HC Deb 27 October 1909 vol 12 cc1013-23

(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 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. JOHN GRETTON moved, on Subsection (2), to leave out the words "as to which the determination of the Commissioners of Inland Revenue of the amount to be paid for compensation under Subsection (2) of Section 2 of the Licensing Act, 1904, is for the time being subject," and to insert instead thereof the words "to the High Court as under the Finance Act, 1894."

I apologise for the Amendment not being on the Paper. The words proposed to be left out are of peculiar importance, dealing as they do with appeals under the Bill. They practically put an appeal under this Bill on the same footing, as regards costs, as an appeal against a decision of the Commissioners of Inland Revenue under the Act of 1904.

By Sub-section 4 of the same Section it was enacted that: "(4). Any costs incurred by the Commissioners of Inland Revenue on an appeal from their decision to the High Court under this Section shall, unless the High Court order those costs to be paid by some party to the appeal other than the Commissioners, be paid out of the amount to be paid as compensation."

One particular objection to the insertion of these words in connection with an appeal against an assessment fox valuation under the Finance Bill is that there is no Compensation Fund from which the costs can be paid. In that respect the reference to the Compensation Fund is mere nonsense. I take it the object of the words must be that whatever might be the decision of the High Court, the costs of both parties to the appeal would have to be borne by the appellant. That is my construction of the Clause as it stands. It is an alteration of the ordinary law for which no justification has yet been put forward in this House. I believe it is the fact that subsequent words in this Clause enable in Scottish oases an appeal to be made to the judges of the Court of Session, and in Irish cases to the High Court of Justice in Ireland; but, so far as those two countries are concerned, there is no provision of this nature with regard to costs. Unless the words are omitted as I suggest, and the matter is dealt with as proposed in the Amendment, the owners of licensed premises in England and Wales, who may deem it necessary to appeal against a decision of the Commissioners, will be in a much less advantageous position than Scottish or Irish licence holders who make a similar appeal. The costs in these cases are by no means light. In the famous Kennedy judgment they amounted to £700, and in addition to that the costs of the Commissioners had to be paid, the result being that the total came to within £100 of the sum awarded as compensation. It must be perfectly obvious that with such high costs the value of an appeal is practically taken away. It is only in very important test cases that it will be possible to carry an appeal forward, and then the appeal will have to be made by a combination subscribing the costs. The Amendment will permit of a less expensive method of procedure. I take it that the House desires, in laying down the terms of appeal, that justice shall be done. The appeal should be an effective appeal, and my Amendment in substance gives an appeal to the county court in cases where the sum involved is not greater than £10,000. In this respect, therefore, the Amendment is one of very great importance. I think the inclusion of this provision as to the payment of costs out of the Compensation Fund must have been an oversight, and I do not believe the Government can wish to adhere to the exact terms embodied in this Clause.

Mr. G. D. FABER

I beg to second the Amendment. I think my hon. Friend's objection is well founded. Often the costs in an appeal become more important than the subject matter of the appeal. It is only the uninitiated who imagine that the costs are a mere matter of form. Under Sub-section (4), Section 2, of the Act of 1904, it is provided that in no event shall the Commissioners of Inland Revenue be called upon to pay their own costs, whatever the issue of the litigation may be. The Sub-section says that the costs incurred by the Commissioners on an appeal from their decision to the High Court shall, unless the court orders the costs to be paid by some party to the appeal other than the Commissioners, be paid out of the Compensation Fund. But in these cases there is no Compensation Fund to draw upon, and the fear of my hon. Friend is that the interpretation of the Section will be to throw the whole of the costs—whatever the issue—on the appellant. Why not leave it entirely open and let the costs, as in the ordinary courts, follow the event? Let the party who appeals, if he is successful, have some chance of recovering his costs.

