not only a just but a generous proposal. He did not want to go into the percentages which had been quoted by various hon. Members, but he thought that the House ought to back up the Government in limiting the period to fourteen years and leave it to the other place to deal with it as they thought proper.
§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH,) Fifeshire, E.
The Committee discussed and decided yesterday the question whether a time-limit—not a time-limit in terms—should form a part of the scheme of this Bill, and, by an overwhelming majority, they answered the question in the affirmative. We are to-day on a different point—a point not of principle, but rather of machinery, 669 namely, assuming that there is to be a time-limit, what the duration of the limit ought in fairness and equity to be. Now it is quite obvious from the course the debate has taken that on that point the Committee is divided into two entirely hostile and irreconcilable camps. There are those who voted yesterday against any time-limit at all, on the ground that, given the scheme of this Bill, it would be impossible for any time-limit to be reconciled by its machinery with the ordinary dictates of justice and fair play. That is the position of the Leader of the Opposition and practically of all those who support him. We have had to-day declarations from the other side of the House—those of the Member for Liverpool and the noble Lord—which are perfectly consistent with the position they took up yesterday. On the other hand, there are to be found the great majority of the representatives in Parliament who are in favour of a time-limit and the resumption by the State of the property which it ought to have, but there is a difference of opinion as to what the precise duration of the time-limit should be. I ventured when I introduced this Bill at the end of last February to lay down on behalf of the Government what appeared to us to be the governing principle in this matter. I said—Your time-limit should be as long as, and not longer than, the time that shall suffice for a prudent trader who has carried on, and is carrying on, his business with due regard to its special character and peculiar risks, to make adequate provision against the disappearance of that part of his property which is to be attributed to the monopoly value.That is I think a perfectly sound principle which the hon. Member has not attempted to controvert. All he has said is that twenty-one years would be more reasonable than fourteen. Now, Sir, I have listened to these debates and have been reading during the last six months vast quantities of literature directed to the point that the term of fourteen years proposed by the Government is an inadequate term. The Government have always preserved a perfectly open mind upon this, which is not a matter of principle, but of detail. I have given the most impartial attention to the arguments, and am bound to say, speaking with full responsibility, that nothing that has been said or put forward has 670 satisfied me that the term of fourteen years is otherwise than a just and a fair one. Let me point out, in parenthesis, that there is no necessary, and indeed no logical connection between the term of fourteen years which the House has already adopted in the first clause as the term during which the compulsory and statutory reduction is to take place, and the term, whatever it may be, which is selected for what we call the time-limit, meaning thereby the period at the end of which the State will resume the monopoly value of all licences, there is no necessary connection between the two things. But after careful examination, we came to the conclusion that the trader who had conducted, and continued to conduct, his business on the lines I have laid down might and ought to be able to make provision for the redemption of that part, and that part only, of his property which is the monopoly value within fourteen, or rather fifteen years from the introduction of the Bill. As I have said, I have not only listened to what has been said here every day, but I have read a great deal of what has been said outside. I find it comes down to particular cases like that of the "Coach and Horses," which, I think, foundered long ago in an argumentative morass [OPPOSITION cries of "Oh, no"]—well, they have been flogged into activity again during the last two days, but I think they still present a very sorry spectacle. After all, the "Coach and Horses," so far as I know anything of the case, was one of the clearest cases, if ever there was one, in which a man entered into a speculation with his eyes open. Everybody knew, in the spring or summer of 1907, when the contract was entered into for the purchase of the "Coach and Horses," not only from the result of the general election more than a year before, but from repeated declarations by responsible Ministers, that legislation on the lines of this Bill was impending. It is, therefore, ridiculous to say that the purchaser, a shrewd man of business—I gather from his observations a very shrewd man of business—has any ground of complaint whatever if Parliament chooses, in the public interest, to legislate on the lines of the present Bill. I am not going to detain the House by 671 entering into specific cases like that of the "Coach and Horses." But I will just mention one or two points which seem to me not to have had sufficient attention or weight given to them in the debate. The allegation that a trader carrying on his business on the lines and in the spirit indicated in the passage I have referred to could not make good the monopoly value within the term prescribed by the Bill seems to rest upon two assumptions, neither of which is well founded. The first assumption is, I find this perpetually in all the literature circulated by the trade, that the monopoly value of licensed premises represents something—I see the proportions differently stated at different times and places, but something which varies from two-thirds to three-fourths, and even nine-tenths, of the total value of the premises. I do not believe that there is the least foundation for the assumption. I think that it is a gross exaggeration. I will give the Committee the summarised totals of the dealings of the Board of Inland Revenue with the houses that in fact have been suppressed under the right hon. Gentleman's legislation in 1905 and 1906. There are 500 houses, and the total Schedule A value of these houses with their licence is £13,952. The total present Schedule A value without a licence is £9,540. In other words, the value of the houses without a licence as compared with their value with a licence is 68 per cent. of the total. If those cases are anything like typical, it shows how gross is the assumption that a licence adds three or four times to the value of the premises. I agree that there is some criticism to be made on these figures if you are to take them as being typical. In the first place, some of those houses were of a lower class. There is the ante-1869 beer-house whose vitality some hon. Gentlemen are so anxious to preserve, and it is true that in some of the houses, owing to density of population and other causes, the monopoly value is less than in other parts of the community. But when you have made the fullest allowance, there is still an enormous margin, which goes to disprove the suggestion that the monopoly value created by the possession of a licence is anything like the figure which the trade and others 672 constantly represent it to be. Another point which is equally important and upon which not sufficient stress has been laid in the course of the debates is that owing to the state of the law, well known now certainly for the last twenty years, provided against by insurance and otherwise, and taken into account by all persons engaged in this industry who survey the situation around them, it has been possible to build up, and there has been built up, enormous reserve funds to