§ (1) The annual value of any premises for the purposes of any duty charged in the First Schedule to this Act shall be determined in the same manner and subject to the same conditions (including as respects licensed premises in Ireland the provisions of Sub-section (7) of Section forty-three of the Inland Revenue Act, 1880), as the annual value of premises is determined for the purpose of a publican's licence, and in the determination of that value the duty on the licence is not to be allowed as a deduction.
§ (2) It shall be the duty of the Commissioners to prepare, and to keep corrected, a register as respects all fully licensed premises and beerhouses respectively of the amount which would be payable as compensation in respect of the premises under Sub-section (1) of Section two of the Licensing Act, 1904, if the premises were premises in respect of which compensation was payable under that Act, and of the annual equivalent of that amount (in this Act referred to as the annual compensation value, that equivalent being determined for the purposes of this Act in accordance with regulations made by the Treasury). That amount and the annual equivalent thereof shall be certified respectively for the purposes of this Act by the Commissioners of Inland Revenue, and any such certificate shall be subject to the like appeal as that to which the determination of the Commissioners of Inland Revenue of the amount to be paid for compensation under Sub-section (2) of Section two of the Licensing Act, 1904, is for the time being subject, with the substitution, as respects Scotland of the Judges of the Court 914 of Session named for the purpose of hearing appeals under the Valuation of Land (Scotland) Acts, and as respects Ireland of the High Court of Justice of Ireland, for the High Court.
In estimating for that purpose the value as licensed premises of hotels or other premises used for purposes other than the sale of intoxicating liquor, no increased value arising from profits not derived from the sale of intoxicating liquor shall be taken into consideration.
§ (3) The licence holder and any person interested in licensed premises shall, if required by the Commissioners, make a return in such form and containing such particulars as the Commissioners may require for the purpose of the ascertainment under this Section of the annual value or the annual compensation value of the premises, and if any person fails to make such a return within the time, not being less than thirty days, specified in the notice requiring the return he shall be liable on summary conviction to a fine not exceeding twenty pounds.
§ Mr. PEEL moved, in Sub-section (1), to omit from the word "licence" ["purpose of a publican's licence"] to the end of the Sub-section.
§ In the discussion to which we have just listened we dealt with the very severe penalties which must fall on licence holders through the new scale of duties. The point which I now wish to bring before your attention is that unless my Amendment is carried a far heavier range of duties will be cast on licence holders than exists at present. In the Debate on this point in Committee the Solicitor-General 915 treated these words as being only in accord with the statutory form of existing practice, and he said that in arriving at the values on these occasions you do not deduct from the gross value the value of the licence. This statement is literally true, but it is only true in a perfectly literal sense, and in a sense which I can show very briefly is entirely unmeaning. In fact these words, in the sense in which they are suggested to be intended by the Solicitor-General, have really no meaning at all. His contention is a mere quibble on the word "deduction." The Licence Duty is not deducted in the same way as certain deductions are made to reach the rateable value from the gross value, but it has already been taken into consideration in deciding what the rate is to be, and, of course, we all know that the rent is the basis of all calculations of assessment. Therefore, I think, I will be justified in saying that his contention is really a mere quibble, because, whether the Licence Duty is deducted in the first stage or the second stage, whether it is treated as being merely taken into consideration or subsequently deducted, in either case you arrive at exactly the same result, and, broadly and practically speaking, the Licence Duty is deducted. But I am afraid that if these words mean anything, they mean that the Licence Duty is to be added to the rateable value. If that is so, it practically means you are taking by your Licence Duty 100 per cent. of the gross value and not 50 per cent. In fact, it means that this Clause which we have just discussed, of taking 50 per cent. of the gross value, because it is on the gross value the Licence Duty is charged, is a false statement made in this Bill, and that by apparently innocent words attached to this particular Clause in the Bill you are by a side-wind—or inference, if you like—actually doubling the gigantic range of this duty.
§ If I may use a word well known I believe in Scotch law, this is indeed a swingeing duty which you are going to put on these licence holders. Take a house of £280 valuation, on which a man may have been paying £35. If in the future he is going to pay £140, it is perfectly clear that that house will be £105 less value than it was before, taking £35 from £140, and under those circumstances it is quite ludicrous to say that there is no change in the gross value or in the rateable value. What you are doing, therefore, is this: You are not charging a 916 percentage of the gross value as that is ordinarily understood, but you are doing what is done so often in this Bill; you are inventing a totally different sort of value, an absolutely fictitious value, a value which does not exist for any reason except for the purpose of levying this gigantic duty. It is a pure creation of this Bill, bearing no relation whatever to any existing value, rateable or otherwise, which has previously obtained in finance or rating schemes. The point is, therefore, a perfectly simple one. It is a gigantic new creation. It is doubling rateable values. I ask the House to simply, as it were, to double all those statements which have been made on this side of the House, notably by the Leader of the Opposition, and then they will get some idea of the severity with which this new impost is going to fall on the licensed trade. The effect of these new Licence Duties levied in this way on the ratepayers will be serious because it is impossible in this respect to separate ratepayers from taxpayers. I think it will bear some weight in this discussion if I can show, as I think I can, that not only will this tax tremendously hit the licensed trade, but that because of this new form of taxation the ratepayers all over the country will be called upon to fill very large gaps indeed by increasing the rates in the towns, because the assessment on which those rates are levied will have fallen largely owing to this new and heavy taxation.
§ I would point out that, although you are going to adopt for the purpose of this tax, this new and fictitious annual value, you are not going to adopt it for the purpose of your rates. Your rating will go on exactly as before, and as your rating the system is to ask, in those cases, what the hypothetical tenant will do, of course the hypothetical tenant, in calculating the payments in relation to the existing tenant, will be ready to give much less than before because of this new duty. Therefore, the rateable value will fall very heavily. I wish to give certain figures affecting London, although, of course, they apply to the rest of this country. These figures are from a report to the London County Council by Mr. Harper, their statistical officer, in which he tries to arrive at the effect of this tax upon the rates of London. I think they will afford an example to the rest of the country of what will be the effect of this new imposition. The total value of all licensed premises in London amounts to £2,642,049 gross and £2,203,610 917 rateable value. I am sorry to say it is quite impossible to give the figures with regard to hotels, restaurants, and beerhouses. The only figures which I give are those which affect fully licensed houses. In the case of these, on the present duty, the Licence Duties payable are £183,000, and the existing value of those fully licensed houses is £1,576,266. I want to take the effect of the tax in two cases—first of all, if the Licence Duty is still considered as a deduction in arriving at this value; and, next, where it can no longer be deducted or taken into consideration. Under the first case, the Licence Duty will run from £183,000 to £627,000, and the rateable value will be reduced from £1,315,000 to £1,045,000. But, of course, if we are to take the figures as they appear, if my Amendment is not accepted, the position of the ratepayers will be far worse, because the Licence Duties rise from £183,000, as it was originally, to £991,000, while the rateable value is reduced by £826,000.
§ Mr. HERBERT SAMUELDoes the hon. Member say that if you take, for instance, a house at £600 rateable value, if the licence value is £300, that in future it becomes £900 as a result of these figures?
§ Mr. PEELI was not dealing for the moment with houses over £500. In this case the assumption is that we do no take into consideration, in fixing the gross value, the new amount of licence. That is my assumption.
§ Mr. HERBERT SAMUELYou say a £500 house will remain at £500 still?
§ Mr. PEELIt will remain a £500 house still. Take those figures as they are—I only give the general result—it is estimated that the loss to the ratepayers, including the ratepayers of the Metropolitan Water Board of London, would be no less than £208,000, and that figure represents one and one-sixth pence over the administrative County of London. I do not propose to give the figures as to the inhabited House Duty, and so on, because I am dealing at this moment with rates. There you have a tremendously heavy fall. I have confined my remarks solely to fully-licensed houses. If it was found possible at this stage to give the figures relating to hotels, restaurants, and beer-houses, the sufferings of the ratepayers would be heavier still. Perhaps I can add, as relevant to the interests of the ratepayers, that the reduction of the consumption of the Whisky Tax, as it is given in the figures for the first five 918 months of this financial year, to the ratepayers will mean from the 3d. per barrel on beer, and the 2s. 6d. a gallon on whisky, a further loss of no less than £203,000. Therefore, in considering the effect on the ratepayers, you must also bear in mind that in another way they are very heavily hit by this Budget. There are two similar points in connection with this matter that I ought to deal with, because it might be suggested that in relation to this particular point the ratepayers do not suffer so heavily. There are in the next Clause deductions under certain circumstances by which licensees are able to deduct from their Licence Duty a certain amount of money which they pay as rent to the brewer. But that has no effect upon the rateable value, because the rateable value of these houses—in London, at any rate—is fixed at what it would be to a free tenant, and therefore no help could come to the ratepayers from that source. The second point is one which has already been alluded to. As to houses over £500 a year, they will be able to charge in another way, namely, on the compensation value. Speaking during the Committee stage, the Chancellor of the Duchy declared—and I think he was confining his remarks to London, and was speaking of the ratepayers—that the amount that would be gained by the trade, or lost by the Exchequer, would be something like £150,000. I think that applies to London. I am very interested to know where the right hon. Gentleman obtained his figures from, because we can only obtain facts from figures which really exist, otherwise they are purely vague guesses. Since the Act of 1904 was passed only one house in London of over £500 in value has received compensation, owing to its having been suppressed under the Act of 1904. Therefore, if the Chancellor of the Duchy in giving those figures generalised on the one single instance, I am advised that if that particular house were dealt with on the basis of compensation value it would pay in Licence Duty a considerably higher sum than it would pay in the other way. Therefore I confess I challenge the figures which the Chancellor of the Duchy gave, and I challenge him to show how he arrived at the basis of £150,000. That is the only way in which he could possibly test it—namely, in the instance of that one house. I say, looking at some of the values of houses in London, that this so-called diminution of charge will act very unequally in London, and will have very little effect in 919 reducing the amount those houses will pay; in fact, in many cases it will very much increase it. I think that is the general view taken by the Chancellor of the Duchy. I think he took the view that charging these houses on compensation value will really inconsiderably reduce the amount to be paid, because when he was speaking before in Committee he was trying to defend himself from the allegation that he was charging much more. The Chancellor of the Duchy said:—
I never in any case, except perhaps in certain particular cases, said that the charge would be less. On the whole my argument was directed to a different position.On 3rd September he said:—This new system of valuation is not intended to be the vehicle of extracting any burdensome taxation from the trade, and I hope, in view of what the Chancellor of the Exchequer has said and my assurance, the discussion will be conducted on that basis.
§ Mr. HERBERT SAMUELI was referring to £500 houses, and that it would not be a reason for extracting anything more. They would take the option.
§ Mr PEELI think the reason would apply to houses under £500 as well as to houses above £500, because there would probably be very little difference with regard to the basis of computation in the case of a house of £450 as compared with a house of £550. Therefore my remarks remain unchallenged. Under existing figures, I say it is impossible to show that the figures I have given to the House can be in any way challenged or diminished by the so-called concession made by the Chancellor of the Exchequer and the Chancellor of the Duchy as regards houses of £500 in value. Therefore I want to move the omission of these words, which double the charge which the Bill itself says is to be put on a licensed house. Secondly, its reflex effect will be very serious indeed to the ratepayers of this country. It is only fair that the Chancellor of the Duchy, who has had so much to tell us on various occasions about the hardship upon the ratepayers, and the necessity of making grants from the Exchequer for certain national purposes which they are now performing, should at least give some sort of ear to my plea when I point out that these unfortunate ratepayers, as a result of this tax, are to have a very heavy and fresh burden cast upon them, and that in order to meet the gap made in their rates they not only will not get a substantial grant from the Exchequer, but the Exchequer itself in this back-handed way is going to 920 deprive them of a very large source of revenue which they are at present enjoying.
§ Mr. E. H. CARLILEI beg to second the Amendment.
§ The SOLICITOR-GENERAL (Sir Samuel Evans)I hope the hon. Gentleman will not expect me to go into the more general portion of his speech, and I will deal at once with the effect of this particular Amendment. Let me disabuse his mind of the impression which apparently is upon it, namely, that the effect of not omitting the words which he seeks to omit would be to double the duty at present imposed. The effect is nothing of the kind. We do not propose to make any change in the law at all as it now stands. It is perfectly right, of course, that the duties are increased. Let us see what the law now is and as it has been understood since the year 1880. As the law now is the Licence Duty is not deducted from the annual value. I said in the Committee stage that there was no decision of the law courts on the point, but it has been the invariable practice, and, therefore, we wanted to put it in the clearest way in the Bill, so that there should not be any change in the law. The practice was referred to in a case which dealt with another matter, in which judgment was given by the present Lord Chief Justice. It was a case of Waddle v. the Sunderland Union, and the point was whether in assessing the rateable value of the licensed premises they were entitled to deduct the compensation which was fixed by the Act of 1904. It was decided in that case that they could not make that deduction, the charge not being necessary to maintaining the premises in a state to command a rent thereon. With reference to the non-deduction of the license duty, the Lord Chief Justice said, "I do not attach much importance to the fact that the money has to be paid with the duty on the Excise licence. It is admitted that it has not been the practice to deduct the duty on the Excise Licence." There can be no doubt at all about the practice. There never has been allowed or claimed the right to deduct the present Licence Duty from the annual value of the premises. Therefore, we do not make any change in the law. The only objection that could be raised is that as your duties are now going to be increased you ought to change the law, but it would have a very material effect on the money that would come to the Exchequer.
921 Let me take a particular case, that of a £100 house, an ordinary house of which the annual value is £100, and which would pay an annual duty of, say, £30 according to the present law. If the hon. Member's Amendment were carried, and the result of his Amendment was as he desires it to be, that the deduction should be made from the annual value you would deduct from the £100 the £50 duty under this Bill, then by a process of going a little further instead of getting 50 per cent. of the annual value, which we propose under this Bill, you would only get 25 per cent., because it is sought to have the right to deduct first of all the amount of the duty, i.e., £50 from the £100, and then take 50 per cent. of the balance, which would only give you £25 on the £100 annual value. That would diminish the duty from one-half to a quarter, but I prefer to rest my case upon this that the present Licence Duty is not allowed as a deduction at all. The reason why we put it in this Bill is that though there has been no legal decision on the matter there is the obiter dictum in the case I have referred to, and to make it beyond all question lest the matter might be raised at any time we put these words in. They do not make any change except so far as increased duties are imposed under the Bill.
Mr. BALFOURI speak with diffidence on the subject, as it is extremely puzzling as to the procedure. As I understand the matter, the valuer has to consider the premises without a licence, and then that there is a licence. He has to consider the building, as it would be unlicensed, and how much that value has to be increased owing to the fact it has got a licence. That is the existing procedure as I understand it. Is not that so?
§ Sir SAMUEL EVANSThat may be. I do not deny that the rateable value is arrived at by the process described.
Mr. BALFOURThen somehow or other the valuer has got to arrive at what the rental value is, and, of course, in arriving at the rental value he must take into account the duty, and the man who offers a rent offers that rent knowing what duty he has got to pay. Therefore, as I understand it, whatever words you put in to your Act of Parliament, when a valuer values a house now he does take into account the amount of duty which you are now charging, and that must be a consideration which the prospective tenant has in 922 his mind when he offers a rent. I do not see how that proposition can possibly be denied; therefore, when the hon. and learned Gentleman says that the existing practice is not affected, I say that whatever view or whatever gloss a lawyer may put on the actual existing transaction, the present duty is taken into account, and must be still more so with the heavy duties you are now putting on. Take the case of a house valued with a licence. Let us say that the value of that house with a licence and with no duty at all was £400. You then put on a duty of £200. Every tenant taking that house will say, "No doubt I take this house with the licence, and if I pay £400 for it I shall have a duty of half that amount, therefore I am not going to pay £400, I am not such a fool. I am only going to pay such a rent for the house as with the duty will put me in as good a position as I should have been if I had to pay £400 for it without duty." I do not care what is put in your Act of Parliament in that sense if the landlord takes into account what the tenant is ready to give the duty must be included.
What I am afraid will happen if you put in these words will be this, a valuer will say, "No doubt under the existing law a tenant will not pay more than £200 for this house, but when I look at the Act of Parliament I see that the duty is not to be deducted. Now, as the duty is not to be deducted, and if I am to act as if there were no duty, this tenant would pay £400, and then I must rate it at £400." You do not go on what the tenant will pay, but to what the tenant will pay you add the amount of the duty. I believe you are changing the law by this procedure. As the law at present stands the valuer tacitly does take the duty into account, knowing what rents are given in the neighbourhood for the kind of house which pays £30 in duty and which lets for, say, £200 per year. If you put these words into the Bill I am convinced that the valuer would say I have got to value this house as it would be when licensed and with an annual duty, and then I have got to add the whole amount of the duty. If that is going to be the interpretation of the words, then I say you are grossly increasing the injustice of a very unjust tax, and if you are not doubling the amount you are very nearly doing so, and so far from getting the rateable value under present conditions you are going to alter that fundamentally, and in a manner most injurious to these particular kind of houses.
§ Mr. WALTER GUINNESSI was very much astonished to hear the learned Solicitor-General state that the law does not allow the deduction of licence value in arriving at gross value. Of course it does not allow it in so many words, because that deduction has been made already before the rent has been arrived at. Under the existing law the gross value is the annual value adopted for the purpose of Licence Duties. I think, perhaps, I can make my point clear if I read the definition of gross value. I have got the Act of 1836 here and the Valuation of Property (Metropolis) Act of 1869.
§ Sir SAMUEL EVANSThe definition in the Act of 1836 did not apply to the annual value for Licence Duty. In arriving at the Licence Duty you must arrive at it by the process pointed out by the Act of 1825 as amended by the Act of 1834. Perhaps it will be convenient if I would read what the Act says on the subject. Under that Act it was enacted that in all cases in which the premises were not so rated, the person Applying for the licence, being the tenant, should produce to the person authorised to grant licences a certificate signed by himself, and the owner or landlord of the premises, stating the true rent paid or for which such premises were let; and that if the true rent, by reason of the payment of any premium, or the performance of any condition or otherwise, should not be reserved and payable, then, and in such case, stating the estimated rent or true annual value of the premises, and that the rate of duty payable by the tenant for the licence should be paid according to the rent or value so certified.
