§ Considered in Committee.
§ (In the Committee.)
§ [Mr. EMMOTT (Oldham) in the Chair.]
§ Clause 10:
§
Amendment proposed—
In page 6, line 14, to leave out subsection (1).—(Mr. James Hope.)
§ Question again proposed, "That lines 14 and 15 stand part of the clause."
§ MR. MOND (Chester)said that in the remarks which he had the honour to address to the Committee on Friday last, he made the statement that under the last administration it was prophesied by a member of that administration that under the Act of 1904 2,500 licences would be reduced every year. He was challenged on that point by an hon. Member opposite, and he would, therefore, like to quote a passage from the statesman who made that remark. It was made by the late Lord Salisbury in another place and these were his words—
Under this Bill we propose to change that possible and occasional 200 into a constant number of nearly 2,500, which is an enormous change in the direction of suppressing those licensed houses which ought to be suppressed.He might point out that Lord Belper speaking for the Government on 2nd 96 August, 1904, estimated that the fund would enable in one year no less than 2,240 licences to be done away with, and the late Home Secretary, speaking in the House of Commons on 10th May, 1904, held out the hope that 2,000 licences per annum might be abolished. Lord Lansdowne, speaking in another place, confirmed the late Lord Salisbury's statement that a large number of licences were to be done away with. He might point out in passing that during the passage of that Bill the reduction of licensed premises was held out as a great temperance reform, and it was now, when the Liberal Party proposed to carry out a scheme which approximated to the figures given by the right hon. Gentleman the Leader of the Opposition's own Government, that they were constantly informed that the reduction of licences would have no effect on drunkenness. He mentioned these figures because the question of numbers was intimately connected with the question of compensation. What had prevented the figures which were held out to both Houses as a great licensing reform being reached? Why, instead of 2,500, did they only get an average in the three years of 1,100 cases? It was owing to the Kennedy judgment upsetting entirely the basis on which all those calculations were made. The compensation fund was now insufficiently large to enable these reductions to take place. He would like to say a few words on the question of what the late Government intended and what Mr. Justice Kennedy's decision did. He had in his hand a report of the Inland Revenue Commissioners for 1905, and a very interesting memorandum by Sir Henry Primrose dealing with the question of how the valuation of licensed premises for the purposes of compensation should be dealt with. He would like to know whether the instructions of the Inland Revenue Department were or were not based on any information supplied to them by any responsible Minister who had taken part in the passing of the Act of 1904, and whether that memorandum had official sanction or not. This was what Sir Henry Primrose said, speaking of the value of licensed premises. He endeavoured to ascertain how the Commissioners must interpret the words 97 in the Act of 1904, and came to the conclusion that—They mean not more than the price which in the opinion of the Commissioners the owners of freehold premises might expect to obtain for them qua premises enjoying the privilege of a licence if sold in the open market. The Commissioners consequently are of opinion that for the purposes of their determination of the value of licensed premises any claim by the occupier of the premises, whether he be the owner or the tenant, for compensation on account of loss of trade cannot be admitted into consideration, and still less can the Commissioners take into consideration any claim on the part of the brewing owner of a licensed house in respect of brewery profits on beer supplied by him to the houses.That was very important. The Kennedy judgment entirely reversed that last sentence. Mr. Justice Kennedy was dealing with exactly the same point in the case of the "Crown." If they looked at the letter in which the valuers for the brewers made out their statement of compensation they would see that they worked, it out at the number of barrels sold and the profit made by the brewery, the total brewing profits being 16s. per barrel of beer. They added to that a profit on the right to compel the tenant to sell such spirits as the brewery company might like to supply him with, a profit of 2s. 6d. a gallon, which came to £18 a year, and it was a curious fact that such an amount should be put in an estimate of compensation, considering that as a matter of fact no spirit had ever been sold in the house. They added depreciation and fixtures and the actual amount the tenant was paying them, and they arrived finally at about £2,400. What Sir Henry Primrose and the Inland Revenue Commissioners were trying to ascertain was the rack rent value of licensed premises, and it was obviously a difficult proposition. What Mr. Justice Kennedy ought to have done was this: he should have asked himself what would the brewers have given for these premises. Let him work out whether a brewer would have given for the premises the amount claimed for compensation.
§ MR. YOUNGER (Ayr Burghs)The hon. Member was confusing two things. In the calculation of 16s. he had included both the retail and the wholesale profits. He would be glad to know of 98 a brewer who made a profit of 16s. a barrel.
§ MR. MONDsaid the Judge himself did not believe that the brewers were making such a profit, and he gave them nothing like that amount. The experts said 16s., another party said 8s., and it was given at 11s. It did not include retail profits. If they had the details of the case before them they would see there was a special valuation of £224, tenant's interest for retail profits, added to the amount he had mentioned. He was not astonished that the hon. Member opposite was amazed at the assertions of brewers' experts when they claimed compensation. He had worked out a little sum. The profit which it was alleged the house made annually was £167 19s., and the amount of compensation paid for the premises was £2,000. If they took £2,000 at 5 per cent. interest, and 2½ per cent. depreciation and repairs, they got £150 a year. Did any hon. Member say that if he was the happy possessor of licensed premises and if he went to a brewer and said: "You can make £167 19s. on this house; give me £2,000, for it," the brewer would undertake the risk of the business, the trouble of manufacturing the beer and the risk of losing his business for the purpose of making £17 19s., while he (the hon. Member) made £150? He would do nothing of the kind. He would say: "How much more can I get in a tied house than in a free house; how much more beer can I sell owing to my owning this house than I could sell without owning it?" Taking that into consideration, he would make a fair offer. Mr. Justice Kennedy never allowed in the least for the fact that all the beer, or a portion of it, might be sold somewhere else. He estimated the whole trade of the brewery as being extinguished. He said they made a profit, of so many shillings per barrel, and he capitalised that at so many years purchase and awarded a lump sum. That was an absolutely fallacious calculation as he would point out. Nobody would compensate the distillery whose whisky was not sold; the distiller was not the owner. Surely the rack rent of the premises was not 99 the profit of the manufacturer plus the retail profit? But that was the figure which had been taken and which vitiated the whole of the calculation. Had the Government of 1904 intended that they could never have presented the figure of reduction of licences which they did. It had been said that this was largely a domestic question, but for all that, as the State had undertaken the obligation of seeing that the trade was not taxed too highly for compensation levies, and that a man whose house was closed did not get an unfair advantage out of the man whose house was not closed, the State must see that the compensation paid was reasonable, and that was absolutely what the Government was trying to arrive at. They were trying to arrive at the true rack rent, and in most cases, in the case of dwelling house property, the assessment to Schedule A was a very fair guide to the annual rental value. If they wished to get the rack rent—and he did not think that could be controverted—the decision of Mr. Justice Kennedy was based on a misapprehension. He could not see a fairer method than that adopted by the Government. The one reason why licensed houses were under-assessed was the remarkable method adopted in carrying out the accounts. The principle of nominal rents charged to tenants of licensed premises, rents which did not represent the real amount, had been adopted in order to make it difficult for assessment committees to find out the true rent. If a fair sum were returned for the purposes of assessment the ratepayer and the taxpayer would get what they ought to have had long ago. The fact that they had been able to escape proper taxation for so many years was no excuse for continuing it or for abusing everybody who wanted them to pay their fair share towards the rates and taxes. The unfairness of the decision became more obvious if they took the case, which was a common one, of the owners not being brewers at all; the owner who was not a brewer would probably charge to the tenant a pretty close rack rent, and he would certainly not make anything like the profit which the brewer was making by the supply of beer. Under the present system the 100 owner of licensed premises who was not a brewer was in actual practice receiving less compensation than the owner who was a brewer. The hon. Member for Kensington said "No," but he (Mr. Mond) did not see how they could avoid that conclusion, if they followed the same line of assessment as was laid down by the Kennedy judgment. Another point which he thought was of considerable importance was this: There were only two options open. If they wished to get the number of reductions which was not in dispute between the two sides of the House, that number of reductions which the Leader of the Opposition wanted in 1904 and which the Government wanted now, there were only two methods of arriving at it. They had either to increase the compensation levy or to reduce the amount now being paid for compensation. He did not see himself, in view of the fact that he could not see any distinction between what was arrived at in 1904 and what was aimed at now as regards reduction, that there was any other course open. It seemed to him much more reasonable to go back to the more reasonable form of assessment than to raise the high compensation levy which had already inflicted a very great injustice on a large portion of the trade. In his constituency he had a gentleman interested in the trade who owned one of the finest hotels in North Wales, a hotel which under no conceivable circumstances could lose its licence, and he had to pay a large compensation levy in order to pay for the extinction of a number of small beerhouses which he had assured him himself ought not to exist at all. He (the speaker) had never been able to see that that was a very equitable arrangement, and it would not be equitable to increase the compensation, levy on the man with a good hotel for the benefit of the owner of a small beerhouse. Therefore, he thought the Government were quite right in adopting the latter of the courses he had named, and in endeavouring to get the compensation down to a reasonable level. He thanked the Government for the Amendment they intended to move on behalf of the licence-holders, who had not had a very happy time of it under the Act of 1904. It was very interesting to see how different was the position of 101 the licence-holder when he was being used as a weapon to beat the supporters of the Bill, and when he was wanting money from the people who were so very fond of using him as one of their most effective electioneering agents. The licensee in the "Crown" case had been there for eighteen years. He had an unblemished character; his conduct was good; he was making £224 a year, and the brewer's representative thought he was very generously treated if he got £250—little more than twelve months profits after eighteen years hard work in that public-house. He was certain that all those who took an interest, as many of them did, in the man behind the bar, hoped that he would get now at least the minimum amount, and that his compensation would be assessed as a separate item, and not mixed up as in the past with the compensation that was being paid to the owner of the house. He hoped that there would be some further explanation of the Government Amendment as to the maintenance of the lease owing to the proposal that the monopoly value should not come into operation until seven years after the expiration of the time-limit. It would very much simplify the Bill if the Government, in addition to the exclusion of the monopoly value for seven years, would also make a close time for reductions for the seven years following the time-limit, so that there might be a peaceful time for the trade during that period. Having made the one concession it seemed to him that the other should follow; it would simplify the proceedings they proposed to adopt. Of course, a con-sequential Amendment would be necessary. So far as he had been able to make out, after a careful study of the Kennedy judgment, he thought it clear that it could not stand. It was based on a false principle. It was a contravention of the idea which underlay the Act of 1904, and would have to be amended; therefore the question which remained to the Committee was very largely whether the Government proposal did or did not provide the best manner of amending it. The more argument was in this direction, and the less in the direction of pure denunciation, the greater progress they would make, and the more likely they would be to arrive 102 at a settlement. After all they were discussing a very serious and a very important question.
The evils of drink come home too bitterly to the hearts and consciences of all classes of the community. There is probably not a man or woman here—there is certainly not a man or woman here who has not had painful opportunities of seeing all the tragedies—the domestic tragedies, the ruin of home life, the destruction of a great and honourable career, the misery brought upon individuals and families by the reckless use and misuse of alcoholic beverages. This great and ever present tragedy—The noble Lord laughed.
§ EARL WINTERTON (Sussex, Horsham)said he was amazed at the hon. Member's method of reading his peroration.
§ MR. MONDsaid that if the noble Lord had waited a moment he would have seen that he was reading not a peroration but a quotation.
§ MR. MONDsaid he was just going to conclude. He was quoting from a speech made by the Leader of the Opposition in the Albert Hall on 25th June, 1908. He knew he was a little wide of the question. They got very few opportunities of speaking, owing to the conditions under which the discussion was carried on. But he must say that those words of the right hon. Gentleman were noble sentiments which were much more finely expressed than he could hope to express them. He felt that instead of the cynical and flippant observations they had had during the Committee stage of the Bill—[Cries from the OPPOSITION benches of "Oh"]—with the single exception of one speech from the hon. Member for Gravesend, he had not heard one speech which rang with the words of the right hon. Gentleman.
*THE CHAIRMANThe hon. Gentleman is getting too wide. These are not the kind of remarks which should be made on an Amendment in Committee.
§ MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)said that at the close of the hon. Member's observations he expressed the hope that hon. Members on that side of the House would address themselves more closely to the question before the Committee, and cease their denunciations, but he fell so far from his own precepts that he was twice called to order by the Chairman.
§ MR. MONDsaid he really thought that that was a most unfair observation. He was going to make an appeal to hon. Members opposite when he was called to order because he was irrelevant. It was an unfair statement, because if he had been allowed to conclude his remarks he could have borne out what he intended to say. In all sincerity he asked hon. Members to aid in carrying through a great social reform.
§ MR. AUSTEN CHAMBERLAINsaid that the hon. Member's observations were irrelevant and couched in language which was quite needlessly offensive to hon. Members on that side of the House. The hon. Member said that with one single exception the whole of the speeches made from that side of the House were cynical and flippant. The very fact that when the hon. Member quite irrelevantly, but for the first time in the course of his speech touched on the question of temperance, he was obliged to come to the Leader of the Opposition for a really touching appeal on that subject, ought to have shown him that the interests of temperance were as dear to hon. Members sitting on that side of the House, even if they did not approve of the manner in which they were being promoted by the Government.
§ MR. LUPTON (Lincolnshire, Sleaford)on a point of order asked whether the manners of the hon. Member were relevant to this discussion.
§ MR. AUSTEN CHAMBERLAINsaid he quite agreed that the manners neither of the hon. Gentleman nor of himself were relevant to the question at issue, 104 which was indeed one of the gravest that they had had to consider in the course of these debates. The particular clause and subsection on which the Committee were engaged did not raise the question of the desirability of an arbitrary statutory reduction of public-houses. If it did he would point out in answer to the hon. Gentleman that there was no inconsistency in their attitude in saying that such a reduction as was proposed was a very different thing from a reduction made on the merits in each individual case judged by those most competent accurately to understand the local circumstances. They were not discussing a question of temperance, but the treatment they would award to any trade or any individual whose property or trade they disturbed or destroyed in the supposed interests of the public at large. Even the Government and the hon. Gentleman himself would admit that the principles they should apply in the compensation of this property were the same whether it was the property of a licence-holder or any other kind of property. That the nature of the interest of licence-holders was different from freehold property was admitted by his right hon. friend and was recognised in the Act of 1904. The hon. Member for Chester summed up his argument by saying that the Kennedy judgment could not stand, and by repeating the words of the Under-Secretary to the Home Office that if the Kennedy judgment did stand the compensation levy was not sufficient to suppress the number of licences they desired to suppress and that therefore as the money would not go round on the basis of the Kennedy judgment they must alter that judgment. They must cut their coat according to their cloth, and make the compensation according to the amount of money at their disposal. That was the argument of the Under-Secretary, though not so concisely put.
§ *THE UNDER - SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. HERBERT SAMUEL,) Yorkshire, ClevelandNo, Sir; that was not at all my argument.
§ MR. AUSTEN CHAMBERLAINsaid the hon. Gentleman, did not in the course of his very interesting speech, which was 105 useful to both sides of the House because it was perfectly lucid and clear and left them in no doubt as to its meaning, use any argument to show that the Kennedy judgment was wrong. The hon. Gentleman did use an argument to show that the anticipation of the late Government as to the value of the houses was not realised. He said that the late Government anticipated that the value would be less and that the number of houses closed for a certain sum of money would be greater. But the calculations of the late Government necessarily depended on anticipations as to the class of houses likely to be closed. In many cases a much more valuable class of houses had been attacked than was anticipated in the earlier stages of their Rill. But let them put that on one side, and take it that they were wrong. What did that prove? It proved that they miscalculated the value of the houses, but it did not prove that Mr. Justice Kennedy was wrong in the principles which he laid down, and the Under-Secretary, with a single exception, which he had shown was not an argument, did not attempt to show that Mr. Justice Kennedy's judgment was wrong. All the hon. Gentleman attempted to show was that the compensation levy, as at present made, was not sufficient to buy in the number of houses which they had to exchange for it, and they had only two alternatives, either to increase the compensation levy or diminish the compensation. The Government thought and the hon. Member for Chester agreed that the better and easier way was to decrease the amount of compensation. The hon. Member talked about cynical proceedings, but a more cynical proceeding he had never heard than that, when they wanted a man's property which he was not willing to sell, they should acquire powers, and then when they had not money enough to pay him the value of the property they should say they must define the value in a different way, meaning a definition of value which would come within the money they had. That was what the Government were doing by this clause, and the importance and seriousness of the clause was not merely that it affected directly a very large interest, but 106 it indirectly threatened every man who had property, business, or trade, which might, at any time, be interfered with in the course of public improvements, or be required for the purposes of the State. Could they be surprised if there was a feeling of insecurity abroad; that men were loth to engage in new expenditure, or to make large investments here, when they saw old investments treated with this levity, and people dispossessed of property with this cynical disregard of every canon of justice? The hon. Member for Chester did, in the earlier portion of his speech, unlike the Under-Secretary, attempt to dispute the merits of the Kennedy judgment. Would the hon. Member permit him to say, without meaning to be offensive, that he thought before anyone could advantageously argue the merits of a case against a judgment, he must understand it, and the hon. Member had wholly misunderstood the judgment. He would undertake to say that the hon. Member would not find a legal authority who had looked up this case who would support his interpretation of Mr. Justice Kennedy's judgment, and if the hon. Member repeated to that learned Judge the arguments he had used as being those of Mr. Justice Kennedy, his lordship would fail to recognise them. The hon. Gentleman made two statements which were, he thought, of some importance with regard to that judgment. He said that what Mr. Justice Kennedy ought to have asked, in regard to the brewer, was what value the brewer would give for the house in the open market. That was exactly what Mr. Justice Kennedy did. He asked that, and nothing more. He took evidence as to profits, and so far as he admitted it, he took it only for the purpose of ascertaining what a problematical buyer in the open market would bid. What he was asked to do was to exclude the brewer, who by the necessities of the case was the man to whom the property was most valuable, and who was likely to be the best purchaser in the open market. The learned Judge said the result surely was that the tribunal was to assess the amount of compensation by finding the price of the licensed premises in the open market, adding to that the sum, if any, for 107 trade fixtures, and deducting from the total the price which the premises would fetch in the open market if unlicensed. Therefore the whole task of the tribunal in the opinion of Mr. Justice Kennedy was to find the price of the premises in the open market, and he had done so. The learned Judge then went on to deal with the various items which would influence the judgment of a possible buyer, and to say that these must be taken into account. He submitted that the definition which Mr. Justice Kennedy gave of that which was the subject of compensation was one which throughout this debate there had been no attempt to dispute or to disprove, and which could not be disputed, for it accurately defined that which was the subject of compensation, which they were taking away, and for which they ought to give full value. He was not concerned to say that in the interpretation and application of the judgment to every particular case the amount of compensation awarded has been right. It might have been too high or too low, because there were circumstances in the cases which were not capable of being met by fixed rules, but which might affect the price in individual cases. Some hon. Members had spoken as if Mr. Justice Kennedy's judgment fixed a particular profit and a particular term of purchase applicable to all licences. That was not so. Those were individual circumstances which must be considered in each individual case, and as Mr. Justice Kennedy said, they had to estimate the annual profit which, according to the ordinary course of the brewery trade, might be treated as being likely to be derived from the supply of liquor in the licensed premises. There was to be added in order to get the basis of the market value the rent which might be obtained from the tenant—the annual sum which he would be willing to pay in anticipation of profits which he would receive from the retail sale of the liquors supplied to him by the brewers. The annual rent having been obtained, there still remained, in order to obtain the licensed value, the capitalisation by a number of years purchase which would be affected by the circumstances of the locality, the particular business 108 and premises, and the state of the market for this class of property. Could anyone lay down more clearly the principles by which they should arrive at the value of that which they were taking away? Mr. Justice Kennedy confessed he was unable to see in what other way the market value of licensed premises could be arrived at than that which he had pursued, and he (Mr. Chamberlain) called the attention of the Committee to the fact that there had been no attempt during the whole of the debate, by anyone conversant with what Mr. Justice Kennedy's judgment was, to dispute the principles laid down. He said that they were the only principles upon which they could act, and if too great compensation had been given in particular cases it was not the fault of Mr. Justice Kennedy's judgment; it was because, after deciding on the number of years' purchase that should be allowed, other matters, which varied with each individual case, had entered into consideration, and the tribunal had over-estimated the allowance to be made in the case then under consideration. He would refer to another observation of the hon. Member for Chester because it contained a widespread misapprehension on the benches opposite as to the effect of the Kennedy judgment. The hon. Member said that the owner of licensed premises not being a brewer got less for his interest in those premises than the brewer got for his smaller interest. That was not true. The measure in each case was not the profits of the brewer, but the value of the premises in the open market in which the brewer was a possible purchaser of a house already owned by the brewer, or of a free house owned by a tenant, or of a house owned by another brewer. The brewer only came in as a possible buyer, but owing to the circumstances he happened to be the purchaser who would give the best price. [Mr. MOND was understood to dissent from the interpretation put upon his words.] The hon. Gentleman did not attempt to argue that Mr. Justice Kennedy's principles were wrong at all; he only said that in his opinion the prices paid were too high. They often found that prices which were paid were said to be too high. There were those who said 109 that that paid by the National Gallery for a picture was too high, but the question was, would it fetch that price at Christie's? One further observation on the question of fact as to whether or not the values paid had been too high. Were they higher than were paid for similar property altogether outside this Licensing Bill? He would undertake to say that, so far from being higher, they were lower than the prices paid when a public authority desired to acquire a licensed house, for some public improvement, under compulsory powers. The Government did not attempt to argue that the judgment of Mr. Justice Kennedy was unfair. They simply said the money would not go round, that they would have to provide a different measure of value for compensation, and they chose Schedule A assessment as that measure. Why? The Committee was sometimes told that it was the basis that the Inland Revenue Commissioners worked upon in the Memorandum issued by them in the last days of the late Government. It was suggested that the late Government had some responsibility for that circular or had given some assistance or guidance or aided in its circulation. As he had before explained to the Committee, if any member of the late Government could have been responsible for the circular it would have been himself as Chancellor of the Exchequer. But in this particular instance the Act of 1904 had placed upon the Inland Revenue a judicial function as against their ordinary administrative functions, and it would have been a very great breach on his part if he had attempted to direct them as to the way in which they ought to act. As a matter of fact, he received from the chairman of the Board of Inland Revenue a copy of the circular, already in print, on, he believed, the day before it was issued. He told the chairman that though he should read it with great interest it was a matter, not for him, but for the Board of Inland Revenue. The late Government had no responsibility for the issue of that circular. If they had disagreed with it they could not have altered it. It would have been obviously improper for him to dictate to the Inland Revenue and say that they should not take a line 110 which they thought was right. The Under-Secretary for the Home Department drew the inference that if the late Government were not officially responsible for this Memorandum, it might, at any rate, have regard to what was in their mind at the passing of the Act of 1904. What was in the mind of the late Government, on the passing of the Act of 1904, was that those who were interested in the licences that were to be destroyed should be compensated on the basis on which they were taxed. They were taxed on the market value of the interest they held, and it was intended that they should be compensated on that interest. Would this circular of the Inland Revenue compensate on that basis? He had before him the cases of a dozen houses which fell to pay estate duty between the years 1901 and 1908. He believed they were all London houses. Among the twelve two were freehold, and were accordingly assessed for death duty as freeholds. For the purposes of comparison, he had converted the value of the non-freehold premises into what it would have been had they also been freehold. The total freehold value of those twelve licensed houses was £288,600 odd. That was the amount on which they would be taxed by the Inland Revenue in proportion to the interests concerned. When they came to assess their value for the purposes of compensation they assessed the value of these houses at £168,500. The Government, not content with that rather severe cutting away of the value, had actually reduced the amount to £51,400. Could anything be less equitable?