preserve them against this contingency. The Under-Secretary for the Home Department, in a speech on the First Reading, made a careful analysis and gave figures to show that these funds, even leaving out of account Guinness', amounted to £11,000,000 sterling, and if the other members of the trade pursue the course which was so widely and prudently taken, and which they might themselves have taken had they had the same insight into the circumstances of the case, I do not believe that there will be the least practical difficulty on an average in having sufficient funds provided for a contingency in respect of the extinction of the monopoly value at the end of the time-limit. Taking all these things into account, I must say that speaking for myself and for my colleagues, we do not think that the term of fourteen years, or rather fifteen years, in the Bill can be said to be in any way unjust. We certainly cannot accept the Amendment which has been brought forward now by the hon. Member for Hackney. If you continue the compensation levy for seven years beyond the fourteen years, you prevent the possibility during that time of the free exercise by the justices of their discretion and you delay the whole settlement of this question for twenty-one years. No; if there is to be anything in the nature of a compromise on this point it must not proceed on these lines. I will state exactly the conditions of what I conceive the problem to be. By the first clause of the Bill a compulsory statutory reduction must take place within the next fourteen years. During these fourteen years compensation will continue to be levied from the survivors among the licence-holders. At the end of fourteen years it is our intention that the compensation levy should cease and that the magistrates should resume the control 673 which they used to possess, and which they ought to possess—a free and unrestricted control over the grant of licences in their district. In addition to that we have by the provision which we propose to insert in the second subsection of the clause reserved to the inhabitants of the locality by an adequate and not excessive majority the power of dealing with the question as far as their own community is concerned. Given those conditions, which the Government regard as fundamental, I am prepared to entertain the suggestion that for a short term of years following the expiration of fourteen years when an old licence is re-granted it should be re-granted without attaching to the re-grant as a condition the surrender of its monopoly value—in other words, to postpone the resumption by the State of the monopoly value of the surviving houses until the expiration of that additional term. That is in accordance with the principle of the Bill, because at the expiration of fourteen years it gives to the justices and to the community the absolute power over the licences which are to be granted or are not to be granted in the locality, but, on the other hand, it may have the effect in exceptional cases of hardship, of postponing the date at which the State would resume the actual possession, and it may have the effect of softening the operation and preventing any possibility—I will not say of unjust, but of inconsiderate treatment. I am not proposing to introduce any Amendment at this stage, but I throw out that suggestion to the House for consideration between now and the Report Stage of the Bill. It will not placate, and it is not intended to placate the opposition of those who are opposed to the principle of this Bill. Those who are opposing the measure would not take twenty-one years as the time-limit; neither would they take a forty years time-limit nor any other time-limit. It is with no desire or expectation of what I may call buying off the hostility of the root and branch opponents of the Bill that I throw out the suggestion. It is made with the object of satisfying even the most meticulous—no, I will not say that, but the most farfetched scruples of any one who feels that injustice in any particular case may be done to individuals It is made in order to meet these scruples, to satisfy every 674 reasonable man who accepts the principle of a State-created monopoly to which the State is entitled and which it is bound to resume. It is to satisfy the scruples of those who hold the view that any possible case of hardship or grievance can be made out, without sacrificing in the least degree the fundamental principle of the Bill, which is that at the end of fourteen years every licence should be held at the uncontrolled and unfettered discretion of those who represent the community. It might be possible by this extension of date at which the monopoly value is in practice to be resumed, to cover all the possible cases of hardship which some hon. Members feel as being likely to occur. The suggestion is made in the interests of the Bill and of those who support its principle. But on the main question of the maintenance of fourteen years, which is the governing principle of the Bill, the Government is absolutely determined to adhere to the lines they have already followed and to ask the House to support them in rejecting the Amendment.
§ MR. A. J. BALFOUR (City of London)
The right hon. Gentleman is correct when he says that we on this side of the House do not think it would be satisfying us to substitute twenty-one years for fourteen years, and even had he accepted the Amendment of the hon. Member he would not have placated those who oppose this Bill, among other reasons, because it is an unjust interference with legitimate rights. I do not now deal with that part of the right hon. Gentleman's argument in which he speaks of the immense reserve funds of the brewers as a sufficient ground for despoiling other parties of their property. I have no acquaintance with the management of these concerns, but I understand that these reserve funds were not accumulated in order to deal with predatory projects of legislation. They were accumulated as reserve funds to deal with the inevitable ups and downs incident to every species of trading; and the truth of what I have said may be found in the fact that Guinness has a large fund, though no licences. There is another curious fact to mention. I believe that a large amount of these reserve funds is invested in public-house property. Now if a reserve fund had been an accumulation to meet attacks on that 675 kind of property it would not have been invested in that property. If I am right in that fact, it proves that the trade at all events never contemplated the species of legislation which the Government have now taken under their control or that it would be seriously pressed. I turn from the right hon. Gentleman's criticism on the management by brewers of their business to the actual proposal he has made. I am not quite sure that I apprehend the right hon. Gentleman's suggestion, but I think his suggestion was this—that for fourteen years existing licence-holders should pay compensation out of their own pockets to those of their number who are going to be dispossessed during the fourteen years to come, and that then these licence-holders who have paid compensation for fourteen years are to be handed over to the discretion of the justices in the first place, and of the parish electors in the second place; and that, after that again, every licence-holder would continue in possession of the goodwill, of the improvements he had made in his house, and of the expectations of his licence, entirely at the discretion of not merely the justices acting upon the old principle, but of justices animated by the new principles with which the right hon. Gentleman is endeavouring to inoculate them, and at the unfettered discretion of a bare majority—or was it two-thirds—of the electors in each parish. I think that it is probably an extremely bad plan from the temperance point of view. I think you are going to ask a trade to be carried on under conditions under which no trade can be carried