§ (1) There shall be charged, levied, and paid for the current and every subsequent financial year on the rental value of all rights to work minerals and of all mineral wayleaves, a duty (in this Act referred to as a Mineral Eights Duty) at the rate in each case of one shilling for every twenty shillings of that rental value.
§ (2) The rental value shall be taken to be—
- (a) Where the right to work the minerals is the subject of a mining lease, the amount of rent paid by the working lessee in the last working year in respect of that right; and
- (b) Where minerals are being worked by the proprietor thereof, the amount which is determined by the Commis-
586 sioners to be the sum which would have been received as rent by the proprietor in the last working year if the right to work the minerals had been leased to a working lessee for a term and at a rent and on conditions customary in the district, and the minerals had been worked to the same extent and in the same manner as they have been worked by the proprietor in that year. Provided that the Commissioners shall cause a copy of their valuation of such rent to be served on the owner of the land; and - (c) In the case of a mineral wayleave, the amount of rent paid by the working lessee in the last working year in respect of the wayleave.
§ (3) Every proprietor of any minerals and every person to whom any rent is paid in respect of any right to work minerals or of any mineral wayleave shall, upon notice being given to him by the Commissioners requiring him to give particulars as to the amount received by him in respect of the right or wayleave, as the case may be, and where the proprietor is working the minerals, in respect of the minerals worked, make a return in the form required by the notice, and within the time, not being less than thirty days, specified in the notice, and in default shall be liable to a penalty not exceeding fifty pounds to be recovered in the High Court.
§ (4) Mineral Rights Duty shall be assessed by the Commissioners and shall be payable at any time after the first day of January in the year for which the duty is charged, and any such duty for the time being unpaid shall be recoverable as a debt due to His Majesty from the proprietor of the minerals, where the proprietor is working the minerals, and in any other case from the immediate lessor of the working lessee. As between the immediate lessor and the working lessee, the duty shall be borne by the immediate lessor, notwithstanding any contract to the contrary, whether made before or after the passing of this Act.
§ (5) Mineral Rights Duty shall not be charged in respect of common brick clay, common brick earth, or sand, chalk, limestone, or gravel.
§ Mr. LAURENCE HARDY moved, in Sub-section (1), after the word "rights" ["of all rights to work minerals"], to insert the words "under a mining lease."
§
This really has the effect of limiting the Mineral Rights Duty to the class of people about whom the Chancellor of the Exchequer and others always talked when
587
they were referring to this tax. They desired to lay it not upon those who were taking the risks necessary for a colliery business, but on those who receive their rents without contributing anything to the rates of the district or in any way risking their money. The consequence of this will be, of course, that it will be necessary to omit paragraph (b), referring to the minerals which are worked by the proprietor. I dare say the House will recollect that on the general discussion we had some very valuable speeches from political economists on the other side, in which they said it was quite unnecessary to modify this, because under no consideration could such a burden be laid upon the proprietor working his own coal make any difference to the price at which it was sold; that it was entirely a burden on rent, which is a separate part of his profits, and that this could not possibly have anything to do with his business. After all the speeches we had on that occasion, when we afterwards came to discuss other minerals than coal, minerals such as chalk and lime and others, immediately the Members opposite at once alleged that this very same burden was of such importance and such decrement to the industry concerned that it was necessary to exclude it. That proposition was accepted by the Government, by the Chancellor of the Exchequer, and other Members. An especially valuable admission was made by a Member from Essex (Mr. Whitehead), who, at that time sat behind the Government, in a speech in which he defended the attitude of the Government. He said that one particular reason why the Chancellor of the Exchequer was not inconsistent with what he had said earlier that afternoon was that in the districts in which chalk was most used
three-fourths of the output of the chalk quarries used in the manufacture of cement are owned by the manufacturers themselves….and would necessarily fall upon them as manufacturers.
§ That was just the argument we had tried to put forward in connection with coal. It comes with much heavier weight from coal than from any of the minerals excluded. We were challenged in the House by another hon. Member as to whether there were any cases of owners working their own coal. At once that challenge was taken up in the House, and would be largely taken up in the country. It is not only the people who work the coal as coal sellers who are affected by the much larger class of people who work it as 588 auxiliary to other industries, such as iron and steel. Manufacturers of iron and steel obtain those minerals for the purpose of working them, and in that way the imposition of this tax does necessarily act upon the industry with which they are connected.
§ It is impossible for them to take the attitude of political economists when they have admitted the exemption in connection with the other minerals. Therefore, I feel we have strong reason for putting this case again on the Government. In fulfilling the pledge to which I alluded, namely, that they do not intend by this Mineral Rights Duty to put any extra burden whatsoever on those who risked their capital, and because it has been already sufficiently burdened by other legislation, the statement made by the Chancellor of the Exchequer to a deputation, I venture to put forward this again, and to press it most earnestly on the attention of those in charge of the Bill, because, undoubtedly, if this exemption is not made on the same lines as has been given to the cheaper minerals, great injustice will be done. The tax will fall upon several of our most important industries and on industries which have at the present time a very small margin of profit. I do think we have established a new case by the very arguments used as to the other minerals, and I therefore ask the kindly consideration of the Government for this Amendment.
Mr. F. A. NEWDEGATEI beg to second the Amendment. In Committee, the Chancellor of the Exchequer was good enough to accept an Amendment of mine in regard to cheaper minerals, and, as one living in a county where many owners have developed their minerals, I earnestly appeal to him not to put this tax on owners who have been public-spirited enough to risk a lot of money in developing minerals in different parts of the country. I was astonished to hear the hon. Member for the Mansfield Division (Mr. Markham) say, in a former Debate, that comparatively few owners of land work their own minerals. In the two counties with which I am familiar—Derbyshire and Warwickshire—I know several cases where they do so. In the neighbourhood in which I live, Sir Alfred Hickman, a former Member of this House, a large proprietor of minerals and a great ironmaster, has laid out large sums of money, first of all in searching for minerals, and then in developing them, 589 with the result that a large population has sprung up; houses have been erected at his expense, and the neighbourhood has greatly developed. It is absolutely unfair that people who risk their money in doing these services to the community should be taxed in the way proposed. The right hon. Gentleman has stated that he does not wish to put a tax on industry, but he will certainly be doing so if he retains the tax as it stands. It is an entirely different thing to tax proprietors who work their own minerals and have laid out their own money, from taxing people who have not invested a single penny in sinking collieries or developing the minerals; therefore, I hope the Amendment will be accepted.
§ Sir JOHN RANDLESIn referring to these taxes on minerals the Chancellor of the Exchequer has all along argued that the infliction on industry and on the iron and steel manufactures of the country would be very slight. His argument was that where there is a heavy royalty, his little tax will be of so small importance that it will not be felt, and that he might very well get 6d. where somebody else is getting 10s. But he has never argued those cases where there is no royalty, where the royalty is part of the manufacture, where there is an actual proprietary right in the minerals, the minerals being worked for the sake, not of the royalty, not even of the mineowner, but of the manufacture which follows on, and is part of the same concern. Even though he thinks it right to take a small portion out of the heavy sum paid to the royalty owner, surely in a case of this kind, where there is no royalty owner, and the tax must of necessity be a tax on the industry, he must agree that the relief sought by this Amendment should be granted. So far as that argument goes the tax would fall on the industry. It was admitted in the case of clay and limestone and those inferior minerals, which are really of comparatively small importance, that it was a benefit to remove the tax from that industry—not from the royalty owner. He had no thought for the royalty owner. It was for the industry. And the great supporter of the policy of the right hon. Gentleman the Member for Mansfield (Mr. Markham), in his speech, said that the Chancellor of the Exchequer had the worst of the argument in his encounter with the hon. Member for Dulwich (Mr. Bonar Law).
590 The hon. Member for Mansfield stated that the argument of the Chancellor was all bad, and that the observations of the hon. Member for Dulwich were right. He did not agree with the Chancellor of the Exchequer in his argument as to the incidence of the tax on clay and limestone. He said that if these taxes fall on the clay and sand industry, they must equally fall on the coal industry. What applies to coal applies with greatly increased force to iron ore, where the taxes are four, five, or more times as much a ton to what they are on coal, where the nature of the industry is much more uncertain, and where there is no certainty that a man will get a good result from his mine. It is therefore more desirable in those cases that the man who is getting the coal should be not only the proprietor of the mine, but the owner of the minerals themselves, and have no royalty to pay. The Chancellor of the Exchequer must see that the burden which comes on the industry in these cases, at any rate, suggests an equally strong case for its relief in respect of the mines owned and worked by manufacturers, as there was a case for those claypits or limestone quarries or any of those other articles which are absolutely necessary to trade and commerce, as distinguished from those being worked from the royalty-owing point of view, and merely for the profit of the royalty owner. I would urge upon the right hon. Gentleman the desirability of accepting the Amendment.
§ Mr. LLOYD-GEORGEI think the hon. Member who moved this Amendment will recognise that this point was very fully debated in Committee. He has used the same arguments as he used before, even to the point of submitting that the concessions that have been extended to chalk should be extended to the owner of a coal mine. It is true of every concession that it must necessarily be a departure from strict principle. But if a concession is used as a means of extending further concessions it loses its merit.