§ MR. LEIF JONES (Westmoreland, Appleby)asked was the value in the licence alone or in the premises, in the structures, and the effects that went with them.
§ MR. AUSTEN CHAMBERLAINsaid the value for death duties was, of course, the whole value, but the hon. Gentleman's observation did not affect the argument. In the case of compensation, they had to allow for the interests not dealt with. But whatever allowances were made there was no possible manner in which it could 111 be shown that when a man's property was taken away in this manner he should be paid compensation which did not in any way approach the scale upon which he was made to pay taxation. The Schedule A basis was a totally inadequate basis to take for the payment of compensation. Upon this point the Under-Secretary for the Home Department on the previous Friday attempted to make a case for the Government, a thing which no one had before attempted. The hon. Gentleman said that a great part of the business was goodwill, and that goodwill was of two kinds; that in so far as it was personal to the tenant it was compensated in a provision of which too little had been said. But the compensation made to the tenant was only the compensation made in the Act of 1904. In this Bill it was less than that, and it was only by Amendments made by the Solicitor-General, who had incorporated words from the Act of 1904, that the compensation had been made equal to the compensation given in the Act of 1904. The hon. Gentleman said that, so far as the goodwill was the result of the tenant's personality and activity, it was compensated for, and that, so far as it was attached to the house, it ought to appear in Schedule A. and would be compensated for when it appeared in the schedule. But only a very small part would appear in Schedule A. The greater part would appear in Schedule D. They should compensate under Schedule D.
§ *MR. HERBERT SAMUELWhose Schedule D? The owner's or the licensee's?
§ MR. AUSTEN CHAMBERLAINsaid both the owner and the licensee. Undoubtedly the main portion of the goodwill appeared in Schedule D and paid tax under the guise of income-tax on profits. How ludicrously unsuitable therefore, was the schedule a basis for the Government's purpose. Let hon. Members turn to the list of licensed premises in the London County Council area and deal with the assessment of those premises under the Licensing Act. The assessment of licensed houses in London under Schedule A was singled out 112 as being a good assessment different from that in the country. The assessment was established on practically the same basis throughout the Metropolis. If, therefore, the Government was right in assuming that the Government assessment bore some relation to the value of the property, then it would be found that this value was given in the purchase price of the house. But the number of years purchase of the rateable value given to these houses in the schedule varied from three years to 128 years, and touched almost every immediate figure according to the circumstances of each particular house. Under Schedule A the assessment in London was extremely well done, in the opinion of competent authorities, at any rate one of the best authorities in the country—but no possible reason could be given which did not show that assessment under Schedule A was an untrue test of the value of a licensed house. The Government, however, had chosen it, he did not know why, except that it would greatly reduce the compensation to be paid, and that it enabled them to do what they would not otherwise be able to do with the funds at their disposal. The only justification they had given was this Memorandum of the Board of Inland Revenue, which, when the brewers took it into Court, the Law Officers could not support. The legal adviser of the Inland Revenue abandoned it, and declared that it was not his, and that he had not been consulted about it. The Judge rejected it, and the Government wisely refrained from any appeal against the judgment. What was the value of that document which was quoted to them as showing the way in which they were to arrive at the valuations? It was really ridiculous as an argument in favour of the course pursued by the Government. This was in many respects a very technical question and they who were laymen feared to tread in these perilous legal paths; but he thought the subject was made more complicated than it need be by reason of the manner in which it had been discussed in Committee. The Opposition reduced the question so that every Member of the House could test it for himself. Their contention was simply that when they took property away for the public interest, they were 113 bound to pay the owner of that property the price for which he might have sold it in the open market. They asked for no more, and they contended that they should have no less. The fact that a man belonged to a trade which was unpopular with hon. Gentlemen opposite afforded no justification for treating him differently from his fellow men. Such treatment could only raise among the holders of other property and other securities a feeling of uncertainty and alarm which had no little to do with the distress which they were discussing the previous night, and would continue to react disadvantageously upon our industrial position as long as the Government persisted in measures so inequitable and unjust as the clause which they were considering.
§ *MR. MONTAGU (Cambridgeshire, Chesterton)said the right hon. Gentleman, had begun with a discussion of the Government's attack on property, and his observations sounded like a faint echo of the speech which he might have delivered yesterday. Those on the Government side of the House differed from the Opposition in their interpretation of the conditions on which a licence was held. The Opposition alleged that the licence-holder had in the licence a property which would be renewed for ever, whereas they on the Government side looked upon it as, in fact and in law, a licence granted for one year and no longer. That had been stated over and over again in the debates. Between these two views a compromise, based on the facility with which a prudent trader could get out of his investment, had been incorporated in the Bill, namely, the fourteen years time-limit. The right hon. Gentleman had been discussing this subsection as though Section 3 of the Bill had never been passed. It seemed to him to be absolutely necessary to take into consideration the fact that what they had to compensate for under this Bill was the loss of a licence held subject to good behaviour, for fourteen years. That had been determined by Section 3 of the Bill. Having decided that, was it not fair to say that this Bill gave to the licence-holder and to the owner of the licensed property fourteen years of an absolutely secure possession of his licence in exchange for the one year's precarious 114 tenure which he had previous to the Act of 1904? If in the fourteen years the holder lost his licence for any other reason than misconduct, he was to be compensated, and for every year of that fourteen years security the holder was deprived of, he got a further instalment of compensation. Upon what were they to base this compensation? Why, surely, the annual value of what they took away.
§ MR. YOUNGERasked the hon. Member if that argument applied to licences in Wales under Clause 9. They might be taken away to-morrow.
§ *MR. MONTAGUsaid that compensation would then be given. The annual value of what they took away partly accrued to the owner of the property and partly to the tenant. So far as he understood, the right hon. Gentleman opposite in the comparison he made, omitted to take into account that over and above the difference between the two schedules, with and without a licence, suggested by the Government, there would, at any rate, be something payable to the tenant or employee. Under the Act of 1904 there was nothing for the tenant or employee, and what he got was carved out of the compensation given to the owner. Under this Bill it would be something additional, and in his judgment a considerable amount should be taken into consideration in respect of the tenant's interest in the comparison which the right hon. Gentleman had made. He did not think that anyone who had listened to the speech of the hon. Member for Lincoln on Friday last could remain in doubt that there was a very good case made out for the statement that throughout the country licensed premises habitually escaped their fair share of taxation. The right hon. Gentleman had been most eloquent on the subject of the Kennedy judgment, and on the fact that they had not proved that judgment to be wrong, but he had admitted, or, at all events, had not denied that what the Kennedy judgment awarded to dispossessed licence-holders was far in excess of what his friends intended under the Act of 1904.
§ MR. AUSTEN CHAMBERLAINI certainly did not say anything of the kind.
§ *MR. MONTAGUsaid the right hon. Gentleman had not denied nor was it controverted after the quotations and figures given to the House on Friday by the Under-Secretary for the Home Department, that during the whole course of the debate the statement was constantly made that it was not the anticipation or intention of the promoters of the Act of 1904 that compensation should be so large as it had been under the Kennedy judgment. If it was contended that the Kennedy judgment was fair, then it might be held that those who were responsible for framing the Act of 1904 intended that there should be higher compensation. The right hon. Gentleman had gone on to say that one of the great fallacies of the scheme of compensation for which the Government was responsible was that it did not take into consideration the profits under Schedule D. He would like the right hon. Gentleman to explain what he meant. There were no owner's profits in the public-house returns under Schedule D. The profits under Schedule D would be compensated for in what was given to the tenant. These were the general brewery profits under Schedule D, but the Government would not concede that the wholesale profits of the brewers returned under Schedule D should be taken into consideration at all. Such profits were independent of the particular licence, and a large portion of them might have be gained on some other licensed property, so that it would be absolutely illogical and unfair that they should be taken into account in considering compensation. Having made that exception of the wholesale profits of the brewers, there was nothing left which would not be included in a fair assessment, under Schedule A, of the value of the licence. Therefore, having regard to the fact that at the end of fourteen years the licence was to be granted as a new licence, he asserted that no real criticism which would hold water had been made on the Government proposal as to compensation. Under the concessions foreshadowed by the Prime Minister, which might be inserted on the Report stage, there was to be a modification of Section 3 of the Bill which affected this subsection (1). Something more was gven to the licence than the fourteen years 116 security given in the Bill as it stood. It was not twenty-one years security; it was fourteen years security, with seven additional years to run, about which there were two elements of risk. One was the possibility, to his mind the not very probable possibility, of the carrying of a local option resolution. He attached very great importance to the recognition of the, to him, incontrovertible principle of local option, but it was too much to expect that the first, or even the second, time a local option vote was taken it would be successful. After all, there were only to be two, or in exceptional cases, three occasions on which a local option poll could be taken in the seven years, and even the most sanguine temperance reformer who hoped most from local option would agree with him that even the third time there was not a very large probability of local option being carried. The good which was to come of it would have to be done by an arduous course of education of local and general public opinion.
*THE CHAIRMANI am afraid the hon. Member is getting a little wide of the Amendment. The question of local option can only come in as affecting the question of compensation. The hon. Member seems to be going beyond that.
§ *MR. MONTAGUsaid he was going to suggest that any one of the seven years coming after the end of the reduction period was not to be considered of equal value to the tenant or owner of licensed property as any one of the years coming in the reduction period, because there was a slight risk of local option, and he was going on to argue that as the local option risk was, to his mind, a very small one, the value of each year was greater than it had been sometimes argued ought to be attached to it. He was going on to suggest that in view of this extra seven years a few extra years purchase should be added to the compensation outlined in the Bill, not based on a certain extra run of seven years, but on the slightly diminished value of that run owing to the risk, which he argued was slight, of the carrying of a local option Resolution. He should like to ask the late Chancellor of the Exchequer whether, in his opinion, 117 the Schedule A valuation of licensed premises was on the whole at the moment a fair one, and whether he considered there was no room for the revaluation laid down in the Bill. After he had answered that, he would ask him whether he considered there were any elements in the value of the licence which were not included in the proper Schedule A valuation except these Schedule D profits which he did not understand otherwise than as the Schedule D profits of the brewery as a whole. If these two matters were cleared up, they could hope to come to some agreement instead of constant assertion on one side and denial on the other.
§ MR. AUSTEN CHAMBERLAINI will answer the second question first. I consider the elements which have to be taken into consideration, in determining the value of that which we take away when we close a licence, ought not and cannot appear in any shape or be represented in any form in Schedule A. Therefore, it does not matter whether Schedule A is a fair or unfair assessment, because, in my opinion, even if it is a perfectly fair assessment it cannot be used as a basis for the calculation of value.
§ *MR. MONTAGUThen all I can say is that the repeated efforts of hon. and right hon. Gentlemen opposite have failed to identify these mysterious items which are not and cannot be included in Schedule A value.
§ MR. SAMUEL ROBERTS (Sheffield, Ecclesall)said the question before the Committee was how much compensation was going to be paid under the Bill for houses whose licences were taken away during the reduction period. Hon. Members said the Kennedy judgment was wrong, but it was not appealed against. Why not? The Law Officers of the Crown agreed with the Judge. He under tood they actually gave up the argument. The Lord Chief Justice, in a case he had heard this year, said of the Kennedy judgment—
So far as it is necessary to consider that judgment as bearing upon Section 2 of the Act of 1904, I do not see how it can possibly be attacked. It must be taken to be good law.
§ *MR. HERBERT SAMUELNo one here would presume to say that Mr. Justice Kennedy's judgment was wrong in law. All we say is that the principles on which it is founded are principles with which we disagree.
§ MR. SAMUEL ROBERTScontended I that those principles were right. What had the Court to decide in that case? The object was to arrive at the value of the licence which was taken away; that was to say, the difference between the value of the premises licensed and unlicensed, plus something for depreciation of fixtures and fittings. Under the Act of 1904 it was provided in Section 2 that if the parties should not agree upon the price, it was to be fixed by the Commissioners of Inland Revenue. Under the Finance Act of 1904—
The principal value of any property shall be estimated to be the price which, in the opinion of the Commissioners, such property would fetch if sold in the open market at the time of the death of the deceased.The Commissioners thought, as a matter of convenience, they could arrive at the value by capitalising the annual value, as determined by the income-tax assessment under Schedule A. and generally they capitalised it at 4 per cent., namely, twenty-five years purchase. The Judge in the Kennedy case said the value did not depend upon the assessed value at all. The assessed value had nothing to do with the market value. What it depended upon was what the property would fetch in the open market, and inasmuch as brewers generally were the large buyers of these houses they must let the opinion of these brewers come into the matter as to what profit they would be likely to expect if they purchased the property. That was the principle which was laid down by the Royal Commission, whose Report said—While the fact that the house is licensed may be considered to some extent in the assessment, it is tolerably certain that the goodwill cannot be considered at all, but the licence and the goodwill are the things for which compensation is given and not the building, which the owner would retain.Under the decision of Mr. Justice Kennedy the "Crown" at Cobham was valued by the Court at £1,497. The 119 Commissioners had fixed the value at £455, but under this Bill the value would be only £52—one-thirtieth of the value which was found by the Court. He was simply quoting that figure to show what a very great difference there would be between the compensation paid under the Bill and the compensation arrived at by the Courts. There were forty-three London houses dealt with last year. The actual compensation was £104,000. Under this Bill, in the first year of the reduction period, that would be reduced to £18,000, and in the seventh, to only £10,000, or one-tenth of the amount actually given last year. The Government proposed to give the value of an annuity of the annual value of the House. The average period of the annuity would be five and three-quarter years, and that would have to be taken as the multiplier, as compared with twenty-five years which was taken generally as the multiplier before Mr. Justice Kennedy's decision. It was totally inadequate in every way. It worked out in practice in various ways according to the situation of the houses. It might work out to be a half or a twentieth of the true market value, and in some cases the value might be nothing at all. There were cases where the public-house might be of the same value with the licence as without it. In such a case the compensation was nil. He quoted that to show the injustice. There was a fully licensed public-house in Clerkenwell. This case was vouched for by valuers of experience. It was closed during last year under the Act of 1904. The total amount awarded was £2,424, of which the owner got £2,020. As the estimated income-tax assessment of the premises was the same, whether licensed or unlicensed, the compensation under the Bill would be nil, the goodwill having been destroyed by the State. Was that justice? If property was taken away, the ordinary rules of justice prevailed in this country—that the market value must be given. They were paying this compensation out of moneys contributed annually to the Compensation Fund. It had been stated that when the Act of 1904 was before the House it was understood that compensation would not be arrived at on those lines. A little circular was published by 120 the Home Office in May, 1904, signed by the Under-Secretary to the Home Department, and it laid down that the valuation of licensed houses came under the general rule applicable to all properties under the Finance Act of 1894, which was the price the property would realise if sold in the open market. Therefore, it was in the mind of the Home Office that the ordinary rules of valuation would be applied in fixing the compensation. Under the present Act the minimum was fixed, but under this Bill that was not so, and there was no right of appeal. He was aware that the Commissioners of Inland Revenue might add something to compensate the publican, but there was no express obligation upon them. About 11 per cent. of the total amount of the compensation allowance under the present law had been given or allotted to the licence-holder, and where the licence-holder had no substantial interest in the premises it amounted to about 10 per cent. They had received no information from the Government upon this point. Hon. Members opposite had expressed sympathy, and had urged that they should receive more, but they had been given no information as to how they were to receive more. No appeal and no minimum had been fixed. He hoped that the Government, even at the last moment, would decide that if they took property for public purposes compensation ought to be allowed at the full market value, and if full value could not be given out of public funds it ought to be given by the trade itself.
§ *MR. LEIF JONESsaid they had heard a great deal about the Kennedy judgment, and the interpretation to be placed upon it. Although the opinion of one who was not a lawyer on a legal judgment could not carry much weight, still he brought to bear upon it ordinary common sense, and he ventured to assert that the right hon. Gentleman the Member for East Worcestershire had not put the whole meaning of the Kennedy judgment before the Committee in the extract he had read. That judgment also laid down that—
In the case of an owner who is not a brewer and who let the licensed premises to a tenant you may be able to find the market value by capitalistion of the annual value based upon the true rack rent.121 That showed that Mr. Justice Kennedy had in mind exactly the same thing which the late Government had in view when introducing their Bill in regard to free houses, and which the present Government had embodied in this Bill. That was clearly the intention of the Government of 1904 when they introduced their Bill. [An HON. MEMBER: Not at all.] He did not wish to repeat extracts from the speech of the late Solicitor-General and the ex-Home Secretary who introduced the Bill. The right hon. Member for St. George's, Hanover Square, had put forward the peculiar doctrine that because no words had been quoted on this point from speeches made by the Leader of the Opposition, therefore the remarks of the other members of the late Government carried no weight as a guide to the intentions of the Government of the day. The late Prime Minister himself spoke in the debate on the introduction of the Bill, and he used these words, again showing what was in the mind of the Government in regard to the valuation of a licence. The right hon. Gentleman said—My right hon. friend the Home Secretary told the House that the machinery by which the value of this kind of property is to be estimated is precisely the machinery which determines the amount at which it is to be taxed. Do hon. Gentlemen really think it can be taxed on one value and dispossessed on another?Those were the views of the Leader of the Opposition. He accepted the theory that the assessment for taxation, and compensation should be made upon the same basis. Their complaint in regard to the Kennedy judgment did not arise in the case of a free house. It only arose when they applied the same rule of interpretation to the tied house as to the free house, and they contended—and this was a clear issue—that the brewery owner got more compensation than the owner of a house who was not a brewer. That never was the intention of the Act of 1904. It was unjust that because the owner of a public-house happened to be a brewer he should receive more compensation than the owner who was not a brewer. There was no difference in regard to a free house, and it was only in the tied house that the difference arose. They found that taking the wholesale profits of the brewer, as a means of 122 arriving at the value, resulted in giving far more compensation than was just for a great many houses. A friend of his who was a farmer believed in brewery investments in spite of all his persuasions, and he derived yearly a large return from them. He had complained of what he (the hon. Member) was doing, and he explained that he was getting on extremely well at present. His friend told him of the case of a public-house which his brewery purchased in the country for £200. Last year that house was closed under the Act, £400 was paid as compensation for the licence, and the brewery company were allowed to retain, the house for any other purpose they liked. There was neither sense nor justice in paying twice as much as a house cost and at the same time leaving the house in the possession of the same owner.
§ EARL WINTERTONAs the hon. Member has repeatedly pressed for specific cases, perhaps he will give the Committee the name in this instance.
§ *MR. LEIF JONESsaid he would not give the name, although he was willing to furnish the noble Lord with it privately. There were many cases where it would be more profitable to the brewery to close down their houses but for the prospects of compensation. He could give instances of houses at present losing money which were being kept open merely to obtain compensation under the Kennedy judgment. That was not the intention of the Act of 1904, and he was sure it was not the intention of this Parliament. If they paid more than the actual loss incurred, they would be doing an injustice to the nation, because the money paid was money which might otherwise be used for other taxation purposes. His complaint all through had been that public-houses were assessed on one basis when it was a question of the payment of rates and taxes and on another basis for compensation. There was a return of 115 houses in regard to which the licences were refused renewal in London last year. The compensation amounted to £327,000, whilst the average net assessment to local rates was £70. He did not know the value of the houses without licences. The difficulty of arriving at any comparison was admitted 123 by the right hon. Gentleman the Member for East Worcestershire, who said that he Could not in the least estimate what was the remaining value when the licences had been taken away.
§ MR. AUSTEN CHAMBERLAINsaid he had omitted to give the figures, but he would give them row. The amount treated as a freehold was £288,600. Allowing for the estimated value of the freehold premises when unlicensed, the amount left to represent the value of the licence was £255,000, which was the sum comparable to the other figures he had mentioned.
§ *MR. LEIF JONESreplied that that meant that only one-ninth of the whole value of the licences and buildings was taken as representing the value of the freehold. How could they accept such a basis as that?
§ MR. AUSTEN CHAMBERLAINThose figures are certainly more valuable than the hon. Member appears to think.
§ *MR. LEIF JONESsaid the right hon. Gentleman must forgive him if he declined to accept as conclusive a valuation of that kind. The right hon. Gentleman had refined to houses in London where the compensation money paid was three times the annual rateable value up to 132 times the annual rateable value. The average compensation was forty-one times the annual rateable assessment. He maintained that forty-one times the annual assessment was a great deal too high a figure to pay as compensation in the case of the non-renewal of a licencee. Very singular statements had been made in regard to this question by people who posed as financial authorities. On 18th March, Lord Rothschild delivered a remarkable speech to the debenture-holders in the City of London, in which he referred to this clause in the Bill. He said—
The compensation you are to receive under the Bill is of a meagre and unsatisfactory character. I shall not go into details.He thought Lord Rothschild displayed a wise discretion in not going into details. Lord Rothschild continued—It suffices to know that for the purpose of taxation your property is valued at a high rate, 124 while for the purposes of compensation it is valued at not a quarter the valuation of taxation.He had tried to understand that I sentence, but he could not. Certainly there was nothing in the Bill to justify the statement. It was the very reverse of the truth. The clause laid it down before the Committee that there should be one assessment for all purposes and that brewers and owners of public-houses should pay and be paid on the same basis; and that they should not any longer when it came to compensation be paid on a high valuation, and when it came to taxation pay on a very low valuation. The hon. Member for the Ayr Burghs said, and not without justification, that, after all, the brewers were not altogether responsible if their houses were under-assessed. The hon. Member said thatin Scotland, where the authorities were sharper and were armed with stronger powers by Parliament, houses were not under-assessed. The hon. Member also said that it seemed as though brewers were expected to be a little better than angels in this matter. Well, the supporters of the Bill were going to help them, they were going to try to make them—he did not wish to use any offensive word—honest by Act of Parliament, and to make them in their own interest assess their premises at the correct figure. If hon. Members appreciated the quotation he had made from Mr. Justice Kennedy they would see that the real difficulty arose from the fact that tied houses were not let at rack rents. There was no difficulty in the valuation of free houses, but only in tied houses where the rent was nominal. By the proposals in the clause a gentle compulsion would be applied to owners of tied houses. It would be their interest to estimate the house at its full value, but not at a higher figure. It would no longer be to their interest to conceal the real value of the house. He maintained that thus justice would be done alike to the brewers and to the public, who had been so long defrauded by the under-assessment of these houses. The Bill was a great advance on the Act of 1904. It contemplated as a normal arrangement a free house and not a tied house That was a most important principle for the House to assert. The present was 125 not the first time that Parliament had resented tied houses. The Beer House Act, frequently referred to in the present debates, was largely intended to prevent the tied house system growing up. He was thankful to say that the Bill contemplated the free house as the normal type of house in future. It was very difficult to ascertain the real value of a tied house, and he hoped the clause would secure that result. The weight of the present Bill was all on the side of the free house, while the weight of the Act of 1904 was all on the side of the tied house. The change was to the public advantage, for the tied house system had been very injurious not only to the public but to the status of the men carrying on the trade, and generally to the interest of all concerned in this matter. Now he came to the Government proposal, with regard to the number of years compensation. He thought hon. Gentleman who were pleading the cause of the owners of the houses had shown themselves a little ungrateful for the latest concession which the Government announced on Friday. Personally he had been engaged in justifying the Bill as just and generous on a fourteen years basis. The Government had, in response no doubt to the arguments of the other side, granted a considerable concession beyond fourteen years. The position at present was that every licence had a fourteen years secure run and a chance of seven years more, and that if the house was extinguished during the reduction period it was to receive the value of the unexpired period plus the value, whatever it was estimated to be worth, of the seven years subsequent run associated with the risk of magisterial action and popular action by means of local veto. He had no means of estimating the total value of that concession, but he should say that it was certainly not less than a three years certain run, and it might be a good deal more. In any case, it could be insured. The risk of closing by justices and by popular option was not so heavy that it could not be easily insured against by the trade, which would then have no compensation levy to pay. He thought that in making the concession the Government deserved recognition by 126 those who were defending the position of the owners of the houses.