on, and the result will be that you will create injury to the cause you profess to serve. Those who do not want this accommodation provided the public, those who want all drinking suppressed are no doubt quite right in doing what they can to increase the abuses. But I hold, and I believe the majority of the House hold, I am certain the majority of the country hold, that you not only must, but ought to give legitimate opportunities to the poor public as you must continue to give them to the rich public, of obtaining alcohol. If you are going to give those facilities—if you admit the necessity—in Heaven's name see that the trade by which that necessity is to be met is carried on under conditions which will give you men of credit and character to conduct it, and 676 will enable this consumption of alcohol to be carried on under conditions which will not produce vice and excess, and not lead to the intolerable evils under which we groan, but which will, so far as legislation can, enable the public to be served in a manner best calculated to produce moderation in the use of alcohol and diminish crimes which so often follow upon excessive indulgence. Is it not clear that the new plan of the Government is not temperance reform, whatever else it is? Is it a concession to the justices? It is no concession to the justices. Under the old system the magistrates abolished some perfectly insignificant number of public-houses, because they felt it was most abominable treatment for men investing their money to be deprived without compensation. You are going to put magistrates in the old position—are the magistrates in fourteen years going to exercise their discretion in the old manner? If they do, I think it will introduce a great deal of that insecurity that existed before 1904, and all the evils consequent upon insecurity in the management. You are going back to that state of things—an utterly bad and rotten state of things—and to argument its evils by supplementing the action of the magistrates by the action of the parishes. I think it is absurd to say that a plan of that kind is temperance reform. Is it not equally absurd to say that it makes this Bill a juster Bill than at present? I think that to ask people for fourteen or fifteen years to pay compensation for the abolition of licences and then to throw the remaining licences to the wolves—
§ MR. A. J. BALFOUR
The temperance faddists. You talk of the evils of the intervention of the publican in politics, local and Imperial; just conceive what the intervention of the publican must be after the fourteen or fifteen years. He knows that at any moment a hostile majority in the parish may deprive him of his whole means of livelihood. Why, his life will be spent in canvassing, and in doing all that his ingenuity and his powers of management of men may enable him to do to collect a sufficient party in his parish to see that his property will not be interfered with. 677 And you call that legitimate security—you call that treating these men in a spirit which is likely to make them good servants of the public and to prevent them interfering unduly in their own personal interests with the management of public affairs. It is characteristic of the method in which we are asked to discuss the Bill that the Government have given us no notice of the method in which they are going to deal with this difficulty. They have adopted neither a modification nor an extension of the old scheme; but a now scheme carrying with it large possibilities which we have only had time to think of while the right hon. Gentleman was speaking. I do not contradict the Prime Minister when he says it is consistent with the Bill, but I do say it is not a modification of the Bill. It is a new scheme which requires much more study than the House can give to it. The Government have known it for months past. They have deliberately compelled us to discuss this Bill under the threat of the closure, and, knowing that we could not protest, they have deliberately abstained from giving us either the smallest notice of what their new plans are or the slightest opportunity of discussing them. Of all the travesties of Parliamentary procedure surely the greatest is this—that exactly sixty minutes before the guillotine falls upon this subsection we should be asked to decide upon two enormous questions neither of which the House has ever had the opportunity of discussing on any occasion; one, the entirely new plan for dealing with the fifteen years period and the other the question of the off-licences. Could there be anything more preposterous, and would any Government in the world that had not bound hand and foot the Assembly with which they were dealing treat that Assembly in that way? Whether I consider the substance of the right hon. Gentleman's plan, or the form in which he has proposed it, or the general manner in which he has treated this House, his action seems to me to be equally open to our condemnation and that condemnation we shall give—in the only manner permitted by the rules under which we are working—in the lobby.
§ *MR. LEIF JONES
said he had listened with grave concern and anxiety to the most important announcement 678 which the Prime Minister had made to the Committee that afternoon. The right hon. Gentleman showed in the course of his speech that the fourteen years time limit was ample for the purpose for which it was intended. He rightly said that none of the opponents of the Bill had been able to prove that injustice would be done to the trade by the fourteen years notice. He (Mr. Leif Jones) thought that never had a proposal emerged more unscathed from a long discussion. There had been plenty of general statements about hardship, but when details were asked for they were not forthcoming. Therefore he regretted that the Prime Minister had felt it necessary to offer more than the too generous terms which wore offered in this clause. He rightly said it would not placate the Opposition, and the tone of the speech of the Leader of the Opposition was sufficient evidence that his foresight in that matter was absolutely accurate. The real issue was between those who wished the nation to control the trade and those who were not unwilling that the trade should control the nation. No concession that the Prime Minister could make would satisfy the grasping and greedy demand that the trade should be allowed to carry on its demoralising business undisturbed. The concession announced by the Prime Minister was a very large giving away of what he considered the nation's right to put reasonable taxation, taxation equivalent to the monopoly conferred, upon licences. The interesting speech they had had from the hon. Member for Huddersfield showed how little taxation was placed on licences in this country as compared with other countries, and yet to-day when the Prime Minister indicated a further period of seven years during which the nation should forego its right to extra taxation, there were renewed cries of dissatisfaction. If the Prime Minister's concession meant that after the expiration of the fourteen years limit the publicans were not to pay monopoly value for a further seven years, that would be a serious giving up of what he considered to be the nation's right to put on the licences taxation equivalent to the monopoly value conferred on them. He noticed that the Chancellor of the Exchequer was not present when the Prime Minister made the announcement, but he would be very curious to know, if with ease he had been 679 induced to consent to so liberal a foregoing of money which he might reasonably have expected to have at his disposal. Let them look at the position the trade would be in at the end of the reduction period. As he understood it, at the end of that period there would be no compensation levy, and they would be free from having to pay any portion of the monopoly value during the seven years suggested, so that they would be in a far better position than at the present time.