§ Mr. WALTER GUINNESSI quite agree as to the Act of 1836 that it does rather complicate the matter as to the exact definition of gross value for the rest of the country. But for London, under the Valuation of Property (Metropolis) Act, there is a definite definition for gross value. That Act provides "The term 'gross value' means the annual rent which a tenant might reasonably be expected, taking one year with another, to pay for an hereditament, if the tenant undertook to pay all usual tenant's rates and taxes, and tithe commutation, rentcharge…" Surely on that definition the Licence Duty is considered in fixing the rent. The whole basis of your assessment is rent, and the rent obtainable obviously depends on the outgoings, and if, as I say, the Licence Duty is deducted from your calculation of 924 the rent, which rent necessarily depends to a large extent on the amount of taxation, then I am perfectly clear the effect of this Clause will be more far-reaching than the Government state, and that it will mean that a new annual value will have to be obtained, quite a different value from the gross value, by adding the Licence Duty to the rent, or by adding the Licence Duty to the gross value.
As has been pointed out, this is a very serious matter indeed to the publican, and I do not think that the concession of the Government to allow the publican, in the case of houses of greater value than £500, to have the option to pay one-third of the annual equivalent of the compensation value of the licence is of any value whatever. I will not say there is any harm in having it in the Bill. There may be an exceptional case where the assessment is unduly high and where the publican may take advantage of it, but the experience in London is that this concession really amounts to nothing. In the case of houses of a very small annual value something might be obtained, but the Government carefully exclude those small houses from the benefits of the exemption, and they have limited it to the houses of over £500 per year. Since the Act of 1904 114 houses have been extinguished in London of less value than £50, and in those cases the average number of years' purchase of the rateable value was 39½ years. If you had given the concession to those houses no doubt you would have been making a substantial concession. But when you take the houses over £200 you find that instead of 39½ years' purchase you only get 21½ years' purchase, and in the only case of a house over £500 if advantage had been taken of this concession the licensee would have paid a heavier Licence Duty than if he had been content to pay half the annual value. In any case there is only a small number of houses in London of that large valuation. They number 743, as against 3,600 which are below the valuation.
8.0 P.M.
I really think that the Government cannot appreciate the very burdensome effect which their proposal will have. I put down this Amendment at the instance of the London County Council, but I notice that the Solicitor-General did not say a single word as to the undoubted effect of this proposal on the ratepayers. If this provision becomes law, every publican at the first possible opportunity will go to the overseer and get him to move the assessment 925 committee to grant a provisional list. He will say that his outgoings have been increased, and I am informed by a London County Council official of great experience in rating that the assessment committee will, as a matter of course, grant as a reduction the whole of the Licence Duty about to be imposed. Even if the Government accept this Amendment, the ratepayers of London will lose £115,000 a year on the rates, while if the Amendment is not accepted the loss will be about doubled. That is on fully licensed houses only. The loss of rates will be far greater if you take hotels into consideration, because they will have their assessment reduced in exactly the same way. They will pay their Licence Duty on a different basis, on the compensation value instead of on the annual value, but they equally will be able to go to the assessment committee, demand a new provisional list, and deduct the increased payment from their rateable value. This is a very serious matter, and in view of the burden which local authorities have to bear I think it is most unjust. The Chancellor of the Exchequer made a great deal of his concession to local authorities of half the produce of the Land Taxes. That half the produce for the whole country will probably be more than swallowed up by the loss to the rates of London under this one provision. The Government may almost be said to have broken faith with the local authorities, because under the Finance Act of 1907 the present Prime Minister provided that local authorities should not lose anything by the increase in the local taxation Licence Duties. He provided that where there was a drop in the local taxation licences, the local authorities would get the average which bad been payable to them for the previous three years. This year, on top of the enormous loss which you are going to impose on the local authorities, you go back on that provision, and you throw on the ratepayers of London an additional loss of £36,000 owing to the decreased consumption of whisky, due to a tax which has prevented people from drinking whisky and turned their attention to other forms of alcoholic liquors. If the Clause passes in its present form the local authorities, in spite of the land taxes, must be very much worse off, and I claim in common fairness that they should be secured from this additional loss. We do not ask for any change; we ask only that the law should be left as it is at present.
§ Mr. GEORGE WYNDHAMThe speech to which we have just listened reinforces an important point made by the hon. Member for Taunton (Mr. Peel), who urged, in the first instance, that if the words which we wish to omit are retained there will be a substantial loss to the ratepayers of the country. The Solicitor-General shakes his head, but he did not reply to that point. There may be an answer to it, and, if so, we ought to have it, as obviously it is a very serious allegation. I will not attempt to repeat the figures given by my hon. Friend the Member for Taunton, but the House will admit that he speaks with great authority on this matter. His connection with the London County Council entitles him to speak on behalf of that body, and as their expert in finance, he declares that unless you accept this Amendment you will inflict on the ratepayers of London a loss running into hundreds of thousands of pounds. The Solicitor-General, in replying, took no notice of that charge whatever. It is not that he put up a reply which does not satisfy us; he passed the matter over in silence. But you cannot pass over in silence an allegation of that character coming from my hon. Friend. I am the more surprised that the Member of the Government undertaking the defence of these words should have left that charge altogether unnoticed, because several times in the course of our discussions Members of the Government have not contradicted but have themselves confirmed the view that if you increase these Licence Duties that increase ought to go to the ratepayers. As the Bill stands, that will not be the case. But if our reading of these words be the true reading, they are not only increasing the duties, but they are actually deducting from the ratepayers an amount of money which in the case of the administrative County of London is asserted by an expert member of the London County Council to be £208,000 a year. It is clear that an answer must be given to so important an allegation. Having heard the speech of the Leader of the Opposition I cannot doubt that the law is being changed by these words. The Solicitor-General read a quotation from an Act of Parliament of 1825, as I thought in order to rebut the view put forward by my right hon. Friend, but those of us who are not learned in the law were unable to see any close relation between the passage cited by the Solicitor-General and the statement of the Leader of the Opposition. My right hon. Friend said that in effect 927 these words would add the duty to what is, in the parlance of laymen, the true rental or average annual value of the house. To anyone not learned in the law, but still conversant with what takes place every day, that seems to be a necessary result. If you have a private dwelling-house in London and the rates are largely increased, the letting value of that house is less. Whatever the law may be now, nothing else can happen. If you impose a large additional burden upon the occupier of the house, the average letting value of the house is diminished by about the amount of that burden. The Solicitor-General has not attempted to deal with that point. He has said that as the law stands, as interpreted by one obiter dictum, the amount of the existing Licence Duty is not taken into account.
§ Sir SAMUEL EVANSAnd according to the invariable practice.
§ Mr. WYNDHAMThen allow matters to stand as they are. Earlier this afternoon we heard from the Prime Minister that the existing Licence Duties were in many cases derisory, that they were so small as to be wholly illusory. It may well be, de minimis non curat lex, nobody has been at the pains to discover accurately whether such duties were taken into account; but now that you are going to make these duties so gigantic that in some cases a tax of £50 is to become a tax of £250, it is a matter of enormous moment to the individual whether that £250 is to be dealt with as you propose, or whether the practice is to be left as it is, which is the real point we are urging on the attention of the House. When the fact that this tax is no longer derisory, but that it is multiplied by five or seven, is added to the fact that this large amount will be deducted from the ratepayers, I think the Government are bound to explain how the ratepayers not only of London, but throughout the country, are not going to be mulcted, under these words, of enormous sums of money in respect of duties which they have been told in the past ought to be used to ease the burdens under which they already labour.
§ Mr. HERBERT SAMUELI rise in response to the request of the right hon. Gentleman, although I can add nothing to what seems to be the perfectly lucid answer already given by the Solicitor-General, who has shown very clearly that the fears entertained by hon. Members opposite are unfounded. Suppose they 928 were well founded, what becomes of all the attacks on the Licence Duties from the standpoint of the trade? We are told that the London County Council are going to lose £208,000, which is at present being paid by the liquor trade in rates. Who is going to get that £208,000? Clearly the liquor trade. From the point of view of the ratepayers, if the contention put forward were true, the loss would be serious; but from the point of view of the trade they have completely destroyed their own case with reference to the Licence Duties as a whole by that contention. For while they say we are ruining the brewers, destroying the profits of the shareholders, and turning publicans into the street by imposing upon them excessive duties, amounting, in the case of London, to some hundreds of thousands of pounds, in the next breath they tell us that the London publicans are going to escape with no leas than £208,000 less of rates than they pay to-day. Consequently the increased burden upon them will be nil, or extremely small, taking the rates and the Licence Duties together. Therefore if hon. Members have proved their case they have proved much too much, and the liquor trade in London will escape very lightly indeed. But their contention is not one with which we agree, and the Solicitor-General, fortified by legal precedents and conclusive arguments, has shown that it is not well founded.
§ Mr. YOUNGERThis case is not a case made by the trade at all. It is a case advanced by my hon. Friends on behalf of the London County Council. The interest of the trade in this particular question differs entirely from theirs. What the trade fear is not that they are to pay £200,000 less rates in London, but that they are going to pay more rates, owing to the fact that this particular Clause may influence the rateable value on which they are charged. What is the Government doing? I know what they meant to do. They mean to take care that the additional burden which they are placing on these houses shall not be taken into account for the first year on which they pay on rateable value. They desire that rateable value to be in no way affected by the heavy additional charge they are placing upon the houses. That is the intention of the Government. What the effect of it will be it is impossible to say. Whether it will affect the valuation which is placed in the assessment book or whether it will not is what the Government 929 have failed to explain in Committee. They have not taken up that point at all. They always evade it. And now the right hon. Gentleman says, in that delightfully merry way in which he gets rid of our difficulties, that there is no use traders bothering; if they pay in one way they will not in another. That, I am very much afraid, will not be the case. It is certainly ridiculous to set up an argument of that kind in dealing with this matter. Have not the Government all along objected to the rateable value at all being taken as the basis of assessment? They have made a very strong point of that, yet what are they doing with the off-licences? They are adopting for the first time a rateable value
§ on which they are going to tax. They are the most inconsistent people in the world. They charged beer-houses £3 10s. whatever the rateable value was. They said the rateable value was not a suitable thing to charge on. Neither is it. But the Government adopt it for a scale for off-licences and therefore are most thoroughly and completely inconsistent in the matter. I am quite sure the trade is extremely uncertain as to the effect of these taxes.
§ Question put, "That the words proposed to be left out, to the word 'the' ["for the purpose of"], stand part of the Bill."
§ The House divided: Ayes, 180; Noes, 64.
931| Division No. 842.] | AYES. | [8.20 p.m. |
| Abraham, William (Rhondda) | Everett, R. Lacey | Lynch, H. B. |
| Acland, Francis Dyke | Falconer, J. | Macdonald, J. M. (Falkirk Burghs) |
| Agnew, George William | Ferens, T. R. | Maclean, Donald |
| Ainsworth, John Stirling | Fiennes, Hon. Eustace | M'Callum, John M. |
| Allen, A. Acland (Christchurch) | Findlay, Alexander | McKenna, Rt. Hon. Reginald |
| Allen, Charles P. (Stroud) | Fuller, John Michael F. | M'Laren, H. D. (Stafford, W.) |
| Ashton, Thomas Gair | Glendinning, R. G. | Maddison, Frederick |
| Asquith, Rt. Hon. Herbert Henry | Glover, Thomas | Mallet, Charles E. |
| Astbury, John Meir | Goddard, Sir Daniel Ford | Marks, G. Croydon (Launceston) |
| Atherley-Jones, L. | Gooch, George Peabody (Bath) | Marnham, F. J. |
| Baker, Sir John (Portsmouth) | Greenwood, G. (Peterborough) | Massie, J. |
| Balfour, Robert (Lanark) | Greenwood, Hamar (York) | Menzies, Sir Walter |
| Barker, Sir John | Gulland, John W. | Micklem, Nathaniel |
| Barran, Rowland Hirst | Hall, Frederick | Molteno, Percy Alport |
| Beale, W. P. | Harcourt, Rt. Hon. L. (Rossendale) | Morton, Alpheus Cleophas |
| Beck, A. Cecil | Harcourt, Robert V. (Montrose) | Murray, Capt. Hon. A. C. (Kincard.) |
| Bell, Richard | Hardy, George A. (Suffolk) | Myer, Horatio |
| Benn, Sir J. Williams (Devonport) | Harmsworth, Cecil B. (Worcester) | Napier, T. B. |
| Bennett, E. N. | Harmsworth, R. L. (Caithness-shire) | Newnes, F. (Notts, Bassetlaw) |
| Berridge, T. H. D. | Hart-Davies, T. | Nicholls, George |
| Bethell, Sir J. H (Essex, Romford) | Haslam, James (Derbyshire) | Nuttall, Harry |
| Bethell, T. R. (Essex, Maldon) | Haslam, Lewis (Monmouth) | Parker, James (Halifax) |
| Black, Arthur W. | Haworth, Arthur A. | Pollard, Dr. G. H. |
| Boulton, A. C. F. | Hazel, Dr. A. E. W. | Price, C. E. (Edinburgh, Central) |
| Brace, William | Hedges, A. Paget | Priestley, Sir W. E. B. (Bradford, E.) |
| Brigg, John | Helme, Norval Watson | Radford, G. H. |
| Bright, J. A. | Henderson, Arthur (Durham) | Rea, Rt. Hon. Russell (Gloucester) |
| Brodie, H. C. | Henderson, J. McD. (Aberdeen, W.) | Rea, Walter Russell (Scarborough) |
| Brooke, Stopford | Henry, Charles S. | Rees, J. D. |
| Brunner, J. F. L. (Lancs., Leigh) | Herbert, T. Arnold (Wycombe) | Rendall, Athelstan |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Higham, John Sharp | Richards, Thomas (W. Monmouth) |
| Bryce, J. Annan | Hobart, Sir Robert | Ridsdale, E. A. |
| Burns, Rt. Hon. John | Hobhouse, Rt. Hon. Charles E. H. | Roberts, Charles H. (Lincoln) |
| Buxton, Rt. Hon. Sydney Charles | Hodge, John | Robinson, S. |
| Byles, William Pollard | Holland, Sir William Henry | Roch, Walter F. (Pembroke) |
| Cameron, Robert | Holt, Richard Durning | Roe, Sir Thomas |
| Channing, Sir Francis Allston | Hooper, A. G. | Rogers, F. E. Newman |
| Cheetham, John Frederick | Hope, W. H. B. (Somerset, N.) | Rose, Sir Charles Day |
| Clough, William | Horniman, Emslie John | Runciman, Rt. Hon. Walter |
| Collins, Stephen (Lambeth) | Howard, Hon. Geoffrey | Rutherford, V. H. (Brentford) |
| Compton-Rickett, Sir J. | Hudson, Walter | Samuel, Rt. Hon. H. L. (Cleveland) |
| Corbett, A. Cameron (Glasgow) | Illingworth, Percy H. | Scott, A. H. (Ashton-under-Lyne) |
| Corbett, C. H. (Sussex, E. Grinstead) | Jackson, R. S. | Sears, J. E. |
| Cornwall, Sir Edwin A. | Johnson, John (Gateshead) | Seely, Colonel |
| Cotton, Sir H. J. S. | Jones, Leif (Appleby) | Shackleton, David James |
| Craig, Herbert J. (Tynemouth) | Jones, William (Carnarvonshire) | Sherwell, Arthur James |
| Crosfield, A. H. | Jowett, F. W. | Snowden, P. |
| Crossley, William J. | King, Alfred John (Knutsford) | Stanger, H. Y. |
| Davies, David (Montgomery, Co.) | Laidlaw, Robert | Stanley, Hon. A. Lyulph (Cheshire) |
| Davies, Ellis William (Eifion) | Lamb, Ernest H. (Rochester) | Steadman, W. C. |
| Dickinson, W. H. (St. Pancras, N.) | Lamont, Norman | Strachey, Sir Edward |
| Duncan, J. Hastings (York, Otley) | Layland-Barratt, Sir Francis | Sutherland, J. E. |
| Dunne, Major E. Martin (Walsall) | Lehmann, R. C. | Taylor, John W. (Durham) |
| Elibank, Master of | Lever, A. Levy (Essex, Harwich) | Taylor, Theodore C. (Radcliffe) |
| Esslemont, George Birnie | Levy, Sir Maurice | Toulmin, George |
| Evans, Sir S. T. | Lloyd-George, Rt. Hon. David | Vivian, Henry |
| Wadsworth, J. | Whitehead, Rowland | Wilson, W. T. (Westhoughton) |
| Wason, John Cathcart (Orkney) | Wilkie, Alexander | Winfrey, R. |
| Waterlow, D. S. | Wills, Arthur Walters | |
| White, Sir George (Norfolk) | Wilson, Henry J. (York, W. R.) | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| White, J. Dundas (Dumbartonshire) | Wilson, P. W. (St. Pancras, S.) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex, F. | Gardner, Ernest | Pearce, William (Limehouse) |
| Arkwright, John Stanhope | Gretton, John | Powell, Sir Francis Sharp |
| Balcarres, Lord | Guinness, Hon. W. E. (B. S. Edmunds) | Rawlinson, John Frederick Peel |
| Balfour, Rt. Hon. A. J. (City Lond.) | Hamilton, Marquess of | Roberts, S. (Sheffield, Ecclesall) |
| Barnard, E. B. | Hardy, Laurence (Kent, Ashford) | Rutherford, John (Lancashire) |
| Barrie, H. T. (Londonderry, N.) | Harrison-Broadley, H. B. | Rutherford, Watson (Liverpool) |
| Bignold, Sir Arthur | Hill, Sir Clement | Salter, Arthur Clavell |
| Bowles, G. Stewart | Hills, J. W. | Stanier, Beville |
| Bull, Sir William James | Hope, James Fitzalan (Sheffield) | Stone, Sir Benjamin |
| Carlile, E. Hildred | Joynson-Hicks, William | Strauss, E. A. (Abingdon) |
| Carson, Rt. Hon. Sir Edward H. | Kennaway, Rt. Hon. Sir John H. | Thornton, Percy M. |
| Cecil, Evelyn (Aston Manor) | Kerry, Earl of | Valentia, Viscount |
| Cecil, Lord R. (Marylebone, E.) | Kimber, Sir Henry | Walrond, Hon. Lionel |
| Clive, Percy Archer | King, Sir Henry Seymour (Hull) | Warde, Col. C. E. (Kent, Mid) |
| Coates, Major E. F. (Lewisham) | Lockwood, Rt. Hon. Lt.-Col. A. R. | White, Patrick (Meath, North) |
| Cochrane, Hon. Thomas H. A. E. | Long, Col. Charles W. (Evesham) | Wortley, Rt. Hon. C. B. Stuart- |
| Douglas, Rt. Hon. A. Akers- | Long, Rt. Hon. Walter (Dublin, S.) | Wyndham, Rt. Hon. George |
| Duncan, Robert (Lanark, Govan) | Lowe, Sir Francis William | Younger, George |
| Faber, George Denison (York) | Mason, James F. (Windsor) | |
| Faber, Capt. W. V. (Hants, W.) | Newdegate, F. A. | |
| Fletcher, J. S. | Nicholson, Wm. G. (Petersfield) | TELLERS FOR THE NOES.—Mr. W. Peel and Mr. Goulding. |
| Forster, Henry William | Nield, Herbert | |
| Foster, P. S. | Oddy, John James |
§ Mr. SAMUEL ROBERTS moved, in Subsection (1), after the word "value" ["in the determination of that value"], to insert the words "any increase in."