§ *MR. YOUNGERBefore the Act of 1904 it was impossible to insure against a withdrawal of a licence owing to the Justices' action in some districts. No insurance company would take the risk. Precisely the same thing would occur under the Prime Minister's concession.
§ *MR. LEIF JONESsaid he was not at all sure if that was accurate; but he was sure that if the hon. Member would come to Lloyd's they would be happy to insure for him any of the houses about which he found difficulty.
§ MR. YOUNGERsaid the insurance companies would refuse to take the risk.
§ *MR. LEIF JONESsaid he was aware that the Licence Insurance Corporation had refused. That was an institution run by brewers and they would not in 1903 aid 1904 insure a risk of that kind, but he had always regarded that as a move in a political game. He maintained that the risk was insurable. Much had been made by hon. Members opposite of the injustice which they said would be meted out to a man who would lose his licence near the end of the reduction period. He had been at pains to go into the arithmetic of the Government proposal, and, whatever might be thought of the injustice of the original proposal, he contended that the payment made to a man at the end of the thirteenth year was exactly the same as to a man at the beginning. He would prove that. Suppose that on the assessment a house was worth £500 a year, and that the licence was taken away in the first year, the licensee was to receive an annuity for fourteen years. That was equivalent to ten and a half years purchase of the £500—that was to say, £5,250. Suppose that the licence ran for twelve years and was taken away in the thirteenth the tenant would get the £500, of which the present value was about £300, but he would have had twelve years run of the £500 a year all the time for his licence, and the present value of that twelve years run 127 would be about 9.9 years purchase. That would amount to £4,950, and, adding the £300 for the lump sum, they got the exact figure of £5,250, the very one they arrived at if they put down the house in the first year. He ought to add that these calculations were made on the fourteen years period. He had not made a calculation based on the subsequent concession. He thought the Government had been very generous in making the concession of the subsequent period. [OPPOSITION cheers.] Hon. Members might cheer ironically, but, after all, there was a delicate balancing of accounts in this matter. They were balancing the financial interests of the trade against the moral well-being of the nation. It was not very easy to decide the exact and just balance in that case. It was said: "The trade pays. Why should they not get as much compensation as they care to pay?" It was perfectly true that the levy was paid by the trade, but the public paid for it through the trade. And if the public eventually paid that money, why should it not be used for other purposes? But there was another way in which the moral interest of the community was affected by these concessions. They spent last Friday a good deal of time in discussing the needs of Wales. This concession affected what they did for Wales, because it was pointed out by hon. Gentlemen opposite that Wales was going to draw funds from England to put down the public-houses in the Principality which they did not require, that Wales was going to rob England and gain benefits at England's expense. But if these concessions went on, there would be no money in the compensation fund for Wales to draw upon. It was not right that Parliament should yield to the insatiable demands of the trade, and that these social reforms so urgently demanded should be kept waiting. The trade had lived under the shadow of legislation by Parliament during the whole period of its existence. There never had been a time when Parliament had not been altering the law affecting the trade. No rights had been established in the trade which were ever thought to be permanent rights. Reference had been made to 128 the beer-houses being now treated as ordinary public-houses, but Parliament had never given up its constitutional right to deal with the beer-houses. There was always the probability that the law would be altered in the public interest. The expectancy conferred upon the trade was limited by any change that might occur in the public view. Parliament had never given up its right to change the law if they thought the public interest demanded it. The primary duty of Parliament in this matter was to safeguard the public. While he had no desire to inflict hardship upon those engaged in carrying on the trade, he was afraid that the public welfare might be sacrificed to a too tender consideration for their financial interests.
§ *MR. CAVE (Surrey, Kingston)said that the hon. Gentleman had repeated in the last part of his speech very much the statement made by the Under-Secretary for the Home Department on Friday last. Both admitted, in fact, that but for the necessity imposed on them by the increased reduction of houses under this Bill, they would not have proposed a reduction of the scale of compensation. The motive which underlay the main part of this clause, and which determined the Government to pay compensation on a lower, and, he thought, unjust scale, was the need of money for the purpose of reduction under Clause 1 of the Bill.
§ *MR. HERBERT SAMUELsaid that that was not his argument. He was sorry he did not make himself clear. What he said was, in the first place, that the Government considered that the sums paid under the Kennedy judgment were grossly excessive and the valuation wrong in principle. But if it was said: "That does not matter to you, because it comes out of the trade; why, therefore, not let it alone?" the answer was: "We cannot let it alone because we must provide a fair and reasonable basis of compensation in order to be able to effect the necessary reduction."
§ *MR. CAVEsaid he did not think his statement was different from that of the hon. Gentleman. What the hon. 129 Gentleman said in effect was that the determining motive of the change was the question of providing compensation for more houses. Of course he said he thought the lower scale was fair, but he also said that but for the need of providing compensation for more houses they should not have made any change. Therefore the motive of the change was the need of money for the further reduction of houses. Did it not occur to the hon. Gentleman that the very existence of that motive must create some bias when the Government came to consider which scale should be applied? But the real question before the Committee was whether the houses to be suppressed during the reduction period were to be paid under the Act of 1904 at market value, or were to be paid at assessed value? After all, the main point was that the Act of 1904 gave market value. It took the value in the market as a test of compensation and not the value in the rate book or assessment. In regard to the Kennedy judgment the hon. Gentleman said on Friday that the decision came as a surprise to the magistrates. What reasons had he for saying that? He himself knew that to one body of justices who knew most about the case the decision came as no surprise at all. The case came from one of the home counties, and the justices offered to fix the compensation at a certain sum. The owners, somewhat unwisely as he thought, would not accept the offer. They went to the Commissioners of Inland Revenue, who awarded a sum equal to about half the sum offered by the justices. The owners then appealed to the High Court, and Justice Kennedy restored almost the exact sum which had been given by the justices. So far from the decision being a surprise to those justices, they were able to say that the High Court had decided that they were right. The hon. Gentleman also said that the judgment was a surprise to the Ministers responsible for the Act. He would point out one fact. In 1904 Ministers estimated the value of the compensation at sums varying from £500 to £600, and in one case to £800 per house. In the first two years of the operation of the Act that predic- 130 tion of 1904 was almost exactly fulfilled. It was true that in the third year there was a different state of affairs and the sums paid were higher. But one reason at all events for the increase was that the justices then began to deal with larger houses, and it was only to be expected that the estimate of 1904 would be exceeded. But, after all, the question was not what was expected, but what was right and proper? He was bound to say that he had listened to the speeches from hon. Gentlemen opposite on the Kennedy judgment and, with all respect to those hon. Members, he believed that they had completely misunderstood that judgment. Even the Under-Secretary seemed to think that the Kennedy judgment only applied to tied houses, and that some special compensation was to be given to the brewers who were the owners of the tied houses. Nothing of the kind was involved in that judgment. The whole principle of the Kennedy judgment applied just as much to the free houses as to the brewers' houses. What the learned Judge laid down was that they had to consider not the present state of things when the house was shut up, but a hypothetical state of things—what the owner would get if the house were sold in the open market. The Judge said that the best bidder in the open market was the brewer, for the house would be valuable to him as an outlet for the sale of his own beer. Then the Judge inquired what would the purchasing brewer take into account in making his bid? He would take into account first, the value of the house as a place for retail trade, and secondly, the fact that if he bought the house he would be able to tie it to his own business as a brewer, and so by means of the house he would get both a retail and a wholesale profit. With that object in view the brewer would inquire what number of barrels of beer were supplied to the house, and so calculate what amount of profit he would make if he bought the house. The whole of this argument would apply just as much to the free house as to the tied house. The Judge was simply inquiring into the market value of the house at the moment of buying. He would only add that in a 131 subsequent case the Court of Appeal expressly approved of the Kennedy judgment and said that no other decision could have been arrived at. So much for the existing principle. Now, let him compare with it the new scale proposed to be set up under the Bill. He accepted the very useful division made by the Under-Secretary when he said that there were two questions involved, namely, first, how the annual licence value should be ascertained, and secondly, what number of years purchase of the value should be given. He would not trouble the Committee with any argument as to the number of years purchase, for once they proposed a time-limit for the general body of houses they could not give the full number of years purchase for houses suppressed. He thought the number of years was unfair to the houses, but that injustice was bound up with the injustice of time-limit in general. He would not, therefore, now argue the number of years purchase. What he wanted to direct the attention of the Committee to was the manner of estimating the annual licensed value. Was that to be estimated on the income-tax assessment or not? He contended that the burden of proof that this was the right mode of assessing the annual value rested upon those who maintained that it was, because to begin with no Court in the world would take assessment as a test of value. They knew that in consequence of that, counsel for the Crown in the Ken-nington and other cases had not relied on it. In London to-day they could find no numerical relation between assessment and compensation. Therefore he thought the burden was on the other side. Look at the manner in which assessments were made. The overseer or the official who undertook the duty of assessing property valued it not for the purpose of purchase or compensation but for the purpose of rating. He was dealing with a district in which there were many thousands of houses. He had to do the best he could, and he made what oftentimes was a somewhat rough valuation of properties for the purpose of assessment to the public rate, but, of course, he could not look into the details of every house. Unions and districts differed very much in their methods, and 132 all of them knew that in one case they got a valuer who put houses high, and in another one who put houses low. It mattered very little, provided they were all assessed on the same basis, and paid rates or, that basis. It mattered little or nothing whether one paid a rate of 6d. on a low assessment or a 5d. rate on a high assessment, as the amount of cash paid would be about the same. But, of course, the moment they were going to take these figures as the basis of purchase or compensation, then, the matter was extremely important, and it could no longer be said that the general scale of assessment was immaterial. The Under-Secretary said that the Schedule A assessment ought to include goodwill, and also the value of the "tie." He might be right; it was a very doubtful point, and experts differed on it. But assuming that the assessment ought to include goodwill, he knew that, in fact, the assessment in very many, indeed, in the majority of cases, did not include goodwill. Perhaps goodwill ought to be there, but it was not there, and in most unions in the country they would find nothing like a proper allowance for goodwill. He found in London, where the thing was scientifically done, the settled practice was to allow only a percentage on half the premiums paid for a house. Therefore, in London only half the goodwill was taken into account. Was it not true to say that by basing compensation on assessment they would not give to the owner anything like the value of the house? He did not want to go into figures—it was a little too late—but he believed no expert would say that the assessment value was a true record of the annual license value of the house. It seemed monstrous that, instead of putting in their Bill, as they might have done, so many years purchase of the annual value to be ascertained in some definite way, the Government should rely upon what was nothing but a second-hand record, and should go back to the assessment. He felt very strongly that assessment ought not to be taken as the test of value. Then what was said by the other side was this: "Very well, if your taxed value is under the real value, then you are paying too little income-tax, and you ought to get your assessment put up." That was a common argument, but would hon. 133 Gentlemen say that this clever device for the purpose of putting assessment up would hold good? The suggestion was that, in order to justify Clause 10, there should be a general increase of assessment throughout the country in regard to public-houses. The Government had gone so far as to put in Clause 45, in which they proposed to enact that the provisions of the Valuation (Metropolis) Act, 1869, should during the time before the next valuation list after the passing of this Act was made, apply to any licensed premises in the administrative County of London as if they had been increased by the addition thereto or erection thereon of a building, and the provisions of those Acts relating to supplemental lists should during that time apply as if an alteration in the value of the premises had taken place during the preceding twelve months. In fact, there was to be a sort of hypothetical increase of value by means of a legal fiction of all houses by reason of the passing of this Bill, the object being that there might be some reason or justification for re-opening the assessments of all these licensed houses. Let the Committee look for a moment at how that would work. The result of that clause was that overseers might if they liked reopen the valuation. Most of the overseers would say that though it was true that they had a right to reopen it, they had valued the houses six months ago, and they adhered to their valuation, and the suggested right of the occupier of the premises to get the assessment reviewed was gone. But supposing that the overseers did act, and put up the assessment, what happened? In the ordinary course, notice of an increase was not given to the owner but to the occupier, that was to the actual tenant of the house. Was the occupier in this case going to submit to an increase? First of all, if the assessment were raised he would pay more rates, and secondly, his compensation for loss of business would be less because his profits would be less. He gained nothing by putting up the assessment, because his compensation depended, not on assessment, but on the profits of his business. The person who stood to gain by the heightening of the assessments was the owner and not the occupier, and what locus standi had the 134 owner to ask for his assessment to be increased? The result of the Government scheme, therefore, would be that the assessment would not be put up, and the man would be compensated at a price which was too low. Therefore he did not think that the machinery of the Bill would work; but supposing that he was wrong, and that everybody who had public-houses would rush to have their assessment increased, what would be the result? The inducement to raise the assessment would not press upon all trades but upon one trade alone, and the publican alone would be assessed upon a higher basis, while all other trades would be assessed on a lower basis. Was not that grossly unfair to the publican? Again, if there was compulsion under this scheme to raise the assessment it was compulsion which worked not upon the good houses, but upon the bad, because it would only operate upon those houses where suppression was likely to occur. Therefore, while the owner of a good house whose licence was safe might go on rejoicing in a low assessment, the owner of a bad house must try to get his assessment raised. The whole of the penalty for the increase of the assessment would fall not upon the owner but upon the lessee. They had had on Friday a concession made to the actual occupying tenants, namely, that they were to receive not less than one year's compensation. That concession gave effect to an Amendment which the Opposition had had on the Paper for weeks past and brought up the compensation under this Bill to something like that of the Act of 1904. Assuming that that was a concession to the tenant, on the one hand they gave him a little more in the event of his licence being refused, but then on this other hand by raising his assessment they at once increased the burden of his rates. The hon. Gentleman was anxious to make himself out as the friend of the publican, but he thought the latter would be far from grateful for this Bill, if he found that his assessment and his rates were increased under it. He would not thank the Government very much for that. The Bill also separated the compensation of the owner from that of the tenant. He quite agreed that that was a change which it was desirable to make. He thought that the whole system under 135 which the tenants' compensation was taken out of the owners' compensation operated possibly hardly on the tenant, certainly hardly on the owners. That change, therefore, was in the right direction. But he strongly urged the Committee not to try this experiment of making compensation depend on assessments but to keep to the simple system, which every business man understood, and which was the only way of arriving at a just compensation, of taking so many years purchase of the annual value as ascertained in the open market. As regards the ante-1869 beer-houses, the condition on which they gave up their statutory right was that they should have a statutory right to compensation. But what were the Government doing by this Bill? Having forced them to abandon their security they were taking from them the quid pro quo. They were doing something which no hon. Member in his private capacity would dream of doing. Supposing an hon. Member had bought goods and paid for them by cheque and then was discontented with his bargain, would he stop the cheque? Certainly not. Here the Government were asking Parliament to dishonour the cheque which the nation had given the licence-holders. He hoped that matter would be reconsidered before the Bill passed another stage.
§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH, Fifeshire, E.)said the hon. and learned Gentleman had made, as he always did, a moderate and reasonable speech full of cogent argument and entitled to the most respectful consideration. He was glad to acknowledge that the very difficult and intricate questions which arose upon this clause had been discussed with great sobriety of temperament, in a spirit of reasonableness, and, as far as the case admitted, even of impartiality. He should be content to leave the case as it was presented by the Under-Secretary for the Home Department—one of the ablest and most closely reasoned Parliamentary statements to which any of them had listened for a long time. He intervened merely for the sake of presenting once more in the simplest fashion the position of the Government in relation to the clause. Now, how 136 were they to define the subject-matter for which compensation was to be given when, during the statutory period of reduction, a licence was suppressed on the ground of redundancy? It did not matter for this purpose what the tenure of the person whose licence was taken away might be, whether it was to be treated as a freehold, as under the Act of 1904, entitled to claim a value of twenty-five years purchase, or whether it was the inevitable consequence of the introduction of a time-limit that the time should be less. The words used in the Act of 1904, which were subject to construction and interpretation first by the Inland Revenue, and subsequently by the Kennedy judgment, were—
The sum to be paid in the way of compensation is to be a sum equal to the difference between the value of the licensed premises calculated as if the licence were subject to the same conditions of renewal as immediately before the passing of this Act and the value which the premises would bear if they were not licensed premises.It was a remarkable circumstance, in view of the difference of opinion which subsequently prevailed as to the true construction of these words, that at no stage in the progress of the Bill through the House were they ever discussed either in Committee or on Report. The House was never allowed to proceed beyond the middle of the second line of the whole of that long section. This Government, which was charged with systematic curtailment of the rights of debate, had given two days to the subject. The words he had quoted were never put from the Chair; they were never the subject-matter of discussion or amendment, and that might account for the complexity of interpretation put upon them. He had always thought, and still thought, the framers of that Act never contemplated that such an interpretation would be put upon them as was put by the Kennedy judgment. He said that from the dicta emitted from time to time by the Ministers responsible for the conduct of the Bill, which showed plainly that in their contemplation and anticipation the kind of figures that would be paid by way of compensation would be very much nearer what the Government were now proposing and very much nearer the practice which was in fact followed in the two years immediately succeeding the passing of the Act than the standard 137 ultimately set up by the Kennedy judgment. He could not conceive it to have been the intention of the framers of the Act of 1904 to give an alternative security—to give to the owners of tied houses suppressed a different and a larger and more generous measure of compensation than was given in the case of free houses. He had always thought, even in the days when he was a lawyer, and he thought with undiminished conviction still—that this was the practical effect of the Kennedy judgment. What were the Government doing now? It had been kindly and generously suggested by more than one speaker that they were making a change in the law, at any rate, as hitherto interpreted, because otherwise they could not make the compensation fund go round. He did not think there would be any difficulty about that. The Government had adopted—strange as it might seem—this definition, in the first place because they thought that Parliament ought itself to take the responsibility of defining a matter of this kind, and should not leave it in ambiguous language capable of different interpretations by Government departments or by Courts of law; and, in the second place, because apart from clearness and definiteness, they believed that this was a fair measure of value. What did it matter to the Government, or to the taxpayers of the country? Nothing at all. The Government had no other motive in the world for dealing with the matter, but that of trying to arrive at a fair measure of value which would remove all sense of hardship and secure to all the different interests concerned a perfect adjustment of value. If, then, that was the object, could they take the average value from Schedule A? He had heard something from the right hon. Gentleman opposite and from the hon. and learned Gentleman who had just sat down as to the difficulties and inequities of taking Schedule A as their standard. Let him try to deal with it in a little detail. First of all, he fully agreed that Schedule A, as it was, was uneven and wanting in uniformity as between different parts of the country. In a very large number of cases it was far below the real value by which the premises ought to be assessed for local or Imperial purposes. Their object, therefore, was that Schedule A should 138 be revised in order that something in the nature of uniformity should be attained, and above all that the assessment of these houses, whether for purposes of levy paid or compensation received, should approximate to the measure of value which they took for both the local and Imperial charge. He argued the question on Schedule A as it ought to be, and he thought that some of the objections pointed out by the hon. and learned Gentleman would be found to be very considerably removed when he remembered that in London it was not a matter for overseers, but for the Surveyor of Taxes, who represented the central authority, and who had the right of intervention, which in his opinion he ought to have, not only in London but throughout the length and breadth of the country, for he could only have one motive—that of equality between the different classes. Assuming, therefore, that there was a Schedule A valuation, on the one hand, of the premises as licensed, and on the other hand, of the premises not licensed, did or did not the difference between the two form a fair measure of the subject-matter which was the basis of compensation? The answer to that question depended on this, and it was a matter which deserved very careful consideration: Were there elements which ought to be taken into account when they were arriving at the extra value which was given by the possession of the licence to the house as compared with its value which were not and ought not to be taken into account under the Schedule A valuation? Was there anything which ought fairly to be taken into account as increment of value created by the possession of a licence which did or did not fall within the Schedule A valuation? He said that there was nothing; and he wanted to know what the element was which, on the one hand, added to the value of the premises that were licensed as compared with what their value would be unlicensed, and, yet which on a proper assessment, conducted by a skilled surveyor, on a careful consideration of all the facts of the case, would not enter into the Schedule A valuation. There was no question of goodwill. Let them see what goodwill meant. They were on very technical ground here and he began to feel almost as if he were 139 back in his old and familiar walk of life, and was not speaking to a Committee of the House of Commons. But there were technicalities which he must be pardoned for dealing with for a few moments. As his hon. friend the Under-Secretary had pointed out the other day, goodwill was of two kinds, and sometimes a mixture of both. It was local or it was personal, or both local and personal. Local goodwill was that part of the value of the business which belonged to it through having been carried on in a particular situation, and might be derived either from the special continuance of that situation for the purposes of business, or from the prestige which it had acquired from having been in the same place and resorted to by the same class of customers for years or for generations past. That element of goodwill ought to be taken into account as part of the value of the premises under Schedule A. He thought it clearly came to that, and so far he agreed that goodwill was an element in regard to which the owner of the premises was entitled, when the licence was taken away and compulsorily suppressed under this part of the Bill, to be compensated. But not so the personal good will. The personal goodwill in the case of a public-house was often a very large element in the value of the business carried on. The activity of the publican, his good manners, his insinuating methods, his capacity for being "hail fellow well met" with all sorts and conditions of customers and men—all these things and many others which he might enumerate, constituted an element of personal goodwill which ought never to enter into the value of the premises under Schedule A, which ought not to enter into the rent which the owner of the premises could ask for, but which, ought to come into consideration when they were taking away the licence and depriving that particular publican, who had contributed so much to the value of his business, of what had hitherto been his resources. He gathered that there was general agreement to that. That element of personal goodwill was provided for, and ought to be provided for, by a sum in addition to anything granted under the Act of 1904, which only gave a lump sum to be subsequently divided up between the different competing interests. Instead of that the 140 Bill provides for a separate additional sum which reasonably and properly was payable to the publican. He came back again to Schedule A, and to the compensation to be given to the owner for the premises. He would take the case of a free house. What in the case of a free house was the compensation which, according to Mr. Justice Kennedy, was fairly payable in respect of the extinction of the licence? Mr. Justice Kennedy said that the object of their inquiry was—To find the price which the owner of freehold premises might expect to obtain qua premises if sold in the open market.He did not think that it made any difference whether they adopted that test or adopted the test of Schedule A. Then Mr. Justice Kennedy added that in the case of an owner who was not a brewer they might be able—To find the market value by capitalisation of the annual value baaed on a true rack-rent.Was or was not that a sound principle in dealing with a free house where presumably the occupier was paying a rent which would represent its value in the market, including the element of local goodwill to a person of average capital, skill and industry carrying on this particular business in these particular premises? Take next the case of the tied house. In the case of the tied house, it was perfectly obvious here that the rent paid by the tied tenant was no real criterion whatever. It was a figure which in nine cases out of ten they altogether ignored—a fancy nominal figure. How then ought they to estimate the Schedule A value, in other words the rack-rent which the tenant would pay in the case of a tied house? By exactly the same considerations as in the case of a free house. He could not see any difference whatever. The vice of the Kennedy judgment—if he might be allowed to use such an expression without prejudice—was that when Mr. Justice Kennedy came to consider what the thing was that corresponded to the rack-rent in the case of a free house, he then took into consideration an element — namely, the wholesale trade done by the brewer, in so far as it was done in that house—as though it was one of the elements of value. That proceeded upon the obvious error that if they suppressed that 141 house that amount of the brewer's wholesale trade was pro tanto diminished. It was nothing of the kind. It was very often carried on to precisely the same extent after the suppression of the house as before. But whether that was so or not it was not an element which ought to enter into the calculation of the value of the house, because it was not an element which anyone ought to take into account in considering the rent which would be paid for it. If that were the case, it was pretty clear that this judgment, which had admittedly established a different standard of compensation as between a free house and a tied house—admittedly so, because they had only to look at the figures in cases actually decided in regard to which compensation had been awarded to see that that was the practical effect—proceeded upon a principle which that House ought not to sanction and which was not just. It was on that ground that the Government had thought it right to put a definition, as to the meaning of which there could be no doubt, into the Act, of the subject-matter which had to be valued, and next, to make it clear that they were to apply to the measurement of that subject-matter one uniform standard whatever the class of house they had to deal with. He admitted the difficulty and complexity of the subject—the whole system was so artificial and overgrown with such a network of conflicting interests that it was difficult to disentangle one from the other—but if it were true that the Schedule A valuation of the premises took into account—if made upon proper principles and in accordance with the rules of the case—every element of value that entered into the calculation of the tenant when he considered what he would pay for the premises for rent, and what for any other purpose, then he submitted that in this Bill they had, for the first time, established a perfectly fair and just rule in regard to which there was no cause of complaint, either on the part of the owner, the brewer, the tenant or anybody else in the trade, and it was on those grounds, as to which it was most important that there should be a perfectly clear understanding, that they must resist the amendment and adhere to the clause.