§ *MR. LEIF JONES
said that at any rate there was to be no new burden for seven years. No doubt they would be exposed to certain risks to which they were not exposed at the present time, as the magisterial discretion was to be restored and the temperance provisions of the Bill to come into operation. It was to those temperance provisions that many hon. Members on that side of the House attached the greatest importance. He himself had not ventured into the financial discussion between experts on one side or the other; that was to him far and away the least important and interesting part of the question. It was for the Chancellor of the Exchequer and those responsible for the finances of the nation to see that taxation was justly levied, and from all he could gather the trade was not justly taxed at the present time. But what he was most concerned about was to see that they should not have to wait longer than the fourteen years for the temperance reforms that were in the Bill. Very many important reforms were to come into operation at the end of fourteen years—magisterial discretion and the local option clauses, the latter of which had been described by the right hon. Gentleman, the Leader of the Opposition, as throwing the publicans to the wolves, the wolves being the voters in the village. He thought the right hon. Gentleman would live to repent that phrase. Even right hon. Gentlemen opposite sometimes repented. At any rate, they ought to. He regretted the concession which the Prime Minister had felt himself justified in making. He failed to find in the arguments which had been 680 advanced anything proving that the time-limit proposed was too short, and he was there to say, on behalf of the temperance people with whom he worked, that, whatever financial arrangements might be made by His Majesty's Government, they would not give thanks for a Bill which postponed the temperance reforms which they all so much desired for a longer period than fourteen years. So rapid had been the education of the people during the discussion of this measure that he said, if owing to the operations of another House, the Government found themselves unable to carry their Bill with the time-limit of fourteen years, temperance reformers would sooner drop the Bill altogether and wait the issue between the nation and that most dangerous trade—for he was confident that the nation would not wait much longer for a genuine settlement of this question.
§ MR. BARNARD (Kidderminster)
said he took a totally different view from the last speaker and welcomed the announcement made by the Prime Minister. But he would like to ask if he understood the right hon. Gentleman rightly to foreshadow that on some future occasion the Government would give the seven years referred to and also give a preference to the sitting tenant in connection with having the first opportunity of continuing in his tenancy. He was, as the House knew, opposed to the Bill, but he had come there prepared to vote for any Amendment which would improve it, and from his point of view it seemed to him the offer of the Prime Minister was far and away better for the trade than what was offered by the Amendment of the hon. Member for Hackney. What did it amount to? It came to this, that after the end of the fourteen years—if ever it did come to an end—the tenant would be in the position of continuing to occupy the house for another seven years without having to pay monopoly value, for that period he would be relieved from the compensation charge. Surely that was far and away better than twenty-one years under existing conditions. He would like to press his question as to preference being given to the sitting tenant. They had been told in many speeches that there was no desire to interfere with the existing tenant, and therefore he would like to see words inserted giving that tenant a 681 reasonable priority. As the existing tenant must be a dying person it would not be creating a new vested interest to do this.
§ LORD R. CECIL (Marylebone, E.)
said it was very difficult to discuss the proposal of the Prime Minister, because they really did not yet know what it amounted to. The last speaker had interpreted it in quite a different sense from the hon. Member for the Appleby Division, who evidently thought they were going to get local option at the end of fourteen years. He did not see how that could be compatible with the proposal made by the Prime Minister, and if it were, then he thought the hon. Member for Kidderminster would hesitate before welcoming it as an improvement on the Amendment of the hon. Member for Hackney. The language of the right hon. Gentleman was perhaps, necessarily vague, and the great probability was, as the Prime Minister knew very well, that they would never have an opportunity of discussing the proposal when it was put on the Paper in black and white. So that they had to make up their minds now whether that proposal was one which at all met the objections they had hitherto felt to the Bill. Speaking for himself, he might say at once that it did not. The hon. Member for the Appleby division in picturesque language had said that the great issue was whether the trade should master the country or the country master the trade. He ventured to say that had nothing at all to do with the question. [Mr. CLOUGH, Yorkshire, W. K., Skipton: Hear hear.] He did not expect to be able to convince the hon. Member for Skipton and had never succeeded, but, as he had said, that was not the real point at issue. The Prime Minister said the question at issue was, "Are you or are you not in favour of the State resuming its monopoly?" He was in favour of it. It would be desirable, he thought, to get rid of anything which was in the nature of a State-aided trade—a trade which 682 depended for part of its profits Upon a special privilege given to it by the State. He had always said that. But he said that if they were to do that they must pay for it. That was the whole point. It was on this point he differed from the hon. Member for the Appleby Division. The hon. Member seemed to think he was entitled to get this advantage for the State without paying for it. He differed from him. He did not care a straw about the elaborate argument as to whether the property was freehold or not; it was a thing which had a money value in the open market, and if they were going to take it away from the men who now had it they must pay for it.
§ LORD R. CECIL
said he had not intended to do so; he had merely made that observation in passing. The Prime Minister had said this value had been greatly exaggerated. He failed to see how that affected the point whether the Government's proposal was fair, and whether the State was going to pay for the advantage which it sought to get. He could not understand the position of those who claimed to be right, and proposed to carry their morality into effect at the expense of other people. When a public improvement was executed, the people whose property was taken were not called upon to pay for it; when they cleared away unhealthy areas they paid the full value of the property taken for the purpose; but, in regard to the licences which would be taken, the Prime Minister admitted to the full that a large proportion of the cost of that public improvement would be paid, not by the State, but by the individuals from whom the licences were taken. He certainly could not understand the justice of that, and he should vote for the Amendment not because it was satisfactory but because it was at any rate an improvement on the proposal of the Government.
§ MR. WYNDHAM (Dover)
asked the Prime Minister if he understood the change which he had made in a complicated scheme to be that, if an existing licence were renewed at the end of the fourteen or fifteen years time-limit, the holder was not to pay more for that licence than he paid on the present scale—that the scale on which he paid was not to be increased in respect of the monopoly value during the next seven years.