§ Sir J. RANDLESI do not see that.
§ Mr. LLOYD-GEORGEIt is then not a concession, but an abandonment of the general principle. You may lay down a general principle and find it desirable in some small cases to make a concession here and there in order to smooth the way. Especially so where it does not produce a large revenue, and probably gives a great deal of irritation. But the concession 591 should not be extended in such a way as to completely destroy the tax! What are the arguments of the hon. Gentleman who moved this Amendment? He said, "It is not fair that you should charge a man who is working his own minerals." We are taxing the landlord's interest in the minerals. If a landlord expends money on developing the property, like a colliery proprietor, we are not charging him at all in respect of the return he may legitimately expect upon what he expends purely as a colliery proprietor; we only charge him upon his mineral rights. I do not see how we could draw a distinction between the landlord who develops the property himself and the one who leases it. That may be a distinction between a rich and a poor landlord. The poor landlord may not be able to develop it himself and hands it over to a company, but if a man is rich enough to develop it himself he is to be let off all mineral rights. I do not think it would be possible to defend that, and therefore I think we must abide by the decision the House came to in the Committee stage, and refuse to draw a distinction between the two cases. I may point out that in Scotland, where royalties are subject to rates, no distinction is drawn between the landlord who leases and the landlord who works the mine, and if there is no distinction drawn in that case, and the landlords do not seem to complain of it there, I do not see why a distinction should be drawn when it is a matter of Imperial taxation.
§ Mr. WATSON RUTHERFORDIt cannot be pointed out too clearly that the word lease, as used in connection with minerals, is a confusion in terms. What is called a mineral lease is not a lease at all, and it is out of that point that the present difficulty arises. A mineral lease is really a sale of the minerals to the person to whom the lease is supposed to be granted, and the royalties paid are the prices of taking the article away. It leads to great confusion to call these transactions leases, and it is out of that the present difficulty arises between the proprietor who is working his own coal and the ordinary man who is working the coal purchased from somebody else. If the colliery company has bought the coal out and out the price is paid for that in advance, but if they take an ordinary mining lease the price of the minerals is spread over a number of years. The transaction is the same, namely, the purchase of so much minerals paid for 592 either in lump sum or in instalments, as the case may be. This Amendment illustrates the extreme difficulty of the tax itself.
I should not be in order in discussing the principle of the tax at this stage, but I wish to point out that the consumer of minerals raised in this country must undoubtedly pay any tax of this kind cast upon this industry in any shape or form. It is quite true, as the right hon. Gentleman has several times pointed out, that with regard to existing leases the Chancellor of the Exchequer makes a very careful provision that this particular tax is to fall upon the landlord to whom the royalties are being paid, but with regard to all future transactions, and where the proprietor is working the mills himself, exactly the opposite case arises. Surely when you come to consider that the iron and coal industries of this country win be affected by this Clause, it will be recognised that these are industries where a few pence per ton makes all the difference between getting the contract either between one establishment and another in this country, or between this and other countries. When these businesses are at the present moment in such an exceedingly difficult and precarious position, I should have thought this would have been the very last moment when the Chancellor of the Exchequer would have insisted upon a proprietor's lease being treated in this way by casting the burden upon the actual cost of getting the material and turning it into money. I cannot help thinking that if the Chancellor of the Exchequer and those who are going to follow him into the Lobby would only pause for a moment and consider what they are doing with reference to the coal and iron industries, they would entirely change their attitude, and something would be done to meet the few cases which have been selected.
§ Mr. AUSTEN CHAMBERLAINI do not propose to repeat the observations which I made on a previous occasion on this subject when the Chancellor of the Exchequer made the announcement of the new form of this tax. I desire, however, to point out to the Government and to the House that the proposal, or rather that part which is challenged by this Amendment, is wholly inconsistent with the justification which the Chancellor of the Exchequer gave in his Budget speech for the establishment of this tax. His justification, in that as in many other instances, is not an argument, but an illustration of the way this Bill is being proceeded with. We are told that without any expenditure on the part of the 593 owner very large mineral revenues were being derived. That is what we want to get at, and that is a proper thing to tax. That, however, is not what the Chancellor of the Exchequer is getting at in that portion of the tax which is challenged by this Amendment. What he is getting at here is not the man who has done nothing, but the man who has done everything. He is the man who has risked his capital, and he is the very man whom the Chancellor of the Exchequer held up as a model, to be encouraged in contra-distinction to the idle, or it may mean the poor man who has not money enough to develop his own property. The Chancellor of the Exchequer has completely changed the tax, and he has put it in a form which is irreconcilable with the arguments he adduced for the tax in its original shape. The Chancellor of the Exchequer appears to have made some observations in my absence in regard to the Opposition raising this point again on Report.
§ Mr. LLOYD-GEORGEI simply gave that as a reason for shortening my observations.
§ Mr. AUSTEN CHAMBERLAINIf the right hon. Gentleman had heard as much
§ of the discussion as I have he would have known it has been conducted with rather remarkable brevity. The longest speeches certainly have not come from this side of the House, and the number of points we have selected for discussion are very few. We might have challenged each Clause, but we have not. We have accepted the decision of the House that these taxes are to be enforced—it has not been usual, and I do not know whether we ought to do such a thing—and we have devoted ourselves merely to points of detail which were either insufficiently discussed, held over for further consideration, or not satisfactorily met in the Committee stage. I desire to emphasise the absolute contradiction in the attitude of the Chancellor of the Exchequer to-day on the proposals we are now discussing, and the attitude he assumed on the proposals made in his Budget speech I do not know exactly how many months ago.
§ Question put, "That those words be there inserted in the Bill."
§ The Committee divided: Ayes, 51; Noes, 161.
595| Division No. 829.] | AYES. | [11.50 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Gibbs, G. A. (Bristol, West) | Ratcliff, Major R. F. |
| Balcarres, Lord | Gooch, Henry Cubitt (Peckham) | Renwick, George |
| Baldwin, Stanley | Gordon, J. | Rutherford, Watson (Liverpool) |
| Balfour, Rt. Hon. A. J. (City Lond.) | Gretton, John | Scott, Sir S. (Marylebone, W.) |
| Banbury, Sir Frederick George | Guinness, Hon. R. (Haggerston) | Sheffield, Sir Berkeley George D |
| Beckett, Hon. Gervase | Guinness, Hon. W. E. (Bury St. Edm.) | Stanier, Beville |
| Bignold, Sir Arthur | Haddock, George B. | Starkey, John R. |
| Burdett-Coutts, W. | Harris, Frederick Leverton | Staveley-Hill, Henry (Staffordshire) |
| Carlile, E. Hildred | Hay, Hon. Claude George | Talbot, Lord E. (Chichester) |
| Cave, George | Helmsley, Viscount | Thornton, Percy M. |
| Cecil, Evelyn (Aston Manor) | Hermon-Hodge, Sir Robert T. | Valentia, Viscount |
| Chamberlain, Rt. Hon. J. A. (Worc.) | Hunt, Rowland | Walker, Col. W. H. (Lancashire) |
| Coates, Major E. F. (Lewisham) | Kerry, Earl of | Walrond, Hon. Lionel |
| Cochrane, Hon. Thomas H. A. E. | King, Sir Henry Seymour (Hull) | Williams, Col. R. (Dorset, W.) |
| Courthope, G. Loyd | Morpeth, Viscount | Younger, George |
| Fletcher, J. S. | Morrison-Bell, Captain | |
| Forster, Henry William | Parkes, Ebenezer | TELLERS FOR THE AYES.—Mr. Laurence Hardy and Mr. Newdegate. |
| Foster, Philip S. (Warwick, S. W.) | Randles, Sir John Scurrah | |
| NOES. | ||
| Acland, Francis Dyke | Bryce, J. Annan | Evans, Sir Samuel T. |
| Agnew, George William | Burns, Rt. Hon. John | Everett, R. Lacey |
| Allen, A. Acland (Christchurch) | Byles, William Pollard | Falconer, James |
| Allen, Charles P. (Stroud) | Causton, Rt. Hon. Richard Knight | Ferguson, R. C. Munro |
| Astbury, John Meir | Cawley, Sir Frederick | Fiennes, Hon. Eustace |
| Balfour, Robert (Lanark) | Channing, Sir Francis Allston | Fuller, John Michael F. |
| Baring, Godfrey (Isle of Wight) | Cherry, Rt. Hon. R. R. | Fullerton, Hugh |