§ MR. A. J. BALFOUR (City of London)said the right hon. Gentleman began his speech by appearing in the character of the defender of the liberties of debate in the House and contrasted the discussion permitted by the closure Resolution under which they were working with what was done in reference to the Act of 1904. He did not mean to deal with those remarks, but he would remind the House that the Bill of 1904 dealt with one single issue in ten clauses, while this one dealt with a series of most complicated measures all compressed together within the limits of one Bill consisting of forty-seven clauses; that there was no comparison in point of perplexity and difficulty between the two; and that whereas they were now allowed nineteen days to discuss the forty-seven clauses, in 1904 the House was allowed eleven days to discuss the ten clauses. A very simple arithmetical calculation would enable hon. Gentlemen opposite to compare the views of freedom entertained by the right hon. Gentleman, the hero of ten closures by compartments in the course of three years, with the relatively modest effort they made to deal with the difficulties, no doubt inherent, in their Parliamentary practice. He did not know why the right hon. Gentleman introduced that controversial topic, but as he had done so he had to reply to it. He would hasten on from the right hon. Gentleman, as the guardian of their liberties, to the right hon. Gentleman as a great legal authority dealing with the interpretation of an Act of Parliament which had passed and with the Bill now before the House. Of course he admitted that the right hon. Gentleman was, by experience and training, far better qualified than he to deal with legal technicalities. Indeed, when he came into the presence of experienced lawyers in that House he always felt his inferiority so acutely that it was only with great diffidence and reluctance that he felt himself forced into the controversial lists. But the right hon. Gentleman began with what seemed to him a fundamental error of statement. He said that the Act of 1904 laid down, or was interpreted as laying down, twenty-five years purchase of the annual value of the licence. It was true that twenty-five years purchase appeared in the 143 memorandum of the Inland Revenue, but that was entirely upset by the Courts. It never had any countenance from any speech, so far as he knew, by his colleagues in passing the Bill, and he was sure it had none in any speech he made.
§ MR. ASQUITHsaid he did not mean to say that, if he said it. All he meant was to contrast the number of years purchase which would naturally be given for an extinguished licence where there was no time-limit, and the more restricted number which must necessarily be given under the principle they were establishing.
§ MR. A. J. BALFOURthought the right hon. Gentleman must have expressed himself somewhat imperfectly on the first occasion, but he fully accepted his explanation, and would not pursue the topic. Then the right hon. Gentleman expressed his view that the authors of the Act of 1904 expected to see carried out the principles embodied in the Bill of 1908. That was quite inaccurate. He was not aware that it had the smallest shadow of foundation. What had been brought forward as an alleged foundation was that some of his colleagues made prophecies, not wholly inaccurate, as to the amount of compensation that would be given. Of course all prophecies of that kind were open to doubt. In the first place they dealt with the future—and every statement about the future was open to doubt—and in the second place they dealt with a question on which it was impossible to dogmatise arithmetically. They could not say positively how much compensation would be given by the tribunals for a certain type of property until they saw how the tribunals were going to act, and what he wished to insist upon was that there never was the smallest ambiguity as to the underlying principle which they thought fair in the matter of compensation—the principle that they should act in the matter of compensating owners of licences for their licences exactly as they acted in taxing the owners of licences. That was a perfectly plain and simple proposition stated over and over again in the debates of 1904, which was accepted then by his colleagues and himself, and which they endeavoured to carry out 144 in the Bill of 1904. They could not read that Act without seeing that those principles were embodied in it. The words were—
Shall be determined by the Commissioners of Inland Revenue in the same manner and subject to the like appeal to the High Court as on the valuation of an estate for estate duty.He did not believe clearer words could be put into an Act of Parliament, and he might add that the principle on which the Commissioners of Inland Revenue directed the valuation of an estate for estate duty was, by Sir William Harcourt's Act of 1894, market value. So that they laid down unmistakably two principles on the face of the Act of 1904—first, that the Inland Revenue should value a man's property for compensation exactly as for taxation, and, secondly, that the proper principle of dealing with all questions of valuation was the market value of the property they were going to take away. That was the bed-rock, as they thought it, on which they must always proceed in dealing with all kinds of property, and if any member of the Government was going to speak further, he would ask him to tell them—what the right hon. Gentleman did not tell them—whether he dissented from the equity of those two principles. Not once had any speaker faced the plain issue he now put before them. That was really their fundamental difference with the Government, though there were some subsidiary differences on which he might say a word. He quite agreed that, on the first blush, it might seem as though Mr. Justice Kennedy took into account the profits made by a brewer who owned a tied house, and that a house that was not tied was compensated under that judgment on a different principle from the house that was tied. But that really was not the case. The principle that underlay Mr. Justice Kennedy's judgment was, if he might speak as a layman, the principle which underlay the Act of 1904—the principle that market value and market value alone was to determine the compensation. They must determine market value by some interpretation of the intentions of the class who were likely to compete in the open market for the commodity which was sold in the open market. 145 Who were the class likely to give the highest price for a licensed house—whether that licensed house were a tied or a free house mattered not? Undoubtedly the brewers, and, therefore, said Mr. Justice Kennedy, if he really interpreted his judgment, what a brewer would give for a licensed house, irrespective of whether that house was now tied or free, was an element, and must always be an element in the market value not of a tied house more than a free house, not of a free house less than a tied house. The Prime Minister absolutely ignored this argument, and he earnestly trusted that before the debate closed the Solicitor-General would really deal with the legal aspect of the Kennedy judgment. Another point which, it seemed to him, the Prime Minister utterly failed to deal with was the question of rating. The Government insisted that a fair basis for compensation was to be found in rating under Schedule A. They had not attempted to answer the arguments that were brought against that proposal by his right hon. friend and his hon. and learned friend the Member for Kingston. One of those arguments was that, even when they had got a local authority which, to the best of its ability, carried out an equal and efficient system of rating, to attempt to value licensed premises on the basis of Schedule A led to the most grotesque conclusions. His right hon. friend pointed out that in the London County Council Return there was an account of all the licensed premises and their annual rating, which was equivalent to Schedule A, and it appeared that in some cases the value sank as low as three years purchase of the rateable value, and in some cases it rose as high as 122 years, and that it varied between those two extreme figures by almost every fraction that they could imagine. It was absurd to say that a valuation of that kind could form a proper basis of compensation when they saw produced results as grotesquely unequal as those which were shown in this Return. Up to the present moment not a single reply had been made from the Treasury bench to this point, and he made a direct and precise appeal to the Solicitor-General to look at the Return and to say, after he had ex- 146 amined the figures, whether he could any longer justify the equity of compensation based on rating under Schedule A. Another point connected with rating which was admirably made by his hon. and learned friend received no reply from the Prime Minister. They were going to compensate a man according to his rating. By universal admission rating was very often a very poor index of the value of a house. Therefore the owner of a house rated very low in proportion to its value would evidently receive much less compensation than the man whose house was rated at its full value. That appeared to be nothing but a source of satisfaction to hon. Gentlemen opposite, who said: "What an excellent and delightful plan of getting automatically a proper and fair system of rateable value." Let him point out, in the first place, that it was not the licence-owner who rated himself, but the public authority. In the second place, the person who had an interest in seeing that rating was high was not the person who had got a right of appeal against the rating; and in the third place it was perfectly notorious that there were many districts in which the rating was perfectly fair as between different kinds of property, because it was universally too low or universally too high. Look what they were going to do in that case. They were going to compel the owner of a licensed house either to rate himself above the general average of the community in which he lived, or submit to unfair compensation. If he rated himself above the average level, they got in that locality, not a good, but a grossly unfair and unequal system. Was that a system they wanted to adopt? Was that a step towards a fair system of rating? It was grotesque, and the Prime Minister should have dealt with it. How on earth were they going to defend a Bill which put before the owner of a house or a licensee this alternative—either you are going to be rated proportionately above your neighbour for every local purpose so long as you continue to own a licence, or else you are going to be robbed if and when the moment comes for the compensation to be fixed. That was the third definite 147 point on which they most earnestly and respectfully asked for a reply from the Solicitor-General. These points seemed to him absolutely to kill the argument that this Bill offered a fair system, and he could not help asking himself whether the Government wished to give fair compensation. A very ominous phrase appeared in the speech of the Prime Minister when he was explaining the Bill to the House on the First Reading. He used the word "compensation," but he used it with a caveat because, he said, it did not exactly express his meaning. What they wanted to get at was that meaning which was not expressed by the word compensation. What was it the Government really meant to do with the owner of a licence? Had they got back to the doctrine of solatium, which was a very favourite one with the right hon. Gentleman in the debates of 1904? He was, he thought, the inventor of the phrase.
§ MR. ASQUITHNo. I think it came from Birmingham.
§ MR. A. J. BALFOURsaid that, whoever the patent rights might lie with, there was in 1904 a fundamental difference between right hon. Gentlemen now on the Treasury Bench and those who were responsible for the Bill of 1904. The then Opposition, the present Government, said there was no right to compensation, only an equitable claim to some kind of solatium. The then Government said: "We are taking away property with a value in the open market. You must give, not a solatium, but compensation." That was the difference between them then. Was it the difference still? Was the solatium doctrine abandoned? Did the Government in this Bill mean compensation, or did they mean gratuity? So lively was his recollection of the solatium view that they held only three or four years ago that the Committee would not regard him as unduly uncharitable if he said that compensation had never been in their minds any more than it was now in their Bill. In their Bill they did not give compensation. In their policy, they never intended to give compensation. Their Bill carried out their intention, and 148 their intention squared with the Bill. It was because they held row, as they held in 1904, that they ought to deal with this question on a fundamentally different principle, because they thought that, when they took away a mar's property, the market value of that property should be given to it, that on this clause, as on the clauses that had preceded it and would follow it, and upon the Bill as a whole, they had offered, and they meant to continue to offer, the most determined opposition to the proposals of His Majesty's Government.
§ LORD R. CECIL (Marylebone, E.)said he was surprised that no member of the Government had even attempted to answer the very pertinent and important questions which the Leader of the Opposition had asked. On that side of the House they certainly did desire to know in what way they were to regard this clause—whether it was intended to be compensation to the owners, and to those interested in licensed house property for the money value that was to be taken from them. The Prime Minister's speech certainly did do something to help; he had, at any rate, definitely abandoned the argument put forward by the hon. Member for Chester that the real defence of the compensation proposals of the Government was that if they were to give the compensation which the licence-holders thought they were entitled to, and which hon. Members on that side thought represented their true loss, it would be impossible to carry out the principles of the Bill. But the Prime Minister had not abandoned a much more serious evil connected with reassessment. The right hon. Gentleman admitted that if they proceeded with this clause on the present basis of assessment the result would be grossly unjust. He did not say that it would be grossly unjust, but no one who listened to him could doubt that that was what he meant. It was now admitted, even by the Government themselves, that unless they had a system of re-assessment the principle of this clause was unjustified. Therefore, it was an absolutely essential part of the Government scheme that there should be re-assessment. What the Prime Minister in effect said was: "We propose to give full compensation. That is our theory." 149 The right hon. Gentleman was not prepared to go to the country and say: "We do not propose to give compensation." Compensation had only one meaning, and what the Prime Minister said was—"We propose to pay to those interested in licensed property the value of that which we take from them." The Government thought they could do this by a revaluation under Schedule A. No answer had been given to the question which had been put again and again. Did the Government assert or deny, speaking generally and apart from licensed premises, that the rateable valuation which is the basis of Schedule A represented the true market value of the subject of such valuation? He did not believe that any hon. Gentleman on the other side of the House would venture to get up and give; an affirmative answer. Everyone who knew anything about the matter knew that rateable value was not the true value or the market value. That was not peculiar to licensed property. He believed the hon. Member for Chester was interested in large chemical factory works in the North of England. He was quite certain that the hon. Member would find that if there was a proposal to expropriate him upon the basis of the assessed value under Schedule A he would be the loser of probably tens of thousands of pounds. That was the broad question which the Committee had to face. The Prime Minister admitted that unless there was a re-assessment there would be injustice. Was it conceivably fair to raise the assessment on one particular class of property when they kept the assessed value of other classes of property at the value at which it stood at present? How could hon. Members pretend that that was fair?
§ *MR. SHERWELL (Huddersfield)I think the noble Lord forgets that there is now a statutory right of independent assessment of licensed premises, so that the distinction he deprecates already exists.
§ LORD R. CECILsaid he did not think the hon. Member quite followed what he had stated. There was no objection to the assessment under Schedule A as merely a basis of taxation. It was perfectly obvious that it was 150 utterly unimportant whether that was absolutely true, provided only that it was relatively true. What he meant was that so long as the rates and taxes were levied equally among the people over the property according to the relative value of the property it did not in the least matter whether that value was the true value or a conventional value. As a matter of fact, if they liked to put it so, it was a conventional value. Personally, he thought that was quite right. He would tell the Committee why. When the State took property compulsorily he thought it was of the utmost importance that the State should not pay too little for it [Laughter.] They might laugh, but it was clearly right that where there was a transaction between the State and an individual, having in view the relative forces and the relative wealth of the two parties, the individual ought not to get less than the true value. That was generally felt by every fair-minded man in the country. Parliament always provided that when property was to be taken from the individual it was to be paid for at, he would not say a grossly excessive value, but at a value which necessarily had a margin of too great rather than too little. Nobody doubted that that was a perfectly just and fair condition of affairs. Exactly the converse applied to the case where they were going to raise taxes. The same law applied. It was clearly right that the advantage should not lie with the State. It ought to lie, if at all, with the individual. Everybody who had given any study to the question knew that he was speaking the truth, and the result had been that the basis of value for the purposes of taxation had always been lower than the true market value, just as the basis of compulsory sale had always been rather higher. He did not care really for the purpose of the argument he was addressing to the Committee whether that was right or wrong. It did not matter. He had no doubt himself that it was right. But assuming that others were right and that he was wrong, and that it was a wholly erroneous system which ought to be abolished, it could not be defended if they were to abolish if for one class of property owners and to leave it for all other classes. The 151 thing was really unarguable. The difference between taking the money from a particular class, not in a lump sum, but from year to year, was equivalent to making a member of that class lose his teeth one by one instead of having them all extracted at the same time. In regard to the vexed question of the Kennedy judgment, it was interesting to observe that the question whether trade should not be considered was not argued by the Attorney-General and the Solicitor-General of that day. The late Sir John Lawson Walton, who was then Attorney-General, said it was not unreasonable to inquire into the amount of business that was done at the inn, and the present Attorney-General agreed that the procedure, which some hon. Members attacked as possibly illegal and certainly inequitable, was not unreasonable. If the licence of premises upon which the tenant brewed the ale which he sold were taken away, would not the loss of his profits on the ale which he brewed be taken into consideration in fixing the amount of compensation? If it were, why should not the same treatment be accorded to other brewers?
§ *MR. CHARLES ROBERTS (Lincoln)asked if the noble Lord could explain why, in the debates on the Bill of 1904, explicit assurances were given by the Home Secretary and the Solicitor-General of the day that no compensation was to be given for trade and for wholesale profits.
§ LORD R. CECILsaid he was not a Member of the House at that time, and did not know what was said. If his right hon. friends were so unjust as to say that in estimating the market value of a public-house they were not to consider the value of the trade that might be done there by the brewer, he really could not conceive what they were thinking about when they said it.
§ *MR. CHARLES ROBERTSWhy, further, did they leave out compensation to the publican for the loss of his retail profits?
§ LORD R. CECILsaid that the hon. Member was entirely mistaken in thinking 152 that that was left out. It was included without a doubt, but by a provision that operated rather harshly on the owner of the premises. It was taken out of his compensation instead of being made a separate matter of valuation, as it ought undoubtedly to have been. He rather deprecated these references to what was said in 1904. In his short experience of political life it had always seemed a certain sign that the other side had very little to say if they abandoned the defence of the proposals really before the House—whether the Government proposals were fair or not—and turned back to some ingenious dove-tailing of isolated sentences from past debates in justification of their proposals. As his hon. and learned friend the Member for Kingston had said, the broad question here was, Were they going to compensate on the basis of market or assessable value? He thought that assessable value was unsatisfactory, and he had already pointed out that the Prime Minister himself also thought so. He was driven to ask why it was that hon. Members who professed to be anxious to be fair to the trade and repudiated with the utmost warmth the accusations made against them had put in their Bill provisions which seemed to be demonstrably unjust. A phrase was used by the hon. Member for Appleby which threw a lurid light on the kind of way in which they and other "wolves" approached this question. The hon. Member said that it would be a difficult balance to strike, the balance between the financial interests of the trade and the moral interest of the nation. Well, what did that mean? He could attach no meaning to it except that the hon. Member thought it was legitimate to cut down the compensation to be given to this particular trade if only in that way he could carry out what he regarded as the moral requirements of the nation. He apprehended that he had rightly interpreted the hon. Member's observation. He hated—he deprecated using strong language—[Cries of "Wolves"]—and he was not going to accuse hon. Gentlemen opposite of being brigands. But that was precisely the language which brigands from time immemorial had used in defence of their trade. The Committee would recollect the case of Robin Hood. The hon. 153 Member for Appleby no doubt would have been Robin Hood, and the hon. Member for Lincoln Little John. Robin Hood always explained that he did not rob the virtuous Saxons who happened to be his friends; his levies were made exclusively on the Norman barons and priests whom he disliked. In other words, he thought that the financial interest of the Norman barons should not be put in competition with the moral interest of suppressing priests and barons for the benefit of the Saxons. Precisely the same arguments were used to-day by semi-criminal and semi-political societies throughout the world. It was a dangerous argument, and one which might lead the Government further than they anticipated at present. At any rate, he understood the argument. It was a frankly predatory argument. What he did not understand was the case of hon. Gentlemen like the Member for Chester, who professed to desire to give full compensation to the trade, who brought a great array of figures to prove that they had examined the question and were satisfied that this clause was going to deal fairly with the trade and that they were therefore not vindictive. He could not believe that they had really given their mind to the proposal which the Government had put before them. He could not help feeling that the kind of argument which satisfied them now would never satisfy them if they were dealing with the ordinary transactions of life. He trusted the Committee would allow him to say, although he admitted that it was rather strong, that political brigandage was one thing, but political hypocrisy was another.
§ *MR. C. B. HARMSWORTH (Worcestershire, Droitwich)said he would not enter into the intricate details which had been touched upon that afternoon by hon. and right hon. Gentlemen who had legal qualifications to do so. He should like, however, at the outset of his remarks, to deprecate the language used by the noble Lord, and that which was almost habitually used by right hon. and hon. Gentlemen opposite when speaking of the policy of the Government in regard to this Bill. They were accustomed to a certain latitude in political language which none of them would think of applying in the private 154 relations of life. But he really thought that right hon. and hon. Gentlemen opposite might at least give them credit for sincerity in their aims and for the same moral attributes which they claimed for themselves. As one who did not profess to be an expert in this matter, he thought that the whole point in dispute was a question of degree—viz., on what basis certain people were to be compensated for certain equities which they undoubtedly enjoyed. He could assure hon. Gentlemen opposite that the gulf between the two sides of the House was by no means a moral gulf, but merely a matter of interpretation and opinion. That was very curiously illustrated by the discussion that afternoon about the Kennedy judgment. He himself, he honestly confessed, had had very vague views in regard to the Kennedy judgment, but the whole tenor of the speeches went to prove that right hon. Gentlemen opposite, when framing their own Act, had no idea of giving compensation on the Kennedy basis. They were always accusing those on the Ministerial side of the House of robbery and confiscation, but having the views they now expressed, they ought to accuse themselves of robbery when they framed their own Act. He thought the language which was bandied about from one side to the other was quite out of place. It did not assist them in their discussions and did not tend to public business. He had always thought that the question of compensation should be decided on an actuarial basis. He and those around him were in this position, that they must absolutely depend upon the opinion of experts, like the hon. Members for Spen Valley and Lincoln, and particularly on the judgment and opinion given from the front bench. He was bound to say, although he regarded the provisions of the Bill with regard to compensation, so far as he understood them, with some misgiving at first, having been a patient auditor of the debates on both sides of the question, he thought that hon. Gentlemen opposite had lamentably failed to prove, especially after the concessions made by the Prime Minister, that the compensation would not be adequate in the greater number of cases. Speaking for himself, he would like to see this thing done not only fairly, but generously, because they 155 must bear in mind the fact that they were not compensating these licences out of public money, although it might be regarded as contingently public money, and that it really did not matter at present how generous that compensation was, provided that it did not interfere with the operations of the Act. Obviously, if the Act was to work, compensation and the compensation levy must, to some extent, accord. They had heard a good deal about the injustice of the present proposals of the Government, but if he pursued that line of argument with regard to the proposals of the late Government when they came to deal not with the owners but with the licence-holders, there was nothing to show in their former action and in their attitude to-day, that they had any regard whatever or consideration for those people who were the only people whom the State recognised at all. He congratulated the Prime Minister on including the manager and the licence-holder in the scheme of compensation. He himself thought that an even higher rate of compensation might be accorded to the manager and the licence-holder than that proposed. He had been very much struck by a speech made the other evening by the right hon. Member for Dover, who, referring to the goodwill of a public-house, attributed by far the greater part of it to the personal good-will of the licence-holder. If that were so, the Government would be well advised to make his condition even more definite than at the present time. He hoped they might regard one year's profits as the minimum and that the Commissioners would be given the power to grant a greater compensation if, in their discretion, they thought it was right. He would like to allude to a class of licence-holders who had been already referred to by the noble Lord. He meant that considerable class, in many parts of this country, of publicans who brewed their own ale. In these cases where a house was suppressed it was not only a licensed house that was done away with but a brewery, because the brewery had no other outlet for its wares. He thought that was a very important class of case, and he trusted that his right hon. friend the Prime Minister would give it careful consideration before 156 this Bill passed. He could only say, in conclusion, that so far as he understood the provisions of this clause, especially with the Amendments which had been foreshadowed, they were fair to the trade as a whole, and they transcended everything that had been done by the other side in their fair and equitable treatment of licence-holder and manager and, generally, of the less influential persons who conducted the trade of public-houses.