§ MR. ASQUITH
This is not a question of taxation at all. It is a question of the conditions under which justices renew licences. Under the Act of 1904 justices might attach as a condition to the grant of a new licence the payment of the whole monopoly value. Under the Bill, as it stands, that would apply to all other licences as well. The suggestion now is that in regard to licences that existed prior to the passing of the Act, that particular condition shall not be put into force for the time being.
§ MR. WYNDHAM
said he thought he did understand the point. The magistrates need not renew the licence; and, if the Committee adopted the Amendment down in the name of the First Commissioner of Works, it could also be taken away by a two-thirds majority of the parish. There were two possibilities by which the existing licence holder might not receive the concession which the Prime Minister offered. He need hardly say that that concession did not modify his opinion of the injustice of the scheme, whilst it did—and he invited the right hon. Gentleman's attention to the point—increase the arbitrary incidence of that injustice. They would, or might have, an existing licence holder in one parish who got a renewal, who had not to pay compensation, and who had not to pay any more as a condition of the magistrates granting it, whilst in the next parish, perhaps a hundred yards away, another licence holder might lose 684 the whole of his property. They would thus create a more glaring injustice as between those two men.
SIR THOMAS WHITTAKERW. R., Spen Valley) (Yorkshire,
said that, when they were discussing the legal right and power of the nation to deal with the licences, he felt they must insist upon that right very stringently and very strictly. He felt they must establish that principle; but when it came to settling the length of the time limit, it was a matter of expediency and arrangement, and he had always been amongst those—perhaps right hon. and hon. Gentlemen opposite would not think it amounted to much—who were anxious and willing to deal with the trade, as he considered, generously. They might not consider it generous, but it had been his view. They had to recognise the position which had grown up, but let them have the principle established, and although he thought the fourteen years ample, he was not going to quarrel with the Prime Minister for making an addition to it. After all, they wanted to establish a great principle and a great policy, and the sooner they could do that the better; but he would give a few years extra in order that it might be done with less friction and less inconvenience to the nation. He wanted to get it and he would make it more difficult for those who would otherwise refuse it to do so. Therefore, whilst he was one of those who thought fourteen years really ample, he was not going to vote against seven years extension of the surrender of the monopoly value. The right hon. Gentleman opposite had said that it did not amount to much and suggested two possibilities by which a man might still lose his licence. He was always interested to hear the views of right hon. Gentlemen opposite on questions of temperance reform. They spoke on them from opposite points of view. Sometimes they told them that local veto would be no use because the vast majority of the people wanted the public-houses. The Leader of the 685 Opposition had told them that that afternoon. If that was so, why did they object to local veto?
§ MR. A. J. BALFOUR
said that if the hon. Member referred to his argument it was that local veto, whether it did or did not abolish public houses, did produce an insecurity which was bad in itself.
§ SIR THOMAS WHITTAKER
said he was referring to the remark of the right hon. Gentleman that the majority of the people wanted the licences. The right hon. Gentleman the Member for Dover, however, would prefer that they should thrust licences upon a district against the wish of two-thirds of the people of the locality. Then, with regard to the discretion of the justices, he thought they might assume that, after the great reduction had been effected, there would be good and substantial reasons if a licence were taken away. He attached importance to the financial question, and he believed a great number of people in the country wished that there should be a time limit during which those in the trade could accumulate funds to enable them to write off any loss. Surely twenty-one years was a very different term from fourteen years. It would enable them to accumulate more than half as much again. Practically, the fourteen years notice was fifteen years notice, because the fourteen years did not commence till next year, and the twenty-one years notice was really twenty-two years. In fifteen years £1 accumulated annually at 4 per cent. compound interest would amount to £20, and in twenty-two years £1 accumulated annually at 4 per cent. compound interest would amount to £34. That was a very great difference indeed, and it would make an enormous difference in enabling the trade to deal with the question. Of course he knew that some would say it did not matter, and, even if they were able to accumulate these funds, they had no right to call upon them to do it. They, however, said that with a precarious 686 security and a risky grant they ought to be prepared to deal with it. Some illustrations had been given, but he noticed that they did not allow for or take into consideration any preparations already made. Prudent concerns had already accumulated very considerable reserve funds, and they would not have the whole preparation to make during the fourteen or twenty-one years. Some of them had made very considerable preparations; and, oven if those funds were invested in public-house licences and those licence values had to be written off, it was simply a matter of book-keeping arrangement. They had only to write off the value of the licences on one side of their balance sheet and their reserve fund on the other side and the thing was done. If the money were invested in licence values, obviously, when those values disappeared the reserve fund disappeared. Surely hon. Gentlemen opposite did not expect that they could write off something and still have the reserve fund remaining; they were assuming some elementary knowledge of finance. It was clear that if the reserve fund was that of some other trade and was invested in licence values, and they wanted to realise them for some other purpose, they would not be available, but the fact that it was invested in the very property to be written off provided the remedy. A very large number of concerns had very prudently accumulated reserves, and this addition to the time during which they could accumulate the extra funds required, would make an enormous difference, it would ease the situation very much indeed, and certainly, so far as he was concerned, he should not do anything to oppose such a proposal.
§ MR. LAMBTON (Durham, S. E.)
said he was sometimes unable to work himself up to such a state of indignation as regarded this Bill as some of his hon. friends, but he thought that in the speeches of the right hon. Member for the Spen Valley and the hon. Member for the Appleby Division of Westmoreland, there 687 might be found justification for the phrase "thrown to the wolves." The right hon. Gentleman who had just spoken had dismissed the question of loss of reserve capital by thousands of traders as a mere matter of book-keeping. The hon. Member for Appleby said he was a temperance reformer, he wanted temperance, and he did not care two-pence about financial considerations. The country, however, did take these matters into consideration, and was not prepared to accept the Bill as a punitive measure invented by the right hon. Member and the hon. Member opposite. Both had spoken of the fourteen years proposal as having come scathless through Committee, but that could scarcely be so seeing the Prime Minister had adumbrated an Amendment to be submitted at a later stage. The hon. Member for the Appleby division was not in the House when the hon. Baronet the Member for Chippenham referred to the time limit as a "reign of terror," and perhaps the Rosespierre and Marat of the period might be found in the right hon. Member for the Spen Valley and the hon. Member for Appleby. The Prime Minister had suggested an Amendment which was not altogether understood, and discussion was impossible under an absolutely unnecessary closure resolution, while Ministers skulked under the scaffolding of the guillotine.