The SOLICITOR GENERAL (Sir Samuel Evans)

With regard to the question of costs the provision under Sub-section (5) of Section 2 of the Act of 1904, which enables the court to give costs against the Commissioners out of the Compensation Fund cannot apply at all in this case. Therefore the law, with reference to costs; upon an appeal, will be governed by the provisions of the 10th Section of the Act of 1894, the Finance Act, and those provisions are perfectly plain because the appeal under the Act of 1904 is in accordance with the provisions of the 1894 Act, which says that the costs of the appeal shall be in the discretion of the court, and the court may order the Commissioners to pay them for such period as they may think fit. Therefore, the position is that any appellant will have a chance of getting his costs, and if he is able to satisfy the court that his appeal is reasonable he may bring it without having to pay costs at all under the discretion of the High Court. It is quite true that the appeal under the Act of 1904 is only to the High Court, and that is the appeal which has been preserved under the provisions of this measure. We have adopted the provisions of the Act of 1894, which will enable the appeal to be taken to the High Court. The costs are mainly within the discretion of the High Court.

Mr. A. J. BALFOUR

As I understand the hon. and learned Gentleman, he really thinks that the Bill as it stands will have the precise effect which my hon. Friend wishes to ensure by moving his Amendment?

Sir SAMUEL EVANS

Except in regard to the county courts.

Mr. BALFOUR

As regards the High Court there is absolutely no difference between my hon. Friend and the Government as to the way costs shall be allocated and they shall be allocated under the Act of 1894, and the fact that the Act of 1904 is interpolated does not affect that at all. They are to be under the Act of 1894?

Sir SAMUEL EVANS

Yes.

Mr. YOUNGER

Why is it necessary to import the Act of 1904?

Sir SAMUEL EVANS

The answer to that is this: The Act of 1904 is referred to in the other part of the Clause, and as we deal with it in the one case we think as a matter of drafting it is well to deal with it in the other.

Mr. GRETTON

Would it not be better, in this connection, to insert words to the effect that the Act of 1904, except as regards the Sub-section dealing with this particular matter of costs, would apply? That would make the matter perfectly clear and would not leave any room for misinterpretation. It is very well known that a Solicitor-General takes one view, but other expert legal opinion takes a different view, and I think it would be better to insert words which would eliminate the portion of that particular Sub-section of which I complain, and which the hon. and learned Gentleman explained to the House the Government do not wish to import into the interpretation of an Act dealing with this matter. On that ground, in the interests of clear drafting, it is very advisable that some limitation of the words should be applied so as to eliminate the ambiguous words and prevent their being applied to the particular matter of this Bill. I venture to make an appeal to the Government for further consideration before the Amendment is finally dismissed, and it is in the interest of their own measure that they should make this clear. I admit that in relation to the Act of 1904 these words are very properly inserted. The Commissioners would come forward, not as interested persons in that case, but in the position of arbitrators between the licence holder who is to receive compensation and the local authority who have contol of the Compensation Fund, and have to award that fund and see it devoted to particular licences. There the Commissioners of Inland Revenue are called in as arbitrators, but in this case they are called in as one of the most interested parties. They are in their official position interested in the collection of the revenue, and it is to their interest to make that collection as high as possible. Therefore they are not in the position of disinterested parties, and they are not able to exercise their powers disinterestedly. If they exceed the absolute line of justice and over-assess and value the property, then it is only reasonable that there should be an appeal against their decision, and if they have to pay the costs when the case is clearly against them, that liability will, at any rate, be some check upon the valuation which they place upon the property for taxation, and will act as a protection to the interests of the subject. In all these cases of valuations and assessments for the purpose of taxing it is held that the interests of the subject and the taxpayer are to have the benefit of any doubt, and I therefore maintain that the insertion of such words as I have suggested would act in the direction which the Government desire. I am quite sure that it will be desirable to do away with this ambiguity. There will be probably in the earlier stages of this legislation some disputes which will result in very costly litigation, and every lawyer in this House knows that in cases of litigation an opinion from an authority, however eminent and well instructed, given to Members of this House as to the intentions of the Government, or even the intentions of Parliament, count for nothing in the law as it stands and as it passed this House, is the matter for decision. I therefore venture to put these words forward for further consideration, and I hope that that consideration will result in the insertion of some words which would make the Sub-section clear.