§ THE SOLICITOR-GENERAL (Sir S. EVANS, Glamorganshire, Mid.)said it had not been his intention to intervene in that debate, because he said what he had to say about the Kennedy judgment on the Second Reading. He now only intervened with a short explanation, in the hope that it would curtail the debate rather than extend it. He did not think himself, with all the different opinions that prevailed in the various quarters of the House, that it was very useful to discuss in detail what was called the Kennedy judgment. One thing was perfectly certain, that whatever was the principle which Lord Justice Kennedy laid down, unquestionably when he worked out the figures he worked them out on the number of barrels and the profit per barrel which the brewer would make, and all the questions put to him showed that the difference between the two sides of the House was whether or not, in arriving at the compensation which they were to pay to those interested in the premises, of which the licence was taken away, they ought to include the brewer's profit in regard to his wholesale business.
§ MR. A. J. BALFOURThat is not the question that I asked.
§ SIR S. EVANSEvery question which the right hon. Gentleman asked came down to that.
§ MR. A. J. BALFOURNo.
§ SIR S. EVANSsaid this was not a legal question, it was a question of what was to be done, and although it was very interesting to go back to the Act of 1904 and discover what it was that was said 157 by the right hon. Gentleman, the question was whether the compensation which they offered for these licensed premises had been put upon a fair and proper basis. The Government said it was, when they put it upon Schedule A, and he would give one or two reasons why they should not include brewers' profits. Schedule A required that the assessment of the premises should be according to the rack rent, and therefore in the case of licensed premises they showed the annual value, of those premises with a licence. The other figure which they took was the annual value of the premises without a licence, and the difference between the two, they said, ought to measure, and did properly measure, the loss sustained by the taking away of the licence in respect of the premises. Now, was it right to include the brewer's profits? First of all, they were the profits made elsewhere in connection with another business. The brewer might, if he liked, rent a public-house to a free tenant. What would be the value? The character of the rack rent which that free tenant would pay. If the brewer let the house to a person who was "tied" as to the business, no doubt over and above all that the brewer made, he in connection with his own wholesale business made an additional brewer's profit. But those profits were profits made in connection with another business. Let him take the case of a house which sold a particular class of beer. In the case of a house where only Bass's or Allsopp's beer was sold, the abolition of the licence took away that particular outlet for part of the business of Bass or Allsopp; but dio anybody propose that Bass or Allsopp should receive compensation? The tenant of a licensed house might by reason of a loan take his aerated waters from a particular manufacturer; had anybody ever suggested that the manufacturer of aerated waters should be compensated if the licence were abolished? Let him put another question. How were they to separate the wholesale profits of the brewers, as distinguished from those of the house itself, because they had been dealing with cases in which the brewing company had become the owners of the premises? But they could have precisely the same class of trade carried on in premises 158 where the brewer had no interest at all. Supposing there was on the public-house a first mortgage to A.B., who was not a brewer, and there might be two or three other mortgages. Supposing, further, that the brewer lent money on the personal covenant of the person who carried on the business to take his beer and spirits; that gave him no interest in the house, but the profits that he made in that case were the same as those he made as the owner.
§ MR. A. J. BALFOURThat is not the question I asked at all.
§ SIR S. EVANSThere is no legal question, for me to deal with.
§ MR. A. J. BALFOURI did not ask a legal question.
§ SIR S. EVANSsaid he was in charge of the legal part of the Bill. The whole question raised was whether they were to include in the compensation the wholesale profit which was made by the brewer. [OPPOSITION cries of "No."] The right hon. Gentleman had directed attention to the figures given in the return of the administrative county of London as to licensed premises, and had pointed out that the amount of compensation awarded varied immensely, being in some cases three, five, or eight years, while in another case it had a maximum of a great many years purchase. That did not show that Schedule A was wrong; and if it was wrong, it ought to be amended. In arriving at the total figure which was divided in order to get the number of years purchase, the huge profits of the brewers were included. He had before him the Kennedy judgment. He would take the first few cases. The particulars were: "The British Queen"—to the tenant, £276; assessment, £75; to the brewers, £2,249. Could anybody say that was due to the inherent value of the premises? The house was a free one. Obviously these were brewer's profits reckoned on the number of barrels. The brewer's profits would depend on the quality of the liquor he supplied to the house; the worse and the cheaper the liquor, the greater his profits. The closer the tie upon the tenant and the higher the price the brewer charged the tenant, 159 the greater also would be the brewer's profits. He came to other particulars: assessment, £50; to the tenant, £186; to the brewers, £1,929; assessment, £41; to the tenant, £100; to the brewers, £549; assessment, £100; to the tenant, £104; to the brewers, £1,356. This was the answer he made to the right hon. Gentleman. It dealt with the whole substance of the case as he put it. [An HON. MEMBER: Assessment?] With regard to assessment, the point raised was whether it was right to take the rack rent as set out in Section 60, Schedule A, of the Act of 1842.
§ LORD R. CECILsaid the point on which he insisted was whether the assessment in fact represented the fair value of the premises. Would the hon. and learned Gentleman on his authority tell the Committee that the assessment for rates represented the fair value of the premises?
§ SIR S. EVANSsaid that if it did not, it ought to. The law, as set forth in Section 60 of the Act of 1842, was that the assessment should show the rack rent value of the premises per annum.
§ LORD R. CECILsaid he asked whether it did.
§ MR. BONAR LAW (Camberwell, Dulwich)said he only rose for a moment to say that his right hon. friend the Leader of the Opposition put some very pertinent and definite questions, but that the hon. and learned Gentleman who had just sat down had not answered them, although as he rose he understood he was going to do so. Later on, however, he said it was not necessary, for the reason that he was only party to the discussion as a lawyer, and it was not his business to deal with any but legal questions. That was what he understood him to mean.
§ SIR S. EVANSWhat are the questions I am asked?
§ MR. BONAR LAWsaid the Leader of the Opposition appealed to the Solicitor-General because he seemed to be the member of the Government who had not spoken, and who was going to speak, and 160 he asked him to deal with certain points which he had ignored. One question was, did the Government, or did it not, recognise that the same principle of compensation should be adopted as that had recourse to by the Inland Revenue in obtaining revenue? Another perfectly clear and relevant question had reference to this state of facts. It was within the knowledge of everyone that there were localities where the whole assessable value was below the natural rent. That was perfectly fair as between properties if treated alike, but under the Government Bill either the publican was going to receive unfair compensation or he was to be assessed at an unfair rate as compared with other properties.
§ SIR S. EVANSHe is assessed, and ought to be assessed, according to the rack-rental.
§ MR. BONAR LAWasked whether the hon. and learned Gentleman really meant that he was going to alter the whole rating system of the United Kingdom. Was he going to deal with other property in the same manner? In his opinion, the hon. and learned Gentleman was wise to stick to the legal aspect of the case. He had given an illustration of the way in which extraordinary profits could be made, which was a revelation to anybody who had been engaged in trade of any sort. The way to make big profits according to the hon. and learned Gentleman was to supply bad stuff. It was, he thought, a bad analogy, but, taking that analogy, the way to make big profits as a lawyer was to do the worst work in the worst possible way. It was as true of the profession of the hon. and learned Gentleman as of any other. Business was not profitable if carried on on those lines. He had not the time, and he had no intention of going into the legal merits of the Kennedy judgment, but when he listened to the Prime Minister, the speech of the right hon. Gentleman appeared to be special pleading to which one could not listen without admiration. The right hon. Gentleman said that to compensate on the basis of assessable value was fair. Was it fair? If it was fair in regard to the public-house it would be equally fair in regard to any 161 other business. Supposing that there were two drapers' shops in the same street, of the same size, and of apparently the same value. Supposing that one of those businesses made a profit of £1,000 and the other made a profit of £2,000 a year. Would that difference be recognised in Schedule A as it stood? If it was not recognised in that case how was it fair to recognise it in the licensed trade? That brought them back to what was pointed out by his right hon. friend at the end of his remarks earlier in the afternoon. There was a fundamental difference here between the Government and those who sat in Opposition. The right hon. Gentleman the Prime Minister had not only quoted the words used by his right hon. friend, but had definitely said either on the First or Second Reading of this Bill that licences were not a form of property. That, obviously and clearly, meant that anything which this House chose to give to the trade was a gratuity which they had no right to have, and about which they had no right to bargain. It was for that reason that one hon. Member, who thought for the purposes of compensation they ought to take the valuation of an actuary, finished up his speech by expressing his willingness to take the opinion of the Treasury Bench. The whole principle of everybody who supported the Government was that these people were entitled to nothing, and anything they got they ought to be thankful for.
§ *SIR THOMAS WHITTAKER (Yorkshire, W.R., Spen Valley)said the hon. Gentleman who had just sat down had stated that compensation and taxation should be on the same basis. It was the contention of those who supported the Government that compensation should be based on taxation under Schedule A. When hon. Members opposite contended that taxation and compensation should be on the same basis they referred to the death duties only. They should refer to all kinds of taxation, and if the Government based their compensation on Schedule A. they were carrying out the principles of hon. Gentlemen opposite. The hon. Gentleman then turned to other bases, and said that lower assessments all round were 162 just. But in particular districts they were not just. It was part of a dodge on the part of the locality to escape their fair share of the local county rate. If some localities were assessed at a low rate, if they were under-assessed, they paid a lower proportion of the county rate than they ought to pay. He agreed that it would be unjust to put up the publican alone; all assessments ought to be put up. If they were not, there was an injustice to somebody somewhere. The Act of 1904 did not include trade compensation, but the hon. Members opposite were now contending that this Bill ought to do so. He was not much troubled as to what the basis of compensation should be, so long as it was a basis on which the publican should pay and be paid. It was not just to the remaining publicans that they should be called upon to pay a compensation of too high an amount, either because the compensation value was too high or the assessment too low. He would give the Committee an illustration. There was a house in Briggate, Leeds, the value of which was assessed at £65 for the purposes of the local rates. After the licence was taken away it was assessed at £50. That was the difference that was supposed to represent the value of the licence. £15 at twenty years purchase would give £300 as the value of the licence. What did the owner of the property ask? She was a lady. Did she ask £300? No. She asked £10,200 as compensation for the loss of her licence. She got £6,300. That was said to be the difference in the value of the house with and without the licence, yet the difference in the assessment for local rating purposes was £15 a year. Either the assessment was much too low or the compensation was vastly too high. They wanted to adopt the principle of the right hon. Gentleman opposite, and have the same basis for taxation which they had for compensation. They had heard a great deal about market value. He contended that assessment should be the annual market value, and the annual market value would represent the capital value. The two things should represent one another, and if they did not injustice was being done. Another point to bear in mind in connection with this, 163 was that the compensation would be the difference on the assessments. If both the assessments were low, the margin of difference between the two assessments would not vary so much as had been suggested from what it would do if both assessments were high. That was rather an important point. With reference to goodwill, if it attached to the premises it should be part of the assessment, and there should be compensation for it. The contention of hon. Gentlemen opposite had reference to a tied house. Both the tied house and the free house should be compensated alike, then the annual value and market value of the house should be and must be the same, and if the annual value were the market value, then it would still represent the capital value. It was really perfectly clear. There could be no difficulty, no injustice, and no inconsistency if the compensation and assessment were on the same basis. All the figures given by opponents of the Bill were based on assessments which were obviously gross under-assessments, and the only way they could get these assessments put on a right footing, was to get the compensation on a right footing. The two matters went together, and it was because this Bill would bring about that levelling-up, that abolition of gross inconsistency, that he thought it would mean a very considerable increase of assessments, which were much below the value of the premises.
§ MR. F. E. SMITH (Liverpool, Walton)said the hon. Gentleman who had just sat down had supplied a very striking omission in the speech of the Solicitor-General. The omission of the hon. and learned Gentleman was made in answering a question which had been repeatedly put from that side of the House on a specific point, and the point was this: If they were going by this Bill to put up the assessments of public-houses to get their true value, how were they going to regulate and adjust assessments of other assessable property at a less amount? No other point had been raised from first to last.
§ SIR S. EVANSwas understood to say that the assessment in the country 164 was not to be put up, and was to be the same as under Schedule A.
§ MR. F. E. SMITHsaid that one result of the Bill would be to compel publicans, in order to get higher compensation, to put up their assessments, and they were using this Bill to give an indirect inducement to brewers to raise their assessments, whereas they gave no such inducement to any other trade in the country. The demonstrable result was that the Bill would compel the publican by indirect means to adopt a course which would apply to no other form of assessable property.
§ SIR S. EVANSThe brewers do not assess themselves.
§ MR. F. E. SMITHsaid he had repeatedly pointed out that if the hon. and learned Gentleman and his friends remembered a little more frequently that the brewers did not assess themselves they would have less vituperation of the brewers than they had heard in the course of these debates. Let there be no misconception. Unless publicans raised their assessments, it was conceded that they would receive a lower degree of compensation, and therefore, from that point of view, the object of this Bill was to give them an indirect inducement—which was offered to no other member of the community engaged in any other trade—to put up their assessments at a higher ratio. They were going by this species of blackmailing to compel publicans to raise their assessments, and pay on more than their fair share of rateable value.
§ MR. F. E. SMITHWould the hon. Gentleman explain why it had nothing to do with the rates? At any rate, so far as the ostensible value was concerned it did interfere, and ought not to be done. The other point, and after all, the main point, in regard to which he had a substantial Amendment on the Paper, which was hardly likely to be reached, was as to the relative fairness of the compensation given under 165 the Act of 1904, and that to be given under the present Bill, and he confessed that he had listened to hon. Gentlemen opposite with very great surprise indeed when they spoke of the Kennedy judgment. In the first place, he thought it a very rash proceeding indeed, on the part of laymen to criticise that judgment. He had listened to one layman on the benches opposite who delivered an elaborate legal argument to demonstrate that one of the most accomplished Judges on the bench, who had been promoted to the Court of Appeal by the present Government, had been guilty of an error in law. Was that the view of the Solicitor-General?
§ SIR S. EVANSI have never said so. I have never passed any opinion upon the Kennedy judgment.
§ MR. F. E. SMITHsaid that apparently the Prime Minister had rushed in where the hon. and learned Gentleman feared to tread, for he had said that the judgment had the fundamental vice in that it took the market value on the basis of the brewers' profits.
§ SIR S. EVANSsaid he thought so too, because the learned Judge had calculated the amount by taking barrel by barrel, and putting the profit at 14s. 6d.
§ MR. F. E. SMITHsaid that, as far as that part of the judgment was concerned, then, the Solicitor-General thought that the learned Judge was wrong. But the question at once suggested itself why the Law Officers had not at once advised the Crown to appeal against the judgment. Every opportunity was presented. The learned Judge had asked the Law Officers point blank whether they contended that the principle was wrong, and they said they did not. His noble friend the Member for Marylebone had pointed out that they could have set the learned Judge right on this point in which he was said to be guilty of a fundamental vice. The fundmental vice stated by the Prime Minister was that the Judge had taken the market price of the premises on the basis of the brewers' profits, and the Solicitor-General, who he was sure had read a report of the case, would agree that was the principle selected 166 by the learned Judge. Here was a case where the Judge was said to be going wrong because he was considering the brewer's profits, and what were the Law Officers of the Crown doing? One would have thought that the Attorney-General and the Solicitor-General would have deemed it their duty to their clients as well as to their superior grasp of the problem, to say to the learned Judge that the basis of the brewer's profits was entirely wrong. But now, months afterwards, in a place where the learned Judge could not reply to the argument used by the Prime Minister, they said that there was a fundamental vice in the judgment, though the Law Officers when they were before the Judge did not contend in any sense for what had been laid down by the Prime Minister to-day. The judgment was appealable, but they had not appealed. He had himself since appeared in a case which was argued before the Court of Appeal, and in which the Lord Chief Justice (Lord Alverstone) said he was utterly unable to conceive of any legal ground on which the judgment of Mr. Justice Kennedy could be appealed. Therefore, whatever might have been the intention of those who framed the Act of 1904, the effect of that Act as construed by an accomplished lawyer, and accepted generally by the legal profession, was that if they took away licensed premises the person dispossessed should receive the full market value. That was the effect of the Act of 1904, and there had been no doubt thrown upon that doctrine in any case which had come before the Court. How was that met? They were told that expressions had fallen from different members of the Government who passed that Act which showed clearly that it did not carry out the intention of those who were responsible for its introduction. He was not familiar with those passages; he had not had an opportunity of looking them up. But the Solicitor-General if he were present would tell the hon. Gentleman who sat behind him that it was a principle of English law that they were not to found in any Court of Law any opinion on isolated expressions of Ministers responsible for introducing a Bill, but that they must determine the legal effect of the measure from what it said on the face of it.
§ *MR. HERBERT SAMUELThis is not a Court of law.
§ MR. F. E. SMITHpointed out to the Under-Secretary that this rule was adopted not for the purpose of legal construction, but as a necessary and convenient rule; to take fifteen or twenty quotations from speakers on opposite sides of the House was neither a convenient nor a reasonable way of determining the meaning of an Act of Parliament. If he was right in that assumption, they started with this, that the Act of 1904 laid down a certain basis on which licensed properties were to be compensated. That was the law of the land as confirmed in the Courts, and until this Bill was introduced no attempt whatever had been made to question the legality of the Kennedy judgment. Such being the circumstances, what were the proposals contained in this Bill. They were told that the Government were introducing Commissioners who were to overrule Mr. Justice Kennedy's judgment. Of course, the variation in the number of years purchase which was taken caused the greatest possible discrepancy even between the untenable and illegal basis adopted by the Commissioners and the arrangement proposed by the Government to-day. The Commissioners took twenty-five years purchase as the multiplier, but the Government had taken out an average figure during the fourteen years, and adopted five years purchase, a fifth of that allowed, by the Commissioners, and which Mr. Justice Kennedy declared to be grossly inadequate. The obscurity of this part of the Bill had been so intensified that he ventured to say that the electors had not the faintest possible conception of what the Government proposed to do. Let him put an illustration of the way in which this question was likely to present itself to the people. Suppose that the London County Council to-morrow for public purposes took away a licence. The Committee would notice that the public purpose here was not a national public purpose but a municipal public purpose, but he did not suppose that it would be suggested that it made any difference whether the London County Council took away a public-house for a municipal purpose or whether 168 the House of Commons took away a public-house for a national purpose; the principle in law was the same, and the compensation ought to be identical. If anyone could show that that principle was not founded on justice, he would be glad to hear it explained. What did the law provide should be done if the London County Council took away a licensed house? Why the owner of the licensed premises was compensated for them at the market value; he was compensated on what Mr. Justice Kennedy had declared in his decision, which had been so much criticised in the course of the debate, to be the true principle. Let him point out how these criticisms were founded. When the judgment was criticised from the point of view of the compensation to be paid in the case of a tied house they were told that a different amount was to be awarded from that which would be awarded in the case of a free house. But he would point out that the compensation would be and ought to be totally different if the tied house was more valuable. What was the position of the tied house, and how far was the tie a circumstance capable of being valued, and one which ought to be valued as part of the market value if, for a public purpose, they were going to take away the licence? The possession of a tie was an asset which could be realised, and for which a valuer would give a man money if that man went to him and said that he was the owner. A man might be the owner of licensed premises whether he had a tie on the house or not. If he had tied it he recovered compensation at the higher rate. But before he tied the house he possessed a potential asset of value in the power to tie the house if he could find a brewer who would give it to him. Therefore, a valuer skilled in compensation cases, asked at once if there was any brewer in the neighbourhood who, if the house was tied, would give a higher price for it, and if there was it followed that there was a further asset, which must be taken into account if the State was going to take the property. He would be glad if the First Lord of the Admiralty or the Secretary for Ireland would inform him whether they dissented from the proposition. It was incontestable and nobody familiar with arbitration 169 cases would deny it. If it was right to pay market value when licensed premises were taken for municipal purposes, why should it not be the same when they were taken under the Bill? They were told by the right hon. Gentleman the Member for Spen Valley, who, however, was not mindful of it in his editorial days, that the reason they did not compensate them on the full market value when Parliament took away a licence was because it was only an annual licence. Was the tenure of licences that had been taken away by the London County Council longer than an annual one? Why had not the Government introduced a Bill providing that when compensation was given under these circumstances, the owners should only receive the compensation which was provided when they took away property for a national purpose? Because they knew well enough that what was compensated where a licence was taken away by a municipality was the fair market value. The case was stronger in the case of licensed victuallers to-day when it was a Parliamentary attack upon the licences, because in 1904, in the reasonable hope of obtaining a settlement, the licensed victuallers consented to do what Mr. Gladstone never anticipated they would do when he spoke of compensation in the hope of obtaining a permanent Parliamentary settlement. They agreed that they themselves should find the money out of which the compensation would be paid. Hon. Gentlemen opposite were never tired of treating the 1904 Act, and the debates which, preceded it, as if they were a monstrous outrage on everybody who did not own a public-house. It had repeatedly been said, and without reference to the question of a fund being provided by licence-holders themselves, that if they interfered with the expectations of a reasonable trade, compensation ought to be paid. When Mr. Gladstone and others spoke of compensation in that context there was no qualification of any kind to suggest that it was to be paid by the trade themselves. He would address a word of caution to those who said they did not recognise the settlement of 1904 because that Parliament had no right to pass the Act. He was not familiar with any principle of representative Govern- 170 ment which would enable hon. Gentlemen opposite to say that which would not enable a future House of Commons to refuse to accept their decision in 1908. The contest resolved itself into this. He took the municipal case in which the compensation was not paid by a fund provided by the licence-holders themselves. In the other case he was taking, it was provided by a fund coming out of their pockets, and yet they refused them in these circumstances the same amount for the purposes of market value which was given in the other case. This proposition might be capable of defence, but it had not received a defence up to now. He would now deal with another part of the case, that of the ante-1869 beerhouses. The only argument which had been used to show that the whole of the other licences were not entitled to market value had been the precariousness of their tenure. But the moment they came to deal with the ante-1869 beerhouses they were face to face with a class of licence which had the fullest statutory security in respect of their tenure. Over and over again, the question of dealing with those licences had been discussed, but they still stood in a privileged position when the solution of the problem was adopted in 1904.
§ MR. LEIF JONESThe hon. Gentleman forgets that in 1882 the beer off-licences were in exactly the same position, and were dealt with by Parliament.
§ MR. F. E. SMITHsaid he forgot nothing of the kind.
§ MR. LEIF JONESI am sorry I reminded the hon. Member of what he knew, but he did not mention it.
§ MR. F. E. SMITHsaid he did not mention it for the simple reason that it was an utterly irrelevant circumstance. It would not surprise him to find there were 100 cases of persons who had enjoyed, in respect of licensed premises, privileged positions and had those privileged positions interfered with by Act of Parliament. No one had disputed that the House of Commons had the fullest possible right, as far as the law was concerned, of dealing with the owner of any licensed property under any circumstances.
§ MR. LEIF JONESI understood the hon. Member to say that Parliament had never interfered with ante-1869 beerhouses until 1904. I pointed out one class of ante-1869 public-houses, namely, the off-licences, which were interfered with in 1882.
§ MR. F. E. SMITHsaid he had dealt, first of all, with the speech of the Under-Secretary, in which he sketched certain attempts which had been made to interfere with 1869 beer-houses.
§ *MR. HERBERT SAMUELNot attempts. Actual steps.
§ MR. F. E. SMITHsaid he would remind the Committee what they were. The hon. Gentleman dealt, in the first place, with the attempt made by Mr. Ritchie, which was never carried into law. In the second place, he had dealt with a proposal which was made by a Committee of the House of Lords.