§ MR. BOTTOMLEY
said he had a little difficulty in deciding what course to adopt in view of the Primo Minister's statement. He desired to do what would meet the general convenience of the Committee. If he clearly understood the right hon. Gentleman's statement, it was the intention on the Report Stage to put down some clause giving present licence-holders a further respite, or purgatorial period of seven years. His own view, if he might respectfully say so, was that the Committee should have an opportunity of seeing the Amendment in black and white, and then consider on the Report Stage whether it met the points raised and how, and whether a case had been made out for re-opening the matter at that stage. Subject to the view of the Committee he was disposed to withdraw his Amendment and not put them to the trouble of a division, which must of necessity result in cross-votings because nobody could understand where they were. Therefore, he formally asked leave to to withdraw the Amendment.
§ Leave to withdraw being refused—
§ Question put, "That the words proposed to be left out stand part of the clause."
§ The Committee divided:—Ayes, 287; Noes, 119. (Division List No. 263.)691
|Abraham, William (Rhondda)||Barran, Rowland Hirst||Bryce, J. Annan|
|Acland, Francis Dyke||Barry, Redmond J. (Tyrone, N.)||Buchanan, Thomas Ryburn|
|Adkins, W. Ryland D.||Beale, W. P.||Burns, Rt. Hon. John|
|Agar-Robartes, Hon. T. C. R.||Beck, A. Cecil||Buxton, Rt. Hn. Sydney Charles|
|Alden, Percy||Bell, Richard||Byles, William Pollard|
|Allen, A. Acland (Christchurch)||Benn, Sir J. Williams (Devonp'rt||Cameron, Robert|
|Allen, Charles P. (Stroud)||Benn, W. (T'w'r Hamlets, S. Geo.||Carr-Gomm. H. W.|
|Armstrong, W. C. Heaton||Berridge, T. H. D.||Cawley, Sir Frederick|
|Ashton, Thomas Gair||Bethell, Sir J. H. (Essex, Romf'rd||Channing, Sir Francis Allston|
|Asquith, Rt. Hn. Herbert Henry||Bethell, T. R. (Essex, Maldon)||Cheetham, John Frederick|
|Astbury, John Meir||Birrell, Rt. Non. Augustine||Cherry, Rt. Hon. R. R.|
|Atherley-Jones, L.||Black, Arthur W.||Churchill, Rt. Hon. Winston S.|
|Baker, Sir John (Portsmouth)||Boulton, A. C. F.||Clough, William|
|Baker, Joseph A. (Finsbury, E.)||Brace, William||Clynes, J. R.|
|Balfour, Robert (Lanark)||Bramsdon, T. A.||Cobbold, Felix Thornley|
|Baring, Godfrey (Isle of Wight)||Branch, James||Collins, Stephen (Lambeth)|
|Barker, John||Brodie, H. C.||Collins, Sir Wm. J. (S. Pancras, W.|
|Barlow, Sir John E. (Somerset)||Brooke, Stopford||Compton-Rickett, Sir J.|
|Barnes, G. N.||Brunner, Rt. Hn. Sir J. T. (Cheshire||Cooper, G. J.|
|Corbett, C H (Sussex, E. Grinst'd||Johnson, John (Gateshead)||Richards, Thomas (W. Monm'th|
|Cornwall, Sir Edwin A.||Johnson, W. (Nuneaton)||Richards, T. F. (Wolverh'mpt'n|
|Cory, Sir Clifford John||Jones, Sir D. Brynmor (Swansea||Richardson, A.|
|Cotton, Sir H. J. S.||Jones, Leif (Appleby)||Roberts, Charles H. (Lincoln)|
|Cowan, W. H.||Jones, William (Carnarvonshire||Roberts, Sir John H. (Denbighs)|
|Crooks, William||Jowett, F. W.||Robertson, J. M. (Tyneside)|
|Crosfield, A. H.||Kearley, Sir Hudson E.||Robinson, S.|
|Crossley, William J.||Kekewich, Sir George||Robson, Sir William Snowdon|
|Dalziel, James Henry||King, Alfred John (Knutsford)||Roch, Walter F. (Pembroke)|
|Davies, M. Vaughan- (Cardigan||Laidlaw, Robert||Roe, Sir Thomas|
|Davies, Timothy (Fulham)||Lamb, Ernest H. (Rochester)||Rose, Charles Day|
|Davies, Sir W. Howell (Bristol, S.||Lambert, George||Rowlands, J.|
|Dickinson, W. H. (St. Pancras, N.||Layland-Barratt, Sir Francis||Runciman, Rt. Hon. Walter|
|Dobson, Thomas W.||Leese, Sir Joseph F. (Accrington||Russell, Rt. Hon. T. W.|
|Duckworth, James||Lchmann, R. C.||Rutherford, V. H. (Brentford)|
|Duncan, C. (Barrow-in-Furness||Lever, A. Lavy (Essex, Harwich||Samuel, Herbert L. (Cleveland)|
|Dunn, A. Edward (Camborne)||Levy, Sir Maurice||Scarisbrick, T. T. L.|
|Dunne, Major E. Martin (Walsall||Lewis, John Herbert||Schwann, C. Duncan (Hyde)|
|Edwards, Clement (Denbigh)||Lloyd-George, Rt. Hon. David||Schwann, Sir C. E. (Manchester|