Sir SAMUEL EVANS

May I say that if there is any genuine doubt on the part of anybody I am quite willing that the words should be put at the end of the paragraph to make it clear, "and the costs of any such appeal shall be in the discretion of the court."

Amendment, by leave, withdrawn.

Amendment made: At the end of the first paragraph of Sub-section (2), to insert the words "and the costs of any such appeal shall be in the discretion of the court."—[Sir Samuel Evans.]

Mr. SPEAKER

With regard to the next Amendment of the Solicitor-General it appears that to strike out the words "no increased value arising from profits not derived from the sale of intoxicating liquor shall be taken into consideration," will increase the charge. To the ordinary mind it implies that the increased value should be taken into consideration. I do not know if the Solicitor-General can show that it does not increase the charge.

Sir SAMUEL EVANS

I put the Amendment down in deference to the opinion expressed by the Prime Minister on the Committee stage that upon the whole, to avoid doubts being raised, it would be better to omit these words, and in that opinion I respectfully agree. But when you, Mr. Speaker, ask me if the excision of the words might in some cases have the effect of increasing the duty, I wish to say that while I do not think it probable, I cannot deny that it is possible that the relief contemplated by the Subsection might not be fully given in some cases, and, accordingly, after what you have said, Sir, I do not propose to move the Amendment.

Mr. JAMES HOPE moved to omit Subsection (3).

I move this on the ground that the Subsection will put, not only upon the licence holder, but upon any person interested in licensed premises, the liability at any time and in any manner, to be questioned and harassed by the Commissioners. This point was raised in Committee, and the Solicitor-General seemed to feel the force of the argument. He said, first of all, that he could not accept the statutory form of the Schedule which was proposed, but he added that he would consider the suggestion which had been made whether it would be advisable if the questions asked were of an inquisitorial character to put it in the form of a Schedule. I would ask the Solicitor-General whether he has not considered that point and whether it could not be put in the Schedule. The case is rather stronger from the fact that a similar question arose under Part I of the Bill. There the powers of the Commissioners to call for particulars were distinctly limited. The form of the Bill as it left the Committee with regard to information as to land was "any other information which the Commissioners may require," which left the Commissioners the extraordinary power to ask information not only from land-owners but from occupiers of land. Those words were left out and other words were inserted. The Chancellor of the Exchequer moved an Amendment limiting the power of the Commissioners to the "title, area, character and use of the land and the consideration given on any previous sale or lease of the land and other matters which might properly be required for the purpose of the valuation of the land," and that was further amended, the word "title" being struck out. It was thought necessary in that part of the Act to lay down distinctly what were the subject matters which the Commissioners might ask about and if it was necessary in that part of the Act it is equally necessary here, and I would ask the Solicitor-General whether he has gone into that point and whether he sees an objection now either to putting definite words in which will limit the range of the Commissioners' questions or else putting here merely that they should call for such information as may be set forth in the Schedule, and then preparing the Schedule accordingly. But as it is, the range is so vast that the unfortunate persons interested would never know when they had satisfied the Commissioners or when they might not have to fill up other forms. I know there are many people who find as great an annoyance in their daily life from the constant filling up of forms as from the taxes themselves.

Mr. E. H. CARLILE seconded the Amendment.

Sir SAMUEL EVANS

I have considered this. I offered in Committee to insert certain words which would be of a limiting-character—"information material for ascertaining the annual value" or something; of that kind. I think in a matter of this kind we must leave it to the discretion of the Commissioners. It is necessary that they should be informed as to the value, rent, and things of that kind which would enable the accurate annual value to be arrived at without making it necessary to embark upon an expensive appeal. The information required cannot be of a very inquisitorial kind. Everyone knows the kind of information which will be asked for. I certainly did not hold out any hope in Committee that I could put any form in the Schedule. The Bill is quite long enough, and I do not want to increase the number of Schedules.