§ *MR. HERBERT SAMUELI dealt with three distinct interferences by Parliament with these licences. First, in 1869 because the licences were held under the Act of 1830. In 1869 Parliament deprived these beer-houses of most of their privileges. Secondly, in 1882 when Parlaiment swept in the whole of the off-beer-houses on precisely the same footing as other public-houses. Thirdly, in 1904 when Parliament required all these beer-houses to pay a compensation levy to insure themselves against a risk which, previous to that year, they had never run.
§ MR. F. E. SMITHsaid that, taking the speches of the hon. Gentleman and the Under-Secretary together, he did not think they in any way affected the argument which he was laying before the Committee. He had stated that at the time the 1904 Act was introduced these ante-1869 houses still maintained all their privileges, though there might have been qualifications. They enjoyed a statutory freehold, and it was no use for the Under-Secretary to tell them that a House of Lords Committee made certain proposals with regard to ante-1869 beer-houses, because the only point, in judging of the reasonableness of the proposals of the Government, was what 172 was the position of these, ante-1869 beerhouses at the time of the settlement of 1904. At that time those licences could not be dealt with by the Government or taken away by licensing justices, and the owners of these licensed premises were induced to abstain from opposing the Bill of 1904 by a Parliamentary settlement which gave them, instead of almost complete immunity, except on grounds of bad character, the right to obtain the full compensation which Mr. Justice Kennedy had decided was provided by the Act of 1904. Parliament now came forward and said: "We, having made this arrangement with you in 1904, will now take away your licence and give you the miserable pittance of compensation provided in our Bill." Strong language had been used of this attempt, but it would be impossible to use language too strong to describe the political immorality of a step of that kind. A more halting defence than that put forward by the Under-Secretary, and surprising ii deed as coming from a Minister, he had never heard, because it only resolved itself into this, that, because Parliament had previously considered ante-1869 beerhouses, they were entitled, having made this arrangement in 1904, by which their privileges were surrendered, to take away the licences and substitute the compensation given in this Bill. There were many provisions in this Bill which, he trusted, if it met with the reception which he anticipated and hoped for it elsewhere, he would have an opportunity of discussing both in the House and in the country with representatives of the Government, but there was no clause in the whole Bill which he should more rejoice to have the opportunity of discussing than the dishonest clauses which dealt with the amount of compensation to be paid. If there was a defence which would show why the market value was not to be paid for these licences, let it be put forward. That contention had not been put forward and therefore he should give his vote against this Bill. He had every confidence in his ability to justify before the electors his opposition to the measure before the House.
§ *MR. E. A. STRAUSS (Berkshire, Abingdon)said that the question the 173 Committee had to consider was whether they were really in favour of giving fair compensation to those interested in licensed property. He could not understand how, once the principle of compensation to those interested in the licensed trade was accepted, it could be seriously argued that that compensation should be awarded on any other basis or scale than that of market value. He could appreciate the attitude of those hon. Members who, from motives of principle, did not believe in compensation for suppressed licences, but once they accepted the principle of compensation they could only adopt one form, and that must be based on market value. The hon. Member for the Appleby Division had referred to the moral side. He would remind the hon. Member that in the year 1875 or 1876, when it was suggested that the vexed question of compensation should be dealt with, a settlement was prevented by the attitude taken up by the temperance party of that day, led by the late Sir Wilfrid Lawson, who would not listen to compensation, because it was contrary to their principles. In that way the attitude of the temperance party had prevented good, practical, and useful legislation from finding its way on to the Statute-book, and had hindered a great social problem being dealt with. Such principles would be as fatal to-day as they were thirty or forty years ago to the progress of the cause of temperance. Let them face the logic, of the situation. What was really separating the opponents from the supporters of this Bill? They were all agreed as to the underlying principle of the Bill; they all desired to grapple with the great evil of intemperance, and what separated them was nothing more nor less than the financial clauses, of which Clause 10 was one of the most important and the most contentious. He spoke with a little experience and knowledge on this subject, because he had received during the last two or three months many communications from members of the temperance party. He had come into contact recently with many earnest and zealous workers in the cause of temperance, and he could assure the Government that the feeling of the rank 174 and file of those workers upon this vexed question of compensation was very different from what it was twenty, thirty, or forty years ago. Many of them had assured him that they would go even further than the late Conservative Government did in dealing with this question, and would even submit to personal sacrifice and taxation rather than any injustice should be done to those who had invested their money in licensed property. The difficulty was that politicians looked at everything through political spectacles, and they gave political colour to almost anything. He could not see why the great cause of temperance or the great curse of intemperance should for ever be made pawns in the political game. The temperance workers with whom he had been in communication were most anxious that this Bill should become law, but they did not wish it to become law if it was going to inflict injury and injustice upon those who were directly or indirectly connected with licences. The Under-Secretary very rightly warned the Committee last Friday not to attach too much importance to the figures submitted to the Committee from time to time in order to contrast the compensation that owners of suppressed licences would receive under this Bill with the market value. As far as he was personally concerned he had tried to study the arithmetic of this question of compensation, and he could not help feeling that if this Bill found its way on to the Statute-book in anything like its present form it would reduce the value of licensed property to about one-quarter or one-third of its present value. He would like to remind the Government that they pursued a very different course when they levied their toll for death duties. Then they took a sensible and reasonable course, and did not bother about any schedule, for they levied their toll on the market value of the licence. The Member for Spen Valley in the very able and eloquent speech which he made on the Second Reading of the Bill assured the House that fourteen years run was equivalent to about ten and a half years purchase, which he considered was in accordance with the judgment of Lord Justice 175 Kennedy. He urged the Government to consult with the right hon. Gentleman, and see if he would lend his support to a proposal to give the owners and those interested in licensed property ten and a half years purchase or a fourteen years run. He knew which they would be likely to accept. In estimating the value of a licence they must not consider merely the monopoly value. It must be remembered that a licence had to be backed up by capital and business knowledge in order to carry out the conditions imposed by the magistrate when a licence was granted or renewed. In that way the goodwill of licensed property was created, and it was created under the protection of the law, and built up by means of the energy and capital of those interested in licensed property. Surely in estimating compensation they could not for one moment ignore goodwill. A licence was nothing more than articles for sale and exchange. Licences were bought and sold hi the open market, and their price was regulated by the law of supply and demand. Where did the whole of this compensation come from? Why, out of the pockets of the trade and not out of the pockets of the taxpayer. The hon. Member for Westmoreland had brought forward the usual argument against this proposition, and he asserted that if the Act of 1904 had not created this compensation levy the State could have exacted higher taxation out of the trade. That might be a very good argument as far as lawyers were concerned, but he could assure the hon. Member that it did not appeal to the average elector. It was difficult to lay down a hard and fast line in assessing compensation. In his opinion each case must be investigated and settled on its own merits. They had heard various arguments with regard to assessment, and he would like to put one case to the Under-Secretary. Let them assume that there were two public-houses in the same street, similar in structure and paying the same amount of rent, and one of them doing double the trade of the other. It was quite contrary to any principle of assessment or equity to screw up and raise the assessment on the house doing the 176 larger trade. It was contrary to all principles of equity to penalise a man's enterprise because he had created a better trade than his neighbour probably because he had been selling a better article. He appealed to the Government not to haggle about the terms of compensation. The great and underlying principle of the Bill was the promotion of temperance, and the promotion of temperance was not a matter of pounds, shillings, and pence. If the Government were to give compensation based on market value they would remove one of the great and genuine causes of complaint against the Bill.
MR. CLEMENT EDWARDS (Denbigh District)said the noble Lord the Member for Marylebone had spoken that evening of political brigandage and political hypocrisy. He understood from the speeches which he had heard that day and on Friday that the representatives of the brewing interest and the leaders of the Conservative Party claimed that the right basis for compensation should include the element of goodwill. He wondered whether it would surprise some of those Gentlemen to know that there were not ten brewery companies in this country that did not prohibit, by express terms in their agreements, their tied tenants from taking goodwill. On the morrow that this Bill became law all these agreements would be voided, because they contained a clause prohibiting the taking of goodwill. He wished to refer to the recent case of the "Horse and Groom," at Cheshunt. An old man named Nicol, seventy years of age, was persuaded to take that house and to pay £95 for goodwill and £25 for the inventory, and a further £20 on deposit on the representation, or rather the misrepresentation — he spoke advisedly—of the broker employed by the brewery company, Messrs. Prior Reid, Ltd., St. Albans, a company owning something like 200 tied houses. The old man took the house on the misrepresentation that it was doing a certain trade.
§ MR. BARNARD (Kidderminster)Might I ask the hon. Member what was the verdict?
MR. CLEMENT EDWARDSsaid it was usual to state the facts before asking for a verdict. He would come to the verdict after he had referred to some of the remarks of the Judge. He wished to speak first of all as to the facts. This poor man was persuaded to go into the house on the representation that it was doing a certain barrelage trade. That was in February. But he had not been there many days when he found that the trade done was only one-ninth of what it was represented. He appealed to the brewers, and they declined to do anything and held him to his agreement, and only three weeks after he left the premises and brought an action in the County Court to recover the money which had been obtained from him by fraudulent misrepresentation, but the Judge held that the brewer had been no party to the misrepresentations on the part of the broker and the previous tenant. Would the House believe it, that this poor old man, who was required to pay the goodwill going in, was debarred from taking that goodwill on going out?
Clause 7 of the agreement provided—
At the end of the tenancy hereby created the tenant shall not claim or receive from the landlord or any other person or persons any compensation or payment whatsoever in respect of good will.He contended, however, that if it was good enough for the brewers and representatives of brewery companies and the Conservative Party, to claim compensation for disturbance or goodwill, it was more important that the claims of the tenant in these matters should be recognised. If the claim for compensation for goodwill was made by the brewers for themselves, still more ought it to be put forth in the case of the tenant, but not a single word had the Committee heard from the Unionist benches in the whole discussion on behalf of the one person who above all others was entitled to compensation for goodwill, namely, the tenant. But on the Ministerial side of the House they could understand that. As a matter of fact, under these tied agreements they knew perfectly well that every tenant was gradually squeezed, skinned, and sweated in the form of increased rental or the increased prices charged for beer. He wondered whether 178 the respectable leaders of the Conservative Party were aware of the methods resorted to by the underlings of the brewery companies to get the uttermost farthing from the tied tenant. A great deal of denunciation was heard from hon. Gentleman opposite regarding the methods of moneylenders when the Moneylenders Act was passed a few years ago. He said without hesitation that the methods described at that time as those followed by a person named Isaac Gordon, a moneylender, were perfectly common methods adopted by many of the brewery companies and their underlings in this country in the case of tied tenants. He had made a calculation, and he estimated that the brewers had taken by way of illicit profits out of tied tenants in fourteen years no less a sum than £160,000,000. It seemed an extraordinary and amazing figure, but he challenged any brewer's representative to say that the difference between the price commonly obtained from tied tenants and that got from free tenants was less than 10s. per barrel. Let them take the statement of the Licensing Commission that three-fourths of the barrelage was under tied tenants, and they would see that £160,000,000 was within the mark. The free tenant had from 5 to 20 per cent. discount, and he had also an allowance for bad beer and wastage. He had tested 150 brewery companies in this country, and he found that the difference in the prices got from tied and free tenants was 10s. a barrel. That was one way in which the brewery companies skinned the tied tenants.
§ MR. GRETTON (Rutland)Will the hon. Member name some of the brewery companies to which his statement refers?
MR. CLEMENT EDWARDSI shall be very pleased to give the names of the brewery companies privately. [Cries of "Give them now."] In view of the tyranny exercised by brewery companies over their tenants I am not going to place any of those tenants in the position of being sent to Coventry for any information that I am giving.
§ MR. GRETTONI do not think the hon. Member need make that reservation, because nobody could ascertain 179 how he got the information or from whom.
§ MR. GRETTONCertainly I deny the statement; it is quite contrary to my own experience.
MR. CLEMENT EDWARDSThen I will give the hon. Member the names of some of the firms. The firm of Allsopp's makes that difference. It is rather larger in their case. Barclay, Perkins and Co., and Watney, Combe, and Co., make the difference, I say that 10s. is the very least, and there are cases where the difference is shown to be as much as 13s. or 14s.
§ MR. REMNANT (Finsbury, Holborn)It is absolutely untrue.
MR. CLEMENT EDWARDSsaid he supposed the hon. Member for Holborn was an expert in brewery finance, but for all that, he adhered to the statement he had made. Now they were told by the representatives of the brewery companies and by the Leaders of the Opposition that the compensation to the owners ought not to be upon a basis which excluded the goodwill. Either the goodwill belonged to the owner or to the trader, but he understood the suggestion was that where the goodwill belonged to the tenant it did not matter. The Opposition did not trouble about him. There was no suggestion that he ought to benefit under Mr. Justice Kennedy's judgment; he was still tied down to the limit under the Act of 1904. There was no suggestion that the tenant's scale of compensation should have been expanded in proportion to the compensation expanded in the case of the owner or brewer under the Kennedy judgment. It was said that the owner ought to have compensation included on the basis of goodwill in relation to the wholesale trade. If it was good enough for a wholesale brewer who happened to have a tie upon a house to receive compensation on the expectation of his wholesale profit, it was 180 equally good for the baker who supplied the public-house to receive compensation on the basis of his expectation of profit destroyed by the suppression of the house. It was equally good that the whiskey distiller in Scotland who sent whiskey down under tie to a house in Plymouth should have compensation for the trade that he had lost; and that the timber merchant in Hull who sent sawdust should also be compensated for his expectation of profit destroyed by the suppression of the house. As a matter of fact the whole thing was absurd. There was not a parallel or analogy to be found for this perfectly amazing proposition. The brewing trade was not the only trade in which ties were known to exist. They were known in the drapery trade. Was it suggested that when a shop tied to J. P. Coates and Company to buy their cotton thread was taken down for a public improvement, the compensation paid should include compensation to Coates and Company for the loss of their trade. No such suggestion had ever been put forth except in connection with the discussion on this Bill. If it was so equitable, so right and proper, then why did the Leaders of the Opposition when they were in office in 1904 and had the responsibilities of government upon them, not make the suggestion and simply tie down compensation to the men having relations not to the business of the house, but to the property? That was brought about by the perfectly ingenious judgment of Mr. Justice Kennedy, for whom they had the highest respect and regard as a lawyer. It was not until that judgment was given that any attempt was made to suggest that the basis of compensation should include the wholesale profits of the business. There was no such suggestion in the speeches during the discussions on the Act of 1904. One was surprised that the suggestion should be put forward by the representatives of the brewery companies and the Leaders of the Conservative Party, and one was equally surprised, if not pained, to find that they were perfectly silent in regard to asking that the particular persons who had a right to be compensated on the basis of the business done should not be compensated on that business, viz., the licence-holder. In conclusion, he would like 181 to offer to the Government both his cordial thanks and hearty congratulations upon their acceptance and promise to include in this clause Amendments making it perfectly clear, first, that licensee managers of tied houses should rank for compensation for the loss of their employment, and, secondly, that no licensee tenant should be turned out of his house under the operation of the Bill without receiving as a minimum of compensation at least one year of the total value of the business, leaving it to the Commissioners of the Inland Revenue to fix in their discretion any sum by way of compensation over and above that guaranteed minimum. He had worked it out in the case of a number of houses in his own constituency, and in other parts of the country, and he found that the difference it would make in the case of one licensee tenant as compared with what he had obtained under the Act of 1904 would be that whereas he obtained £25 under the Act by way of compensation's compensation under the new scheme would be £220 or £230. In another case where the compensation to the tied tenant was only £65 under the Act, he found on the figures as to the value of the business that if this manager had been allowed compensation under the new scheme he would have received a sum of £610. The tenants throughout the country would profoundly thank the Government for their proposal. The effect would be that instead of being compensated on his rental, which was frequently nominal in order to keep down the assessment, he would be compensated on an equivalent for the total loss he had sustained by the suppression of his house. He would only make one other point and that was that while the brewers were demanding in such a scandalous way goodwill compensation for themselves, they had not put forth that claim on behalf of the tenant. That they did so he had shown in the typical agreement which he had read prohibiting the tenant from receiving goodwill when he went out of the house. He would read an extract from the report of a case which had been tried at Chester Assizes—
Mr. Justice Cave made some strong observations about brewers' arrangements with their tenants. A dispute arose between the incoming and out-going tenant of the 'Wynnstay Arms Inn,' Rhyl, which was now the subject 182 of an action. One of the items in dispute was £100 for goodwill.Mr. Hartley, North Wales agent for the brewers, called for the defendant, said their firm did not recognise tenants' goodwill.Mr. Justice Cave: When a tenant gets up the value of a house, do you confiscate the goodwill?Mr. Hartley: Certainly.Mr. Justice Cave: Well, it is about the coolest thing I ever heard of in my life.Asked if he was sure as to this, the witness replied in the affirmative, upon which the Judge said it was a most disgraceful thing.In summing up, his Lordship said this custom of appropriating the tenant's goodwill was all the more outrageous and monstrous in the face of the fact that brewers were going up and down the country complaining that their own property was being confiscated.The jury returned a verdict for the plaintiff.He regarded this Clause 10 as a perfectly just one. It was more than generous to the great brewing interest, and now that it was being made perfectly clear by the acceptance on the part of the Government of certain Amendments, that the licence-holder, who, after all, was the real person with whom the State had to deal, was to have his interest fully protected in this matter of compensation, he hoped they would hear less from the other side that the tenants were being badly treated, and that hon. Gentlemen opposite would show their real regard for the licensee and for the tenant by seeing to it that these particular Amendments were embodied in the Bill.
§ *SIR GEORGE WHITE (Norfolk, N. W.)said he would not have risen had it not been for a remark made by one hon. Member who appealed, he said, to the Government on behalf of the temperance workers to be more liberal in connection with their compensation clauses. He thought he might claim to have some knowledge of the opinion of the various bodies of temperance workers throughout the Kingdom, and he ventured to say that while they had responded to the appeal which was made to them not to protest against compensation in any form and had yielded to the exigencies of the case and consented to a certain form of compensation—they were not against the Bill because they felt that the time had come when, in the interests of 183 temperance, a settlement ought to be made—but he had yet to find any body of temperance workers who were opposed to the Bill because it was not liberal enough in its principles of compensation, and he could not imagine who they were who had made these representations to the hon. Member in favour of dealing with this question more liberally. He need scarcely say that many active temperance workers were still of the opinion which was held by the late Sir Wilfred Lawson, that there could be no claim for compensation successfully established in the case of licence-holders who held the position for one year. But that was not the position they were taking now. They had conceded the principle of compensation, and the discussion which had occupied, the attention of the House for many days was really as to the basis upon which that principle should be fixed. An hon. Gentleman said that it was very difficult for them to reach a just conclusion, because they could not consider the matter from the temperance point of view without looking through political spectacles. Might he assure the hon. Gentleman that it was just as easy to get a just appreciation of the case by looking through political spectacles as it was by looking through financial spectacles. The cause of the great difference between Members on one side of the House and on the other was that they had debated this question far too largely on financial considerations. The question of compensation must largely affect the question of reduction, which was one of the most important questions at stake in this Bill. He was a member of a licensing committee and a compensating authority, where they had in one place to deal with the largest number of houses in proportion to the population in the Kingdom, and at the same time they had the anomaly that they had the smallest sum to deal with in connection with their compensation authority, with the result that, partly in consequence of the Kennedy judgment, they had for eighteen months stopped any idea of reduction at all. They had in the three years since the passing of the last Act reduced the number of licences by twenty-four, which was far less a number 184 than that by which they would have been reduced if that Act had not been passed at all; and if they were to go on the basis of the Kennedy compensation he could only say that it would be a century before they reached the statutory number in proportion to the population under this Bill. How their business was going to be managed to reach the statutory number was a question which he had not been able to solve. The real question which had been, he thought, debated during the last two days was whether the compensation was to be on the basis of the Kennedy judgment, or whether it should be on the basis which the authors of the 1904 Act believed they were presenting to the House and the country. He followed that discussion very closely, and he came away from it, as he believed every hon. Member who took part in it did, with the conviction that the compensation to be paid was the difference between the public-house with a licence and the same house without a licence. Many quotations had been given from speeches of Members of the Government on that occasion which amply justified that conclusion, and he could not but feel that there had been some lack of sincerity on behalf of the authors of that Bill in not frankly admitting that that was their conviction at the time, whatever had been read into the Act since and whatever had been the result of the Kennedy decision. This compensation was of much greater importance to some brewers than was admitted in the House. The compensation authority to which he belonged had closed some twenty-four or twenty-five houses, and he was perfectly certain from the evidence before them that the majority of those houses were a loss to the owner every year. They closed the houses and gave compensation from £100 to £400 upon incomes derived from half a barrel or a barrel a week, which was the utmost that was consumed, and in regard to houses in which caretakers were put in at 10s. a week and free lodgings. Yet they had to pay compensation for relieving the brewer of an establishment in which from week to week he was losing money. He made bold to say that there were hundreds of houses closed in this country under these conditions, 185 and therefore, when they heard of the injustice of this measure let them remember that there was another side to it, even as far as the brewers themselves were concerned. But he would rather have heard much more about the general public in this discussion. They had heard too little about their interests. Analogies had been attempted to be drawn from other businesses, altogether oblivious of the fact that if they attempted to argue on this drink business on the same line as any other business in the country, they would start on a false basis, and one which the law had never recognised, and starting on such a false basis they were bound to come to unjust conclusions. Then he thought the fact had been overlooked that Acts of Parliament were constantly injurious to traders and vested interests. He had in his mind cases which would illustrate the point he was endeavouring to put before the House. In one of these he knew a business which was very much dependent upon a good supply of water, which came from a stream connected with the premises. These premises had been leased by two generations and three years ago a third generation came into the lease and carried on the business. They ventured to make a purchase of the premises, but within two years of that they were told by the local authorities that they could no longer use this water, which was practically an essential to the conduct of the business, as they were polluting a public stream and thereby endangering the comfort and health of the inhabitants. Therefore it was said they must make other provisions. The making of this other provision was a question of nearly £2,000 to those who occupied these premises, and yet when they purchased them they had a just expectation of being able to carry on that business, which had gone on for seventy or eighty years in the family. They paid the price of the business upon that expectation, and yet if they had attempted to get any compensation, because the public improvement and the health of the people required that the steps in question should be taken, they would have been scouted. That was a sample of hundreds of cases that arose in consequence of 186 legislation passed by Parliament, and, therefore, he said, without going into detail, that the Government had not only been just in their compensation but extremely generous, considering that this Bill was before the House and the country in the interests of the public and for the public good, and that the trade required that this legislation should be applied to it. Therefore he hoped the Government would remain firm against any further concessions, even a financial concession. He would make only one other observation, and that was to the appeal made by his hon. friend the Member for Chester in the closing remarks of an admirable speech. The hon. Member only used one sentence with which he disagreed in that speech, and that was when he appealed to the Government that they would not only make the concession in regard to the seven years monopoly value but make the Bill one for twenty-one years in the whole of its application. He wanted to press the Government that they should not on any account yield to any suggestion of that kind. Those who felt very strongly upon the temperance character of the Bill had not done more than protest against the concession which had been made. It was practically a financial concession, and if such a small concession would accelerate the progress of the Bill, much as he thought it unnecessary, still he felt sure, as long as it was a financial matter only, that the great bulk of the friends of temperance would be willing to accede to it; but it would be a very different matter if the whole provisions of the Bill were to be extended to twenty-one years, and a temperance reform which should come into operation at the end of fourteen years postponed for another seven years. He asked in the interests of the generation which would come in those six or seven years that the Government should no longer withhold from the nation its right to deal with these questions of local option and the discretion of the magistrates which the Bill embodied, and feeling that they had done everything with justice and generosity they should not yield another seven years monopoly. He hoped they would pass this Bill, which he believed had the great mass of the public opinion of the country behind it, as he thought the 187 Government would find out when they appealed to the nation about it.