| Barnard, E. B. | Clough, William | Gibson, James Puckering |
| Beale, W. P. | Cobbold, Felix Thornley | Gladstone, Rt. Hon. Herbert John |
| Beauchamp, E. | Collins, Stephen (Lambeth) | Glover, Thomas |
| Benn, W. (Tower Hamlets, St. Geo.) | Corbett, A. Cameron (Glasgow) | Goddard, Sir Daniel Ford |
| Bennett, E. N. | Corbett, C. H. (Sussex, E. Grinstead) | Grove, Archibald |
| Berridge, T. H. D. | Cotton, Sir H. J. S. | Guiland, John W. |
| Bowerman, C. W. | Cowan, W. H. | Harcourt, Robert V. (Montrose) |
| Brace, William | Davies, Sir W. Howell (Bristol, S.) | Harmsworth, Cecil B. (Worcester,) |
| Brigg, John | Dunn, A. Edward (Camborne) | Harvey, A. G. C. (Rochdale) |
| Brunner, J. F. L. (Lancs., Leigh) | Essex, R. W. | Harvey, W. E. (Derbyshire, N. E.) |
| Haworth, Arthur A. | Marnham, F. J. | Shaw, Sir Charles Edward |
| Hazel, Dr. A. E. | Massie, J. | Sherwell, Arthur James |
| Hazleton, Richard | Masterman, C. F. G. | Soares, Ernest J. |
| Hedges, A. Paget | Micklem, Nathaniel | Strachey, Sir Edward |
| Helme, Norval Watson | Molteno, Percy Alport | Tennant, H. J. (Berwickshire) |
| Henderson, J. M. (Aberdeen, W.) | Morse, L. L. | Thomasson, Franklin |
| Herbert, Col. Sir Ivor (Mon., S.) | Murray, Capt. Hon. A. C. (Kincard.) | Toulmin, George |
| Herbert, T. Arnold (Wycombe) | Newnes, F. (Notts, Bassetlaw) | Ure, Rt. Hon. Alexander |
| Higham, John Sharp | Nuttall, Harry | Verney, F. W. |
| Hobart, Sir Robert | O'Brien, Patrick (Kilkenny) | Villiers, Ernest Amherst |
| Hodge, John | Parker, James (Halifax) | Vivian, Henry |
| Holt, Richard Durning | Pearson, W. H. M. (Suffolk, Eye) | Walsh, Stephen |
| Howard, Hon. Geoffrey | Philipps, Owen C. (Pembroke) | Walters, John Tudor |
| Hyde, Clarendon | Pollard, Dr. | Warner, Thomas Courtenay T. |
| Idris, T. H. W. | Ponsonby, Arthur A. W. H. | Wason, John Cathcart (Orkney) |
| Illingworth, Percy H. | Price, C. E. (Edinburgh, Central) | Waterlow, D. S. |
| Jones, Leif (Appleby) | Priestley, Sir W. E. B. (Bradford, E.) | Watt, Henry A. |
| Jones, William (Carnarvonshire) | Radford, G. H. | White, Sir George Norfolk |
| Keating, Matthew | Raphael, Herbert H. | White, J. Dundas (Dumbartonshire) |
| Lambert, George | Richards, Thomas (W. Monmouth) | White, Sir Luke (York, E. R.) |
| Layland-Barratt, Sir Francis | Richards, T. F. (Wolverhampton) | |
| Lehmann, R. C. | Roberts, Charles H. (Lincoln) | Whitehead, Rowland |
| Levy, Sir Maurice | Roberts, G. H. (Norwich) | Whitley, John Henry (Halifax) |
| Lewis, John Herbert | Robinson, S. | Wiles, Thomas |
| Lloyd-George, Rt. Hon. David | Robson, Sir William Snowdon | Wilkie, Alexander |
| Lupton, Arnold | Roch, Walter F. (Pembroke) | Williams, J. (Glamorgan) |
| Luttrell, Hugh Fownes | Roe, Sir Thomas | Wills, Arthur Walters |
| Lynch, H. B. (Yorks, W. R., Ripon) | Rogers, F. E. Newman | Wilson, Henry J. (York, W. R.) |
| Maclean, Donald | Rose, Sir Charles Day | Wilson, J. W. (Worcestershire, N.) |
| Macnamara, Dr. Thomas J. | Russell, Rt. Hon. T. W. | Wilson, P. W. (St. Pancras, S.) |
| Macpherson, J. T. | Rutherford, V. H. (Brentford) | Wilson, W. T. (Westhoughton) |
| MacVeagh, Jeremiah (Down, S.) | Samuel, Rt. Hon. H. L. (Cleveland) | |
| McKenna, Rt. Hon. Reginald | Samuel, S. M. (Whitechapel) | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| M'Laren, H. D. (Stafford, W.) | Seely, Colonel | |
| M'Micking, Major G. | Shackleton, David James |
Question, "That those words be there inserted in the Bill," put, and agreed to.
§ Drafting Amendment made.
§ Mr. LLOYD-GEORGE moved at the end of paragraph (c) Sub-section (2) to insert the words. "Provided that if in any special case it is shown to the Commissioners that the rent paid by a working lessee exceeds the rent customary in the district, and partly represents a return for expenditure on the part of any proprietor of the minerals which would ordinarily have been borne by the lessee, the Commissioners shall substitute as the rental value of the right to work the minerals or the mineral wayleaves, as the case may be, such rent as the Commissioners determine would have been the rent customary in the district if the expenditure had been borne by the lessee."
§ Mr. FALCONERThis, Mr. Speaker, is exactly the same matter with which the next Amendment standing in my name deals [to insert, "(d) In ascertaining the rental value for the purposes of this section, there shall be allowed to the proprietor a deduction therefrom of such sum as shall represent interest for the year at the rate of five per cent. on all expenditure made by the proprietor or his predecessors in title or by companies, the ordinary stock of which belongs wholly or mainly to him or them, for the purpose of developing the said minerals on boring, sinking shafts, and equipping pits or collieries, or in constructing and equipping railways or docks 596 in connection therewith."] It is quite inconceivable that both the proposal which is brought forward by the Government and the Amendment which I have suggested should be inserted in the Bill, because they both deal with the same subject. I am not quite sure, however, whether I should raise the question upon the Government Amendment now, and if I were to allow it to pass now it would be very stupid of me to ask them to take my alternative as well as theirs.
§ Mr. SPEAKERThe hon. Member's proper course is to object now and to take exception to and criticise the Amendment before the House. If he succeeded and defeated the Government Amendment then he might have an opportunity of proposing his own.
§ 12.0 P.M.
§ Mr. FALCONERI am not sanguine of being able to defeat the Government, but I am not without hope of being able to persuade them to modify their Clause, and I venture to say so, because the one feature which more than another I have admired in the Government and in the Chancellor of the Exchequer in the few matters which I have ventured to bring up has been the readiness with which they have listened to representations made when the object has been to make the tax more equitable in its bearings. It is with that feeling, and with no desire to militate against the general principle of the 597 tax, that I have put down this Amendment. There is no tax either in this Bill or any other Bill which seems to me to be one more to be commended than a tax which is placed upon the owner of land under which there are minerals, which he himself does nothing to develop, but which he leases out to somebody else, who incurs all the expenditure and all the risk in connection with the development, the owner really receiving a royalty. That seems to me to be an ideal subject on which to raise taxation for the necessities of the country. With that proposition I always agreed, and I still agree. The point of my Amendment and that of the Amendment of the Government is an entirely different one. There you are dealing with a case where the owner of the land has himself made the expenditure and taken all the risk, and contributed all the energy upon which the success of the enterprise has depended, and, if I might give an illustration of a very important undertaking in Scotland, it will explain my argument a great deal better than I can state it in general terms. It is the case of a property in Fife, which belonged to the late Mr. Erskine Wemyss, under which there was a very large area of third-class coal which was incapable of being developed at a profit. It was coal of comparatively low thermal value, and did not fetch a very high price, and it could not afford the railway rate necessary to take it to the nearest port, 15 miles away, and at the time there was no market to be found for coal of that class in this country in any very large quantity. Mr. Wemyss built a dock on his estate and a railway at a cost of £250,000, and he expended in the sinking of pits and otherwise, roughly, £1,000,000, and he built up a business under which he exported about 2,000,000 tons of coal a year. He has thus provided employment for somewhere between 20,000 and 30,000 people. He has built houses which are a model for everyone, and he spent money in tramways for carrying the people to and fro. The rates paid in respect of the enterprise amount to something like £8,000 or £9,000 a year. I do not know of any instance so much to be commended from the point of view of anyone interested in the development of the country. It is a real romance of enterprise which has not been equalled in Scotland in my time, and I commend it as a case which is worthy of every possible encouragement.
598 Mr. Wemyss had, of course, to raise all the money. He formed an owning company, of which he held the whole of the ordinary capital and took all the risk. He also formed a working company, of which, again, he held the whole of the ordinary capital and took all the risk, and he held them as a means of giving security to those from whom he borrowed the money to assist him in his enterprise. The royalty which is paid by the working company to the owning company and by another tenant in another part of the field amounts to about £60,000 a year, and the Mineral Bights Duty would amount to about £3,000 a year. If you allow interest on the expenditure which Mr. Wemyss made in connection with that development at 5 per cent. there is £50,000 of the £60,000 already gone in interest. Therefore the £3,000 duty is altogether out of balance, whatever it is, between the interest and expenditure and the amount of the royalty, say, £10,000.
§ Mr. W. E. HARVEYMay I ask what the tenants pay as rent for these houses?