§ This Amendment rather gives an opportunity to the Government in order to make a concession. It limits the duty which is not to be considerable as calculated in the annual value to the increase proposed by this Bill; that is to say that the whole duty is to be taken into consideration as it is now, but the increase of that duty is not to be taken into consideration. I cannot see why the Government should not accept this proposal, because, if they do not, what we fear the result will be is this. The present duty will be added to the present annual value, inasmuch as the present duty has already been taken into consideration in calculating the gross annual value. The valuer will say the duty has already been deducted, and we must add it to the present annual value before we can get at the new annual value. Supposing a house was at the present of the gross annual value of a £100, and the duty is £30, the valuer would say, I must add that £30 to the £100, because the £30 had been already taken into consideration in calculating the £100. So that the new duty will be taken to be half of £130, that is £65, instead of £50, which is the scale of the Government. We contend that some limiting words such as those proposed in my Amendment should be accepted, and put into the Bill.
932§ Mr. GRETTONI second the Amendment. The Government contend the duty is not taken into account in assessing the present annual value of the licence at all. If their contention is right, why put in these words. We really have a suspicion that they are wrong. The object of the Amendment proposed by my hon. Friend is that this charge shall not be added to the value of the house. It is merely intended to keep the value of the house as it is. The object of the Amendment is to keep the basis of the present practice, and not to start upon a hypothetical practice which has never been put into force.
§ Sir SAMUEL EVANSI venture to suggest that this Amendment is practically covered by the decision which the House has come to on the last Amendment, but I do not want to raise that as a point of Order. The effect of carrying this Amendment would be unquestionably to say that the present duty can be deducted. Nobody will deny that the effect of the Amendment would be to say in language sufficiently expressive that the present duty can be deducted, but that the increased duty cannot. I said, dealing with the last Amendment, that the unbroken practice has been not to deduct the Licence Duty at all in arriving at the annual value of the premises, and I fortified myself by quoting the dictum of the Lord Chief Justice in a compensation claim. The Amendment of the hon. Member opposite, therefore, would mean a serious alteration in the law. I think the hon. Member and his 933 friends are under a misapprehension as to the effect of the words which they have sought to have omitted altogether. Unquestionably the effect of the Licence Duty upon the rental value of the premises will be borne in upon the mind of the valuer. No valuer can exclude entirely the consideration of the duty because he has to arrive at the rental value. What is secured by these words is this: that immediately you have the rental value of the premises arrived at the licence holder cannot then turn round and say, that being the annual value of the premises I want the deducted increased Licence Duty or the increased amount of the existing duty. An attempt of that kind was made in connection with compensation value. They said in arriving at the rateable value the compensation levy should be deducted, but the court said "No," so we say here that the Licence, Duty, whether the increased part of the Licence Duty of the existing Licence Duty ought not to be deducted at all. Unquestionably it will be taken into consideration not as a deduction of the whole sum. A man who takes a premises might want to deduct the whole of the licence. He might possibly take a smaller profit, but unquestionably any valuer must take into consideration the Licence Duty that is payable before he can arrive at the annual value. When that has been done we want to make it absolutely impossible for anyone to be able to turn round and say, "That being the only value, it ought to come out of the annual value." They do not do that at the present moment, and they will not be allowed to do so if the Bill remains in its present form. With the Amendment in its present form they will say, "Do not deduct the increased duty, because it produces an effect we do not desire." If the hon. Member thinks the effect of these words will be to prevent consideration of the duty in arriving at the annual value he is mistaken, because they will make it obligatory upon the present valuer to deduct only the existing duty and exclude entirely the consideration of the increased duties under this Bill. I think the hon. Member is under a misapprehension. I know what the hon. Member and his fellow Members feel on this point. They are afraid that the valuer will be told by the provisions of this Clause that they cannot take into consideration in any way in arriving at the value of the premises the Licence Duty. That will not be the effect. The valuer will have to ascertain the rental value according to the Act, and that 934 having been done there can be no claim for the deduction in respect of any licensed premises.
§ Sir E. CARSONI think the arguments of the Solicitor-General are full of fallacies. Let us for the moment get away entirely from the question of the compensation value. This is purely an estimate of the value of the premises.
§ Sir S. EVANSI only gave it as an illustration of the deduction.
§ Sir E. CARSONThe Solicitor-General now admits that this has nothing to say to the question we are discussing. I always suspect very much arguments such as that which has just been used in which we are told, "I can assure you that you are entirely wrong in your own interests and in the interests of persons you are attempting to protect from this outrageous charge. You are entirely wrong, and I know much better than you, and I am trying to do a great deal better for your friends than you are doing." I do not think that the licensed trade will agree with the arguments used by the Solicitor-General. He has been very plausible, and nobody is better able to put forward plausible arguments than the hon. and learned Gentleman. His arguments, however, are about as fallacious as any that could be put before the House of Commons. The Solicitor-General says he can assure us that under the present system the valuer who has to value for the purpose of estimating the rental and other purposes will always make an allowance for the Licence Duty.
§ Sir S. EVANSI said "take it into consideration."
§ Sir E. CARSONHon. Members will see what thin ice we are skating upon. The valuer, we are now told, does not make an allowance, but takes it "into consideration." What does he do? When he "takes it into consideration" does he say, "I can assure you I have fully considered the matter, and I have come to no conclusion at all as to how this matter should be treated"? Does the Solicitor-General say that is what takes place at the present moment? All this is a mere question of language. Any valuer in estimating the annual value of the premises must take into consideration the question of the deduction. All this Amendment asks is that the adequate consideration which has been given hitherto should be allowed after the passing of this Act. The Solicitor-General says that it is considered now, but he 935 refuses an Amendment which says it should be considered after the passing of this Act. The whole thing is entirely fallacious, and when the Solicitor-General tells us the same consideration will be taken as before I ask him will it not be an express contravention of the Act of Parliament, which says that in the determination of the value the amount of the licence is not to be allowed as a deduction? Any valuer taking into consideration after this Bill has become law—which I earnestly hope it never will—but if it does become law the valuer would be acting in the teeth of the Act of Parliament. Let us face the real situation under the Act of Parliament. Let us face the worst. It is no use quibbling about words. What the Government mean is that the value is to be assessed, and that no consideration is to be given for the amount of the licence. There is no other meaning. If that is not the meaning, there are very simple words which the draftsman could suggest to the effect that in the valuation in future they shall not consider the amount of the Licence Duty except so far as they have hitherto been able to consider it. If the Solicitor-General is sincere and really means what he says, let him promise to put an Amendment into the Bill by which the valuers will give exactly the same consideration as hitherto. That is all my hon. Friend is asking for, and that is exactly the point which the Solicitor-General is refusing to concede. The whole of this matter which arises under this Amendment and under the preceding Amendment will, as far as I can see, throw the whole of this question into the greatest chaos, because, whether the amount is that which was put as the Licence Duty in the first place, or the amount provided for in this Bill, it will have to be considered for rating as it is now, because this Bill does not alter the rating law. Consequently, you will have one valuer for the premises for rating purposes, in which this deduction will be allowed, and you will have another valuer ascertaining the valuation for the purposes of this Bill, in which the deduction will not be allowed, and the chaos which will ensue under these different valuations and assessment as regards licensed premises will put the whole matter into such a confused condition that it is very hard to say what will be the result. The Solicitor-General, however, has refused this Amendment, and I suppose the Government have made up their 936 minds, although we always have expectations that they may make what purports to be a concession. If we are going to pass the Bill in its present form, let us be under no delusion, because, as a matter of fact, it will be impossible in the future to allow what has been allowed in the past: that is, a deduction in making an assessment of the annual value.
§ Mr. YOUNGERThe hon. Gentleman has made the perfectly frank admission, for which I certainly thank him, that the valuers in assessing the premises will no doubt have regard to this particular charge upon them. Would the hon. Gentleman answer me this question? Is not the Licence Duty to be levied on the existing rental, and was any such consideration in the mind of the valuer when he fixed the existing rental? Of course not. Therefore, no consideration whatever has been given for this extra charge in fixing the basis on which at all events for the first year these people will have to pay the increased Licence Duty. It is obvious these people will be very unfairly and unjustly penalised. We suppose that within the year we shall have the new register and the new licence value, whatever that will be. Why should not the Government be perfectly content with things as they are? Then, if the register is not ready and this basis continues for a second year, consideration would no doubt, under the existing arrangements be given. My point is that as the thing stands the new Licence Duties will be charged on a rental value in which no reasonable consideration is given for the new burdens proposed.
§ Mr. JAMES HOPEI cannot help remembering that exactly this time last year the learned Solicitor-General and Members on this side of the House were discussing an exactly similar proposal in a similar measure to this part of the Finance Bill. In those Debates I learned to admire the mixed ability and geniality with which the learned Solicitor-General, doubtless fortified by long experience, was able to make the best of a bad case, and so he is to-night. During the last few months I have had some experience of the Attorney-General, and I may say of both that I have noticed one thing in common. Whenever they are hard pressed on any point, and are asked to insert words to make the intention of the Government perfectly clear, they always say it is quite certain the Commissioners will do it, and why therefore put it in? There may, however, in the future be other Law Officers and 937 other Commissioners, and surely it is quite impossible for them to say, as a serious argument, "We quite agree with the substance of the Amendment, but it is unnecessary, because the Commissioners or the valuers will certainly carry it out." If they are certain to carry it out, it cannot do any harm to put in words directing them to do so, and that is what the Government refuse to do. The learned Solicitor-General says the valuers will undoubtedly take this Licence Duty into consideration in the assessment. What does "consideration" mean? If the assurance of the Solicitor-General is not worthless, it means deduction, and if it does mean deduction, why not say so on the face of the Bill? If, therefore, there is anything in the argument of the Solicitor-General, he can lose nothing by accepting these words.
§ Mr. LEIF JONESSpeakers on the opposite side of the House have not taken into account the purpose for which the annual value is required. It is not the annual value for rental purposes, but for the purposes of the duties charged in the Schedule; and, seeing that the duty charged in the Schedule is to be a percentage of the annual value, if the Government did what the Opposition ask, they would be involved in a logical embarrassment. Take a house of which the annual value is £100. Under the Goverment scale you have £50 duty, and, according to the Opposition, the proper annual value is £50 and not £100. If £50 is the annual value, then the tax the Government are imposing is not £50 but £25. The annual value would then be £75 and the duty £37 10s., and not £25. The annual value would then become £62 10s. So the game goes on. So long as you fix your duty at a percentage of the annual value, that annual value must be determined without reference to the duty. Otherwise you will have confusion. It is, therefore, in my opinion, absolutely impossible for the Government to accept the Amendment.
§ Sir E. CARSONMay I remind the hon. Gentleman that we are not dealing with the new duty, but the old duty. The old duty is already deducted, and we are only asking that it should be allowed to be deducted still.
§ Mr. LEIF JONESIf that is so, it really does not matter from the point of view of the Opposition. When dealing with a duty which is a percentage of the annual value, it is a logical impossibility to take that percentage into consideration in assessing the annual value, and the point has no meaning at all.
Mr. G. D. FABERMay I take a concrete case—the case of a fully licensed house with £100 gross annual value and £30 Licence Duty? Will the new duty be half the £100, or half the £100 plus the £30, the present Licence Duty? We complain that that may be the effect of the Clause as it stands, because the Clause says the Licence Duty shall not be deducted. We therefore fear that the £30 Licence Duty will be added to the gross annual value of the house, making £130 in all, so that the duty, instead of being £50, will be £65. It seems to me to be open to that contention, and, if I am right, the difference will be something stupendous, because the present total licence value—£2,200,000—has hitherto been allowed for in arriving at the gross annual value, and, if in the future it is not to be allowed for, then you are going to add £2,200,000 to the gross annual value of the licensed premises of the country. It means if you take the total duty you are going, at 50 per cent., to get an increment of £1,100,000, and that is what I meant when, earlier in the evening, I said there might be a tremendous additional impost put on the trade by this Bill. We want to whittle down the chances of an interpretation of the Act which will bring that about.
§ Sir S. EVANSIf the rental value of a house is £100 and the duty at present leviable £30, it is not intended to charge the 50 per cent. on the £100 plus the £30. But we also want to make it impossible to deduct the £30 fom the £100, and only charge the duty on £70. What is required is that the valuer shall take all the circumstances into consideration. If he arrives at an annual value of £100 the duty of 50 per cent. will be on that—it will not amount to either £65 or £37 10s., it will be £50.
§ Question put, "That those words be there inserted in the Bill."
§ The House divided: Ayes, 48; Noes, 174.