|Ellis, Rt. Hon. John Edward||Lough, Rt. Hon. Thomas||Scott, A. H. (Ashton under Lyne|
|Erskine, David C.||Lynch, H. B.||Sears, J. E.|
|Essex, R. W.||Mackarness, Frederic C.||Seddon, J.|
|Esslemont, George Birnie||Maclean, Donald||Seely, Colonel|
|Evans, Sir Samuel T.||Macnamara, Dr. Thomas J.||Shackleton, David James|
|Everett, R. Lacey||Macpherson, J. T.||Sherwell, Arthur James|
|Faber, G. H. (Boston)||M'Callum, John M.||Shipman, Dr. John G.|
|Fenwick, Charles||M'Crae, Sir George||Silcock, Thomas Ball|
|Ferens, T. R.||M'Laren, Sir C. B. (Leicester)||Simon, John Allsebrook|
|Ferguson, R. C. Munro||M'Laren, H. D. (Stafford, W.)||Sinclair, Rt. Hon. John|
|Fiennes, Hon. Eustace||M'Micking, Major G.||Sloan, Thomas Henry|
|Findlay, Alexander||Mallet, Charles E.||Smeaton, Donald Mackenzie|
|Foster, Rt. Hon. Sir Walter||Mansfield, H. Rendall (Lincoln)||Soares, Ernest J.|
|Freeman-Thomas, Freeman||Marks, G. Croydon (Launceston||Spicer, Sir Albert|
|Gibb, James (Harrow)||Marnham, F. J.||Stanger, H. Y.|
|Gladstone, Rt. Hn. Herbert John||Massie, J.||Stanley, Albert (Staffs, N. W.|
|Glover, Thomas||Menzies, Walter||Stanley, Hn. A. Lyulph (Chesh.)|
|Goddard, Sir Daniel Ford||Micklem, Nathaniel||Steadman, W. C.|
|Gooch, George Peabody (Bath)||Molteno, Percy Alport||Stewart, Halley (Greenock)|
|Grant, Corrie||Mond, A.||Stewart-Smith, D. (Kendal)|
|Greenwood, G. (Peterborough)||Money, L. G. Chiozza||Straus, B. S. (Mile End)|
|Guest, Hon. Ivor Churchill||Montagu, Hon. E. S.||Stuart, James (Sunderland)|
|Gulland, John W.||Morgan, G. Hay (Cornwall)||Taylor, Theodore C. (Radcliffe)|
|Gurdon, Rt. Hn. Sir W. Brampton||Morrell, Philip||Thomas, Abel (Carmarthen, E.)|
|Hall, Frederick||Morse, L. L.||Thomas, Sir A. (Glamorgan, E.)|
|Harcourt, Rt. Hn. L. (Rossendale||Murray, Capt. Hn A. C. (Kincard||Thorne, G. R. (Wolverhampton|
|Harcourt, Robert V. (Montrose)||Murray, James (Aberdeen, E.)||Tomkinson, James|
|Hardy, George A. (Suffolk)||Myer, Horatio||Torrance, Sir A. M.|
|Harmsworth, Cecil B. (Worc'r)||Newnes, F. (Notts, Bassetlaw)||Toulmin, George|
|Hart-Davies, T.||Nicholson, Charles N. (Doncast'r||Trevelyan, Charles Philips|
|Harvey, A. G. C. (Rochdale)||Norman, Sir Henry||Ure, Alexander|
|Harvey, W. E. (Derbyshire, N. E.||Norton, Capt. Cecil William||Verney, F. W.|
|Harwood, George||Nuttall, Harry||Wadsworth, J.|
|Haslam, James (Derbyshire)||O'Donnell, C. J. (Walworth)||Walker, H. De R. (Leicester)|
|Haslam, Lewis (Monmouth)||Partington, Oswald||Walsh, Stephen|
|Haworth, Arthur A.||Paulton, James Mellor||Walters, John Tudor|
|Hazel, Dr. A. E.||Pearce, Robert (Staffs, Leek)||Walton, Joseph|
|Helme, Norval Watson||Pearce, William (Limehouse)||Ward, John (Stoke upon Trent)|
|Henry, Charles S.||Philipps, Col. Ivor (S'thampton)||Ward, W. Dudley (Southampton|
|Herbert, Col. Sir Ivor (Mon., S.)||Philipps, Owen C. (Pembroke)||Wason, Rt. Hn. E (Clackmannan|
|Higham, John Sharp||Pickersgill, Edward Hare||Wason, John Cathcart (Orkney)|
|Hobhouse, Charles E. H.||Pirie, Duncan V.||Waterlow, D. S.|
|Hodge, John||Pollard, Dr.||Wedgwood, Josiah C.|
|Holland, Sir William Henry||Ponsonby, Arthur A. W. H.||Weir, James Galloway|
|Hooper, A. G.||Price, C. E. (Edinb'gh, Central)||White, Sir George (Norfolk)|
|Horniman, Emslie John||Price, Sir Robert J. (Norfolk, E.)||White, J. D. (Dumbartonshire)|
|Horridge, Thomas Gardner||Priestley, W. E. B. (Bradford, E.)||White, Luke (York, E. R.)|
|Howard, Hon. Geoffrey||Pullar, Sir Robert||Whitehead, Rowland|
|Hudson, Walter||Radford, G. H.||Whitley, John Henry (Halifax)|
|Hutton, Alfred Eddison||Rainy, A. Rolland||Whittaker, Rt. Hn. Sir Thomas P|
|Hyde, Clarendon||Rea, Russell (Gloucester)||Wiles, Thomas|
|Isaacs, Rufus Daniel||Rea, Walter Russell (Scarboro'||Williams, J. (Glamorgan)|
|Jacoby, Sir James Alfred||Redmond, William (Clare)||Williams, Llewelyn (Carmarthen|
|Jardine, Sir J.||Rees, J. D.||Williams, Osmond (Merioneth)|
|Williamson, A.||Wilson, J. W. (Worcestersh. N.)||Yoxall, James Henry|
|Wills, Arthur Walters||Wilson, P. W. (St. Pancras, S.)|
|Wilson, Henry J. (York, W. R.||Wilson, W. T. (Westhoughton)||TELLERS FOR THE AYES—Mr. Joseph Pease and Master of Elibank.|