§ Mr. FALCONERI was coming to the question of what Mr. Wemyss got for the houses in rent. I am not pretending that what was done was solely for the sake of philanthropy. He did his work in a manner which was intended to provide the best accommodation for the people, and I think he gets credit for that in the country around. He probably also got feuing value for his land. He was carrying out an industrial enterprise in the best possible spirit, and, no doubt, with a desire to get as good a return as he could. Bents are got for the houses, and I dare say feu duties are paid for some parts of the property which is feued to other people. I do not wish to suggest that he did not get the benefits incidentally accruing from his property, and, if alive, he would be the last to show any desire to shirk paying a fair share of this duty. He would not have thanked me or anyone else for suggesting that be would not have been willing to pay. What the Government propose to do in dealing with this situation is to charge duty upon the royalty which can be got in the neighbourhood. That I am bound to say, looked upon at the first blush, is a very fair way of meeting the case. I do not deny it. On the other hand, it is really not so, because, in the situation I have described, if it had not been for the enterprise and the risk taken by Mr. Wemyss 599 with his own money and the money which he borrowed from others, there would not have been any development of that field at all. I do not say that there were no workings in the neighbourhood which his ancestors worked to a certain extent, but it was impossible to have any development of that coal field, and to have that dock accommodation provided, without the large expenditure which he made. At present the proprietor is sinking another pit, with the view to a further development of the field. I think it is a much fairer way to allow interest on the money he has borrowed to be deducted from the amount of the royalties upon which duties are to be paid.
I do not wish to press the Government in any way as to the figures which I have given. It is the principle that I wish to establish. They can safeguard themselves so that the Commissioners can check and disallow to any extent. For instance, one of the docks that Mr. Wemyss built was sold to a railway company, and allowance must be made for that. I trust that the Chancellor of the Exchequer will quite understand that I am not seeking to commit the Government with regard to expenditure without their having the fullest opportunity of satisfying themselves that this is expenditure made for the development of this great property which ought to be allowed. I do not think that the owner in a case like that should lose the benefit from the mere fact that for the convenience of raising the money from his friends and those who joined with him he formed two companies. He took the whole of the risk himself, and this arrangement was simply to enable him to give the form of security that best suited him. Therefore in my Amendment I suggest that these two companies should be dealt with as if he were the owner himself. Further, it should be remembered that this is in Scotland, where the owner of royalties pays his contribution to local rates, which is not the case in England; and while half of the Land Duty is to go to the local authorities in relief of the local rates, as a matter of fact the contribution to the rates from these royalties is being already made in Scotland, and I think that in Scotland, in circumstances such as I have mentioned, there is a very strong case for a provision which would reduce the duty payable by an owner who develops his property by the extent to which he contributes to the rates already, so that he should not be paying twice over.
§ Mr. LLOYD-GEORGEI promised my hon. Friend yesterday that I would give full consideration to the facts which he has now stated fully to the House of Commons. I think he will admit that I have really gone into the whole of the facts with very great care. The Amendment put on the Paper in my name fully and adequately meets the case which he has presented. I recognised its merits and promised to meet it. If my hon. Friend had been able to point out in what respect I fail in this Amendment to meet that case I think it would have been useful to reconsider the point which he has pressed on the consideration of the House. Full credit ought to be given in a case of the kind, and I submit that full credit is being given in the Amendment on the Paper, and that in a much more effective and business-like way than by an arrangement which would involve an investigation by the Commissioners of Inland Revenue of the complicated business of two or three companies. I am perfectly certain that the House, although the hon. Member stated his case with admirable lucidity, found some difficulty in following the whole involution of the transaction, because it is a very complicated financial arrangement. I know how difficult it was to follow it when I had all the documents. Instead of going into a complicated business we have taken this very simple method. We take the case of the whole expenditure incurred by the lessee, and we simply charge the lessor on what he has got as lessor, if somebody else has spent the whole of the money. I do not know how my hon. Friend thinks he is helping his case by referring to the local rates. Take his case of the local rates. I am perfectly certain that no allowance of the kind is made in that case, and probably the landlord is charged on the whole of his interest there. I think we have recently met the case fully and fairly in the best and most business-like way.
§ Mr. GROVE moved, at the end of paragraph (c), to add the words: "Where it is shown that the rental value in any case represents a return for money expended within thirty years by a lessor in boring or otherwise proving the minerals the rental value shall be reduced for the purposes of the collection of duty by the amount which represents the expenditure."
601§ Hon. Members are aware that in many mining transactions three parties are concerned—the landlord, the discoverer of the minerals, and the working lessee. The Chancellor of the Exchequer pointed out that he wishes to get rather at the landlord, who does nothing, than at the industrial and commercial man, who puts money, enterprise, and brains into the undertaking. As the Bill stands the landlord has to pay—I do not complain—his fifth of unearned increment, the working lessee has to pay no increment duty at all, and the discoverer of the minerals is put on a level with the landlord and has to pay a fifth of his increment. That is not treating the man of brains, who has expended his capital, I think the House will agree with me, in a perfectly fair way. It is not in accordance with what the Chancellor of the Exchequer has truthfully and eloquently laid before the country. I think it is probably a lapse on his part, for even Homer nods, and even a great authority in finance nods. If this Amendment were not accepted, I almost hesitate to mention the name, but the authority, not only of John Stuart Mill would be violated, but also of Adam Smith, because both those eminent authorities say that the most expensive form of tax is that which is laid on the initiation of any industry.
§ Tax your spade and you at once put the most expensive form of taxation on an industry. To tax the coal would be less expensive. In this case you are not taxing the spade, but you are doing very nearly the same thing—you are taxing the instrument which the discoverer has made use of, the bore. The coal bore is the commencement of the industry of coal, and you are taxing, in the same way as the landlord who does nothing, the man who takes the greatest risk. A company with which I am intimately acquainted took some 6,000 acres in Yorkshire to exploit. They risked £10,000 to put down the coal bore. They bought from the landlord at £20 per foot per acre, and they sold at £25 per foot per acre—a very good deal. What was the actuarial value of the profit they made? £12,500, of which £10,000 was spent on the bore. Yet, as the Bill stands, the unfortunate discoverer of the wealth, which is so useful to this country, would have to pay increment of 20 per cent., not on the £12,500, but on his paltry profit of £2,500. I maintain that is an injustice which has only to be brought to the attention of the Chancellor of the Exchequer to be remedied at once. I claim in the interests 602 of the coal industry, for after all the discoverer of the coal is the pioneer of the coal industry, that the tax should be on the same basis as our working lessee. If he does not see his way to do that he ought, before he charges any Increment Duty, to deduct the money they have expended in risking the undertaking. With the utmost confidence I appeal to the Chancellor to accept this Amendment.
§ Mr. SCARES seconded the Amendment.
§ Sir W. ROBSONThe hon. Member has made a persuasive case with regard to Increment Value Duty, which undoubtedly is a duty of a much more serious burden when it comes to be imposed than the Mineral Eights Duty, but he has put his Amendment down in a place where it applies to Mineral Rights Duty. I dare say it would apply also to Increment Value Duty. With regard to the Mineral Rights Duty, I think the House will agree it is desirable that we should keep to the sweet simplicity of our five per cent. With regard to the Increment Value Duty perhaps different considerations do arise where the colliery owner has added to the value of the minerals before they have begun to be worked by boring operations. It is not unfair—or, at all events, it is not inconsistent with the cases we have dealt with in other parts of the Bill—that some allowance should be made when the original capital value comes to be taxed. But for that purpose it would be necessary to move it at a different part of the Bill, namely, in Clause 22. I think, however, we could scarcely allow so long a period as 30 years. Ten years would be sufficient for all practical purposes. It would involve some consequential alterations in a subsequent Government Amendment, which we will suggest when we reach that Amendment. If my hon. Friend is content that the Amendment should be made applicable only to Increment Value Duty, and moved where it would be restricted to that purpose, I think we can meet him.
§ Sir W. ROBSONI will say 15 years; there is not much in it. In fact, I do not think there is much in the whole Amendment. Though my hon. Friend is doubtless familiar with such cases, I have not heard of one. The case is an extremely rare one; but though it is very rare in practice, it is somewhat difficult to resist in Debate.
§ Mr. AUSTEN CHAMBERLAINThe speech of the Attorney-General has greatly surprised me. The Amendment is intended to apply to any case in which the owner has himself sunk the borings which have proved the coal, and have led to the development of the coalfield; and the Attorney-General says that he has never heard of such a case. Has he heard of Lord Dudley's collieries?
§ Sir W. ROBSONThe boring is not the sinking of the shaft. That is a comparatively small matter.
§ Mr. AUSTEN CHAMBERLAINThe boring precedes the sinking of the shaft. There are many cases where an owner sinks shafts, but there are many more cases where the owner sinks borings in order to get somebody else hereafter to sink shafts. But what interested me was to ascertain the reason why the Government treat the expenditure of the owner of a mine in this respect differently from the expenditure of a man who owns other forms of real property. Again and again we have had it from the Chancellor of the Exchequer that no man should pay Increment Value Duty on any value created by his expenditure. I did not understand that that pledge was limited to Increment Value Duty on land, I thought it extended equally to Mineral Increment Duty, and that the same privilege or justice would be accorded to the mineral owner who had created value by his expenditure and enterprise as was given to the owner of land which by expenditure had been rendered fit for building. I do not know whether the hon. Member (Mr. Groves) is satisfied to have this limitation imposed in the case of the mineral owner only. For myself, I cannot see any reason why the mineral owner should not have as wide an exemption as an owner of other real property. If a man has reclaimed land and thereby created its value, or if he has made a railway and thereby created a building value, he is to have credit, not for the amount of money he has expended, but for all the value he has created. Why should not a man who has sunk borings or shafts have credit for all the value that he has created? I really cannot see any reason for the distinction that is drawn between the two forms of property.