939| Division No. 843.] | AYES. | [9.0 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex, F. | Bignold, Sir Arthur | Carson, Rt. Hon. Sir Edward H. |
| Arkwright, John Stanhope | Bull, Sir William James | Clive, Percy Archer |
| Barrie, H. T. (Londonderry, N.) | Carlile, E. Hildred | Coates, Major E. F. (Lewisham) |
| Cochrane, Hon. Thomas H. A. E. | Hills, J. W. | Powell, Sir Francis Sharp |
| Douglas, Rt. Hon. A. Akers- | Hope, James Fitzalan (Sheffield) | Rawlinson, John Frederick Peel |
| Duncan, Robert (Lanark, Govan) | Joynson-Hicks, William | Rutherford, John (Lancashire) |
| Faber, George Denison (York) | Kimber, Sir Henry | Rutherford, Watson (Liverpool) |
| Faber, Capt. W. V. (Hants, W.) | King, Sir Henry Seymour (Hull) | Salter, Arthur Clavell |
| Fletcher, J. S. | Lockwood, Rt. Hon. Lt.-Col. A. R. | Stanier, Beville |
| Forster, Henry William | Long, Rt. Hon. Walter (Dublin, S.) | Thornton, Percy M. |
| Foster, P. S. | Lowe, Sir Francis William | Valentia, Viscount |
| Gardner, Ernest | Magnus, Sir Philip | Walrond, Hon. Lionel |
| Goulding, Edward Alfred | Mason, James F. (Windsor) | Warde, Col. C. E. (Kent, Mid) |
| Hamilton, Marquess of | Meysey-Thompson, E. C. | Younger, George |
| Hardy, Laurence (Kent, Ashford) | Newdegate, F. A. | |
| Harrison-Broadley, H. B. | Oddy, John James | TELLERS FOR THE AYES.—Mr. S. Roberts and Mr. Gretton. |
| Hill, Sir Clement | Peel, Hon. W. R. W. | |
| NOES. | ||
| Abraham, William (Rhondda) | Foster, Rt. Hon. Sir Walter | Menzies, Sir Walter |
| Acland, Francis Dyke | Fuller, John Michael F. | Micklem, Nathaniel |
| Agnew, George William | Glendinning, R. G. | Molteno, Percy Alport |
| Ainsworth, John Stirling | Glover, Thomas | Murray, Capt. Hon. A. C. (Kincard.) |
| Allen, A. Acland (Christchurch) | Goddard, Sir Daniel Ford | Myer, Horatio |
| Allen, Charles P. (Stroud) | Gooch, George Peabody (Bath) | Napier, T. B. |
| Ashton, Thomas Gair | Greenwood, G. (Peterborough) | Newnes, F. (Notts, Bassetlaw) |
| Astbury, John Meir | Greenwood, Hamar (York) | Nicholls, George |
| Atherley-Jones, L. | Gulland, John W. | Nuttall, Harry |
| Baker, Sir John (Portsmouth) | Hall, Frederick | Parker, James (Halifax) |
| Balfour, Robert (Lanark) | Harcourt, Rt. Hon. L. (Rossendale) | Pearce, William (Limehouse) |
| Barker, Sir John | Harcourt, Robert V. (Montrose) | Pollard, Dr. G. H. |
| Barran, Rowland Hirst | Hardy, George A. Suffolk) | Price, C. E. (Edinburgh, Central) |
| Beale, W. P. | Harmsworth, Cecil B. (Worcester) | Radford, G. H. |
| Beck, A. Cecil | Harmsworth, R. L. (Caithness-shire) | Rea, Walter Russell (Scarborough) |
| Bell, Richard | Hart-Davies, T. | Rees, J. D. |
| Benn, Sir J. Williams (Devonport) | Haslam, James (Derbyshire) | Rendall, Athelstan |
| Bennett, E. N. | Haslam, Lewis (Monmouth) | Richards, Thomas (W. Monmouth) |
| Berridge, T. H. D. | Haworth, Arthur A. | Richards, T. F. (Wolverhampton, W.) |
| Bethell, Sir J. R. (Essex, Romford) | Hazel, Dr. A. E. W. | Ridsdale, E. A. |
| Bethell, T. R. (Essex, Maldon) | Hedges, A. Paget | Roberts, Charles H. (Lincoln) |
| Black, Arthur W. | Helme, Norval Watson | Roberts, Sir J. H. (Denbighshire) |
| Boulton, A. C. F. | Henderson, Arthur (Durham) | Robinson, S. |
| Brace, William | Herbert, T. Arnold (Wycombe) | Roch, Walter F. (Pembroke) |
| Brigg, John | Higham, John Sharp | Roe, Sir Thomas |
| Bright, J. A. | Hobart, Sir Robert | Rogers, F. E. Newman |
| Brooke, Stopford | Hobhouse, Rt. Hon. Charles E. H. | Rutherford, V. H. (Brentford) |
| Brunner, J. F. L. (Lancs., Leigh) | Hodge, John | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Holland, Sir William Henry | Scott, A. H. (Ashton-under-Lyne) |
| Bryce, J. Annan | Holt, Richard Durning | Sears, J. E. |
| Burns, Rt. Hon. John | Hooper, A. G. | Seely, Colonel |
| Burnyeat, W. J. D. | Hope, W. H. B. (Somerset, N.) | Shackleton, David James |
| Buxton, Rt. Hon. Sydney Charles | Horniman, Emslie John | Sherwell, Arthur James |
| Byles, William Pollard | Howard, Hon. Geoffrey | Simon, John Allsebrook |
| Cameron, Robert | Hudson, Walter | Stanger, H. Y. |
| Channing, Sir Francis Allston | Illingworth, Percy H. | Steadman, W. C. |
| Cheetham, John Frederick | Jackson, R. S. | Strachey, Sir Edward |
| Clough, William | Johnson, John (Gateshead) | Sutherland, J. E. |
| Collins, Stephen (Lambeth) | Jones, Leif (Appleby) | Taylor, John W. (Durham) |
| Compton-Rickett, Sir J. | Jones, William (Carnarvonshire) | Taylor, Theodore C. (Radcliffe) |
| Corbett, A. Cameron (Glasgow) | King, Alfred John (Knutsford) | Toulmin, George |
| Corbett, C. H. (Sussex, E. Grinstead) | Laidlaw, Robert | Vivian, Henry |
| Cornwall, Sir Edwin A. | Lamb, Ernest H. (Rochester) | Wadsworth, J. |
| Cotton, Sir H. J. S. | Lambert, George | Walsh, Stephen |
| Craig, Herbert J. (Tynemouth) | Lamont, Norman | Wason, John Cathcart (Orkney) |
| Crosfield, A. H. | Layland-Barratt, Sir Francis | Waterlow, D. S. |
| Crossley, William J. | Lehmann, R. C. | White, Sir George (Norfolk) |
| Davies, David (Montgomery, Co.) | Lever, A. Levy (Essex, Harwich) | White, J. Dundas (Dumbartonshire) |
| Davies, Ellis William (Elfion) | Levy, Sir Maurice | Whitehead, Rowland |
| Dickinson, W. H. (St. Pancras, N.) | Lewis, John Herbert | Wilkie, Alexander |
| Duncan, J. Hastings (York, Otley) | Lloyd-George, Rt. Hon. David | Wills, Arthur Walters |
| Dunne, Major E. Martin (Walsall) | Lynch, H. B. | Wilson, Henry J. (York, W. R.) |
| Elibank, Master of | Macdonald, J. M. (Falkirk Burghs) | Wilson, J. W. (Worcestershire, N.) |
| Esslemont, George Birnie | Maclean, Donald | Wilson, P. W. (St. Pancras, S.) |
| Evans, Sir S. T. | M'Callum, John M. | Wilson, W. T. (Westhoughton) |
| Everett, R. Lacey | Maddison, Frederick | Winfrey, R. |
| Ferens, T. R. | Marks, G. Croydon (Launceston) | |
| Fiennes, Hon. Eustace | Marnham, F. J. | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Findlay, Alexander | Massie, J. |
§ Mr. CLAVELL SALTER moved to leave out Sub-section (2).
§ This Sub-section provides for the creation and continuance of a register of com- 940 pensation valuations. According to the intention of the Government every public-house in the country is to be valued upon the basis of the compensation which it 941 would receive if it were reduced for compensation, and that would apply not only to England and Wales, where the Compensation Act is in force, but also in Scotland and Ireland, in which that Act has never had any application. It is obvious that the proposal is one which will commit the country and the trade to a very costly and novel undertaking. That is quite clear. We all know how costly and tedious it is to ascertain the compensation value even of a single public-house, and when we reflect that there are in the country 120,000 on-licences we can form some idea of the magnitude of the undertaking to which this House is asked to commit the country. Nor does it deal only with the making of the original valuations, but the direction is for the keeping correct as well as for the making of these valuations. Considering how great are the fluctuations in the value of licensed property from year to year it is quite obvious that that will throw a heavy task upon whoever has to discharge it.
§ I do not want to base our opposition to this Sub-section upon a matter of machinery, but I should like to point out how unfortunately vague this Sub-section is as to the manner of keeping this new register corrected. We are not told even how often or by whom these corrections are to be made. It was explained to the House by the Chancellor of the Duchy when this matter came up in Committee that in regard to the original valuation it was to be made by the Inland Revenue upon material to be collected by the Customs and Excise, and as I read this Sub-section the keeping of this register correctly clearly involves fresh valuation as well as the collection of materials, not to be conducted by the Customs, but by the Inland Revenue; and I shall be glad if information can be given to us in regard to that, because if the Excise are to make the valuations and the Inland Revenue the corrections it would appear a very strange proceeding. What justification is put forward by the Government for the vast expenditure and trouble to which they seek to put the country? So far as this Bill is concerned there is no justification for this great departure.
§ There is practically no use to be made of this valuation. So far as the revenue is concerned it is to be used in exceedingly unimportant cases—the large hotels and houses over £500, but, with that exception, this valuation is a thing in the air, a costly thing to be done, of which no practical use is to be made. Of course, we all know what the intention of the Govern- 942 ment, repeatedly stated, is. It is that so soon as this valuation can be completed they will shift the basis of the whole licence taxation of the United Kingdom from its present basis of annual value on to this new basis which they formerly called compensation value, but which it is now proposed to call licence value. I think it will not be inconvenient to the House if I discuss this Sub-section in the form in which it is proposed it should take by the Amendments of the Chancellor of the Duchy. It is obvious that the matter for the House on this Sub-section is nothing less than what is the best, wisest and most politic basis, on which to base the whole of our licence taxation. Everyone will admit that the present basis is not free from fault, but I would point out that it is impossible to make a case for this proposed new basis merely by pointing out defects in the present system. It will be incumbent for the Government to go into the relative merits of the system which exists and the system which they propose to substitute for it, and to show that the system they advocate is superior to the system that at present exists. This is a matter which does not affect the amount of taxation at all. You can raise heavy or light taxation on either basis, but it is a matter which affects the incidence of the taxation and its fair adjustment between one publican and another.
§ The change which is proposed is one, I think, of great magnitude and of great importance, and I think, in a few words, it amounts to this. Most people would agree in a public-house there are three main elements of value, on any one or more of which you may base your taxation. There is the value of the structure as unlicensed—its shop value. Second, there is the added value which is given to the structure by the existence of the licence and which I should call the licence value; and the third element of value and the most important of all is the goodwill. In view of the observations made on this matter by the Chancellor of the Duchy in Committee, I wish to make it clear I am not speaking of personal good will caused by the personal popularity of the tenant, I am speaking of the goodwill in the popular commercial sense, and of the added value which is given to the premises by reason of long-continued user of them for a particular purpose. Those are the three main elements of value. At present our taxation is based on the first and second, and it is now proposed to shift it to the second and third. It is 943 based at present on the annual value, that which is technically called gross estimated rental in rating; that is to say, upon the gross annual value of the premises, together with the added value of the licence as part, and it is proposed to change that to the second and third and to base the taxation upon the added licence value and on the goodwill. My main objection, on principle, to this proposed new basis is that it proposes to tax the goodwill, and that it will have the effect not merely of taxing each man's goodwill but making that the main subject of our taxation.
§ To illustrate my meaning for a moment may I take the case of two public-houses of absolutely equal structure, convenience, age, and situation. Let me suppose that in one of these houses a successful trade has long been carried on, while the other has been unfortunately managed, and has done a bad trade. The actual value of these two concerns will be very different, and probably the actual rent of the two premises will be very different. The successful house will pay a much higher rent. The compensation value would be very different, and it ought to be. The present Licence Duty, I think, would be the same, and the annual value would be the same, and the rating would be the same. The rating is that which a hypothetical tenant would be prepared to give on a tenancy from year to year for the premises. In a court of law it would be permitted to give evidence in a case of that kind that a large and successful trade had been done, but no more. That evidence would be allowed to be given in order to show that the premises were suitable, and had proved suitable. The amount of the trade would be rigidly excluded, and, inasmuch as these two premises are on the hypothesis of exactly equal size and convenience, and afford an exactly equal opportunity for making profit, their rateable value would be identical, and their present taxation would be identical, and the change proposed to be made is to shift the taxation by taking the goodwill. At present it is beyond question that the publican's goodwill is not taxed. That is very strikingly shown in London, where rating proceeds upon an arrangement, and certain percentages are taken, among other things upon the premium. The percentage on the premium is always taken on half the premium for the reason that half the premium is assigned to the buildings and the licence, and the other half to the goodwill, 944 and the half which is supposed to represent the goodwill is always excluded, showing clearly that the goodwill is not in substance taxed.
§ Under the system that the Government propose it is abundantly clear, not merely that the goodwill will be taxed but that the taxation will be mainly imposed upon the goodwill. The taxation is to be imposed on the compensation value, which is to be ascertained in accordance with the Compensation Act of 1904, which refers you back to the Finance Act of 1894, as interpreted in a judgment with which we are all familiar. In that judgment £1,412 was the value of the trade capitalised at ten years and £360 was the difference between the licensed and unlicensed rent taken at 18 years, so that it is quite clear in that case, and it is a fact in all these cases, not merely that the goodwill is taxed, but that it is the main item of taxation. If this kind of momentous change is to be undertaken by this House on reasoned discussion, and not by mere mechanical registration of the decrees of the Government, it is obvious that the onus rests very heavily upon the Government to institute a comparison of these two methods and bases of taxation, and to show that the proposed method is better than that which now exists. The Government have not succeeded in doing so, and have never attempted to do so. What they have done is most extraordinary. They began by denouncing the Kennedy judgment in no measured terms. They denounced it in the House and outside as being mistaken, as being unjust, as being not in accordance with the intention of Parliament, and as being a grossly excessive method of arriving at compensation. The next thing they did was to attempt to override it in the Licensing Bill of unhappy memory, but they were not successful. Then they suddenly turned round, and this Kennedy judgment is translated to the highest places. It is hurried from the dungeon to the palace, put upon the throne, worshipped, apotheosised, and they now declare it is to be the basis and foundation of their entire system. What they now say is not merely, "We accept this as the propoer method of compensation," but "We base our whole taxation upon the assumption that that which is the right basis for compensation must necessarily be the right basis for taxation." The thing is a transparent fallacy. It is right, that a man should be paid for his labour, it is right that he should be paid for that which he has personally 945 brought in and added to that which the State has given him, but it does not at all follow from that that it is right that he should be taxed upon it. That which the State has given him is not the trade nor the profit, but merely the opportunity to do the trade and make the profit. It does not at all follow that because it is right, when he is being bought out in the pubilc interests, that he should receive the actual market value of his business, that he should be taxed upon his labour in that way. Suppose two men were granted by the State an equal opportunity and a licence for premises of equal size. One makes a better use of the licence than the other. There is no ground in principle or justice for taxing one of those men higher than the other. They have received an equal privilege from the State, and ought to pay equal taxation in consideration of it.
§ I want to say a word about the change, and although not vital, I think it is very important, which the Government are seeking to make in this Sub-section. They are taking the phrase which I suggested in Committee—the annual licence value—and applying it to a thing to which it cannot properly be applied at all, and the change which they are proposing to make, I think, amounts in practice to this. They are proposing to substitute what they now call the annual licence value for annual compensation value. As the Bill now stands the basis of taxation is to be ascertained by ascertaining, first, that lump sum which would be actually received as compensation, and then by ascertaining the annual equivalent to it. That is to say, you proceed under the Kennedy judgment to take the trade in so many years, and the difference between the licensed and unlicensed value at so many years, and having arrived at these annual factors you multiply them by the appropriate number of years' purchase, and so arrive at a lump sum in compensation which the persons interested in the house will receive. Then, according to the original scheme of this Bill, you will proceed to find the annual equivalent of that lump sum. That obviously involves the ascertainment of some constant divisor—because it is clear you must have a divisor of some kind in each case—which can be set up and defended as being just in all cases. I ventured when we were in Committee to say that this new method of annualising, if I may use the word, would be found to be very full of difficulties. Well, I think it has been found to be impossible, and it is because it has been found 946 to be impossible to discover any general annual equivalent of these compensation lump sums that the Government have resorted to a change of front, which I should think in a Bill of this kind and at this period is without precedent in the Debates of this House. What do they propose to do? In order to get rid of the difficulty of dividing, they propose to be rid both of multiplication and division. They are going to ignore the question of years' purchase altogether. It appears to me that that avoids one difficulty by introducing another and very serious difficulty. No one, I take it, would suggest that £100 a year in Consols is property of the same value as £100 a year in some even more speculative security. The difference is the difference in the quality of the security. In ascertaining the compensation value of a public-house you have two elements. You have the annual factor, which represents the quantity, and you have years' purchase, which represents the quality of the security. Justice Kennedy, in his well-known judgment, referred to this, and pointed out how the number of years' purchase must differ in different cases, according to the neighbourhood, the quality of the trade, and other matters of that kind. If you take two public-houses, each of which has a profit of £200, it by no means follows that each has the same value. If one is in a sinking neighbourhood and the other in a growing neighbourhood, one may be entitled to many more years' purchase than the other. This the Government ignore. These two houses would represent very different values, and yet they would be taxed alike. The latest method of the Government is equal taxation of different values.
§ The truth is that this latest position of the Government is neither one thing nor the other. First of all we have our taxation based on annual value. Then the Government proposed to change it, and base it on compensation value. That is logical. But now they propose to do neither the one thing nor the other. They propose to base it on the factor which goes to the ascertainment of annual value. I venture to say that the Government in their latest change of front have avoided the difficulty by introducing another injustice. From the Prime Minister downwards we have always been told—and indeed it is the only logical justification for exceptional taxation this trade is called upon to bear—that the principle is that they should pay an exceptional tribute to the State for the exceptional privilege 947 which is given to them by the State. If that is the principle, it logically follows that the publican is entitled to say, "Let me be taxed by the State for that privilege in proportion to the opportunity given to me for making a profit." The hon. Member for Huddersfield (Mr. Sherwell) stated that licences had become more valuable because of the more rigorous way in which they were now looked after. If that is so, let the publican pay on his opportunity. Do not go beyond that and tax him upon the uses he makes of his experience and ability in the industry in which he is engaged.
§ Mr. JAMES HOPEI desire to second the Amendment. The Chancellor of the Duchy asked us earlier in the day to name any provision in this Bill which was not appropriate to a Finance Act. Surely this provision is not appropriate to it? This is a Sub-section in vacuo. If it is not, I challenge the right hon. Gentleman on the ground that he is proposing an Amendment which is out of Order because of increasing the charge. I cannot do that because it has no binding force. Surely it is a strange thing to say that a register is to be prepared which can have no effect upon the finance of the year, and which can have no effect at all until future legislation is introduced. The register is going to be a matter of great difficulty. I do not know the estimated cost of preparing it, but it must be a matter of considerable difficulty, because this is to be based upon certain factors of annual compensation value, and in individual cases these factors take a great deal of time and trouble to work out. Sometimes it takes months. You are going to do this in the case of 120,000 licences up and down the country. The proposed land valuation is expected to take four years, and I should be surprised if a satisfactory register of annual licence values can be made in much less time. I believe the cost will be infinitely greater than anything that has been calculated for the making of these two valuations. It really is almost whimsical that the Kennedy judgment, which was the subject of attacks for years as giving the licence holder much too much, should now, when the object is not compensation but taxation, be acclaimed and made the basis for future legislation. As to compensation value I think it is not clear that other than personal goodwill will not be brought in. By bringing this in the basis must be enlarged, and if the basis is enlarged, supposing the factor be the same 948 then the unfortunate publican will certainly pay more in future than he does now. Having that in mind, the proposed concessions very soon lose their significance, because undoubtedly when put on this new basis, supposing the factor is the same, the result must be a heavier burden. But will the factor be the same? That is a point on which we are absolutely in the dark. When the register comes into operation—and we must assume that there will be a future enactment to make it operative—is one-half of the annual value to be taken or not? That is a matter of considerable importance, because what those interested in the trade feel more than the tax is the uncertainty. Every year a new burden is put upon them. They are threatened in different ways, and if they are not to know what the basis of the taxation is, they will not really know whether they have touched bottom under the Bill of the present Government. I submit that if they are to be taken on half the new value under this new Subsection, instead of half the annual value, their state in the great majority of cases will be far worse than under the present annual value. If that is so, they ought to know it at once.
There is also one point as to goodwill. The effort of creating a successful business is not a proper subject of taxation. A fair analogy would be this. Take the case of two theatres. Both theatres are of the same capacity for receiving an audience and they have a similar situation, but the profit is different, because one is successfully conducted and the other is not successfully conducted. In the case of both theatres no higher duty should be charged on one of them simply because the management has enhanced the value. If that is a true analogy in the case of theatres I submit that it should be a true analogy in the case of licensed houses. Unless that point is cleared up the new valuation will be worse than the old. Then the application of this method to the whole of the United Kingdom is something grotesque. It depends on the Kennedy judgment, which depends on the Act of 1904, which Act applies only to England. How you are to ascertain for Scotland or Ireland what would be the annual licence value based on a state of things applying only to England passes my belief. I believe that even in England you have not got it quite uniform, because I am told that cases in Lancashire differ from the cases in Surrey, on which the Kennedy judgment was based.