§ MR. CROOKS (Woolwich)said he felt more than an ordinary amount of interest in this question of compensation of licence-holders, as he did not believe that the Government would have taken up this Bill at all if it had been a question of their claims. They would not have got the support of the brewers if they had, because they were not "out" for compensation for the licence-holders, but for themselves. He wanted to know how this compensation would work out. He must be very careful in his language or he should call things which had taken place in the past a swindle. Some arrangements had been made between the tenants and the brewers, and things had not "panned out" as expected. There had been a good deal of the confidence trick played by the owner upon the tenant, and under the last Licensing Bill the money went all one way. Look at it how they liked, they perpetrated what certainly was a very grave injustice in the system of letting houses. This was shown by the varying statements made when the assessment was fixed, when the house was said to be worthless, and those made when the process had been gone through, when the house became a wonderful one. What happened? The brewers were looking out for a respectable tenant. Perhaps this man was a teetotaller, and being a careful man had saved money and thought he would like to invest it in a public-house. He was just the sort of man to commend himself to the brewers. He would go and see them, and the usual conversation would take place. He would be asked how much he was prepared to put down, and he would say 188 £500, the whole of his savings. He would then be told the thing was ridiculous, that the house was worth £5,000, but he was just the sort of man they were looking for, and he had better see the agent, with whom, perhaps, some arrangement could be made. Eventually he deposited his £500, and signed a document for an imaginary loan of £4,500. He then entered into possession of the "Dog and Lion," and it was not very long before he discovered that he was not in the paradise he expected to be, but in the other shop. He then came to the assessment committee and said that the assessment of this house was too high, and must be reduced, but the assessment committee told him that inasmuch as he had a loan on this house of £4,500, on which he was paying 3 per cent., he should go to the brewers and get that reduced and not come to the ratepayers to reduce the assessment. He went to the brewers. They could not see their way to reduce the loan, but would reduce the interest to 1½ per cent. That was a consideration, but the tenant asked then whether they could not see their way to reduce the loan, and still allow him to pay 3 per cent. on the reduced loan. He was told that such a request showed his absolute lack of business capacity; that some time or other some wretched Government would come into power and talk about the reduction of licences and compensation; that the loan must be kept up whatever interest was paid for it. Eventually the tenant found he could not pay 1½ per cent., that he could not pay his rent, and that he could not pay his rates. The brewers then said they would have to let the house. This the tenant was willing 189 they should do, as it had been a burden to him. When the licence was transferred the tenant naturally said he had deposited £500, and asked whether he was not to get anything back on the transfer, whereupon he was told not to bother them about his deposit, that he had ruined their business, and he had got to get out of it. He went out of it, and some other enlightened sinner came along and did the same thing. There were hundreds of men walking about London who had been ruined in this way. He knew one particular public-house, the licence of which was kept alive, for what reason he could never understand until the Licensing Act came into force. He did not know how many tenants there had been in it. Men of this kind were got to take it and deposit a little money and were turned out. There had been two suicides in that house, and eventually the business was so bad that the brewers had to pay a man to remain in it. When the Licensing Act came in they got £2,100 for shutting it up—after they had killed two tenants there and ruined many. He asked then, and he asked now, that wherever and whenever a house was closed under this Bill, when it presently became an Act, the person who had deposited money in order to take up a licence should be the first person considered. The man who had put his savings into the business had a right to claim some consideration from the State which had no right to neglect him. It was not always that the owner of the house held the licence. It was, therefore, very difficult to say who the licence-holder was. Everybody knew how this transferring of licences was carried out. They went before the licensing justices 190 and the magistrate turned to the man who held the licence and said: "Are you willing to transfer this licence?" and the man nodded. The magistrate then turned to the man who was going to take it up and said: "Are you willing to take this licence?" and he nodded, and then the parties went outside and squared matters up and separated. He knew three public-houses; the "Noah's Ark," the "Watermans' Arms," and the "Two Brewers." The owners of these houses, the brewers, were anxious to obtain a full licence for a large house in a main road. Counsel was instructed to appear at the Middlesex Licensing Sessions, and he told the story in the delightful way in which counsel could tell these stories. The magistrates were told that his clients were an eminent firm of brewers who were exceedingly anxious to further the cause of temperance, as anxious as anyone in the Court could be to promote temperance, and remove from the weaker portion of the population the temptation to drink. The licensing justices would then ask what his proposal was. They would be told that the brewers proposed to shut up these three houses; that they were perfectly willing to surrender these three licences if the justices granted them a licence for the house for which they now applied. The justices—good, kind, Christian souls—thought this was an offer not to be despised, and that the poor slum-dwellers, exposed to this temptation in this vile neighbourhood, would be benefited. The locality certainly was a vile one from the brewers' point of view. There was nobody there. It cost the brewers £150 a year to keep these houses open, so they willingly surrendered the licences, saved £150 a year by the 191 transaction, and got a fully licensed house in the main road in the bargain. He wondered how much they paid the poor creatures they turned out into the street in their desire to remove the temptation to drink from the slum-dwellers. The whole question of compensation required much consideration. What he wanted was to get at the bedrock value of the licence, and also what the poor men who had invested their money in the business were going to get out of it. It was not the rich people who were ruined. It was the little men who put their £500 or £700—their savings—into the business. It was no part of the business of the brewers to look after them. A man got a chance where a house was removed for the purpose of improvements. He remembered a case which was brought before his licensing committee, in which the value of the goodwill was elicited. Two documents were produced before them: one was goodwill, £11,000, and the other £7,000 for the lease. The house, he said, had recently been sold for £18,000. The other side, however, said they could produce evidence to the effect that the lease was sold for £7,000, and the goodwill for £11,000; but he challenged them to produce the tenant, who was a tied tenant, to swear that he had £11,000 for the goodwill. They replied that they did not know his address, and he retorted that he knew where he lived. The fact of the matter was the tenant never had 11,000 farthings; he had been turned out to make way for a better tenant, and they wanted to cheat the assessment. Why had they this false sentimentality about compensation? The licence-holders had always taken care of themselves; let the House take care of the man who could not take care of himself.
§ SIR E. CARSON (Dublin University)said the hon. Member who had just sat down had made a very interesting and amusing speech, but, although he had been honestly trying all the time to follow him, he had not been able to gather the precise question upon which he wished to appeal for information. He was afraid he could not follow the hon. Member into all the various matters to which he had referred, and he really must confess that he had not been present at any of the conversations which had taken place between the thrifty temperance man who had saved a little money and the licence-holder or particular brewer with whom he had to deal. After all, however, there was a question on which he had something to say with regard to the compensation to be paid to the licence-holder. The debate had proceeded for some considerable time, and he did not profess that he should be able to add anything new to the arguments already adduced, but no one could doubt the vast importance in this intended legislation of the particular clause with which they were dealing. If one thing more than another demonstrated to him the spirit in which the Government approached the question, it would be the way in which they were attempting to treat this matter of compensation. After all, they knew very well that they had brought in a Bill which was going to take away from people vast interests, rights, equities, or whatever they might call them—and that they were going to affect those people pecuniarily; and, if they had wished to approach the matter in a fair spirit, inflicting the least possible hardship, the one question on which they would have taken care to be generous was the question of compensation. A good deal had been said about the Act of 1904, and he was told that some 193 quotations had been made from his own speeches when that Act was going through. He was sorry to say he had not had time either to read his own speeches or the quotations; but he thought the position they took up on the Act of 1904, having regard to the situation, was perfectly easy of definition. They were going to reduce these houses at the expense of the trade. If one thing more than another seemed to be forgotten during that debate, it was that the money they were dealing with on the present occasion was the money of the trade. When, under the Parliamentary settlement of 1904, they induced—or compelled, if they liked—these people to levy upon themselves an insurance against their own loss, they asked the trade to subscribe their money as an insurance fund for the purpose of putting down a number of these licensed houses. The hon. Member who spoke a few moments earlier said that they were extremely generous to the trade. He did not know what the extent of the hon. Member's generosity was or how much he paid.
§ SIR GEORGE WHITEI am paying a great deal every year.
§ SIR E. CARSONI did not know that the hon. Member was a member of the trade or I would not have said such a thing, nor did I know that he very largely contributed to its revenue.
§ SIR GEORGE WHITEI have no need to be a member of the trade to pay the expenses of the trade.
§ SIR E. CARSONsaid he did not know either that the hon. Gentleman had contributed to any particular extent to the particular revenue which was derived from the trade. What was the question 194 which had to be met in 1904, when the Government of the day were asking for this money? For the purpose of death duties the valuation of these houses was taken at the market value. For every public purpose for which a public-house was taken over by a county council or corporation it was taken at the market value plus something for complusory purchase. If they had a covenant in a deed to keep up the licence of a house, and broke it, they would have to pay damages on the basis of the market value. There was no valuation known to the law at the date of the Act of 1904 for the taking away for any purpose of licensed houses except the market value. The Government were asking the trade to supply £1,500,000 for the purpose of insuring them. What were they to say was to be the basis of compensation? Were they to ask the trade to set up its insurance fund and then say they would not allow them to have out of their own insurance fund the market value of the premises taken away? Would anybody have put such a proposal either before them or before the House? The whole basis of the Bill was and only could be the question of market value. What did they do? They said the market value ought to be ascertained for the purpose of insurance, just in the same way as the value was ascertained for the death duties. That was the whole basis of the scheme put forward. Could it be said that it was an unfair basis? The Kennedy judgment had been referred to, and it was said they had made some change. He thought it would be found that what he said in his speeches on that Bill was that he believed the market value would be what they would have to get at. He said over and over again that all they wanted the 195 Inland Revenue Commissioners to do was exactly what they did in relation to the fixing of the money for the purpose of the death duties. Was there anything inconsistent with that in the Kennedy judgment? There were many ways in which they might fix the market value. They might go into the district and find out what houses there of the same character had been sold for, what houses there were there, and what demand there was for them. Anyone who had been in compensation cases knew that they called surveyors who would say that they had a house not far away and sold it for such a sum. In that way they arrived at the market value. The fallacy underlying the arguments advanced on the Kennedy judgment was the leaving out of account of the fact that the learned Judge was laying down that what he wanted to get at was the market value. Hon. Members might think the best way was not adopted of arriving at that value. He was not concerned with that. It was not for him to criticise the Lord Justice. The principle remained the same; it was the market value that was sought, and it was the market value which the Government of the day contemplated under the Act of Parliament. It was idle to try and turn the debate on what took place before Mr. Justice Kennedy; the real question was whether the market value was a fair compensation. If there was anything wrong in the opinion of the House in the way Mr. Justice Kennedy arrived at the market value, and if they thought there ought to be an alteration as regarded the fixing of the market value, then they might put it in the Bill; but that did not necessitate getting rid of what only could be the real value, viz., the market value. What was the change proposed? It was well 196 to see what was the real difference between the two sides of the House. The Government proposal was something absolutely different from what was intended by the Act of 1904. He would take an instance, the case of the Coach and Horses," which had been referred to. He knew hon. Gentlemen opposite did not like it, but it was a very instructive case. The War Office sold it for £10,000. He might take that as a fair indication of the market value. He thought they had a right to get for the taxpayer the full market value of the premises. What would they get under this Bill? £400. It was no use arguing that they were giving what was intended under the Act of 1904, for they were giving something totally different. Having set up this insurance, out of which the market value was to be paid, the first thing they did was to reduce the number of years. The Prime Minister had said that was not germane to the question. With great respect, he thought it was most germane. Insurance was asked for from the trade, on the ground that they were going to get the market value when everybody was treating a licence as if it might reasonably be expected to exist for a number of years, and they said: "The most it can exist for is fourteen years, and you must take that into consideration when you are valuing." In each succeeding year they took off one year, because they were getting nearer the end of the term. In addition they did a great deal more. They gave up the market value, and gave a value as to which he thought nobody in the House understood how it would work out, or on what basis it was made, or for what reason they gave up the market value. Market value was the only possible value upon 197 which they could base any compensation proposal. Was there any estimate of compensation which had ever been based upon the rateable valuation of the premises? Such a thing was impossible, because the rateable valuation of the premises was entirely artificial, and had nothing whatever to say to what was the real value. Several hon. Gentlemen had said that under the Act of 1904 they had a different system of valuation for a free house and for a tied house. That he absolutely denied. How could there be a difference in the market value of a house, whether it was tied or whether it was free? If it was free it could be tied, and the owner had a right to sell it to a man who could have it tied. Where was the injustice, under the Act of 1904? At all events, if they wanted to put forward any intelligible basis of compensation he said, with confidence, that they could not put forward any intelligible basis of compensation other than the market value. They might say the market value was too high, and they would take 20 per cent. off because they were brewers, or they might take a great deal more off, or divide the money in different proportions, but they could never get at the value of any property except by going to the market and seeing what it would fetch. In listening to the Prime Minister one was greatly struck by the development that this debate had had in pointing out that they really had demonstrated an additional Bill inside this Bill. He had heard no answer given to the proposition put forward by the hon. Member for Kingston and the Leader of the Opposition as regarded the question of rateable value. The whole of the Bill was based, as regarded compensation, said the Prime Minister, on Schedule A., but he said that 198 Schedule A. would have to be altered. They had asked over and over again, were they going to alter Schedule A. as regards the whole country? If they were only going to alter it as regards the value of licensed premises it had been demonstrated that they were going for all purposes for which taxation was required to put additional taxation upon one trade, and one trade alone. There was no alternative but either to alter the valuations on Schedule A. all through the country on every class of house and business, or to compel what was admittedly an unjust valuation to remain in the case of public-houses. The truth of the matter was that they were determined to be unfair in their compensation towards these men. It was their money. It was they who had subscribed it under the arrangement made in 1904. The Government were going back upon that arrangement. They were at the same time keeping the money under the Act of 1904, and whittling away almost to nothing the advantages that had been promised. In every particular where the Bill was examined it was so unfair to the interest concerned that one was driven to believe that the Government themselves never could have hoped to pass the Bill. The question of compensation, as far as they had gone, was really a disgrace and a discredit to the House. He appealed to the Government, whatever other provisions they might not be able to alter in a Bill which they said would promote a great social reform in the interests of temperance, that they might at least be somewhat generous even at the expense of the trade itself to those whom they were attempting to rob.
§ Question put.
199| The Committee divided:—Ayes, 313; Noes, 129. (Division List No. 294.) |
| AYES. | ||
| Abraham, William (Rhondda) | Davies, Sir W. Howell (Bristol, S. | Horridge, Thomas Gardner |
| Acland, Francis Dyke | Dickinson, W. H. (St. Pancras, N. | Howard, Hon. Geoffrey |
| Ainsworth, John Stirling | Dickson-Poynder, Sir John P. | Hudson, Walter |
| Allen, A. Acland (Christchurch) | Dilke, Rt. Hon. Sir Charles | Hyde, Clarendon |
| Allen, Charles P. (Stroud) | Duckworth, James | Isaacs, Rufus Daniel |
| Armitage, R. | Duncan, C. (Barrow-in-Furness | Jackson, R. S. |
| Armstrong, W. C. Heaton | Duncan, J. H. (York, Otley) | Jacoby, Sir James Alfred |
| Asquith, Rt. Hon. Herbert Henry | Dunn, A. Edward (Camborne) | Johnson, John (Gateshead) |
| Astbury, John Meir | Dunne, Major E. Martin (Walsall | Johnson, W. (Nuneaton) |
| Baker, Sir John (Portsmouth) | Edwards, Clement (Denbigh) | Jones, Leif (Appleby) |
| Baker, Joseph A. (Finsbury, E.) | Edwards, Enoch (Hanley) | Jones, William (Carnarvonshire |
| Balfour, Rebort (Lanark) | Edwards, Sir Francis (Radnor) | Jowett, F. W. |
| Baring, Godfrey (Isle of Wight | Ellis, Rt. Hon. John Edward | Kearley, Sir Hudson E. |
| Barlow, Sir John E. (Somerset) | Erskine, David C. | Kekewich, Sir George |
| Barlow, Percy (Bedford) | Essex, R, W. | Kelley, George D. |
| Barnes, G. N. | Ksslemont, George Birnie | King, Alfred John (Knutsford) |
| Barran, Rowland Hirst | Evans, Sir Samuel T. | Laidlaw, Robert |
| Barry, Redmond J. (Tyrone, N. | Everett, R. Lacey | Lamb, Ernest H. (Rochester) |
| Beale, W. P. | Fenwick, Charles | Lambert, George |
| Beauchamp, E. | Ferens, T. R. | Lamont, Norman |
| Beck, A. Cecil | Fiennes, Hon. Eustace | Layland-Barratt, Sir Francis |
| Bell, Richard | Findlay, Alexander | Leese, Sir Joseph F. (Accrington |
| Bellairs, Carylon | Foster, Rt. Hon. Sir Walter | Lehmann, R. C. |
| Benn, W. (T'w'r Hamlets, S. Geo. | Freeman-Thomas, Freeman | Lever, A. Levy (Essex, Harwich) |
| Bennett, E. N. | Fuller, John Michael F. | Levy, Sir Maurice |
| Birrell, Rt. Hon. Augustine | Fullerton, Hugh | Lewis, John Herbert |