§ Mr. GROVEI beg to thank the Attorney-General for the very fair way in which he has received this Amendment. I think he has thoroughly met the justice of the case, and I ask leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Further Amendment made: In Subsection (3) to leave out the words "in respect of" ["in respect of the minerals worked"], and to insert instead thereof the words "particulars as to."—[Sir W. Robson.]
§ Mr. WHITEHEAD moved in Subsection (5) after the word "of" ["in respect of common brick clay"], to insert the words "common clay."
§ When this Bill was in Committee an Amendment was moved by the hon. Gentleman the Member for Tamworth, and I think that nearly every speaker assumed that common clay would be exempted from this tax. As the line in the Sub-section now stands the exemption only applies to what is described as "common brick clay." I think the words "common clay" ought to go in. It was quite clear as a result of the discussion in Committee that clay which is used for the purposes of manufacture was not to be subjected to this duty, because in many cases it is the manufacturer who is the owner of the clayfield and the tax would therefore fall upon the industry. It is suggested that the words of the Sub-section "common brick clay" are sufficient to cover the case. I understood in the Committee stage that the Attorney-General was clearly of opinion that the legal decisions with regard to clay were somewhat ambiguous, and that it was very uncertain as to what extent clay of particular qualities and kinds could be described as minerals, and in consequence it was very desirable to have a definition and an exemption in the Bill. But I think that the difficulty which already exists in the legal test case has been very much increased by this Clause as it stands.
§ A clear distinction is drawn in this Sub-section (5) between "common brick clay" and other classes of clay. I do not know whether the Chancellor of the Exchequer suggests that "common brick clay" is a sufficient description to cover what is generally known as "common clay." If so, I very much doubt whether courts of law or judges to whom the duty of interpretation will fall will not be obliged to consider that the insertion of the word "brick" between "common" and "clay" was inserted for an express purpose, and must therefore be given some special meaning to distinguish "common brick clay" from "common clay." I do not know whether that will be so, but it seems to me a very natural method of 605 interpretation. Having regard to the existing ambiguity in the text and to the decided cases, I should like, as representing a constituency where cement is largely manufactured, to have that ambiguity cleared up, and to have the Clause made perfectly straightforward, so that the exemption which I understand the Chancellor of the Exchequer intended to give should be given effectively in plain English terms. I myself do not pretend to have any knowledge of the distinction between "common brick clay" and "common clay," but I have endeavoured to acquire the information at the best source. I find that in the encyclopædias and other books the articles are certainly described as very largely of a chemical and geological character, but the descriptions of these two articles are very different, both in the geological descriptions and in law; and where there is a distinction in geology and in law existing there can be little doubt that those engaged in the business are looking at this tax, not with a great amount of apprehension, perhaps, but with a great amount of caution. They think that the Clause as drafted will not give them the protection that the Chancellor of the Exchequer held out to them.
§ Mr. J. M. HENDERSONI beg to second the Amendment.
§ Sir W. ROBSONI think "common clay" is generally known as "brick clay," and has been so spoken of in a commercial sense. However, we have no objection, if there is any ambiguity, to insert "common clay." I think common brick clay covers the ordinary exemption, but if my hon. Friend has been searching the encyclopædias and thinks there is some ambiguity we have no objection to insert the words common clay.
Mr. BALFOURI am rather puzzled at this. If I understand the hon. Gentleman rightly he moved his Amendment because he wants to relieve from taxation that clay which was not a raw material of bricks, but was a raw material of cement, and the reason he wants the raw material of cement relieved is because he has got cement works in his constituency, and his constituents feel that the cost of their raw material will be increased if this tax is put upon cement clay. Therefore, we have it, at all events, from one important branch of producers that this tax does increase the cost of raw material. There can evidently be no economic distinction between a tax put upon coal or iron on 606 the one hand and a tax put upon clay on the other. We have it now from a distinguished Member upon the other side that if this tax is put upon the raw material of cement the people who make cement believe it will be injurious to their industry. I suggest, therefore, he is bound to vote for every Amendment which relieves everything that can be used as raw material. Everything taken out of a mine comes within that category, and, therefore, the only justification the hon. Gentleman has for his Amendment is the absolute destruction of the whole economic basis of the tax as presented by the Government. I hope in the remaining part of our discussion and in his constituency he will explain that the Government are now putting a tax upon raw materials.
§ Amendment made.
§ Mr. LAURENCE HARDY moved in Subsection (5) after the word "sand" to insert the words "sandstone, marl."
§ Whereas in the iron and steel industry sand is largely used, there are many other industries in which they use sandstone and grind it down into sand for the same purpose as sand is used in the iron industry. Therefore I ask the Government to include the word "sandstone" as well as sand. I should also like to plead for marl, because if the cement people are to be exempted may I point out that marl is used for exactly the same purpose as clay.
§ Mr. LLOYD-GEORGEI do not agree that sandstone is quite in the same category. Once you make a concession of this sort in one case it is very difficult to show why you should not make a similar concession to something else. The reason for making the previous concession was because the Government desired to give general satisfaction to the House, and it was accepted by both sides of the House.
§ Mr. LAURENCE HARDYIt was thought to be excluded at the time.
§ Mr. LLOYD-GEORGEI do not think so, because this is quite a different thing. The reason why we excluded sand was because it involved a great deal of trouble in collection, and would not produce much. If we agree to leave out granite someone else will say "why not leave out slate?" That would relieve the revenue of a very considerable amount of money. I think, in this matter, we have gone as far as the House wishes us to go. We have come to the conclusion that we cannot go any further.
§ Question put, "That those words be I there inserted in the Bill."
§ Mr. NEWDEGATE (for Mr. Lambton)moved in Sub-section (5) after the word "chalk" ["Mineral Rights Duty shall not be charged in respect of common brick clay, common brick earth, or sand, chalk"] to insert the words "stone used for road making, building stone."
§ In the absence of my hon. Friend, I move this Amendment, which is to exempt stone used for road making and building stone. When I moved an Amendment to exclude certain minerals from this tax I particularly asked the Chancellor of the Exchequer if he would consider the question of road metal and of building stone,
608§ The House divided: Ayes, 35: Noes 117
607| Division No. 830.] | AYES. | [12.45 a.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Foster, Philip S. (Warwick, S. W.) | Scott, Sir S. (Marylebone, W.) |
| Balcarres, Lord | Gibbs, G. A. (Bristol, West) | Stanier, Beville |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gordon, J. | Starkey, John R. |
| Banbury, Sir Frederick George | Guinness, Hon. R. (Haggerston) | Staveley-Hill, Henry (Staffordshire) |
| Bignold, Sir Arthur | Guinness, Hon. W. E. (Bury St. Edm.) | Talbot, Lord E. (Chichester) |
| Carlile, E. Hildred | Hay, Hon. Claude George | Valentia, Viscount |
| Cecil, Evelyn (Aston Manor) | Helmsley, Viscount | Walker, Col. W. H. (Lancashire) |
| Chamberlain, Rt. Hon. J. A. (Worc.) | Hope, James Fitzalan (Sheffield) | Walrond, Hon. Lionel |
| Coates, Major E. F. (Lewisham) | Hunt, Rowland | Younger, George |
| Cochrane, Hon. Thomas H. A. E. | Kerry, Earl of | |
| Courthope, G. Lloyd | Morpeth, Viscount | TELLERS FOR THE AYES.—Mr. Laurence Hardy and Sir John Randles. |
| Everett, R. Lacey | Newdegate, F. A. | |
| Forster, Henry William | Rutherford, Watson (Liverpool) |
| NOES. | ||
| Acland, Francis Dyke | Harvey, A. G. C. (Rochdale) | Radford, G. H. |
| Agnew, George William | Harvey, W. E. (Derbyshire, N. E.) | Richards, Thomas (W. Monmouth) |