949 Think of all the facts you will have to take into account to apply this Kennedy judgment to the case of Scotland and Ireland. I remember when the Opposition was being conducted against the Licensing Bill last year some ingenious person suggested that an Amendment should be moved applying the Bill to Scotland and Ireland, doubtless with the benevolent intention of giving Scotch and Irish Members an opportunity of proving their consistency by applying to their own country what they were so ready to apply to England. But when looked into this course was found to be quite impossible, because it was found that you would have to apply the 1904 Act, and all the definitions and all the readjustments that would have to be made would have been completely impossible, and, therefore, this amiable and benevolent idea did not fructify. But this is what the Government now proposes to do. Here you have to assume the hypothesis that the 1904 Act was applied in Scotland and Ireland, and that decisions were given under it similar to the Kennedy judgment. Until you are able to do that it is absolutely impossible to find a Scotch or Irish basis for the application of this provision. If the provision is a provision in vacuo as regards England, it is still more so as regards Scotland and Ireland. On all these grounds, of its injustice, its impracticability, and the fact that it is a provision which should find no place in a Finance Bill, I trust that this Amendment will pass.
§ Mr. HERBERT SAMUELI can understand hon. Members opposite opposing our general scheme of taxation on the ground that it is injurious to the interests of the trade, and imposes excessive burdens on their finances, but I confess, and I speak quite frankly, I think that hon. Members opposite are not justified, even from their own point of view, in opposing the proposition which is now before the House. This proposition is not intended to be in any sense a means of extracting from the trade any increase of revenue. It is solely intended to be a means for securing greater justice in the interests both of the trade and the community at large in the allocation of the burden on the trade among its different parts. It is admitted on all hands that rateable value is really not a satisfactory basis for taxation. It has to be used for this year, because it is the only basis that has existed in England really for centuries.
§ Mr. YOUNGEROff-licences.
§ Mr. HERBERT SAMUELIn the case of the off-licences the duties are comparatively low, but if you could arrive at a basis of licence value for the off-licences it would be far preferable. But the difficulty and complexity in seeing how much was due to the licence in a trade which was mainly in non-alcoholic commodities are so great that it is not practicable to take this step, and it is really unnecessary. But theoretically it would be better to have the value, not of the premises as premises, but the value of the licence as a licence to those premises; that is the value of the privilege conferred by the State enabling the holder to sell without competition from others. It is admitted that there are many public-houses which may have a rateable value—say, of £1,000 a year—which have not a trade in proportion to their rateable value, premises on a conspicuous site, in important thoroughfares, where they have to pay much for the land, and where the premises are expensive, but which, when the accounts come to be examined, are found to have a comparatively small liquor trade. It is not just to charge them merely on the basis of the value of the building. Now, when the Licence Duties are increased, the time has come for the State to make an effort to place the whole of these taxes on a fairer basis.
The hon. Member who has just spoken was incorrect in saying that this provision will not have immediate application. All hotels and restaurants will at once be taxed under this provision; houses over £500 a year throughout the three Kingdoms will at once have the option of being taxed upon this basis instead of upon the annual value. In other cases throughout the three Kingdoms it is intended that this Clause shall come into operation when the register is completed, and when the new basis has been authorised by Parliament in a subsequent Finance Bill. But, if we are never to authorise the register until the same moment that we are ready to impose the tax, then the register can never be made. The register must take some time to make, and, therefore, it would be impracticable to authorise the two operations over the whole country in the same Bill.
We desire that the register should be prepared as quickly as possible and that it should come into speedy operation. The hon. Member opposite asked whether after all it is really any concession to houses over £500 a year. The hon. Member for the Ayr Burghs (Mr. Younger) gave 951 us some very remarkable figures, showing that no reduction of the revenue could be anticipated from this cause.
§ Sir E. CARSONCan the right hon. Gentleman state how many houses will be affected?
§ Mr. HERBERT SAMUELThere were 1,957 houses over £500 a year in England, 60 in Scotland, and 6 in Ireland in 1907. In the first place, it has never been asserted or claimed that this will be a concession or advantage to all houses above £500 a year. I have stated again and again that it is not intended to have that effect. But where a house is of high rateable value, its licence value will be large, and the tax will be, and ought to be, large, and there is no reason why such a house should not pay the same tax in proportion to rateable value as the smaller house has to pay. This concession is intended to apply to the case of houses of high rateable value, but which do not do a proportionately large trade, and in their case it will be a very real concession. I do not see how that can be disputed.
§ Mr. YOUNGERWill the right hon. Gentleman mention a case?
§ Mr. HERBERT SAMUELI do not like to give a concrete case. I have examined the matter, and the hon. Member is well acquainted with the trade himself, and he knows that there are many houses in London—I have one or two instances in my own mind—where a remarkably small amount of business is done in proportion to the rateable value, and where the tax will be very much lower under this proposal than if it were charged on the rateable value, and had to pay £500 or £600 a year. The hon. Member for the Ayr Burghs is a very able exponent of the views of this trade, but when he challenges the estimates which have been very carefully formed by the Treasury and disputes the figures supplied to us by the Customs and Excise, he wanders a little bit outside the sphere which he so well adorns, and lays himself open to retort, which he seldom does when he is within his own domain. The hon. Member gave us certain figures.
The Bill, as introduced, said that all houses over £700 a year should have the right of being charged on the basis of one-half of their compensation value. The hon. Member takes the difference between £500 and £700, and says there is not sufficient 952 margin for the estimate of £300,000. The hon. Member has clearly forgotten that the amendments not only lowered the figure from £700 to £500, but also said that the charge on compensation value should be not one-half but one-third in the case not only of houses of £500 to £700, but houses above £700.
§ Mr. YOUNGERThat is not what your White Paper says. It says distinctly that the concession is in respect of public-houses and beer-houses of from £500 to £700 value. It is not I who am wrong, but your White Paper.
§ Mr. HERBERT SAMUELI have not got the White Paper with me, but if that is so I apologise to the hon. Member that he should have been misled. I am exceedingly sorry, and the hon. Member is not in the least to blame for what is really an error in the White Paper in regard to the effect of the Bill. I very much regret that a Paper of that kind, which did not pass through my hands, should have been printed with the error that has misled the hon. Gentleman. The change not only applies to houses of between £500 and £700, but it also means that the basis is reduced from half to one-third of the compensation value. The difference between half and one-third is one-sixth, but the difference to the revenue is much more than one-sixth—it is two-sixths. Take a case of a house that is worth £1,200 licence value. If it were charged half the licence value it would pay £600 to the Exchequer; if it is charged on the one-third basis the Exchequer will receive £400. That is a reduction of one-third to the revenue. The reduction of from one-half to one-third is a reduction of 33 per cent. in revenue. That applies not only to houses of from £500 to £700, but also to houses above £700. The houses above £700 are in their total worth considerably more than twice as much, compared with the houses between £500 and £700, and that accounts for the discrepancy in the hon. Member's figures. The estimate of £300,000, as I have said on every occasion, is a rough one, and does not pretend to be exact. Possibly it may turn out to be somewhat less than that; I do not think it is likely to be more. However, it is obviously impossible in these matters to arrive at a precise estimate, or even a close estimate, though the matter can be precisely calculated when the register has been made. The officials have prepared these estimates with great care and trouble, and they may be accepted by the House as fairly accurate. 953 Let me turn to the general purpose of this Clause, and I think it may be to the convenience of the House if I take this opportunity to explain the Amendment which I have on the Paper, and when it is reached I can then move it formally. The question that presents itself to the Government is how you are to ascertain what is really the value of a licence? We want to charge, not the value of the premises, but the value of the licence. How are we to test what that value is? Last year, under the Licensing Bill, we proposed that for the purpose of obtaining the licence value we should take the Schedule A value of the premises licensed and the Schedule A value of the premises unlicensed, and deduct one from the other, and get at the licence value. That was strongly opposed by the trade and by hon. Members opposite. They said that it would give a most inadequate basis, and that it would be most unjust. We have said that it makes no difference to the purpose of revenue which basis we take. If you declare that the Act of 1904 as now interpreted really does give the value of these licences we will accept your own basis. That is our position. We consider there is no inconsistency between our position now and then. We still consider that that is too high to represent the value of the licence.
§ Mr. HERBERT SAMUELThe words of the Act of 1904 are that the value for the purpose of compensation is the difference between the value of the licensed premises and the value of those premises if they were not licensed premises, and that is precisely what we want to arrive at. We say we want to arrive at that not only for the purpose of compensation, but also for the purpose of taxation. We declare, although on that basis it gives the valuation higher, that makes no difference for this purpose, for we have declared again and again that we do not propose to use this new assessment as a means for extracting from the trade as a whole any substantially greater sum than will be taken by the Licence Duties under the Finance Bill of this year. Of course, the new basis may cause variation as between one house and another. No doubt it will. It may cause variation between different localities. It may be so, and it is intended to have that effect. It is intended to charge higher the little liquor shop with a low valuation doing a large trade 954 which gets off too cheaply now, and it is intended to charge less than now on houses with commodious premises, doing perhaps a certain amount of restaurant business, and which at present will be somewhat highly taxed. We say that for our purpose it makes no difference whether you take as a whole the high valuation and put on a low rate, or whether you take a low valuation and put on a high rate.
10.0 P.M.
The Leader of the Opposition attacked the Government, hotly saying, "Although you admit this basis as unjust nevertheless you are going to commit the injustice." There is no injustice. Let me take as an analogy the local rates. Supposing that there was no question of grants in aid and that you want to get from a house of a certain value the sum of £20 for the local rates. It makes no difference whether you assess that house at £200 and charge at a rate of 2s. in the £ or whether you assess that house at £100 and charge at a rate of 4s. in the £, as it would yield £20 in either case. It makes no difference. So here also, although it is true you will have arrived at a basis somewhat higher than we should have put it if the Government does, as it is pledged to do, not impose upon that basis a rate higher than would yield a total sum substantially the same as is taken by the provisions of the Bill of this year, then I submit no injustice is being done, and that we may legitimately accept the basis of trade for the purpose of this Bill. With regard to the question whether it is just to take the same value for compensation and for taxation we submit, and on this matter I would like to have the attention of the hon. Member for Basingstoke (Mr. Clavell Salter), who gave us a most interesting and lucid argument on this subject, our position is this, that personal goodwill will be excluded from both compensation and taxation. It ought to be excluded under the provisions of the Act of 1904 from compensation, and in our view from taxation also. If a publican is a specially popular publican, and we have had the illustration of the prize-fighter and the professional footballer, and if he attracts particular custom to a house and gives the house additional value that is not compensated for under the Act of 1904. The Act of 1904 did not intend to compensate for that, and the Kennedy judgment does not include it for the purposes of compensation. We say that goodwill shall be excluded similarly, since we use the same words as the Act of 1904, from taxation, and quite rightly, too. 955 Personal goodwill of that kind should not be included. Local goodwill which becomes inherent in the premises is included in both. It is now taxed under the existing law, it is also compensated for under the Act of 1904, and it will be taxed now under our new provisions.
I will take the language of the hon. and learned Member, which seemed to me to be very excellent in defining the local goodwill as the annual value given to premises by the long continued conduct there of successful trade. I submit that is now taxed under the existing law. The hon. Member takes the instance of two houses similar in their building and in their situation. Take, as I have taken before, two houses in the market-place of some country town. One of them, the "George" Hotel, has been recognised for a long time past as the leading house in the town. The other, the "Rose and Crown," has an inferior position. As the hon. Member has said, the rent of the "George" will be higher than that of the "Rose and Crown." I do not know how he makes out with the rent higher that the assessment for local rating will be the same.
§ Mr. CLAVELL SALTEROne is the actual rent, and the other is the hypothetical rent merely for the structure.
§ Mr. HERBERT SAMUELNo matter how hypothetical he may be a tenant would certainly give a higher rent for the "George" than for the "Rose and Crown." I am advised that undoubtedly the assessment of the leading hotel of the town would be higher than the assessment of the inferior hotel, although from the point of view of bricks and mortar they may be identical.
§ Sir E. CARSONThat shows goodwill.
§ Mr. HERBERT SAMUELIt shows that a certain amount of local goodwill is taken into account for the purpose of existing Licence Duties. That has been the law of the land from time immemorial. When we assess our duties we make no difference. We take the existing law and practice. We say that while we do greater justice between one house and another we do not make any difference from the law and practice in respect to local goodwill. The hon. Member says that in his opinion what the State has to do is to charge a man for what he gets, that is the opportunity for trade. I wonder how he would do that. Does he really propose that every house be charged 956 precisely the same amount through out the country, or does he propose that every house in London should be charged the same amount, and that every house in the village should be charged the same amount. What is his ideal scheme under which Licence Duty would be charged? Would it be that £100 should be imposed on every house in London, no matter what its position, size, or trade, and, say, £10 on every house in the village, no matter what its position, size, and trade? If he rejects that, and there is the reductio ad absurdum of his argument, I do not see——
§ Mr. YOUNGERThat is exactly what they do in America.
§ Mr. HERBERT SAMUELIt is open to very grave objection. Unless he does that, which is equivalent to a Poll Tax on licensed houses, so to speak, I do not see how he can assess what he calls the opportunity which the State gives to the licence holder, except by taking, in the words of the Act of 1904, the difference between the value of the premises licensed and the value of the premises unlicensed. How is that to be arrived at under the Act of 1904 and under our present proposals? Where there is a rack rent it can be easily ascertained. The Kennedy judgment does not apply to cases of rack rent; therefore it necessarily does not have any application to Scotland or Ireland. In those cases you take the rack rent and assess the value of the premises without a licence, and the difference between the two is the licence value for the purposes of the Act of 1904 and for our purposes also. If it is not a rack-rented house but a tied house, the rent is no real measure of the licence value. The rent may be little more than nominal, and the rent paid by the publican does not represent the licence value. That was realised in the Kennedy judgment, and by the Inland Revenue before the Kennedy judgment. The Kennedy judgment, therefore, said that in the case of a tied house you have to take into account three elements. You take, first, the tied or nominal rent, and secondly, the value of the house to the brewer for the trade he is able to do there; you capitalise those two amounts, and take, thirdly, the value of the house as bricks and mortar, as a shop for other purposes, and deduct that. The result represents the compensation value, taking a proper number of years' purchase. Having capitalised this sum, you have, according to the Act of 1904, to add an addi- 957 tional sum in respect of depreciation of fixtures. If a man has to leave a house because the licence is taken away, the value of the fixtures is depreciated, and it is quite right that he should be compensated for them. We have been anxious to keep as closely as possible to the Act of 1904, simply because that is the basis accepted by the trade as representing fairly the value of their licences for compensation purposes, and we claim that the same value shall be taken for the purposes of taxation. But where you have to impose a tax you must have an annual basis on which to impose it, whereas when you pay compensation you pay it in a lump sum. Therefore it is necessary to convert that lump sum of compensation value under the Act of 1904 and obtain an equivalent for it in annual value. In the Bill as introduced we proposed that, having got this capital sum for the purposes of compensation, we should convert it into an annual sum according to rules to be laid down by the Treasury. That could have been done; it would not have been impossible, as hon. Members said, but it would have been very complicated.
§ Mr. AUSTEN CHAMBERLAINThat is the first time it has been admitted. It was not admitted in the Committee stage.
§ Mr. HERBERT SAMUELI think it was. I said in the Committee stage that it would be necessary to take into consideration varying circumstances in varying cases, and that you could not have, in my opinion, a single divisor—taking, say, the compensation value divided by 12. You would have to take into account a different number of years' purchase for public-houses, hotels, rack-rented premises, and others; and perhaps you would have to have a different basis of calculation for Scotland and Ireland. But while this could have been done—and an outline of the proposals has been prepared—it was found very complicated. As hon. Members opposite have claimed, other elements came in in compensation which ought not to come in in cases of annual value. Where there is a dwindling neighbourhood the number of years' purchase may be low. That ought not to make a difference in the taxation levied on the annual value. Then there is a rather exceptional case which would have had to be provided for, namely, that of a man against whom there was a conviction for illegal sale. That would at once have depreciated the compensation value and thereby lowered the annual 958 value for the purposes of taxation. As soon as a man had been convicted he could have gone to the Inland Revenue and said, "Put me down at a lower sum in the register," and at once he would have got off with a lower Licence Duty. Therefore it would have been necessary to provide in the rules for a case such as that. All these elements would have made it a very complicated matter to convert the lump sum into annual value. Hence, for the sake of simplicity, and in order to meet the views of hon. Members opposite, we now propose an alternative, which I think is admitted on all hands to be really preferable. Instead of taking the lump sum for compensation purposes and decapitalising it, we take the annual elements which go to make up that lump sum without capitalising and decapitalising. Where a rack rent can be ascertained, as in Scotland, you might take the rack rent, deduct from it the annual value of the premises for the purposes of a shop other than for the sale of liquor, and the difference between the two would be the licence value for the purposes of this Bill. In the case of hotels you would have to take into account the sales, for it is very difficult to estimate the rack rent. It may be said that it is impossible to arrive at the value of the premises licensed and unlicensed in the case of hotels. If it is impossible in the case of hotels in actual existence, how infinitely more impossible it would be under the Act of 1904, where you have to arrive at that very thing in the case of a new hotel which is going to be opened, in order to ascertain how much monopoly value should be paid to the public in respect of that hotel. In the Act of 1904 the very same words are used. The justices have to arrive, in the case of hotels and other newly licensed premises, at the amount of the difference between the value which the premises will bear as licensed and the value of the same premises if they were not licensed; and if it can be done in the case of a new hotel it can be done much more easily by skilled valuers in the case of a hotel actually working. In other cases, where you have an ordinary tied house, or a free house in a district in which the tied house system is the prevailing system, you have to take the basis of the Kennedy judgment. There you would take, as Mr. Justice Kennedy took, first, the nominal tied rent; secondly, the value of the house to the brewer for the purpose of his profit; add those together, and deduct the annual value of the premises as they would be for the purposes of a shop other than for the sale of liquor. This is a very 959 complicated and technical subject; I have done my best to make it clear, and I trust that I have succeeded in doing so. However that may be, I have been perfectly frank, and have stated quite clearly what is the whole view of the Government on the subject.