|Wilson, John (Durham, Mid)||Winfrey, R.|
|Wilson, J. H. (Middlesbrough)||Wood, T. M'Kinnon|
|Arkwright, John Stanhope||Gardner, Ernest||Percy, Earl|
|Ashley, W. W.||Gibbs, G. A. (Bristol, West)||Randles, Sir John Scurrah|
|Aubrey-Fletcher, Rt. Hn. Sir H.||Goulding, Edward Alfred||Ratcliff, Major R. F.|
|Balcarres, Lord||Gretton, John||Rawlinson, John Frederick Peel|
|Balfour, Rt. Hn. A. J. (City Lond.)||Guinness, Hon. R. (Haggerston||Remnant, James Farquharson|
|Banbury, Sir Frederick George||Haddock, George B.||Renwick, George|
|Banner, John S. Harmood-||Hamilton, Marquess of||Roberts, S. (Sheffield, Ecclesall)|
|Beach, Hn. Michael Hugh Hicks||Hardy, Laurence (Kent, Ashford||Ronaldshay, Earl of|
|Beckett, Hon. Gervase||Harrison-Broadley, H. B.||Rothschild, Hon. Lionel Walter|
|Bignold, Sir Arthur||Hay, Hon. Claude George||Rutherford, John (Lancashire)|
|Bottomley, Horatio||Helmsley, Viscount||Rutherford, W. W. (Liverpool)|
|Bowles, G. Stewart||Hill, Sir Clement||Salter, Arthur Clavell|
|Bridgeman, W. Clive||Hope, James Fitzalan (Sheffield)||Sandys, Lieut.-Col. Thos. Myles|
|Bull, Sir William James||Hunt, Rowland||Sassoon, Sir Edward Albert|
|Burdett-Coutts, W.||Joynson-Hicks, William||Scott, Sir S. (Marylebone, W.)|
|Butcher, Samuel Henry||Kerry, Earl of||Smith, Abel H. (Hertford, East)|
|Campbell, Rt. Hon. J. H. M.||Kimber, Sir Henry||Smith, F. E. (Liverpool, Walton)|
|Carlile, E. Hildred||King, Sir Henry Seymour (Hull)||Smith, Hon. W. F. D. (Strand)|
|Carson, Rt. Hon. Sir Edw. H.||Lambton, Hon. Frederick Wm.||Stanier, Beville|
|Castlereagh, Viscount||Lane-Fox, G. R.||Starkey, John R.|
|Cave, George||Lea, Hugh Cecil (St. Pancras, E.)||Staveley-Hill, Henry (Staff'sh.)|
|Cecil, Evelyn (Aston Manor)||Lockwood, Rt. Hn. Lt. -Col. A. R.||Stone, Sir Benjamin|
|Cecil, Lord John P. Joicey-||Long, Col. Charles W. (Evesham)||Strauss, E. A. (Abingdon)|
|Cecil, Lord R. (Marylebone, E.)||Lonsdale, John Brownlee||Talbot, Lord E. (Chichester)|
|Chamberlain, Rt Hn. J. A. (Wore||Lowe, Sir Francis William||Thomson, W. Mitchell-(Lanark)|
|Clive, Percy Archer||Lupton, Arnold||Thornton, Percy M.|
|Coates, Major E. F. (Lewisham)||Lyttelton, Rt. Hon. Alfred||Walker, Col. W. H. (Lancashire)|
|Collings, Rt. Hn. J. (Birmingh'm||MacCaw, William J. MacGeagh||Warde, Col. C. E. (Kent. Mid)|
|Craig, Charles Curtis (Antrim, S.||M'Arthur, Charles||Warner, Thomas Courtenay T.|
|Craig, Captain James (Down, E.||M'Calmont, Colonel James||Watt, Henry A.|
|Craik, Sir Henry||M'Iver, Sir Lewis||White, Patrick (Meath, North)|
|Dixon-Hartland, Sir Fred Dixon||Magnus, Sir Philip||Willoughby de Eresby, Lord|
|Douglas, Rt. Hon. A. Akers-||Marks, H. H. (Kent)||Wilson, A. Stanley (York, E. R.)|
|Du Cros, Arthur Philip||Mason, James F. (Windsor)||Winterton, Earl|
|Duncan, Robert (Lanark, Govan||Mildmay, Francis Bingham||Wortley, Rt. Hon. C. B. Stuart-|
|Faser, George Denison (York)||Moore, William||Wyndham, Rt. Hon. George|
|Faber, Capt. W. V. (Hants, W.)||Morpeth, Viscount||Younger, George|
|Fardell, Sir T. George||Nicholson, Wm. G. (Petersfield)|
|Fell, Arthur||Oddy, John James||TELLERS FOR THE NOES—Sir Alexander Acland-Hood and Viscount Valentia.|
|Fletcher, J. S.||Parker, Sir Gilbert (Gravesend|
|Forster, Henry William||Pease, Herbert Pike (Darlington|
"Question, "That the Amendment be made," put, and agreed to.
§ And, it being Five of the clock, the CHAIRMAN proceeded, in pursuance of the Order of the 17th July, to put the Question on an Amendment of which notice had been given by the Government.
Another Amendment proposed—
In page 3, line 13, to leave out the words 'on-licence' and insert the words 'licence (whether an on-licence or an off-licence.)'"—(Mr. L. Harcourt.)
§ Whereupon the Chairman left the Chair to make his report to the House.
§ Committee report Progress; to sit again upon Monday next.
§ Whereupon Mr. SPEAKER, pursuant to the Order of the House of 31st July, adjourned the House without Question put.
§ Adjourned at Two Minutes after Five o'clock till Monday next.