| Allen, A. Acland (Christchurch) | Haworth, Arthur A. | Richards, T. F. (Wolverhampton) |
| Allen, Charles P. (Stroud) | Hazel, Dr. A. E. W. | Roberts, Charles H. (Lincoln) |
| Balfour, Robert (Lanark) | Hazleton, Richard | Roberts, G. H. (Norwich) |
| Barnard, E. B. | Hedges, A. Paget | Robinson, S. |
| Beale, W. P. | Helme, Norval Watson | Robson, Sir William Snowdon |
| Beauchamp, E. | Herbert, Col. Sir Ivor (Mon., S.) | Roch, Walter F. (Pembroke) |
| Benn, W. (Tower Hamlets, St. Geo.) | Higham, John Sharp | Rogers, F. E. Newman |
| Bennett, E. N. | Hobart, Sir Robert | Russell, Rt. Hon. T. W. |
| Berridge, T. H. D. | Holt, Richard Durning | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bowerman, C. W. | Howard, Hon. Geoffrey | Samuel, S. M. (Whitechapel) |
| Brace, William | Illingworth, Percy H. | Seely, Colonel |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, Leif (Appleby) | Shackleton, David James |
| Bryce, J. Annan | Jones, William (Carnarvonshire) | Sherwell, Arthur James |
| Burns, Rt. Hon. John | Keating, Matthew | Soares, Ernest J. |
| Causton, Rt. Hon. Richard Knight | Layland-Barratt, Sir Francis | Strachey, Sir Edward |
| Channing, Sir Francis Allston | Lehmann, R. C. | Tennant, H. J. (Berwickshire) |
| Cherry, Rt. Hon. R. R. | Levy, Sir Maurice | Toulmin, George |
| Clough, William | Lloyd-George, Rt. Hon. David | Ure, Rt. Hon. Alexander |
| Cobbold, Felix Thornley | Lupton, Arnold | Verney, F. W. |
| Corbett, A. Cameron (Glasgow) | Luttrell, Hugh Fownes | Villiers, Ernest Amherst |
| Corbett, C. H. (Sussex, E. Grinstead) | Maclean, Donald | Walsh, Stephen |
| Cotton, Sir H. J. S. | Macnamara, Dr. Thomas J. | Ward, W. Dudley (Southampton) |
| Craig, Herbert J. (Tynemouth) | Macpherson, J. T. | Warner, Thomas Courtenay T. |
| Davies, Sir W. Howell (Bristol, S.) | MacVeagh, Jeremiah (Down, S.) | Wason, John Cathcart (Orkney) |
| Essex, R. W. | M'Kenna, Rt. Hon. Reginald | Watt, Henry A. |
| Evans, Sir Samuel T. | M'Laren, H. D. (Stafford, W.) | White, Sir George (Norfolk) |
| Falconer, James | Mansfield, H. Rendall (Lincoln) | White, J. Dundas (Dumbartonshire) |
| Ferguson, R. C. Munro | Marnham, F. J. | White, Sir Luke (York, E. R.) |
| Fuller, John Michael F. | Massie, J. | Whitehead, Rowland |
| Fullerton, Hugh | Masterman, C. F. G. | Whitley, John Henry (Halifax) |
| Gibson, James Puckering | Micklem, Nathaniel | Wilkie, Alexander |
| Gladstone, Rt. Hon. Herbert John | Murray, Capt. Hon. A. C. (Kincard.) | Williams, J. (Glamorgan) |
| Glover, Thomas | Newnes, F. (Notts, Bassetlaw) | Wilson, Henry J. (York, W. R.) |
| Goddard, Sir Daniel Ford | Nuttall, Harry | Wilson, J. W. (Worcestershire, N.) |
| Grove, Archibald | Parker, James (Halifax) | Wilson, W. T. (Westhoughton) |
| Guiland, John W. | Philipps, Owen C. (Pembroke) | |
| Harcourt, Robert V. (Montrose) | Pollard, Dr. | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Harmsworth, Cecil B. (Worc'r.) | Priestley, Sir W. E. B. (Bradford, E.) |
§ and he said, in reference to stone, "That is a totally different thing—I shall have to consider it." I hope the right hon. Gentleman has considered it, because I venture to say it is absolutely necessary that we should have the road metal in this country as cheap as we possibly can. In my own county, the county of Warwick, motor-cars are made to a great extent, and we find it is a very great tax on the county to keep those roads in order. We have excellent road metal for the roads and a good deal of this granite belongs to the people who work the quarries. I do strongly urge upon the Chancellor of the 609 Exchequer, especially at a time when he talks of developing roads in the country and of giving grants to local authorities for the purpose, not to put this tax on road metal for the making of the roads. Then as regards building stone, surely the Chancellor of the Exchequer, having exempted brick clay, which is used for making houses, will also consider that it is advisable to exempt building stone which is also used for building houses. There are certain parts of the country where brick clay is practically unknown, and where stone is used for building houses instead, and I venture to hope the Chancellor of the Exchequer will give us this concession, and that he will, having given way on the question of brick clay, give way on the question of building stone. I think what is sauce for the goose is sauce for the gander, and if bricks are exempted building stone should also be exempted. I beg to move, and I hope the Chancellor of the Exchequer will look upon this Amendment with a lenient eye.
§ Mr. WALTER GUINNESSI beg to second this Amendment, and I hope the Chancellor of the Exchequer will accept it, because he said on the other occasion that he exempted other classes of minerals because they would cause a good deal of trouble to the Inland Revenue to collect. I think the collection of a tax on road material will be quite as difficult, because there are certain parts of Ireland where people build their houses of stones which they pick up from the roadsides. Are the Commissioners to go round and ask the peasants who build their houses whether they pay for the right of taking these stones off the road sides? Apparently the person who receives royalty on these occasions is not to give any notice until he is called upon to do so. Are the Commissioners to send round people to all the districts to examine small quarries and search into cases in which royalties have been paid? If so I think the expense and trouble of discovering this information will be much greater than the amount which will be raised. I also ask the Chancellor of the Exchequer to exempt road material especially, because I feel that it is a very great grievance in the case of counties like that which I represent, which possess no road material, if this product is to be made more expensive by being taxed, and they are to be reduced again to making their roads of chalk and gravel as they have done in the past. Last time this point was raised the Chancellor of the Exchequer said it was not a tax upon the local 610 authorities, but upon the royalties, but he has admitted that a tax on royalties will eventually fall upon the consumer who buys the minerals. The right hon. Gentleman shakes his head, but I do not know why he has given these exemptions except for that reason, and on account of the difficulty of collection. The difficulty of collection will be just as great in the case of road material, and if there is a case of the exemptions granted on the Committee stage there is just as much a case for that which my hon. Friend has proposed.
§ 1.0 A.M.
§ Mr. LLOYD-GEORGEThe hon. Member who moved this Amendment taunted the Government with having introduced numerous changes in the Bill. It is rather a curious way of seeking to amend a concession by taunting us with having already made concessions. I confess I shall take to heart the observations made by the hon. Member. The hon. Member who has just sat down said that the reason why we had made concessions was because they involved considerable trouble to the Inland Revenue. He forgot the second part of the reason—namely, that they would produce but a very small return. In this particular case a considerable amount of revenue would be exempted by the Amendment. The hon. Member (Mr. Newdegate) talked as if road material and building stone were a matter of no consequence in this country. As a matter of fact, there are considerable royalties paid in respect of them.
§ Mr. YOUNGERNot in Scotland for road material, because we are entitled to take it for roads for nothing.
§ Mr. LLOYD-GEORGEIn that case there is no tax.
§ Mr. YOUNGERTherefore there is no value in the concession.
§ Mr. LLOYD-GEORGEThere is obviously no value to Scotland, but Scotland is not the only part of the United Kingdom. In my part of the country there are very valuable quarries, paying very heavy royalties, where a considerable portion of the business consists in the making of road material. It makes no difference at all to the industry whether we tax royalties. It will be no tax upon the industry, but a tax upon the royalty that is being paid. It involves a considerable amount of revenue. With regard to the Irish hillside case, what royalty is payable to anybody in respect of taking an occasional stone from the hillside?
§ Mr. WALTER GUINNESSMy point was that the Commissioners will be put to expense and trouble in making inquiries as to whether any royalties are payable.
§ Mr. LLOYD-GEORGEI really do not think the Commissioners will spend very much time inquiring into the blasting of
§ Mr. J. M. HENDERSON moved in Subsection (5), after the word "limestone," to insert the word "granite."
§ I do not expect much encouragement from the Government after what has just happened, but that will not deter me from stating my case. In Aberdeenshire there are 21 quarries, and the rents begin at £5, the highest being £350. The total rents 612 stones by natives on the hills of Connemara or anywhere else. I cannot possibly accept the Amendment.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 31; Noes, 113.