The Amendment which I am about to move will have, in our view, practically the same result, though it differs in one small particular, as in the Bill as originally introduced you would take the compensation value and get the annual equivalent. Our proposal will still be the annual equivalent of the compensation value, but we get it direct instead of capitalising first—except, as I say, in one particular. The depreciation of fixtures, which is included in the compensation value under the Act of 1904, will not be included here. That is a distinct improvement. We recognised from the beginning that it was in principle wrong to tax a man upon the sum which would represent the depreciation of his fixtures, suppose his licence were taken away. But the error would be so small that we thought it would not be worth while making a distinction. The depreciation of the fixtures does not represent a large sum in any case. To get at its annual equivalent you have to divide it, perhaps, by 15, which reduces it to very little. A tax on that would have been one-third on public-houses and one-fourth on hotels. That would reduce the sum to an amount so minute that it could be regarded in the light of the principle, de minimis non curat lex, and it was not thought necessary to specially provide for it. I do think we have improved our proposal by eliminating the depreciation of fixtures, which is a matter quite right to be compensated, but not right to be taxed. With the exception of that slight alleviation and improvement, which is affected by our change, our proposals will make no difference in money compared with the proposals which were already in the Bill. There is a consequential change which we make in regard to compensation value. We use the term "annual licence value"—which is more applicable in the case of Scotland than Ireland, where the Act of 1894 does not apply—and which represents more closely the subject which is the real basis of the tax.
There is only one other small point to which I need refer, which was raised by the Mover of this Amendment, who suggested that this Clause was imperfect, because it would be one set of Commissioners 960 that would make the original register, and another set of Commissioners who would correct it. If the Clause is carefully read I think that will be found not to be so, and that it will be the same Commissioners of Inland Revenue who will have any correction of the entry in the register to make as well as any original entry. Let me end as I began, by saying that in the view of the Government, while the trade naturally may be expected to oppose the increased burdens thrown upon them by this Finance Bill, we really do believe that this proposal is a fairer basis of taxation, which in the long run will be an advantage and privilege of the trade, rather than a burden upon it.
§ Sir E. CARSONI do not think anybody will in the least complain of the manner in which the Chancellor of the Duchy has treated the Amendment of my hon. and learned Friend behind me. He has dealt with it at great length. He has admitted the great complication which now arises in reference to the subject. I venture to suggest to the House that now when we are going into the seventh month of the consideration of this Bill that we had a speech which would have been a worthy and very able speech on the second reading of a Valuation Bill in reference to the assessment of public houses. I do really ask the House to consider the way in which this Bill is being conducted. When this Clause was before the Committee, I think in the month of September, I took considerable interest in it. I said that the system which the Government were trying to set up was an impossible one. I said it was so complicated that it would not be worked out by regulations. I challenged over and over again the Members of the Government to give me any concrete cases—I did not care what their hypotheses were with regard to the figures, which would show us what we were attempting to work out. All we received from time to time was the usual ridicule that really we were asking matters which were so simple or easy that it was not necessary for Parliament to go into them at all, that "that will be all done by the simple regulations of the Commissioners, and you must trust them."
Now, in the seventh month of our consideration, the Chancellor of the Duchy comes down here, and what does he tell us in an oration which does him great credit for the care he has bestowed upon it and the lucidity with which he has explained these matters. He says we find we really 961 cannot now stand by all we have been saying when this was before the Committee. The matter is so complicated—I took down his words—that we find that even the Commissioners and ourselves are unable to frame regulations by which we can carry out our original proposal.
§ Mr. HERBERT SAMUELI said precisely the opposite. I said undoubtedly it could be done, that regulations could be framed, but they would be very complicated and that it would be a simpler course to proceed upon the lines upon which we are now proceeding.
§ Sir E. CARSONAt all events, he found out after the matter had been fought out and threshed out, as all these proposals of the Government are, that while he told the Committee that the real way to do it was by regulation, we now find it is so complex that we are agreed that Parliament should deal with it. Now look at what the House is brought to, and it really does show what Parliamentary procedure is in certain circumstances. The Chancellor of the Duchy or whoever was dealing with the Bill at the moment, said this was all quite simple and could be done by regulation, and the men behind him cheered that statement and followed him into the Lobby. Now when he says, We find the regulations will be so complex that we really rather agree with the Opposition, Members behind him cheer him, and they are prepared equally to follow him into the Lobby. I really believe that if the right hon. Gentleman or the Members of the Government were to say black is white hon. Members behind them would say: "It certainly is," and if they were to say "It is not," they would certainly say "It is not." But, after ail, what is all this complicated procedure being set up for? Is it being set up for revenue? It is not pretended that it is, because the admission of the Chancellor of the Duchy is that the provisions of this complicated Section which have been altered and realtered, sworn to and resworn to in different forms, are to have no application at all until another Parliament has fully considered them.
§ Mr. HERBERT SAMUELNo, not the whole of them.
§ Sir EDWARD CARSONI said the greater part of them, I will now go into how many. How many valuations are you to have under this complicated form? About 120,000. I will take it on a basis, which is, I believe, a low estimate, 120,000 962 valuation, and the Section is to apply to about 2,000. What will these 120,000 valuations cost? Put them at £10 per valuation, which is the very lowest estimate, and I will tell the House why. The owner of the house will have his expenses just as well as the Government, and if you put down the expenses both of the Government and the publican—it may be that you do not care about the publican, but this will be an expense to him all the same, and it will amount to an additional tax—therefore putting it at £10 in large and small cases, it is a very low valuation. Look what it means? It means putting £1,200,000 on to the taxpayers of this country for what purpose? In order that hereafter some Parliament, as regards all but 2,000 of these valuations, may deal with this matter in some way that the Chancellor of the Duchy or anybody else cannot indicate. I venture to say that at this stage of our proceedings to come down here and tell us that the only effect of your proposal as regards 118,000 out of 120,000 valuations is that you are going to put on a charge of £1,200,000 and to get no revenue for the year out of it is a monstrous proposal to make to the House at this stage of the Session in regard to a matter which the Chancellor of the Duchy himself admits requires the very closest attention, and which he found the greatest difficult in dealing with and explaining to the House.
What does the right hon. Gentleman say as regards the effects of it? He says that the alteration brings it out at too high a value. Is that his argument? What right have the Government to adopt a valuation with a view to Parliament in future legislating with regard to it upon a basis which admittedly will be too high? What is the meaning of it? How does the Chancellor of the Duchy deal with his own conclusion? He says, "Oh! that makes no difference." Why? "Because," he says, "we assure you that having got out the valuation we will hereafter adjust our legislation in such a way that we will only take the same amount out of the trade as we are taking at the present moment." That is legislation by promise. You are simply setting up a basis for the purpose of knocking it down again, and you are doing that in relation to provisions so complicated that the right hon. Gentleman himself has said that they had to be altered and realtered in regard to a matter which is not going to bring in a single sixpence during the present year. This is unparalleled in the history of any fiscal Bill that has ever been brought before the 963 House. The right hon. Gentleman dwelt upon the merits of his proposal in adapting the procedure of the Act of 1904 for the purpose of taxation. I wish those who are in the House now had heard the speech of the hon. Member for Basingstoke (Mr. Salter), because a more able, concise, or clearer argument has seldom been put before this House, and so far as I am concerned I do not profess to be able to add anything to it or make the matter clearer.
What we want to know and have argued is this: What on earth has the question of an assessment for compensation to do with an assessment for taxation? The Chancellor of the Duchy seems to think the case is conclusive when he takes up the Act of 1904 and reads out the words, "The value of compensation shall be so-and-so." He says the Act of 1904 says that, and therefore we are justified in making it the basis of the value for taxation. What on earth is the relationship between the two? In the one case you are compensating a man for taking away a business he has conducted, or, at least, the value attaching to a licence which he, by his efforts, has greatly increased. The moment you adopt that as a basis for taxation you are taxing not merely what the State has given and what you claim to tax, but you are taxing in addition what the man's own hard work and energy have added to the value of the licence, and the whole argument on which you base the justice of this proposal entirely falls away, because you are not basing your taxation upon anything the State has given, but upon something the man has himself created. No reason has been or can be given as to why this should be selected as the method of taxation. You might as well say you will adopt the compensation given where a railway company or anything else under the Land Clauses Act takes away property from a licence holder, and say that because he was paid in that case certain moneys for the taking away of his property, therefore you ought to assess the taxation upon the same basis. Anything more ridiculous and absurd it is impossible to conceive. You are applying to the subject-matter of taxation a matter entirely different, and which has no analogy, and you are setting up a purely artificial standard, which is entirely unsuitable and inapplicable. The real and proper way to treat this matter is for us to drop this Subsection altogether. The Chancellor of the Duchy says, "You will find this scale will work great benefit to the people you re- 964 present." We hear that upon every occasion. We are always told, "You are nothing but a pack of fools; you do not really know what good things are given to you." That was exactly the argument used by the Solicitor-General on the Last Amendment. He said, "We are conferring much more benefit upon the trade than you imagine." Now we are told that if we will only trust them the one thing they have at heart is to work this matter out to the great benefit of the licensed trade. Probably we are wrong, but we consider ourselves able to form some judgment upon these matters, and we certainly do not trust the Government, having regard to their previous utterances. None of us forget the speeches of the Lord Advocate—his swingeing duties; which were to reduce licences, as he said, far more than the Bill of last year. Do the Government ask us not to believe the Lord Advocate? I venture to say that one of the most remarkable facts connected with this Sub-section is this—and the same applies to other sub-sections in the Bill—while we are asked to deal with this as a fiscal Bill we can strike out the whole of these complicated matters and not make one single shilling difference to the revenue. If you call that a fiscal proposal, I reply that it is an abuse of the term.
§ Mr. YOUNGERI thank the right hon. Gentleman the Chancellor of the Duchy of Lancaster for having in his reply dealt with the figures I mentioned this afternoon. I also thank him for having exonerated me from any blame for having been misled by the White Taper. I do not on my part desire to impute any blame to the authors of that Paper. I know that lately the Treasury officials have practically been worked to death, and I am not at all surprised that Papers of this kind are not perhaps as efficiently revised as they might be. I am only sorry I gave imperfect figures when criticising the loss of £300,000 which the Chancellor of the Exchequer says he will make on the concessions granted to larger houses. The speech of the right hon. Gentleman was extremely interesting and very lucid, but the real question is, Have the Government arrived at what may be regarded as a reasonable solution in their alternative to the present system of rating? I really felt that the right hon. Gentleman's speech was, from beginning to end, an elaborate apology for the failure of his advisers to translate into annual value the compensation value which was 965 originally proposed to be substituted for rateable value. In the Committee stage the right hon. Gentleman was told over and over again that it was an impossible task. I do not think that even now he has got rid of the difficulty which embarrasses us. The right hon. and learned Gentleman the Member for Dublin University very truly said that the basis of compensation was in no sense a basis upon which you should base your taxation, largely because it includes elements which have no bearing whatever for the purposes of taxation. And when you consider what these elements are you are bound to admit that while the right hon. Gentleman accepts the Kennedy judgment—which takes the difference between the licensed and unlicensed value of the premises and the profits of the business, and uses these factors in order to arrive at the equivalent of the annual licence value—he is absolutely wrong in doing so, as he eliminates the very important consideration of the number of years' purchase. That is an unequal and thoroughly imperfect basis that cannot be fair. Did I hear some hon. Member say, "Why not?" I should have thought it was obvious. I should have thought, if you take a different multiplicand in two cases in regard to two houses on opposite sides of the street you will not get a similar basis. You will not get a similar basis if you eliminate the multiplicand.
§ Mr. LEIF JONESI do not see that it is unfair for annual purposes which is the purpose we have in view.
§ Mr. YOUNGERThat is another matter. You are basing this on the Kennedy judgment, but you have got to take into consideration what the Kennedy judgment means, and what it does. I am not discussing annual value. If you did that, and carry it out to capital value, you get all the elements which Lord Justice Kennedy said you ought to take into consideration, but if you stop there, and do not deal with the multiplicand you do not introduce all these elements which he said you ought to introduce. You are introducing into this new scale an uncertain factor which is to be made the basis of a generally applied rate which cannot be fair. The hon. Gentleman shakes his head, and it is a very difficult question, I know, but I do not see that there is any answer to that argument. The question of goodwill arises, and the right hon. Gentleman again stated that, in the decision of Lord Justice 966 Kennedy there is no personal goodwill included in this valuation. That, I agree, is Lord Justice Kennedy's dictum, but the application of that dictum is a very different thing. He said, "You must not take these personal considerations within your purview when you are dealing with this matter? That is perfectly true, but what did they go on to do in practice. They took the barrels of beer and the gallons of whisky which a man sold, and they based upon that turnover their valuation of the profits and of capital value. Does anyone suggest to me that the fact that the publican is a noted football player does not enter into the number of barrels of beer which he sells. Of course it does, every bit of it is in the trade for which the man is compensated, and although the dictum said it was not to be included every penny of it is included just as much as it is here. That cannot be right as a permanent basis for taxation, and while I am perfectly willing to admit that the Government intend this to be a concession, and I am willing to agree with them that if they could get a proper basis of annual licence value it would be a concession and it would be a proper thing to do, they do not get it. They are going to apply it to Scotland according to the Chancellor of the Duchy, but I cannot understand how under this Clause it is possible to translate the Kennedy judgment in Scotland into mere difference between two rental values, while in England we know it means profit value as well. I cannot understand it. It is a mystery to me. You say the Kennedy judgment is to be applied, but you are only applying one of the factors and ignoring the other. The Solicitor-General shakes his head, but the Chancellor of the Duchy said that in Scotland, where the basis was entirely different, the difference between the two rentals would be taken and nothing else. What I say is this, if you take the difference between the two rentals in Scotland, and that is the basis of your annual licensing value, it is totally different to that which you take in England, where you have not only that value, but a profit value as well.
§ Mr. HERBERT SAMUELThe difference is not between Scotland and England, but between a country where there are no tied houses and a country where there are.
§ Mr. YOUNGERPrecisely, and that is why I have always said you cannot apply the Kennedy case to Scotland.
§ Mr. HERBERT SAMUELI do not say we can.
§ Mr. YOUNGERBut what are you going to apply? What are we to have in Scotland? You do not tell us at all. There is no single word of the Clause which gives the Scotch publican any idea whatever of what he has to pay. There is not a single word in the Clause to show that the difference between the two values is the value to be taxed.
§ Mr. HERBERT SAMUELYes, the whole Clause.
§ Mr. YOUNGERAs interpreted by Mr. Justice Kennedy.
§ Mr. HERBERT SAMUELOur Bill does not mention Mr. Justice Kennedy's name. It imports the words of the Act of 1904, which speaks of the difference between the value of the premises licensed and the premises unlicensed.
§ Mr. YOUNGERIf we admit that the difference between the two values is to be the annual licence value, I do not see how you can apply a rate to that which will be the same as the English rate without having inequality. Moreover, the licence value is somewhat less than the difference
§ between the two values in Scotland, because the Schedule A valuation of licensed premises in Scotland unquestionably contains elements which are no part, and ought to be no part of the Schedule A valuation for this purpose in this respect, that it includes a certain amount for tenants' goodwill. It cannot be got rid of. The principles and manner in which the Somerset House officials value licensed premises in Scotland unquestionably includes part of the goodwill, and that goodwill ought not to be rated at all. Believing this is not the concession which the right hon. Gentleman believes, I still think there will not be anything like a loss of £300,000. I still think the Government is groping with this question and has found nothing like an adequate or fair solution of it. It is past praying for now. It has to stand, I suppose, as it is, but I believe it will be found that this valuation is not one which for the first year will be so largely taken advantage of as the right hon. Gentleman thinks.
§ Question put, "That the words proposed to be left out to the word 'as' ['a register as respects'], stand part of the Bill."
§ The House divided: Ayes, 184; Noes, 72.