| Black, Arthur W. | Furness, Sir Christopher | Lloyd-George,) Rt. Hon. David |
| Boulton, A. C. F. | Gibb, James (Harrow) | Lough, Rt. Hon. Thomas |
| Bowcrman, C. W. | Gill, A. H. | Luttrell, Hugh Fownes |
| Brace, William | Gladstone, Rt. Hn. Herbert John | Lyell, Charles Henry |
| Bramsdon, T. A. | Glen-Coats, Sir T. (Renfrew, W. | Lynch, H. B. |
| Brigg, John | Glover, Thomas | Macdonald, J. R. (Leicester) |
| Bright, J. A. | Goddard, Sir Daniel Ford | Macdonald, J. M. (Falkirk B'ghs |
| Brocklehurst, W. B. | Gooch, George Peabody (Bath) | Mackarness, Frederic C. |
| Brodie, H. C. | Greenwood, G. (Peterborough) | Maclean, Donald |
| Brooke, Stopford | Greenwood, Hamar (York) | Macpherson, J. T. |
| Bryce, J. Annan | Grey, Rt. Hon. Sir Edward | M'Callum, John M. |
| Buchanan, Thomas Ryburn | Gurdon, Rt Hn. Sir W. Brampton | M'Crae, Sir George |
| Buckmaster, Stanley O. | Haldane, Rt. Hon. Richard B. | M'Kenna, Rt. Hon. Reginald |
| Burt, Rt. Hon. Thomas | Hull, Frederick | M'Laren, H. D. (Stafford, W.) |
| Buxton, Rt. Hn. Sydney Charles | Harcourt, Rt. Hn. L. (Rossendale | M'Micking, Major G. |
| Byles, William Pollard | Harcourt, Robert V. (Montrose) | Maddison, Frederick |
| Cameron, Robert | Hardie, J. Keir (Merthyr Tydvil) | Mallet, Charles E. |
| Carr-Gomm, H. W. | Hardy, George A. (Suffolk) | Manfield, Harry (Northants) |
| Cawley, Sir Frederick | Harmsworth, Cecil B. (Worc'r) | Markham, Arthur Basil |
| Chance, Frederick William | Harmsworth, R. L. (Caithn'ss-sh | Marks, G. Croydon (Launceston) |
| Channing, Sir Francis Allston | Hart-Davies, T. | Marnham, F. J. |
| Cheetham, John Frederick | Harvey, A. G. C. (Rochdale) | Masterman, C. F. G. |
| Churchill, Rt. Hon. Winston S. | Harvey, W. E. (Derbyshire, N. E. | Menzies, Walter |
| Clough, William | Harwood, George | Micklem, Nathaniel |
| Clynes, J. R. | Haslam, James (Derbyshire) | Middlebrook, William |
| Cobbold, Felix Thornley | Haslam, Lewis (Monmouth) | Molteno, Percy Alport |
| Collins, Stephen (Lambeth) | Haworth, Arthur A. | Mond, A. |
| Collins, Sir Wm. J. (S. Pancras, W. | Hazel, Dr. A. E. | Montagu, Hon. E. S. |
| Compton-Rickett, Sir J. | Helme, Norval Watson | Morgan, G. Hay (Cornwall) |
| Corbett, C H (Sussex, E. Grinst'd | Hemmerde, Edward George | Morgan, J. Lloyd (Carmarthen) |
| Cornwall, Sir Edwin A. | Henderson, Arthur (Durham) | Morrell, Philip |
| Cory, Sir Clifford John | Henderson, J. M. (Aberdeen, W.) | Morse, L,. L. |
| Cotton, Sir H. J. S. | Henry, Charles S. | Morton, Alpheus Cleophas |
| Cox, Harold | Herbert, Col. Sir Ivor (Hon., S.) | Murray, Capt. Hn A. C. (Kincard. |
| Crooks, William | Herbert, T. Arnold (Wycombe) | Myer, Horatio |
| Crosfield, A. H. | Higham, John Sharp | Newnes, F. (Notts, Bassetlaw) |
| Crossley, William J. | Hodge, John | Nicholls, George |
| Dalmeny, Lord | Holland, Sir William Henry | Nicholson, Charles N. (Doncast'r |
| Dalziel, James Henry | Holt, Richard Durning | Norman, Sir Henry |
| Davies, Ellis William (Eifion) | Hooper, A. G. | Norton, Capt. Cecil William |
| Davies, M. Vaughan-(Cardigan | Hope, W. Bateman (Somerset, N. | Nuttall, Harry |
| Davies, Timothy (Fulhnm) | Horniman, Emslie John | O'Donnell, C. J. (Walworth) |
| O'Grady, J. | Samuel, S. M. (Whitechape, l) | Vivian, Henry |
| Parker, James (Halifax) | Scarisbrick, T. T. L. | Walker, H. De R. (Leicester) |
| Partington, Oswald | Sehwann, C. Duncan (Hyde) | Walsh, Stephen |
| Paulton, James Mellor | Scott, A. H. (Ashton under Lyne | Walters, John Tudor |
| Pearce, Robert (Staffs, Leek) | Seaverns, J. H. | Walton, Joseph |
| Pearce, William (Limehouse) | Seddon, J. | Ward, John (Stoke upon Trent |
| Perks, Sir Robert William | Seely, Colonel | Ward, W. Dudley (Southampton |
| Philipps, Col. Ivor (S'thampton) | Shackleton, David James | Waring, Walter |
| Philipps, Owen C. (Pembroke) | Shaw, Charles Edw. (Stafford) | Wason, Rt. Hn. E. (Clackmannan |
| Pickersgill, Edward Hare | Shaw, Rt. Hon. T. (Hawick B.) | Wason, John Cathcart (Orkney) |
| Pollard, Dr. | Sherwell, Arthur James | Waterlow, D. S. |
| Pirie, C. E. (Edinb'gh, Central) | Silcock, Thomas Ball | Watt, Henry A. |
| Price, Sir Robert J. (Norfolk, E.) | Simon, John Allsebrook | Wedgwood, Josiah C. |
| Priestley, Arthur (Grantham) | Sinclair, Rt. Hon. John | White, Sir George (Norfolk) |
| Priestley, W. E. B. (Bradford, E.) | Smeaton, Donald Mackenzie | White, J. D. (Dumbartonshire) |
| Radford, G, H. | Snowden, P. | White, Luke (York, E. R.) |
| Rainy, A. Rolland | Soames, Arthur Wellesley | Whitehead, Rowland |
| Raphael, Herbert H. | Soares, Ernest J. | Whitley, John Henry (Halifax) |
| Rea, Walter Russell (Scarboro' | Spicer, Sir Albert | Whittaker, Rt. Hn. Sir Thomas P. |
| Rees, J. D. | Stanley, Albert (Staffs, N. W.) | Wiles, Thomas |
| Rendall, Athelstan | Stanley, Hn. A. Lyulph (Chesh.) | Williams, J. (Glamorgan) |
| Richards, Thomas (W. Monm'th | Steadman, W. C. | Williams, Llewelyn (Carmarth'n |
| Richards, T. F. (Wolverh'mpt'n | Stewart, Halley (Greenock) | Williams, Osmond (Merioneth) |
| Richardson, A. | Straus, B. S. (Mile End) | Williamson, A. |
| Ridsdale, E. A. | Stuart, James (Sunderland) | Wills, Arthur Walters |
| Roberts, Charles H. (Lincoln) | Summerbell, T. | Wilson, Henry J. (York, W. R. |
| Roberts, G. H. (Norwich) | Sutherland, J. E. | Wilson, John (Durham, Mid) |
| Roberts, Sir John H. (Denbighs) | Taylor, Theodore C. (Radcliffe) | Wilson, J. H. (Middlesbrough) |
| Roberts, J. M. (Tyneside) | Tennant, H. J. (Berwickshire) | Wilson, P. W. (St. Pancras, S.) |
| Robinson, S. | Thomas, Sir A. (Glamorgan, E.) | Wilson, W. T. (Westhoughton) |
| Roch, Walter F. (Pembroke) | Thomas, David Alfred (Merthyr | Winfrey, R. |
| Roe, Sir Thomas | Thompson, J. W. H. (Somerset, E. | Wood, T. M'Kinnon |
| Rogers, F. E. Newman | Thorne, G. R. (Wolverhampton) | Yoxall, James Henry |
| Rose, Charles Day | Tomkinson, James | |
| Runciman, Rt. Hon. Walter | Torrance, Sir A. M. | TELLERS FOR THE AYES—Mr. |
| Russell, Rt. Hon. T. W. | Toulmin, George | Joseph Pease and Master |
| Rutherford, V. H. (Brentford) | Trevelyan, Charles Philips | of Elibank. |
| Samuel, Herbert L. (Cleveland) | Ure, Alexander |
| NOES. | ||
| Anson, Sir William Reynell | Cochrane, Hon. Thos. H. A. E. | Joynson-Hicks, William |
| Arkwright, John Stanhope | Collings, Rt. Hn. J. Birmingh'm | Kerry, Earl of |
| Ashley, W. W. | Craig, Charles Curtis (Antrim, S) | Keswick, William |
| Aubrey-Fletcher, Rt. Hn Sir H. | Craig, Captain James (Down, E.) | Kimber, Sir Henry |
| Balcarres, Lord | Craik, Sir Henry | King, Sir Henry Seymour (Hull) |
| Baldwin, Stanley | Dixon-Hartland, Sir Fred Dixon | Lambton, Hon. Frederick Wm. |
| Balfour, Rt. Hn. A. J. (City Lond) | Douglas, Rt. Hon. A. Akers- | Lane-Fox, G. R. |
| Banbury, Sir Frederick George | Du Cros, Arthur Philip | Law, Andrew Bonar (Dulwich) |
| Banner, John S. Harmood- | Duncan, Robert (Lanark, Govan | Lee, Arthur H. (Hants, Fareham |
| Baring, Capt. Hn. G (Winchester | Faber, George Denison (York) | Lockwood, Rt. Hn. Lt.-Col. A. R. |
| Barnard, E. B. | Faber, Capt. W. V. (Hants, W.) | Long, Col. Charles W. (Evesham |
| Barrie, H. T. (Londonderry, N.) | Fell, Arthur | Long, Rt. Hn. Walter (Dublin, S. |
| Beach, Hn. Michael Hugh Hicks | Fletcher, J. S. | Lonsdale, John Brownlee |
| Beckett, Hon. Gervase | Forster, Henry William | Lowe, Sir Francis William |
| Bertram, Julius | Gardner, Ernest | Lyttelton, Rt. Hon. Alfred |
| Bignold, Sir Arthur | Gibbs, G. A. (Bristol, West) | MacCaw, William J. MacGeagh |
| Bowles, G. Stewart | Gooch, Henry Cubitt (Peckham) | M'Killop, W. |
| Bridgeman, W. Clive | Goulding, Edward Alfred | Marks, H. H. (Kent) |
| Bull, Sir William James | Gretton, John | Mason, James F. (Windsor) |
| Butcher, Samuel Henry | Guinness, Hn. R. (Haggerston) | Mildmay, Francis Bingham |
| Carlile, E. Hildred | Guinness, W. E. (Bury S. Edm.) | Morpeth, Viscount |
| Carson, Rt. Hon. Sir Edw. H. | Haddock, George B. | Morrison-Bell, Captain |
| Castlereagh, Viscount | Hamilton, Marquess of | Nicholson, Wm. G. (Petersfield) |
| Cave, George | Hardy, Laurence (Kent, Ashford | Nield, Herbert |
| Cecil, Evelyn (Aston Manor) | Harrison-Broadley, H. B. | Nolan, Joseph |
| Cecil, Lord John P. Joicey- | Hay, Hon. Claude George | Nussey, Thomas Willians |
| Cecil, Lord R. (Marylebone, E.) | Hill, Sir Clement | Oddy, John James |
| Chamberlain, Rt Hn. J. A. (Worc) | Hills, J. W. | Parker, Sir Gilbert (Gravesend) |
| Clark, George Smith | Hope, James Fitzalan (Sheffield) | Pease, Herbert Pike (Darlington |
| Clive, Percy Archer | Houston, Robert Paterson | Percy, Earl |
| Coates, Major E. F. (Lewisham) | Hunt, Rowland | Powell, Sir Francis Sharp |
| Randles, Sir John Scurrah | Smith, Abel H. (Hertford, East) | Walker, Col. W. H. (Lancashire) |
| Ratcliff, Major R. F. | Smith, F. E. (Liverpool, Walton) | Warde, Col. C. E. (Kent, Mid) |
| Rawlinson, John Frederick Peel | Smith, Hon. W. F. D. (Strand) | Whitbread, Howard |
| Remnant, James Farquharson | Stanier, Beville | Williams, Col. R. (Dorset, W.) |
| Renwick, George | Starkey, John R. | Winterton, Earl |
| Roberts, S. (Sheffield, Ecclesall) | Staveley-Hill, Henry (Staff'sh.) | Wyndham, Rt. Hon. George |
| Ronaldshay, Earl of | Stone, Sir Benjamin | Young, Samuel |
| Ropner, Colonel Sir Robert | Strauss, E. A. (Abingdon) | Younger, George |
| Rothschild, Hon. Lionel Walter | Talbot, Lord E. (Chichester) | |
| Rutherford, W. W. (Liverpool) | Talbot, Rt. Hn. J. G. (Oxf'd Univ. | TELLERS FOR THE NOES—Sir |
| Salter, Arthur Clavell | Tennant, Sir Edward (Salisbury | Alexander Acland-Hood and |
| Sandys, Lieut.-Col. Thos. Myles | Thomson, W. Mitchell-(Lanark) | Viscount Valentia. |
| Sassoon, Sir Edward Albert | Thornton, Percy M. | |
| Scott, Sir S. (Marylebone, W) | Tuke, Sir John Batty |
§ And, it being after half-past Ten of the clock, the CHAIRMAN proceeded, in pursuance of the Order of the House of 17th July, successively to put forthwith the Question on the Amendments moved by the Government, of which notice had been given, and the Questions necessary to dispose of the Business to be concluded this day.
§
Amendments proposed—
In page 6, line 23, after the word 'business' to insert the words 'or, where the licence-holder is managing the business on behalf of some other person, for the licence-holder's loss of employment.'
In page 6, line 25, after the word 'licence' to insert the words 'not in any BUM being loss than the amount of one year's net profits to be determined in accordance with the rules and
§ regulations of the Acts relating to income-tax.'"
§ In page 7, line 2, at end, to add the words '(4) If the amount payable as compensation in respect of the extinction of a licence is not determined or for any other reason is not divided and paid at the time when the licence expire the Licensing Commission shall pay to the holder of the licence such sum as they think fit under the circumstances of the case in anticipation of any sum which may ultimately become payable to him, and any sum so paid shall be deducted from his share in the compensation when the amount payable as compensation is ultimately divided and paid."—(The Solicitor-General.)
§ Amendments agreed to.
§ Question put. "That the Clause, as amended, stand part of the Bill."
§ The Committee divided:—Ayes. 314; Noes, 128. (Division List No. 295.)
| Edwards, Enoch (Hanley) | King, Alfred John (Knutsford) | Rees, J. D. |
| Edwards, Sir Francis (Radnor | Laidlaw, Robert | Rendall, Athelstan |
| Ellis, Rt. Hon. John Edward | Lamb, Ernest H. (Rochester) | Richards, Thomas (W. Monm'th |
| Erskine, David C. | Lambert, George | Richards, T. F. (Wolverh'mpt'n |
| Essex, R. W. | Lamont, Norman | Richardson, A. |
| Esslemont, George Birnie | Layland-Barratt, Sir Francis | Ridsdale, E. A. |
| Evans, Sir Samuel T. | Leese, Sir Joseph F. (Accrington | Roberts, Charles H. (Lincoln) |
| Everett, R. Lacey | Lehmann, R. C. | Roberts, G. H. (Norwich) |
| Fenwick, Charles | Lever, A. Levy (Essex, Harwich) | Roberts, Sir John H. (Denbighs.) |
| Ferens, T. R. | Levy, Sir Maurice | Robertson, J. M. (Tyneside) |
| Fiennes, Hon. Eustace | Lewis, John Herbert | Robinson, S. |
| Findlay, Alexander | Lough, Rt. Hon. Thomas | Roch, W7alter F. (Pembroke) |
| Foster, Rt. Hon. Sir Walter | Lupton, Arnold | Roe, Sir Thomas |
| Freeman-Thomas, Freeman | Luttrell, Hugh Fownes | Rogers, F. E. Newman |
| Fuller, John Michael F. | Lyell, Charles Henry | Rose, Charles Day |
| Fullerton, Hugh | Lynch, H. B. | Runciman, Rt. Hon. Walter |
| Furness, Sir Christopher | Macdonald, J. R. (Leicester) | Russell, Rt. Hon. T. W. |
| Gibb, James (Harrow) | Macdonald, J. M. (Falkirk B'ghs | Rutherford, V. H. (Brentford) |
| Gill, A. H. | Mackarness, Frederic C. | Samuel, Herbert L. (Cleveland) |
| Gladstone, Rt. Hn Herbert John | Maclean, Donald | Samuel, S. M. (Whitechapel) |
| Glen-Coats, Sir T. (Renfrew, W.) | Macpherson, J. T. | Scarisbrick, T. T. L. |
| Glover, Thomas | MacVeagh, Jeremiah (Down, S. | Schwann, C. Duncan (Hyde) |
| Goddard, Sir Daniel Ford | M'Callum, John M. | Scott, A. H. (Ashton under Lyne |
| Gooch, George Peabody (Bath) | M'Crae, Sir George | Seaverns, J. H. |
| Greenwood, G. (Peterborough) | M'Kenna, Rt. Hon. Reginald | Seddon, J. |
| Greenwood, Hamar (York) | M'Laren, H. D. (Stafford, W.) | Seely, Colonel |
| Grey, Rt. Hon. Sir Edward | M'Micking, Major G. | Shackleton, David James |
| Gurdon, Rt Hn. Sir W. Brampton | Maddison, Frederick | Shaw, Charles Edw. (Stafford) |
| Haldane, Rt. Hon. Richard B. | Mallet, Charles E. | Shaw, Rt. Hon. T. (Hawick B.) |
| Hall, Frederick | Manfield, Harry (Northants) | Sherwell, Arthur James |
| Harcourt, Rt. Hn. L. (Rossendale | Markham, Arthur Basil | Silcock, Thomas Ball |
| Harcourt, Robert V. (Montrose) | Marks, G. Croydon (Launceston) | Simon, John Allsebrook |
| Hardie, J. Keir (Merthyr Tydvil | Marnham, F. J. | Sinclair, Rt. Hon. John |
| Hardy, George A. (Suffolk) | Masterman, C. F. G. | Smeaton, Donald Mackenzie |
| Harmsworth, Cecil B. (Worc'r.) | Menzies, Walter | Snowden, P. |
| Harmsworth, R. L. (Caithn'ss-sh | Micklem, Nathaniel | Soames, Arthur Wellesley |
| Hart-Davies, T. | Middlebrook, William | Soares, Ernest J. |
| Harvey, A. G. C. (Rochdale) | Molteno, Percy Alport | Spicer, Sir Albert |
| Harvey, W. E. (Derbyshire, N. E. | Mond, A. | Stanley, Albert (Staffs, N. W.) |
| Harwood, George | Montagu, Hon. E. S. | Stanley, Hn. A. Lyulph (Chesh.) |
| Haslam, James (Derbyshire) | Morgan, G. Hay (Cornwall) | Steadman, W. C. |
| Haslam, Lewis (Monmouth) | Morgan, J. Lloyd (Carmarthen) | Stewart, Halley (Greenock) |
| Haworth, Arthur A. | Morrell, Philip | Straus, B. S. (Mile End) |
| Hazel, Dr. A. E. | Morse, L. L. | Stuart, James (Sunderland |
| Helme, Norval Watson | Morton, Alpheus Cleophas | Summerbell, T. |
| Hemmerde, Edward George | Murray, Capt. Hn A. C. (Kincard. | Sutherland, J. E. |
| Henderson, Arthur (Durham) | Myer, Horatio | Taylor, Theodore C. (Radcliffe) |
| Henderson, J. M. (Aberdeen, W.) | Nicholls, George | Tennant, H. J. (Berwickshire) |
| Henry, Charles S. | Nicholson, Charles N. (Doncast'r | Thomas, Sir A. (Glamorgan, E.) |
| Herbert, Col. Sir Ivor (Mon., S.) | Norman, Sir Henry | Thomas, David Alfred (Merthyr |
| Herbert, T. Arnold (Wycombe) | Norton, Capt. Cecil William | Thompson, J. W. H. (Somerset, E. |
| Higham, John Sharp | Nussey, Thomas Willans | Thorne, G. R. (Wolverhampton |
| Hodge, John | Nuttall, Harry | Tomkinson, James |
| Holland, Sir William Henry | O'Donnell, C. J. (Walworth) | Torrance, Sir A. M. |
| Holt, Richard Dinning | O'Grady, J. | Toulmin, George |
| Hooper, A. G. | Parker, James (Halifax) | Trevelyan, Charles Philips |
| Hope, W. Bateman (Somerset, N. | Partington, Oswald | Ure, Alexander |
| Horniman, Emslie John | Paulton, James Mellor | Vivian, Henry |
| Horridge, Thomas Gardner | Pearce, Robert (Staffs, Leek) | Walker, H. De R. (Leicester) |
| Howard, Hon. Geoffrey | Pearce, William (Limehouse) | Walsh, Stephen |
| Hudson, Walter | Perks, Sir Robert William | Walters, John Tudor |
| Hyde, Clarendon | Philipps, Col. Ivor (S'thampton) | Walton, Joseph |
| Isaacs, Rufus Daniel | Philipps, Owen C. (Pembroke) | Ward, John (Stoke upon Trent) |
| Jackson, R. S. | Pickersgill, Edward Hare | Ward, W. Dudley (Southampt'n |
| Jacoby, Sir James Alfred | Pollard, Dr. | Waring, Walter |
| Johnson, John (Gateshead) | Price, C. E. (Edinb'gh, Central) | Wason, Rt. Hn. E. (Clackmannan |
| Johnson, W. (Nuneaton) | Price, Sir Robert J. (Norfolk, E.) | Wason, John Cathcart (Orkney) |
| Jones, Leif (Appleby) | Priestley, Arthur (Grantham) | Waterlow, D. S. |
| Jones, William (Carnarvonshire | Priestley, W. E. B. (Bradford, E.) | Watt, Henry A. |
| Jowett, F. W. | Radford, G. H. | Wedgwood, Josiah C. |
| Kearley, Sir Hudson E. | Rainy, A. Rolland | White, Sir George (Norfolk) |
| Kekewich, Sir George | Raphael, Herbert H. | White, J. D. (Dumbartonshire) |
| Kelley, George D. | Rea, Walter Russell (Scarboro' | White, Luke (York, E. R.) |
| Whitehead, Rowland | Williamson, A. | Winfrey, R. |
| Whitley, John Henry (Halifax) | Wills, Arthur Walters | Wood, T. M'Kinnon |
| Whittaker, Rt Hn. Sir Thomas P. | Wilson, Henry J. (York, W. R.) | Yoxall, James Henry |
| Wiles, Thomas | Wilson, John (Durham, Mid) | |
| Williams, J. (Glamorgan) | Wilson, J. H. (Middlesbrough) | TELLERS FOR THE AYES—Mr. |
| Williams, Llewelyn (Carmarthen | Wilson, P. W. (St. Pancras, S.) | Joseph Pease and Master of |
| Williams, Osmond (Merioneth) | Wilson, W. T. (Westhoughton) | Elibank. |
| NOES. | ||
| Anson, Sir William Reynell | Fletcher, J. S. | Oddy, John James |
| Arkwright, John Stanhope | Forster, Henry William | Parker, Sir Gilbert (Gravesend) |
| Ashley, W. W. | Gardner, Ernest | Pease, Herbert Pike (Darlington |
| Aubrey-Fletcher, Rt. Hn. Sir H. | Gibbs, G. A. (Bristol, West) | Percy, Earl |
| Balcarres, Lord | Gooch, Henry Cubitt (Peckham) | Powell, Sir Francis Sharp |
| Baldwin, Stanley | Goulding, Edward Alfred | Randles, Sir John Scurrah |
| Balfour, Rt Hn. A. J. (City Lond.) | Gretton, John | Ratcliff, Major R. F. |
| Banbury, Sir Frederick George | Guinness, Hon. R. (Haggerston) | Rawlinson, John Frederick Peel |
| Banner, John S. Harmood- | Guinness, W. E. (Bury S. Edm.) | Remnant, James Farquharson |
| Baring, Capt. Hn. G (Winchester | Haddock, George B. | Renwick, George |
| Barnard, E. B. | Hamilton, Marquess of | Roberts, S. (Sheffield, Ecclesall) |
| Barrie, H. T. (Londonderry, N.) | Hardy, Laurence (Kent, Ashf'rd | Ronaldshay, Earl of |
| Beach, Hn. Michael Hugh Hicks | Harrison-Broadley, H. B. | Ropner, Colonel Sir Robert |
| Beckett, Hon. Gervase | Hay, Hon. Claude George | Rothschild, Hon. Lionel Walter |
| Bertram, Julius | Hill, Sir Clement | Rutherford, W. W. (Liverpool) |
| Bignold, Sir Arthur | Hills, J. W. | Salter, Arthur Clavell |
| Bowles, G. Stewart | Hope, James Fitzalan (Sheffield) | Sandys, Lieut.-Col. Thos. Myles |
| Bridgeman, W. Clive | Houston, Robert Paterson | Sassoon, Sir Edward Albert |
| Bull, Sir William James | Hunt, Rowland | Scott, Sir S. (Marylebone, W) |
| Butcher, Samuel Henry | Joynson-Hicks, William | Smith, Abel H. (Hertford, East) |
| Carlile, E. Hildred | Kerry, Earl of | Smith, F. E. (Liverpool, Walton) |
| Carson, Rt. Hon. Sir Edw. H. | Keswick, William | Smith, Hon. W. F. D. (Strand) |
| Castlereagh, Viscount | Kimber, Sir Henry | Stanier, Beville |
| Cave, George | King, Sir Henry Seymour (Hull) | Starkey, John R. |
| Cecil, Evelyn (Aston Manor) | Lambton, Hon. Frederick Wm. | Staveley-Hill, Henry (Staff'sh. |
| Cecil, Lord John P. Joicey- | Lane-Fox, G. R. | Stone, Sir Benjamin |
| Cecil, Lord R. (Marylebone, E.) | Law, Andrew Bonar (Dulwich) | Strauss, E. A. (Abingdon) |
| Chamberlain, Rt Hn. J. A. (Worc | Lee, Arthur H. (Hants, Fareham | Talbot, Lord E. (Chichester) |
| Clark, George Smith | Lockwood, Rt. Hn. Lt.-Col. A. R. | Talbot, Rt. Hn. J. G. (Oxf'd Univ. |
| Clive, Percy Archer | Long, Col. Charles W. (Evesham) | Tennant, Sir Edward (Salisbury |
| Coates, Major E. F. (Lewisham) | Long, Rt. Hn. Walter (Dublin, S) | Thomson, W. Mitchell- (Lanark) |
| Cochrane, Hon. Thos. H. A. E. | Lonsdale, John Brownlee | Thornton, Percy M. |
| Callings, Rt. Hn. J. (Birmingh'm | Lowe, Sir Francis William | Tuke, Sir John Batty |
| Courthope, G. Loyd | Lyttelton, Rt. Hon. Alfred | Walker, Col. W. H. (Lancashire) |
| Craig, Charles Curtis (Antrim, S. | MacCaw, William J. MacGeagh | Warde, Col. C. E. (Kent, Mid) |
| Craig, Captain James (Down, E.) | M'Killop, W. | Williams, Col. R. (Dorset, W.) |
| Craik, Sir Henry | Marks, H. H. (Kent) | Winterton, Earl |
| Dixon-Hartland, Sir Fred Dixon | Mason, James F. (Windsor) | Wyndham, Rt. Hon. George |
| Douglas, Rt. Hon. A. Akers- | Mildmay, Francis Bingham | Young, Samuel |
| Du Cros, Arthur Philip | Morpeth, Viscount | Younger, George |
| Duncan, Robert (Lanark, Govan | Morrison-Bell, Captain | |
| Faber, George Denison (York) | Nicholson, Wm. G. (Petersfield) | TELLERS FOR THE NOES—Sir |
| Faber, Capt. W. V. (Hants, W.) | Nield, Herbert | Alexander Acland-Hood and |
| Fell, Arthur | Nolan, Joseph | Viscount Valentia. |
§ Clause 11:
§
Amendments proposed—
In page 7, line 3, after the word 'compensation,' to insert the words 'excluding any additional sums in respect of loss of business or employment or depreciation of fixtures.'
In page 7, line 12, to leave out the word 'and.'
In page 7, line 13, to leave out the words '(b) Any,' and to insert the words '(2) The additional sums in respect of loss of business or employment and depreciation of fixtures shall be dealt with as follows: (a) The '
In page 7, line 14, after the word 'business' to insert the words 'or employment.'
208
In page 7, line 14, after the word 'to' to insert the words 'and notwithstanding any agreement to the contrary may be retained by.'
In page 7, line 15, to leave out the word 'any' and to insert the words '(b) The.'"—(The Solicitor-General.)
§ Amendments agreed to.
§ Clause, as amended, agreed to.
§ Committee report Progress; to sit again To-morrow.
§ Whereupon, Mr. SPEAKER, pursuant to the Order of the House of 31st July, adjourned the House without Question put.
§ Adjourned at five minutes before Eleven o'clock.