611| Division No. 831.] | AYES. | [1.5 a.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Gordon, J. | Starkey, John R. |
| Balcarres, Lord | Guinness, Hon. R. (Haggerston) | Staveley-Hill, Henry (Staffordshire) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Hay, Hon. Claude George | Talbot, Lord E. (Chichester) |
| Bignold, Sir Arthur | Helmsley, Viscount | Valentia, Viscount |
| Carlile, E. Hildred | Hope, James Fitzalan (Sheffield) | Walker, Col. W. H. (Lancashire) |
| Cecil, Evelyn (Aston Manor) | Hunt, Rowland | Walrond, Hon. Lionel |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Kerry, Earl of | Younger, George |
| Coates, Major E. F. (Lewisham) | Morpeth, Viscount | |
| Courthope, G. Loyd | Randles, Sir John Scurrah | TELLERS FOR THE AYES.—Mr. Newdegate and Mr. Watson Rutherford. |
| Forster, Henry William | Rutherford, Watson (Liverpool) | |
| Foster, P. S. | Scott, Sir S. (Marylebone, W.) | |
| Gibbs, G. A. (Bristol, West) | Stanier, Beville |
| NOES. | ||
| Acland, Francis Dyke | Harmsworth, Cecil B. (Worcester) | Richards, Thomas (W. Monmouth) |
| Agnew, George William | Harvey, A. G. C. (Rochdale) | Roberts, Charles H. (Lincoln) |
| Allen, A. Acland (Christchurch) | Harvey, W. E. (Derbyshire, N. E.) | Roberts, G. H. (Norwich) |
| Allen, Charles P. (Stroud) | Haworth, Arthur A. | Robinson, S. |
| Balfour, Robert (Lanark) | Hazleton, Richard | Robson, Sir William Snowdon |
| Barnard, E. B. | Hedges, A. Paget | Roch, Walter F. (Pembroke) |
| Beale, W. P. | Helme, Norval Watson | Rogers, F. E. Newman |
| Beauchamp, E. | Herbert, Col. Sir Ivor (Mon. S.) | Russell, Rt. Hon. T. W. |
| Benn, W. (Tower Hamlets, St. Geo.) | Higham, John Sharp | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bennett, E. N. | Hobart, Sir Robert | Samuel, S. M. (Whitechapel) |
| Berridge, T. H. D. | Holt, Richard Durning | Seely, Colonel |
| Bowerman, C. W. | Howard, Hon. Geoffrey | Shackleton, David James |
| Brace, William | Illingworth, Percy H. | Sherwell, Arthur James |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, Leif (Appleby) | Soares, Ernest J. |
| Bryce, J. Annan | Jones, William (Carnarvonshire) | Strachey, Sir Edward |
| Burns, Rt. Hon. John | Keating, M. | Tennant, H. J. (Berwickshire) |
| Causton, Rt. Hon. Richard Knight | Layland-Barratt, Sir Francis | Toulmin, George |
| Channing, Sir Francis Allston | Lehmann, R. C. | Ure, Rt. Hon. Alexander |
| Cherry, Rt. Hon. R. R. | Levy, Sir Maurice | Verney, F. W. |
| Clough, William | Lewis, John Herbert | Villiers, Ernest Amherst |
| Cobbold, Felix Thornley | Lloyd-George, Rt. Hon. David | Walsh, Stephen |
| Corbett, A. Cameron (Glasgow) | Lupton, Arnold | Ward, W. Dudley (Southampton) |
| Corbett, C. H. (Sussex, E. Grinstead) | Maclean, Donald | Warner, Thomas Courtenay T. |
| Cotton, Sir H. J. S. | Macnamara, Dr. Thomas J. | Wason, John Cathcart (Orkney) |
| Craig, Herbert J. (Tynemouth) | Macpherson, J. T. | Watt, Henry A. |
| Davies, Sir W. Howell (Bristol, S.) | McKenna, Rt. Hon. Reginald | White, Sir George (Norfolk) |
| Essex, R. W. | M'Laren, H. D. (Stafford, W.) | White, J. Dundas (Dumbartonshire) |
| Evans, Sir S. T. | Mansfield, H. Rendall (Lincoln) | White, Sir Luke (York, E. R.) |
| Falconer, J. | Marnham, F. J. | Whitehead, Rowland |
| Ferguson, R. C. Munro | Massie, J. | Whitley, John Henry (Halifax) |
| Fiennes, Hon. Eustace | Masterman, C. F. G. | Wilkie, Alexander |
| Fuller, John Michael F. | Micklem, Nathaniel | Williams, J. (Glamorgan) |
| Fullerton, Hugh | Newnes, F. (Notts, Bassetlaw) | Wilson, Henry J. (York, W. R.) |
| Gibson, J. P. | Nuttall, Harry | Wilson, J. W. (Worcestershire, N.) |
| Gladstone, Rt. Hon. Herbert John | Parker, James (Halifax) | Wilson, W. T. (Westhoughton) |
| Glover, Thomas | Philipps, Owen C. (Pembroke) | |
| Goddard, Sir Daniel Ford | Pollard, Dr. G. H. | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Guiland, John W. | Priestley, Sir W. E. B. (Bradford, E.) | |
| Harcourt, Robert V. (Montrose) | Radford, G. H. |
§ for the biggest Scottish granite district, Aberdeenshire, amount to £1,800. The tax would amount to £90—not the salary of the man who collected it. I do not believe that in the whole of Scotland this tax will yield to the Exchequer £1,000. Of course, the landlords will pay at first, but eventually it will be put on the rent. I know that Tariff Reformers will say, 613 "Here is a distressed industry, and it is subject to very great competition. See what this Government are doing. Instead of putting on a tariff to give you a chance, they are actually putting on a duty and handicapping you!" I know perfectly well how to answer that argument, and I know my constituents are level-headed enough to understand it. But I have not the slightest idea how to explain to them why limestone is exempt and granite is not. If the Chancellor of the Exchequer will explain why he excludes brick clay and not granite, I shall be happy to withdraw my Amendment, but, as a matter of fact, the excuse is that bricks are the material for building houses. Well, granite is the only material with which they build houses in the North. A brick house is no good to anyone north of the Grampians. It would not stand the weather. Very well, why do you exempt limestone, brickclay, common day, and uncommon clay, and put in granite, when so little is to be got out of it? I do not object to a tax on landlords, or anybody else, but I do object to a tax being put upon something which is very difficult to work, which is hampered in its competition, and out of which so very little is got. I am perfectly certain that in Scotland you will not get sufficient revenue to pay for the expense of collecting the tax. I do not expect much from the Chancellor of the Exchequer, but, if there is any concession for brick, cement, and other articles, let him include granite, and, if he will not include granite, then let him strike out all the rest. If there is a concession to anything, I think it ought to be to granite, having regard to all that we have heard about it, and considering the fact that the number of granite quarry workers—and for them I am most concerned—are just 50 per cent. of what they were in the Scottish quarries in 1906, so great has been the competition.
§ Mr. ROWLAND HUNTI beg to second the Amendment. I have got very large granite quarries in my division. They have been hit very hard indeed by foreign competition, and I really think this will be the last straw for the granite industry, and for the Government in places where there are granite quarries. The competition from abroad is so severe that in a large quarry, which is owned or managed by a great supporter of the Government, almost the whole of one winter they had to work short time because of foreign competition, although the men had always been told that competition did not make any difference. The House 614 will probably remember that an hon. Member—a great supporter of the Government for one of the constituencies in Cornwall—showed how foreign competition had altogether knocked out the granite kerb trade in this country. Now the Chancellor of the Exchequer, and all those hon. Gentlemen who call themselves Free Traders on the other side of the House, are actually going to tax British raw material, and let the foreigner send the manufactured article free to this country. They tell the people that they are Free Traders, and would not for the world tax anything like food or raw material. It is not quite the same in this House. We have seen, quite lately, that they all trooped merrily at the crack of the Government whip—you might almost say like a herd of dumb-driven cattle—to vote for a double tax on the people's food, and here they are going to vote for a new tax on British raw material We have always been told that, whatever you do, you must not tax raw material, and they tell us sometimes that leather is raw material. If leather is raw material, goodness knows granite is, and I should really think that the Chancellor of the Exchequer might accept this Amendment from an hon. Gentleman on his own side, especially when it is backed on this side. I do not think you could have a clearer case to exemplify the absurdity of so-called Free Trade than this tax upon granite.
§ Mr. LLOYD-GEORGEThe inference which my hon. Friend (Mr. J. M. Henderson) drew from my speech on a previous Amendment was quite right, for I cannot see my way to accept his proposal. I must say I do not think he made out very much of a case—in fact, he gave it away. He and his Seconder do not seem to agree about the general principle on which they advocate the Amendment. My hon. Friend admitted that the tax was not a burden on the industry.
§ Mr. AUSTEN CHAMBERLAINHe said he proposed it in the interests of the workers.
§ Mr. LLOYD-GEORGEHe said he could give a most effective answer to that argument. I wish he had given that answer instead of making the speech he did, because it would have been a much better contribution to the Debate. Let us take the case of Aberdeen. The whole of the £1,500 or £1,800 will be paid by the granite quarries to the landlord. Five per cent. will be charged on that—not to those who work the quarry, but to the landlord. 615 That is not passed on to the industry. The Income Tax on that £1,500 will not be passed on to the industry, it will be taken out of the rent. If a man has a very large income he will have to pay the Super-tax. He will pay 1s. 2d. if the income is under £5,000, and beyond that he will have to pay the extra sixpence. The hon. Member (Mr. J. M. Henderson) does not suggest that the 1s. 8d. is to be paid by the quarry proprietors. It is to be paid by the landowners out of the rent. Some hon. Members are constantly talking about the tax on royalties as if it were a tax on those who are cultivating the soil or working a quarry. I have already answered that point three or four times even to-night.
§ Mr. J. M. HENDERSONWhat I said was that although the landlords may pay the duty now, the quarries are all held on leases, and the moment the leases run out the renewed lease will bear the tax.