969| Division No. 844.] | AYES. | [10.50 p.m. |
| Abraham, William (Rhondda) | Clough, William | Harmsworth, Cecil B. (Worcester) |
| Acland, Francis Dyke | Cobbold, Felix Thornley | Harmsworth, R. L. (Caithness-shire) |
| Agnew, George William | Collins, Stephen (Lambeth) | Haslam, James (Derbyshire) |
| Ainsworth, John Stirling | Collins, Sir Wm. J. (St. Pancras, W.) | Haslam, Lewis (Monmouth) |
| Allen, A. Acland (Christchurch) | Compton-Rickett, Sir J. | Haworth, Arthur A. |
| Allen, Charles P. (Stroud) | Corbett, A. Cameron (Glasgow) | Hazel, Dr. A. E. W. |
| Ashton, Thomas Gair | Corbett, C. H. (Sussex, E. Grinstead) | Hedges, A. Paget |
| Astbury, John Meir | Cornwall, Sir Edwin A. | Helme, Norval Watson |
| Atherley-Jones, L. | Cotton, Sir H. J. S. | Hemmerde, Edward George |
| Balfour, Robert (Lanark) | Craig, Herbert J. (Tynemouth) | Henderson, Arthur (Durham) |
| Baring, Godfrey (Isle of Wight) | Crosfield, A. H. | Henderson, J. McD. (Aberdeen, W.) |
| Barker, Sir John | Crossley, William J. | Henry, Charles S. |
| Barran, Rowland Hirst | Davies, David (Montgomery Co.) | Herbert, T. Arnold (Wycombe) |
| Beale, W. P. | Davies, Ellis William (Eifion) | Higham, John Sharp |
| Beauchamp, E. | Dickinson, W. H. (St. Pancras, N.) | Hobart, Sir Robert |
| Beck, A. Cecil | Duncan, J. Hastings (York, Otley) | Hobhouse, Rt. Hon. Charles E. H. |
| Bell, Richard | Dunne, Major E. Martin (Walsall) | Hodge, John |
| Benn, Sir J. Williams (Devonport) | Erskine, David C. | Holland, Sir William Henry |
| Benn, W. (Tower Hamlets, St. Geo.) | Esslemont, George Birnie | Holt, Richard Durning |
| Bennett, E. N. | Evans, Sir S. T. | Hooper, A. G. |
| Berridge, T. H. D. | Everett, R. Lacey | Horniman, Emslie John |
| Black, Arthur W. | Ferens, T. R. | Howard, Hon. Geoffrey |
| Boulton, A. C. F. | Fiennes, Hon. Eustace | Hudson, Walter |
| Bowerman, C. W. | Findlay, Alexander | Hyde, Clarendon G. |
| Brace, William | Foster, Rt. Hon. Sir Walter | Illingworth, Percy H. |
| Brigg, John | Glendinning, R. G. | Isaacs, Rufus Daniel |
| Brodic, H. C. | Glover, Thomas | Johnson, John (Gateshead) |
| Brooke, Stopford | Goddard, Sir Daniel Ford | Jones, Leif (Appleby) |
| Brunner, J. F. L. (Lancs., Leigh) | Gooch, George Peabody (Bath) | Jones, William (Carnarvonshire) |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Greenwood, G. (Peterborough) | Jowett, F. W. |
| Bryce, J. Annan | Greenwood, Hamar (York) | King, Alfred John (Knutsford) |
| Burns, Rt. Hon. John | Gulland, John W. | Laidlaw, Robert |
| Buxton, Rt. Hon. Sydney Charles | Hall, Frederick | Lamb, Ernest H. (Rochester) |
| Byles, William Pollard | Harcourt, Rt. Hon. L. (Rossendale) | Lambert, George |
| Channing, Sir Francis Allston | Harcourt, Robert V. (Montrose) | Lamont, Norman |
| Cheetham, John Frederick | Hardy, George A. (Suffolk) | Layland-Barratt, Sir Francis |
| Lehmann, R. C. | Price, C. E. (Edinburgh, Central) | Taylor, John W. (Durham) |
| Lever, A. Levy (Essex, Harwich) | Radford, G. H. | Taylor, Theodore C. (Radcliffe) |
| Levy, Sir Maurice | Rea, Walter Russell (Scarborough) | Thomas, Abel (Carmarthen, E.) |
| Lewis, John Herbert | Rees, J. D. | Toulmin, George |
| Lupton, Arnold | Rendall, Athelstan | Verney, F. W. |
| Lynch, H. B. | Richards, Thomas (W. Monmouth) | Villiers, Ernest Amherst |
| Macdonald, J. M. (Falkirk Burghs) | Richards, T. F. (Wolverhampton, W.) | Vivian, Henry |
| Maclean, Donald | Roberts, Charles H. (Lincoln) | Wadsworth, J. |
| Macnamara, Dr. Thomas J. | Roberts, Sir J. H. (Denbighshire) | Walsh, Stephen |
| M'Laren, H. D. (Stafford, W.) | Robertson, Sir G. Scott (Bradford) | Wason, John Cathcart (Orkney) |
| Maddison, Frederick | Robinson, S. | Waterlow, D. S. |
| Marks, G. Croydon (Launceston) | Robson, Sir William Snowdon | White, Sir George (Norfolk) |
| Marnham, F. J. | Roch, Walter F. (Pembroke) | White, J. Dundas (Dumbartonshire) |
| Mason, A. E. W. (Coventry) | Roe, Sir Thomas | White, Sir Luke (York, E. R.) |
| Massie, J. | Rogers, F. E. Newman | Whitehead, Rowland |
| Micklem, Nathaniel | Rose, Sir Charles Day | Wilkie, Alexander |
| Molteno, Percy Alport | Rutherford, V. H. (Brentford) | Williamson, Sir A. |
| Morton, Alpheus Cleophas | Samuel, Rt. Hon. H. L. (Cleveland) | Wills, Arthur Walters |
| Murray, Capt. Hon. A. C. (Kincard.) | Scott, A. H. (Ashton-under-Lyne) | Wilson, J. W. (Worcestershire, N.) |
| Myer, Horatio | Seely, Colonel | Wilson, P. W. (St. Pancras, S.) |
| Newnes, F. (Notts, Bassetlaw) | Shackleton, David James | Wilson, W. T. (Westhoughton) |
| Nicholls, George | Sherwell, Arthur James | Wood, T. M'Kinnon |
| Nuttall, Harry | Simon, John Allsebrook | |
| Parker, James (Halifax) | Snowden, P. | |
| Philipps, Owen C. (Pembroke) | Stanley, Hon. A. Lyulph (Cheshire) | TELLERS FOR THE AYES.—Captain Norton and Sir E. Strachey. |
| Pollard, Dr. G. H. | Summerbell, T. | |
| Ponsonby, Arthur A. W. H. | Sutherland, J. E. | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex, F. | Gibbs, G. A. (Bristol, West) | Meysey-Thompson, E. C. |
| Arkwright, John Stanhope | Gooch, Henry Cubitt (Peckham) | Newdegate, F. A. |
| Balcarres, Lord | Goulding, Edward Alfred | Nicholson, William G. (Petersfield) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gretton, John | Nield, Herbert |
| Banbury, Sir Frederick George | Guinness, Hon. R. (Haggerston) | Oddy, John James |
| Banner, John S. Harmood- | Hamilton, Marquess of | Peel, Hon. W. R. W. |
| Barrie, H. T. (Londonderry, N.) | Hardy, Laurence (Kent, Ashford) | Remnant, James Farquharson |
| Beckett, Hon. Gervase | Harrison Broadley, H. B. | Roberts, S. (Sheffield, Ecclesall) |
| Bignold, Sir Arthur | Hay, Hon. Claude George | Ronaldshay, Earl of |
| Bridgeman, W. Clive | Helmsley, Viscount | Rutherford, John (Lancashire) |
| Carlile, E. Hildred | Hill, Sir Clement | Rutherford, Watson (Liverpool) |
| Carson, Rt. Hon. Sir Edward H. | Hope, James Fitzalan (Sheffield) | Scott, Sir S. (Marylebone, W.) |
| Castlereagh, Viscount | Hunt, Rowland | Stanier, Beville |
| Cecil, Evelyn (Aston Manor) | Joynson-Hicks, William | Starkey, John R. |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Kerry, Earl of | Thornton, Percy M. |
| Clive, Percy Archer | Kimber, Sir Henry | Valentia, Viscount |
| Coates, Major E. F. (Lewisham) | King, Sir Henry Seymour (Hull) | Walrond, Hon. Lionel |
| Craig, Charles Curtis (Antrim, S.) | Lane-Fox, G. R. | Warde, Col. C. E. (Kent, Mid) |
| Craik, Sir Henry | Lee, Arthur H. (Hants, Fareham) | Wortley, Rt. Hon. C. B. Stuart- |
| Douglas, Rt. Hon. A. Akers | Lockwood, Rt. Hon. Lt-Col. A. R. | Wyndham, Rt. Hon. George |
| Faber, Capt. W. V. (Hants, W.) | Long, Col. Charles W. (Evesham) | Younger, George |
| Fell, Arthur | Long, Rt. Hon. Walter (Dublin, S.) | |
| Fletcher, J. S. | Lonsdale, John Brownlee | TELLERS FOR THE NOES.—Mr. Clavell Salter and Mr. G. D. Faber. |
| Forster, Henry William | Lowe, Sir Francis William | |
| Foster, P. S. | Mason, James F. (Windsor) | |
| Gardner, Ernest |
§ Mr. HERBERT SAMUEL moved, in Sub-section (2), to leave out from the word "register" ["to keep corrected a register"] all the words to the word "respectively" ["shall be certified respectively"], and to insert instead thereof the words "showing the annual licence value of all fully-licensed premises and all beer-houses.
§ "For the purpose of this provision the annual licence value shall be taken to be the amount by which the annual value of the premises as licensed premises exceeds the value which the premises would bear if they were not licensed premises, those values being calculated on the same basis as that on which the amount to be paid as compensation under Section two of the 970 Licensing Act, 1904, is calculated in default of agreement and approval in cases where compensation is payable under that Act, but there shall not be included in the value of the premises as licensed premises any amount on account of depreciation of trade fixtures.
§ "The annual licence value shall be fixed and certified."
§ Question, "That the words proposed to be left out stand part of the Bill," put, and negatived.
§ Mr. GRETTON moved to leave out all the words of the proposed Amendment from the word "as" ["calculated on the same basis as"] to the end of the paragraph concluding with the word "fix- 971 tures," and to insert instead thereof the words "on the valuation of an estate for the purpose of the Estate Duty."
§ The adoption of the Amendment would go down to what is really the basis of the principle of the Act of 1904, that the valuation of the licensed premises should be on the same basis as the valuation for the purpose of the Estate Duty. That was the intention of the Act of 1904, and I think the words of my Amendment to the proposed Amendment would conduce to greater simplicity than the words submitted by the Government.
§ Mr. JAMES HOPEI beg to second the Amendment to the proposed Amendment, which I think offers a better means of solving the difficulty.
§ Mr. HERBERT SAMUELThis is not an Amendment the Government could accept. It is essential that it should be known what should be the method and the principles on which these valuations should be arrived at. The Act of 1904 in this country is well understood, and the principles of valuation have been accepted, and have been working now for five years. It is very advisable to stick as closely as we can to them. The hon. Member's words are open to this objection; he suggests that the same method as for the purposes of Estate Duty shall be applied here, but although it is true it is mentioned in the Acts of 1902 and 1904, it rarely ever occurs that the Board of Inland Revenue have to assess public-houses for Estate Duty. When the public-house belongs to a brewery then the valuation of the stocks
§ is taken to cover the valuation, and of the premises that belong to that particular company. It practically never happens that a man dies who owns the premises and is the publican who owns the licence. Consequently, I am afraid those words would not give any special indication either to the brewer or to the Inland Revenue or satisfy parties interested. As for securing greater simplicity, in my view this would introduce fog into what is now limpid lucidity.
§ Mr. GRETTONI do not propose to proceed with this Amendment. His objections to the difficulty of valuing licensed premises for the purposes of Estate Duty will not hold water. The principles of the Kennedy judgment were not applied to the Metropolis at all, and does not apply to districts in the North.
§ Amendment to proposed Amendment, by leave, withdrawn.
§ Mr. CLAVELL SALTER moved, in the proposed Amendment, after the word "Act" ["compensation is payable under that Act"], to insert the words "except that in the calculation of the annual licence value for the purposes of this Act the value of the goodwill shall not be included."
§ This Amendment raises separately the question of goodwill, and I think we ought to divide upon it.
§ Mr. G. D. FABER seconded the Amendment to the proposed Amendment.
§ Question put, "That those words be there inserted."
§ The House divided: Ayes, 69; Noes, 175.
973| Division No. 845.] | AYES. | [11.12 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex, F. | Gibbs, G. A. (Bristol, West) | Newdegate, F. A. |
| Arkwright, John Stanhope | Gooch, Henry Cubitt (Peckham) | Nicholson, Wm. G. (Petersfield) |
| Balcarres, Lord | Guinness, Hon. R. (Haggerston) | Oddy, John James |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Guinness, Hon. W. E. (B. S. Edmunds) | Peel, Hon. W. R. W. |
| Banbury, Sir Frederick George | Hamilton, Marquess of | Remnant, James Farquharson |
| Banner, John S. Harmood- | Hardy, Laurence (Kent, Ashford) | Roberts, S. (Sheffield, Ecclesall) |
| Barrie, H. T. (Londonderry, N.) | Harrison-Broadley, H. B. | Ronaldshay, Earl of |
| Beckett, Hon. Gervase | Hay, Hon. Claude George | Rutherford, John (Lancashire) |
| Bridgeman, W. Clive | Helmsley, Viscount | Rutherford, Watson (Liverpool) |
| Carlile, E. Hildred | Hill, Sir Clement | Scott, Sir S. (Marylebone, W.) |
| Carson, Rt. Hon. Sir Edward H. | Hope, James Fitzalan (Sheffield) | Stanier, Beville |
| Castlereagh, Viscount | Hunt, Rowland | Starkey, John R. |
| Cecil, Evelyn (Aston Manor) | Joynson-Hicks, William | Talbot, Lord E. (Chichester) |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Kerry, Earl of | Talbot, Rt. Hon. J. G. (Oxford Univ.) |
| Clive, Percy Archer | King, Sir Henry Seymour (Hull) | Thornton, Percy M. |
| Coates, Major E. F. (Lewisham) | Lane-Fox, G. R. | Valentia, Viscount |
| Craig, Charles Curtis (Antrim, S.) | Lee, Arthur H. (Hants, Fareham) | Walrond, Hon. Lionel |
| Douglas, Rt. Hon. A. Akers- | Lockwood, Rt. Hon. Lt.-Col. A. R. | Warde, Col. C. E. (Kent, Mid) |
| Faber, George Denison (York) | Long, Col. Charles W. (Evesham) | Wortley, Rt. Hon. C. B. Stuart- |
| Fell, Arthur | Long, Rt. Hon. Walter (Dublin, S.) | Wyndham, Rt. Hon. George |
| Fletcher, J. S. | Lonsdale, John Brownlee | Younger, George |
| Forster, Henry William | Lowe, Sir Francis William | |
| Foster, P. S. | Mason, James F. (Windsor) | TELLERS FOR THE AYES.—Mr. Clavell Salter and Mr. Gretton. |
| Gardner, Ernest | Meysey Thompson, E. C. | |
| NOES. | ||
| Abraham, William (Rhondda) | Glover, Thomas | Nuttall, Harry |
| Acland, Francis Dyke | Goddard, Sir Daniel Ford | O'Brien, Patrick (Kilkenny) |
| Agnew, George William | Gooch, George Peabody (Bath) | Parker, James (Halifax) |
| Ainsworth, John Stirling | Greenwood, G. (Peterborough) | Philipps, Owen C. (Pembroke) |
| Allen, A. Acland (Christchurch) | Greenwood, Hamar (York) | Pollard, Dr. G. H. |
| Allen, Charles P. (Stroud) | Gulland, John W. | Ponsonby, Arthur A. W. H. |
| Ashton, Thomas Gair | Hall, Frederick | Price, C. E. (Edinburgh, Central) |
| Astbury, John Meir | Haroourt, Rt. Hon. L. (Rossendale) | Priestley, Sir W. E. B. Bradford, E.) |
| Atherley-Jones, L. | Harcourt, Robert V. (Montrose) | Radford, G. H. |
| Balfour, Robert (Lanark) | Hardy, George A. (Suffolk) | Rea, Walter Russell (Scarborough) |
| Baring, Godfrey (Isle of Wight) | Harmsworth, Cecil B. (Worcester) | Rendall, Athelstan |
| Barker, Sir John | Haslam, James (Derbyshire) | Richards, Thomas (W. Monmouth) |
| Barran, Rowland Hirst | Haslam, Lewis (Monmouth) | Richards, T. F. (Wolverhampton, W.) |
| Beale, W. P. | Haworth, Arthur A. | Roberts, Charles H. (Lincoln) |
| Beauchamp, E. | Hazel, Dr. A. E. W. | Roberts, Sir J. H. (Denbighshire) |
| Beck, A. Cecil | Hedges, A. Paget | Robertson, Sir G. Scott (Bradford) |
| Bell, Richard | Helme, Norval Watson | Robinson, S. |
| Benn, Sir J. Williams (Devonport) | Hemmerde, Edward George | Robson, Sir William Snowdon |
| Benn, W. (Tower Hamlets, St. George) | Henderson, Arthur (Durham) | Roch, Walter F. (Pembroke) |
| Bennett, E. N. | Henderson, J. McD. (Aberdeen, W.) | Roe, Sir Thomas |
| Berridge, T. H. D. | Henry, Charles S. | Rogers, F. E. Newman |
| Black, Arthur W. | Higham, John Sharp | Rose, Sir Charles Day |
| Boulton, A. C. F. | Hobart, Sir Robert | Rutherford, V. H. (Brentford) |
| Bowerman, C. W. | Hobhouse, Rt. Hon. Charles E. H. | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brace, William | Hodge, John | Samuel, S. M. (Whitechapel) |
| Brigg, John | Holland, Sir William Henry | Scott, A. H. (Ashton-under-Lyne) |
| Brodie, H. C. | Holt, Richard Durning | Seely, Colonel |
| Brooke, Stopford | Hooper, A. G. | Shackleton, David James |
| Brunner, J. F. L. (Lancs., Leigh) | Horniman, Emslie John | Sherwell, Arthur James |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Howard, Hon. Geoffrey | Simon, John Allsebrook |
| Bryce, J. Annan | Hudson, Walter | Stanley, Hon. A. Lyulph (Cheshire) |
| Burns, Rt. Hon. John | Hyde, Clarendon G. | Strachey, Sir Edward |
| Byles, William Pollard | Illingworth, Percy H. | Summerbell, T. |
| Channing, Sir Francis Allston | Isaacs, Rufus Daniel | Sutherland, J. E. |
| Clough, William | Johnson, John (Gateshead) | Taylor, John W. (Durham) |
| Cobbold, Felix Thornley | Jones, Leif (Appleby) | Taylor, Theodore C. (Radcliffe) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Jones, William (Carnarvonshire) | Toulmin, George |
| Compton-Rickett, Sir J. | Jowett, F. W. | Verney, F. W. |
| Corbett, A. Cameron (Glasgow) | King, Alfred John (Knutsford) | Villiers, Ernest Amherst |
| Corbett, C. H. (Sussex, E. Grinstead) | Laidlaw, Robert | Vivian, Henry |
| Cornwall, Sir Edwin A. | Lamb, Ernest H. (Rochester) | Wadsworth, J. |
| Cotton, Sir H. J. S. | Lambert, George | Walsh, Stephen |
| Craig, Herbert J. (Tynemouth) | Lament, Norman | Wason, John Cathcart (Orkney) |
| Crosfield, A. H. | Layland-Barratt, Sir Francis | Waterlow, D. S. |
| Crossley, William J. | Lehmann, R. C. | White, Sir George (Norfolk) |
| Davies, David (Montgomery Co.) | Lever, A. Levy (Essex, Harwich) | White, J. Dundas (Dumbartonshire) |
| Davies, Ellis William (Eifion) | Levy, Sir Maurice | White, Sir Luke (York, E. R.) |
| Dickinson, W. H. (St. Pancras, N.) | Lewis, John Herbert | Whitehead, Rowland |
| Duncan, J. Hastings (York, Otley) | Lupton, Arnold | Wilkie, Alexander |
| Dunne, Major E. Martin (Walsall) | Macdonald, J. M. (Falkirk Burghs) | Williamson, Sir A. |
| Elibank, Master of | Maclean, Donald | Wills, Arthur Walters |
| Erskine, David C. | Macnamara, Dr. Thomas J. | Wilson, J. W. (Worcestershire, N.) |
| Esslemont, George Birnie | Maddison, Frederick | Wilson, P. W. (St. Pancras, S.) |
| Evans, Sir S. T. | Massie, J. | Wilson, W. T. (Westhoughton) |
| Everett, R. Lacey | Micklem, Nathaniel | Wood, T. M'Kinnon |
| Ferens, T. R. | Molteno, Percy Alport | |
| Fiennes, Hon. Eustace | Murray, Capt. Hon. A. C. (Kincard.) | |
| Findlay, Alexander | Myer, Horatio | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Fuller, John Michael F. | Newnes, F. (Notts, Bassetlaw) | |
| Glendinning, R. G. | Nicholls, George |
§ Mr. JAMES HOPE moved, at the end of the proposed Amendment, to add the word "annually."