Mr. G. D. FABER

There is a certain amount of hardship because cases of this kind under this Bill differ entirely from compensation cases under the Act of 1904. There, there is no hardship at all in having the fullest possible inquiry, because there, there is no secrecy in the matter. It is no longer a going concern. The licence was about to be extinguished, the amount payable in respect of the extinction was to be ascertained, and there was nothing to be held back on the part of the trader. But here it is a totally different matter. It is a going concern, and no trader likes to disclose the whole quantity and quality of his business. The wind should be tempered, as far as possible, to the shorn lamb. Unfortunately, words uttered by so eminent a legal luminary as the Solicitor-General carry no weight with those who have to decide these matters hereafter. They may see no reason at all for being benignant when they have to perform their duty. They may demand the ransacking of the books from beginning to end, and go into the whole business. I wish some words could be put in roughly, as a guidance to those gentlemen to show that only the information which is absolutely necessary in ascertaining the annual value of the licence should be required. We have some grievance in this matter.

Mr. WALTER LONG

I do not know whether, after the statement made by the Solicitor-General, it is any use to press this matter further on his consideration. I do not think there is any exact precedent for conferring these powers on the Commissioners of Inland Revenue. I believe that the right of the Inland Revenue Commissioners to ascertain for the purpose of Income Tax the facts as to the business being done is strictly limited to certain particulars. They have not a roving commission. They have the right to make inquiries in regard of certain specified matters, but they are not allowed to go beyond these. I can give an instance, not drawn from the revenue laws, but from the public health laws. In dealing with some of the greatest nuisances arising in relation to the question of public health, one of the difficulties in the way of discovering the causes was that it was impossible for the Government inspectors to make certain investigations without making such demands on manufacturers as might result in the disclosure of secret processes of manufacture. The manufacturers thought they should not be called upon to part with information which might be used to their prejudice if disclosed to others. Here you are asking wide powers, which are not defined or limited in any way. No one doubts the bona fides or the capacity of the Commissioners, but I think some difficulty might arise, as in the case I have referred to in connection with the administration of the public health laws. I had the pleasure of proposing an alteration in the law for the purpose of enabling the Government inspectors to carry out their inquiries more effectively in regard to public nuisances, and an hon. Member opposite vehemently resisted the change on the ground that a manufacturer should not be exposed to the risk of having the information which would be supplied to inspectors disclosed to his competitors. It is clear that for the purpose of arriving at the value of the premises you do not want to investigate the innermost secrets of a man's business. I am sure the Solicitor-General is entirely at one with us in desiring that there should be no inquisitorial procedure and no disclosure of matters which are not necessary to the purpose of the Commissioners of Inland Revenue. Surely it would be possible to insert words to guard the licensed trade against what they conceive to be a real risk. If the Solicitor-General could suggest some words to do so, the trade would be relieved from a danger which, I think, they very reasonably fear.

Sir SAMUEL EVANS

I am entirely at one with the right hon. Gentleman when he says that no particular information should be asked except that which is reasonably necessary for the purpose of making the valuation. I have been informed since I spoke that when the Bill was in Committee the words "such particulars as may be material for the purpose of ascertaining the value" were inserted in connection with the Land Clauses. They provide some limitation, but I think they are not so good as the discretion of the Commissioners. I am quite willing to insert the word "properly," so that the Sub-section would read "such particulars as the Commissioners may properly require."

Mr. JAMES HOPE

I think that is about as much as I can ask for under present conditions. I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendment made: After the word "may," in Sub-section (3), to insert the word "properly."—[Sir Samuel Evans.]

Drafting Amendment made.