§ Mr. LLOYD-GEORGEMy hon. Friend's political economy is sound only in parts. It is all right when he says that this is not a tax on the industry, but he is all wrong when he makes the statement he has just made. Take, for instance, the charge under Schedule A—a charge which ran up to 1s. 3d. under the late Government. That did not fall upon the tenant by being added to the rent. If that is so, why should the charge of 6d. in respect of mining royalties be added to the rent. The landowners, you may depend upon it, are charging the best rent they can get. If they can get more they will take it. They are taking it in the South Wales collieries even now on the mining leases—not since the Budget was introduced, but during the last few years. Where the landlords have found they could get a larger rent the mere fact of charging a royalty has made no difference whatever, and they have simply charged a rack rent. I say that this charge will not pass on to the industry at all; it will be charged on rent, which in itself is a heavy burden upon industry. The hon. Member (Mr. J. M. Henderson) said that the 5 per cent. which will be charged on the Aberdeen quarries amounts to £75.
§ Mr. J. M. HENDERSON£90.
§ Mr. LLOYD-GEORGEHe says that the £90 is going to destroy the trade of the Aberdeen quarry proprietors, and is going to make all the difference in foreign competition, but that the £1,800 rent will 616 make no difference at all. The same thing applies to the case raised by the hon. Member opposite (Mr. Rowland Hunt). It will make no difference to the man who works the quarry. It will come out of the pockets of the landlord. I cannot accept the Amendment.
Mr. BALFOURI am not going to argue the question of political economy with the right hon. Gentleman at this hour. I will say it is ominous that we have two hon. Gentlemen from the other side of the House each pleading on behalf of his constituents that this tax will fall upon the industry. There was the hon. Member for Essex (Mr. Whitehead), who urged that argument with regard to cement, and now there is the hon. Member for Aberdeen (Mr. J. M. Henderson), who urges it in regard to granite. I would venture to suggest to the hon. Member for Aberdeen that the only possible way of getting anything out of the Government is not to make speeches at two o'clock in the morning, but that all those who are suffering under some grievance on that side of the House should support each other in the Lobby. The hon. Member for Essex is not here to vote for granite, and the hon. Member who now pleads for granite was not here to vote for his hon. Friend, who pleaded for cement. There is no difference between the arguments urged by those two hon. Members or the political economy on which those arguments were based. Neither will support the other, but each pleads perfectly plainly for his own constituency. So long as they do so they will plead in vain. That is a suggestion in tactics which I present to hon. Gentlemen opposite.
§ Mr. WALTER GUINNESSThe Chancellor of the Exchequer made use of two rather curious arguments in answering this Amendment. He was prepared to hold that the principle of the granite tax was indisputable because it was supported by two different sets of arguments. He forgets the fact, which every logician admits, that although you cannot get a false conclusion from true premises you can get a true conclusion from false premises. I will not suggest which of the premises is false. The right hon. Gentleman argued that it was impossible for the Mineral Rights Duty to be passed on to the lessee because the Income Tax was not passed on to the lessee in a like case. The obvious answer to that is that every Income Tax payer is not treated alike. One quarry owner who gets a small 617 income pays a far smaller Income Tax than his neighbour who has a large income, and another man next door, perhaps, has to pay the Super-tax. When you consider the Mineral Eights Duty you are considering a duty which has a quite different foundation because every person who receives a mineral royalty is going to pay the same duty. Therefore, he will be in exactly the same position, and you will get combination between all those who enjoy these royalties. You
| Division No. 832.] | AYES. | [1.30 a.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Gibbs, G. A. (Bristol, West) | Stanier, Beville |
| Balcarres, Lord | Gordon, J. | Starkey, John R. |
| Balfour, Rt. Hon. A. J. (City Lond.) | Guinness, Hon. R. (Haggerston) | Staveley-Hill, Henry (Staffordshire) |
| Bignold, Sir Arthur | Guinness, Hon. W. E. (B. S. Edmunds) | Talbot, Lord E. (Chichester) |
| Carlile, E. Hildred | Hay, Hon. Claude George | Valentia, Viscount |
| Cecil, Evelyn (Aston Manor) | Helmsley, Viscount | Walker, Col. W. H. (Lancashire) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Hope, James Fitzalan (Sheffield) | Walrond, Hon. Lionel |
| Coates, Major E. F. (Lewisham) | Kerry, Earl of | Watt, Henry A. |
| Cory, Sir Clifford John | Morpeth, Viscount | Younger, George |
| Courthope, G. Loyd | Newdegate, F. A. | |
| Cowan, W. H. | Randles, Sir John Scurrah | TELLERS FOR THE AYES.—Mr. J. M. Henderson and Mr. Rowland Hunt. |
| Forster, Henry William | Rutherford, Watson (Liverpool) | |
| Foster, P. S. | Scott, Sir S. (Marylebone, W.) |
| NOES. | ||
| Acland, Francis Dyke | Harmsworth, Cecil B. (Worcester) | Radford, G. H. |
| Agnew, George William | Harvey, A. G. C. (Rochdale) | Richards, Thomas (W. Monmouth) |
| Allen, A. Acland (Christchurch) | Harvey, W. E. (Derbyshire, N. E.) | Roberts, Charles H. (Lincoln) |
| Allen, Charles P. (Stroud) | Haworth, Arthur A. | Roberts, G. H. (Norwich) |
| Balfour, Robert (Lanark) | Hazleton, Richard | Robinson, S. |
| Barnard, E. B. | Hedges, A. Paget | Roch, Walter F. (Pembroke) |
| Beale, W. P. | Helme, Norval Watson | Rogers, F. E. Newman |
| Beauchamp, E. | Herbert, Col. Sir Ivor (Mon. S.) | Russell, Rt. Hon. T. W. |
| Benn, W. (Tower Hamlets, St. Geo.) | Kigham, John Sharp | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bennett, E. N. | Hobart, Sir Robert | Samuel, S. M. (Whitechapel) |
| Berridge, T. H. D. | Holt, Richard Durning | Seely, Colonel |
| Bowerman, C. W. | Howard, Hon. Geoffrey | Shackleton, David James |
| Brace, William | Illingworth, Percy H. | Sherwell, Arthur James |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, Leif (Appleby) | Soares, Ernest J. |
| Bryce, J. Annan | Keating, Matthew | Strachey, Sir Edward |
| Burns, Rt. Hon. John | Layland-Barratt, Sir Francis | Tennant, H. J. (Berwickshire) |
| Causton, Rt. Hon. Richard Knight | Lehmann, R. C. | Toulmin, George |
| Channing, Sir Francis Allston | Levy, Sir Maurice | Ure, Rt. Hon. Alexander |
| Cherry, Rt. Hon. R. R. | Lewis, John Herbert | Verney, F. W. |
| Clough, William | Lloyd-George, Rt. Hon. David | Villiers, Ernest Amherst |
| Corbett, A. Cameron (Glasgow) | Lupton, Arnold | Walsh, Stephen |
| Corbett, C. H. (Sussex, E. Grinstead) | Maclean, Donald | Ward, W. Dudley (Southampton) |
| Cotton, Sir H. J. S. | Macnamara, Dr. Thomas J. | Warner, Thomas Courtenay T. |
| Craig, Herbert J. (Tynemouth) | Macpherson, J. T. | Wason, John Cathcart (Orkney) |
| Davies Sir W. Howell (Bristol, S.) | M'Kenna, Rt. Hon. Reginald | White, Sir George (Norfolk) |
| Essex, R. W. | M'Laren, H. D. (Stafford, W.) | White, J. Dundas (Dumbartonshire) |
| Evans, Sir Samuel T. | Mansfield, H. Rendall (Lincoln) | White, Sir Luke (York, E. R.) |
| Falconer, James | Marnham, F. J. | Whitley, John Henry (Halifax) |
| Ferguson, R. C. Munro | Massie, J. | Wilkie, Alexander |
| Fiennes, Hon. Eustace | Masterman, C. F. G. | Williams, J. (Glamorgan) |
| Fuller, John Michael F. | Micklem, Nathaniel | Wilson, Henry J. (York, W. R.) |
| Fullerton, Hugh | Newnes, F. (Notts, Bassetlaw) | Wilson, J. W. (Worcestershire, N.) |
| Gibson, J. P. | Nuttall, Harry | Wilson, W. T. (Westhoughton) |
| Glover, Thomas | Parker, James (Halifax) | |
| Goddard, Sir Daniel Ford | Philipps, Owen C. (Pembroke) | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Guiland, John W. | Pollard, Dr. G. H. | |
| Harcourt, Robert V. (Montrose) | Priestley, Sir W. E. B. (Bradford, E.) |
§ Mr. AUSTEN CHAMBERLAINI beg to move "That the further consideration of the Bill be now adjourned."
§ Mr. LLOYD-GEORGEI confess I had hoped that we might have gone further
§ cannot have a combination between Income Tax payers to hand on the tax, because they are treated differently, but you will have combination between those who enjoy these royalties, and, therefore, I believe the tax will eventually be transferred to the industry.
§ Question put, "That the word 'granite' be there inserted in the Bill."
§ The House divided: Ayes, 35; Noes, 117.
§ to-night, and I believed that the right hon. Gentleman shared that expectation. I cannot, however, possibly complain of the way in which the Opposition have conducted the business, and, therefore, I cannot resist the Motion.
619§ Ordered: That the further consideration of the Bill, as amended, be now adjourned.—[Mr. Austen Chamberlain.]
§ Bill, as amended, to be further considered to-morrow (Friday).