§ This will make the proposed Amendment read at the end, "The annual licence value shall be fixed and certified annually." It is obvious that every year the factors change, and may change. It is only fair that the certified annual licence value shall be varied accordingly, without the necessity of going through a complicated appeal.
§ Mr. J. S. ARKWRIGHTI second the Amendment. May I express the hope that the Chancellor of the Duchy will see his 974 way to accept what does seem to be a most reasonable proposition?
§ Mr. HERBERT SAMUELI do not think this Amendment would really be desired either by the trade or by the Board of Customs and Excise or by the Board of Inland Revenue. It would involve a great deal of expense and trouble, and it is quite unnecessary. It is true annual values will be corrected from time to time; there are cases where corrections will have to be made, but that is no reason why every licensed premises in the country should be assessed annually. Where corrections are 975 necessary the parties will apply to the Commissioners, whose duty it is to keep corrected the register they have made. If they refuse to do so, and the parties are dissatisfied, they always have the right of appeal.
§ Amendment to the proposed Amendment negatived.
§ Question put, "That those words as amended be there inserted in the Bill."
§ The House divided: Ayes, 164; Noes, 58.
977| Division No. 846.] | AYES. | [11.22 p.m. |
| Abraham, William (Rhondda) | Goddard, Sir Daniel Ford | Parker, James (Halifax) |
| Acland, Francis Dyke | Gooch, George Peabody (Bath) | Philipps, Owen C. (Pembroke) |
| Agnew, George William | Greenwood, G. (Peterborough) | Pollard, Dr. G. H. |
| Ainsworth, John Stirling | Greenwood, Hamar (York) | Ponsonby, Arthur A. W. H. |
| Allen, A. Acland (Christchurch) | Gulland, John W. | Price, C. E. (Edinburgh, Central) |
| Allen, Charles P. (Stroud) | Hall, Frederick | Priestley, Sir W. E. B. (Bradford, E.) |
| Ashton, Thomas Gair | Harcourt, Rt. Hon. L. (Rossendale) | Radford, G. H. |
| Astbury, John Meir | Harcourt, Robert V. (Montrose) | Rea, Walter Russell (Scarborough) |
| Atherley-Jones, L. | Harmsworth, Cecil B. (Worcester) | Rendall, Athelstan |
| Balfour, Robert (Lanark) | Haslam, James (Derbyshire) | Richards, Thomas (W. Monmouth) |
| Barran, Rowland Hirst | Haslam, Lewis (Monmouth) | Richards, T. F. (Wolverhampton, W.) |
| Beale, W. P. | Haworth, Arthur A. | Roberts, Charles H. (Lincoln) |
| Beauchamp, E. | Hazel, Dr. A. E. W. | Roberts, Sir J. H. (Denbighs) |
| Beck, A. Cecil | Hedges, A. Paget | Robertson, Sir G. Scott (Bradford) |
| Benn, Sir J. Williams (Devonport) | Helme, Norval Watson | Robinson, S. |
| Benn, W. (Tower Hamlets, St. Geo.) | Hemmerde, Edward George | Robson, Sir Wm. Snowdon |
| Bennett, E. N. | Henderson, Arthur (Durham) | Roch, Walter F. (Pembroke) |
| Black, Arthur W. | Henry, Charles S. | Roe, Sir Thomas |
| Boulton, A. C. F. | Higham, John Sharp | Rogers, F. E. Newman |
| Bowerman, C. W. | Hobart, Sir Robert | Rose, Sir Charles Day |
| Brace, William | Hobhouse, Rt. Hon. Charles E. H. | Rutherford, V. H. (Brentford) |
| Brigg, John | Hodge, John | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brodie, H. C. | Holland, Sir William Henry | Samuel, S. M. (Whitechapel) |
| Brooke, Stopford | Holt, Richard Durning | Scott, A. H. (Ashton-under-Lyne) |
| Brunner, J. F. L. (Lancs., Leigh) | Hooper, A. G. | Seely, Colonel |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Horniman, Emslie John | Shackleton, David James |
| Bryce, J. Annan | Howard, Hon. Geoffrey | Sherwell, Arthur James |
| Burns, Rt. Hon. John | Hyde, Clarendon G. | Stanley, Hon. A. Lyulph (Cheshire) |
| Byles, William Pollard | Illingworth, Percy H. | Strachey, Sir Edward |
| Channing, Sir Francis Allston | Johnson, John (Gateshead) | Summerbell, T. |
| Clough, William | Jones, Leif (Appleby) | Sutherland, J. E. |
| Cobbold, Felix Thornley | Jones, William (Carnarvonshire) | Taylor, John W. (Durham) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Jowett, F. W. | Taylor, Theodore C. (Radcliffe) |
| Corbett, A. Cameron (Glasgow) | King, Alfred John (Knutsford) | Toulmin, George |
| Corbett, C. H. (Sussex, E. Grinstead) | Laidlaw, Robert | Verney, F. W. |
| Cornwall, Sir Edwin A. | Lambert, George | Villiers, Ernest Amherst |
| Cotton, Sir H. J. S. | Lamont, Norman | Vivian, Henry |
| Craig, Herbert J. (Tynemouth) | Layland-Barratt, Sir Francis | Walsh, Stephen |
| Crosfield, A. H. | Lehmann, R. C. | Wason, John Cathcart (Orkney) |
| Crossley, William J. | Lever, A. Levy (Essex, Harwich) | Waterlow, D. S. |
| Davies, David (Montgomery Co.) | Levy, Sir Maurice | White, Sir George (Norfolk) |
| Davies, Ellis William (Eifion) | Lewis, John Herbert | White, J. Dundas (Dumbartonshire) |
| Dickinson, W. H. (St. Pancras, N.) | Lough, Rt. Hon. Thomas | White, Sir Luke (York, E. R.) |
| Duncan, J. Hastings (York, Otley) | Lupton, Arnold | Whitehead, Rowland |
| Dunne, Major E. Martin (Walsall) | Maclean, Donald | Wiles, Thomas |
| Elibank, Master of | Macnamara, Dr. Thomas J. | Wilkie, Alexander |
| Erskine, David C. | Maddison, Frederick | Williamson, Sir A. |
| Esslemont, George Birnie | Massie, J. | Wills, Arthur Walters |
| Evans, Sir S. T. | Micklem, Nathaniel | Wilson, J. W. (Worcestershire, N.) |
| Everett, R. Lacey | Molteno, Percy Alport | Wilson, P. W. (St. Pancras, S.) |
| Ferens, T. R. | Murray, Capt. Hon. A. C. (Kincard.) | Wilson, W. T. (Westhoughton) |
| Fiennes, Hon. Eustace | Myer, Horatio | Wood, T. M'Kinnon |
| Findlay, Alexander | Newnes, F. (Notts, Bassetlaw) | |
| Fuller, John Michael F. | Nicholls, George | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| Glendinning, R. G. | Nuttall, Harry | |
| Glover, Thomas | O'Brien, Patrick (Kilkenny) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex, F. | Cecil, Evelyn (Aston Manor) | Gardner, Ernest |
| Arkwright, John Stanhope | Chamberlain, Rt. Hon. J. A. (Worc'r.) | Gibbs, G. A. (Bristol, West) |
| Balcarres, Lord | Clive, Percy Archer | Gretton, John |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Coates, Major E. F. (Lewisham) | Guinness, Hon. R. (Haggerston) |
| Banbury, Sir Frederick George | Courthope, G. Loyd | Guinness, Hon. W. E. (B. S. Edmunds) |
| Banner, John S. Harwood | Craig, Charles Curtis (Antrim, S.) | Hamilton, Marquess of |
| Barrie, H. T. (Londonderry, N.) | Douglas, Rt. Hon. A. Akers- | Hardy, Laurence (Kent, Ashford) |
| Bridgeman, W. Clive | Fell, Arthur | Harrison-Broadley, H. B. |
| Carlile, E. Hildred | Fletcher, J. S. | Hay, Hon. Claude George |
| Castlereagh, Viscount | Foster, P. S. | Helmsley, Viscount |
| Hill, Sir Clement | Lowe, Sir Francis William | Starkey, John R. |
| Hope, James Fitzalan (Sheffield) | Meysey-Thompson, E. C. | Talbot, Lord E. (Chichester) |
| Hunt, Rowland | Peel, Hon. W. R. W. | Thornton, Percy M. |
| Kerry, Earl of | Roberts, S. (Sheffield, Ecclesall) | Walrond, Hon. Lionel |
| King, Sir Henry Seymour (Hull) | Ronaldshay, Earl of | Wortley, Rt. Hon. C. B. Stuart- |
| Lane-Fox, G. R. | Rutherford, John (Lancashire) | Wyndham, Rt. Hon. George |
| Lee, Arthur H. (Hants, Fareham) | Rutherford, Watson (Liverpool) | Younger, George |
| Lockwood, Rt.-Hon. Lt.-Col. A. R. | Salter, Arthur Clavell | |
| Long, Col. Charles W. (Evesham) | Scott, Sir S. (Marylebone, W.) | TELLERS FOR THE NOES.—Viscount Valentia and Mr. H. W. Forster. |
| Long, Rt. Hon. Walter (Dublin, S.) | Stanier, Beville |
Question, "That the Clause stand part of the Bill," put, and agreed to.
§ Mr. HERBERT SAMUEL moved in Subsection (2), after the word "and" ["and any such certificate"], to insert the words "those Commissioners shall send by post a copy of the certificate to the licence-holder, and on the application of any other person who appears to them to be interested in the premises furnish a copy of the certificate to him."
§ Mr. SAMUEL ROBERTS moved in the proposed Amendment, after the word "shall" to insert the words "not later than the 1st of July in England and Ireland and the 1st of March in Scotland in any year."
§ It is quite evident there ought to be some date after which the certificate ought not to be sent, and my Amendment will make it incumbent upon the Commissioners to send three weeks' notice.
§ Mr. G. D. FABER seconded the Amendment to the proposed Amendment.
§ Mr. HERBERT SAMUELThis Amendment would really apply to an annual, valuation of the premises, but that is not the purpose of the Clause. The valuation, when made, will be made once and for all, unless there is some reason to change it. Consequently, it would be inconsistent with the scheme of the Clause to insert an annual date. It is contemplated that those who think the licence value of their premises has altered, and that the register ought to be corrected, should apply to the Commissioners to have the correction made. Supposing the licence-holder were to apply in England and Ireland in the latter part of July or in Scotland in the latter part of March, this would apparently be an intimation to the Commissioners that they are not to consider his request until a period of eleven months had elapsed and the date for the sending of the certificates had come round. For these reasons I trust the hon. Member will not press the Amendment.
§ Question, "That those words be there inserted in the proposed Amendment," put, and negatived.
978§ Amendment made: In the proposed Amendment, after the word "certificate" ["a copy of the certificate to the licence-holder"], to insert the words "(and in case any correction is subsequently made in the amount certified, a copy of the corrected certificate)."—[Mr. James Hope.]
§ Mr. SAMUEL ROBERTS moved, in the proposed Amendment after the word "licence-holder," to insert the words "together with a statement showing the basis on which the amount has been determined."
§ This Amendment provides that when the certificate is sent a statement shall also be sent showing the basis on which the amount has been determined. It is very advisable that the licence-holder should have a statement of the basis, because, if he has not a detailed statement as to how the amount has been arrived at, it will be very difficult for him to appeal.
§ Mr. CARLILE seconded the Amendment to the proposed Amendment.
§ Sir SAMUEL EVANSThe Amendment of the hon. Member would not make any difference, because all he proposes is that the Commissioners should send with the certificate a statement showing the basis on which the amount has been determined, and that is set out in the Amendment of my right hon. Friend, and which we have just accepted. The basis is to be that set out in Section 2 of the Act of 1904. The Amendment, therefore, will not have any effect at all. The hon. Member probably means to cast the obligation upon the Commissioners to send details of their calculations, and that I am afraid we could not accept. We discussed proposals of that kind in Committee, and I think it would be sufficient to say if there is to be an appeal, if there is such dissatisfaction with the amount named in the certificate as to give rise to a desire to appeal, I should have no doubt it would in the ordinary course be given by the Commissioners, thereby enabling the person who feels aggrieved to make up his mind whether or not to appeal. In no case that I know of is it the practice, where a 979 certificate of this kind has to be made out, for details of the ultimate figure arrived at to be supplied to anybody concerned.
§ Mr. AUSTEN CHAMBERLAINThe Government, I believe, refused to yield on this point in Committee. They also, at that stage, refused to make a similar concession in regard to the Land Tax, but on the Report stage they agreed, so far as the Land Tax was concerned, that the person assessed should have all the facts supplied. In order to show how the valuation was arrived at, it would be necessary to set forth the gross value as well as the deductions; indeed, all the factors which contributed to the ultimate figure of assessment would have to be set out. This illustrates one of the disadvantages arising from the method in which the Government conduct their business. I do not think that either the Chancellor of the Duchy or the Solicitor-General were aware of what took place with regard to the Land Tax, and of the fact that, in the discussion of that, it was explicitly stated that the subject should have all the information which my hon. Friend is now seeking to secure in relation to this particular tax which we are debating. I quite agree with the Solicitor-General that the words of my hon. Friend's Amendment are not quite properly chosen; it might be desirable to substitute the word "factor" for "basis"; that would cure, at any rate, the Amendment of the defect pointed out by the hon. and learned Gentleman, and I am sure my hon. Friend will consent to make that alteration. The Solicitor-General said that if the assessment became a matter of appeal, the Commissioners would be willing to give this information. But a little earlier in the evening we had the Chancellor of the Duchy protesting that there was no earthly reason why the subject should not immediately get the information which, if the case were taken into court, would be at once forthcoming, and the earlier giving of which might prevent the appeal being lodged.
§ Mr. HERBERT SAMUELI did not say that.
§ Mr. AUSTEN CHAMBERLAINI am confusing the speech of the right hon. Gentleman with another speech. I think it was the hon. Member for the Hitchin Division of Herts (Mr. J. Bertram) who, speaking on an Amendment in regard to the Land Tax, protested that the information which was being asked for from the subject was the information on which he 980 would have to rely in case of appeal. The answer of the Government was that it was in the interest of the subject to produce the information at once, as it might prevent the necessity for going to the court. If the information was material to the judgment, it was only proper that it should be produced at the earliest possible moment. What is sauce for the goose is sauce for the gander. If it is true of the subject it must be equally true of the taxing authority. If it is right to call on the subject to produce material facts for the information of the Government it must be equally right for the Government to produce material information for the benefit of the subject. I hope that with the substitution of the word "factor" for the word "basis" the Government will accept the Amendment of my hon. Friend, as by so doing they will only be acting in harmony with the change they made in the Land Tax yesterday, and with the defence they advanced of the proposal which they submitted to the House.
§ Sir SAMUEL EVANSI am quite willing to indicate that the Commissioners should give the two factors which I think are the only necessary factors. What I object to is to place upon them obligations, whether they like it or not, to give all the details on which they arrived at the amount. If it would satisfy hon. and right hon. Gentlemen I am willing to give the two annual values, that is, to state what the annual value of the premises with the licence and what the annual value of the premises without the licence is. I would, after the words in the original Amendment, "copy of the certificate to the licence holder," be prepared to insert the words "stating the two annual values upon which the true annual licence value has been arrived at."
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ Sir SAMUEL EVANS moved to amend the proposed Amendment by inserting, after the words "licence holder" ["copy of the certificate to the licence holder"] the words "stating the two annual values upon which the true annual licence value has been arrived at."
§ Mr. GRETTONI would like, with the leave of the House, to point out that the two annual values are not the real factors, they do not cover the whole ground, but the proposal is some mitigation of the Amendment. The annual licensing value is one factor, but it is only of very partial 981 value. However, what is proposed is some indication, and although it is only a partial indication, it is better than none at all, and I shall be prepared to support it as far as it goes.
§ Amendment to proposed Amendment made.
§ Further Amendment made in the pro posed Amendment: After the word "certificate" ["furnish a copy of the certificate to him"] to insert the words "or corrected certificate."—[Mr. James Hope.]
§ Proposed words, as amended, there inserted in the Bill.
§ Resolved: That the further proceedings on the Bill be adjourned till to-morrow.
§ Bill, as amended, to be further considered to-morrow.