§ (1) Any Legacy or Succession Duty which under the Stamp Act, 1815, or the Succession Duty Act, 1853, or any other Act, is payable at the rate of three per cent. shall be payable at the rate of five per cent., and any Legacy or Succession Duty which under the said Acts is payable at the rate of five per cent. or six per cent. shall be payable at the rate of ten per cent. on the amount or value of the legacy or succession.
§ (2) The Legacy and Succession Duty payable at the rate of one per cent. on the amount or value of any legacy or succession under the Stamp Act, 1815, and the Succession Duty Act, 1853, or any other Act, shall be levied and paid not with standing any repeal effected by or anything contained in the principal Act or any other Act, and the duty shall also be levied and paid in cases where the person taking the legacy or succession is the husband or wife of the testator, intestate, or predecessor as in cases where the person taking the legacy or succession is a lineal ancestor or descendant of the testator, intestate, or predecessor.
1966§ Provided that the duty shall not be levied—
- (a) Where the principal value of the property passing on the death of the deceased and chargeable with Estate Duty (other than property in which the deceased never had an interest) does not exceed fifteen thousand pounds, whatever may be the value of the legacy or succession; or
- (b) Where the amount or value of the legacy or succession together with any other legacies or successions derived by the same person from the testator, intestate, or predecessor does not exceed one thousand pounds, whatever may be the principal value of the property so passing and chargeable; or
- (c) Where the person taking the legacy or succession is the widow or a child under the age of twenty-one years of the testator, intestate or predecessor, and the amount or value of the legacy or succession together with any other legacies or successions derived by the same person from the testator, intestate, or predecessor does not exceed two thousand pounds, whatever may be the principal value of the property so passing and chargeable.
§ (3) In this Section the expression "deceased" means in the case of a legacy the testator (including a person making a donation mortis causa) or intestate, and in the case of a succession arising through devolution by law, the person on whose death the succession arises, and in the case of a succession arising under a dis- 1967 position, the person on whose death the first succession there under arises; and the expression "legacy" includes residue and share of residue and share of residue.
§ (4) This Section shall take effect in the case of Legacy Duty only where the testator by whose will the legacy is given or the intestate on whose death the Legacy Duty is payable, dies on or after the thirtieth day of April, nineteen hundred and nine, and in the ease of a- succession arising through devolution by law, only where the succession arises on or after that date, and in the case of a succession arising under a disposition, only if the first succession under the disposition arises on or after that date.
§ Amendment proposed [13th September]: In Sub-section (2) to leave out the words "levied and paid notwithstanding any repeal effected by or anything contained in the principal Act or any other Act, and the duty shall also be levied."—[Mr. G. D. Faber.]
§ Question again proposed, "That the words proposed to be left out, to the word 'and' ['and the duty'], stand part of the Clause."
§ Mr. WALTER GUINNESSThe Amendment really raises a very sample question, but, owing to the love of the Government for legislation by reference, it perhaps needs a word of explanation. Section 1 of the Finance Act, 1894, exempts from the payment of the 1 per cent. Legacy and Succession Duty any legacy which has already paid Estate Duty; and by Section 5(2) that exemption is extended to the whole duration of the settlement. The object of this Amendment is to continue this exemption to lineals and to extend the same benefit to those new successions between husband and wife which are now for the first time being made liable to the 1 per cent. Legacy or Succession Duty. It will still enable Succession Duty to be paid where Estate Duty is not payable. I think such cases may still arise. Under the Finance Act, 1894, where funds were left under will or disposition by someone dying before the Act came into force, no Estate Duty was payable—that is to say, in cases where Probate Duty had been paid. There may be many cases where this exemption from Estate Duty still exists. Take the case of a man who, before 1894, settled property on his son, with remainder to that son's wife. If the son now dies, that legacy will not pay Estate Duty; therefore, under this 1968 Clause, if the Amendment is accepted, the 1 per cent. Succession Duty can still be levied. Hence the right hon. Gentleman cannot say that the Amendment will frustrate the whole object of the Clause. I think there is a strong case for lenient treatment of the succession between husband and wife. Their separate estates are treated as one for the purposes of Income Tax, and it seems very unjust to-treat them separately only in those cases, where it is to the advantage of the State so to do. The severe steepening of the lower grades of the Estate Duties must inevitably seriously affect widows, and at this moment there is strong reason against levying this onerous new duty in the case of successions.
I think it is onerous in the case of small estates where, perhaps, the family has been accustomed to live on a fairly comfortable scale, owing not to large invested funds, but to the earned income of the husband. I think it is very hard, just at the moment when that earned income is cut off, that you should go down and not only increase very considerably the Estate Duty, but also, for the first time, levy Succession Duty, which has previously only in very rare cases been levied. Of course, I know that widows get very little sympathy from hon. Members opposite. [HON. MEMBERS: "Oh."] Well, I think it is within the recollection of the House that they have been mentioned over and over again during the Finance Bill discussions, and during the discussions on other Bills—the Licensing Bill for instance—and they have always been laughed at. I can only imagine that the reason for that is that widows share with dukes an incapacity to vote for hon. Members of this House. But the case of widows does raise a very real grievance. I think it is most unjust that they should be treated separately only when it pays the State. If this Amendment is accepted, it will mitigate the severity of this new 1 per cent. duty.
§ Mr. GEORGE CAVENo doubt the intention and object, or feeling, when the Act of 1894 was framed, and the duties levied under it, was that it was desirable that children should be provided for, and not too heavily burdened by an accumulation of those duties upon estates left to them. If that was thought fair in 1894, surely now—when Esate Duties are being very greatly increased and Settlement Estate Duty is being doubled—the reasons apply with even greater force. As my 1969 hon. Friend has said, this is certainly not the time that this particular exemption, which is no doubt a benefit to children who become legatees, should be taken away. It is true that the further charge is limited in this respect, that it is not to apply to estates under certain amounts. But, after all, an estate of £20,000 or £25,000, or even £30,000, is not a large estate, and I think the Committee ought to consider this; in the case of children, which alone we are dealing with in this Amendment—it does not raise the question of widows—the duties are levied just at the moment when they lose the breadwinner of the family, when all earned income disappears, when the means of the family are necessarily very much reduced and straitened, and when, therefore, in many cases, every £100 of estate is of value and importance. It does seem to me to be very hard, when a man has done his best to save a moderate sum for his wife and his children—and in that respect done what is only his duty—that the State can step in and say: "Although you have been doing what is right, we fine you a substantial sum, and annex it for public purposes." I press upon the Government that every exemption in that case ought to be continued. It is not fair or desirable, whatever you are doing in regard to estates left to strangers or more distant relations, to increase the charges upon legacies which a man leaves to his own children. May I add this: Reference has been made to foreign laws. Well, compare in this respect French law with English law. You will find that the French law acts upon the principle to which I have referred. It does look with considerable favour on cases of gifts to children. A question was put to the right hon. Gentleman opposite not long ago asking him to give comparative figures as to the result of the Death Duties under the English law and the French law—the first as it is proposed to be enacted and the second as it is. The figure given to him for the purposes of comparison was a very large one—the estate was put at £5,000,000. I think his figures would be much about the same even in the case of a smaller estate. What was his answer? He said: "If such an estate passes in a direct line, that is, to the children, the Death Duties might be estimated roughly at £700,000 under the existing English law, at £791,500 under the Budget proposals, and under the French law at £246,000. The latter is less than one-third of the amount which the right 1970 hon. Gentleman proposes to raise I commend that example to the Government. The French law favours gifts to children, and very rightly and properly so. Our law hitherto has done the same by exempting very small legacies when they put on the heavy Estate Duty. I hope that that exemption in favour of gifts to children will not be taken away.
§ Mr. SAMUEL ROBERTSTo my mind the most severe part of these duties are the duties in the direct line. What did Sir William Harcourt find in 1894? There was a fixed Probate Duty of 3 per cent. whatever the value of the property. In addition to that there was this 1 per cent. in the direct line. Sir William Harcourt thought, under the circumstances, when he was graduating his duty from 1 per cent. to 8 per cent., that it was just to do away with the Probate Duty of 3 per cent., and also that it was not fair to keep on this 1 per cent. in the direct line. Now the Government are increasing very much the valuation of Sir William Harcourt, and there is all the more reason, therefore, that this duty of 1 per cent. should not be reimposed. I think, when we consider that, and also that the Settlement Estate Duty is to be raised to 2 per cent., that these are very cogent reasons why the Government should fall in with this proposal. My hon. and learned Friend has mentioned the case of France. He might also have mentioned the case of Germany, because I believe there is no Inheritance Duty at all in the direct line. In fact, the whole of the Inheritance Duty in Germany last year only brought in about £2,000,000. I do hope the Chancellor of the Exchequer will see his way to accept this Amendment, and leave the Legacy and Succession Duties in the direct line standing as at present.
§ Mr. CHIOZZA MONEYMay I remind the hon. Member opposite that it is scarcely using equitable language to describe estates of from £10,000 to £25,000 as small estates. It is not really accurate to speak about steepening the lower part of Estate Duties. One has to remember, not merely the estates that are reviewed by the Estates Commissioners, but also the estates that are not reviewed. May I remind the hon. Member who moved this Amendment that in this country about 700,000 persons die in the year. Of those 700,000 only about from 70,000 to 80,000 leave estates that are worth the notice of Somerset House at all. Even of that 70,000 or 80,000 only a small proportion 1971 leave that enormous amount of wealth which was reviewed by the hon. and gallant Gentleman the Member for Colchester (Sir Weetman Pearson) in his speech yesterday. The £25,000 estate referred to by the hon. and learned Gentleman the Member for Kingston is not a small estate. It is a very large estate indeed. I am not at all sure that the subject is dealt with from every proper aspect when the hon. and learned Gentleman pleads for special consideration on the ground that these estates are small. Taken in relation to the other wealth in the country, or to the number of people in the country who own property, it is not a small estate. It is difficult to say precisely, but I imagine that the number of families in the country with £25,000 accumulated wealth cannot be larger than about 75,000, or 100,000 at the outside. I do not think the figure can be certainly more than that. I do think when these proportions are taken into consideration they throw much light upon the subject, and alter the perspective very much of the hon. Gentleman who moved the Amendment and the hon. and learned Member who supported it.
§ Mr. AUSTEN CHAMBERLAINOf course, we shall have an answer from the Government, but I rise to comment upon the observations which we have just heard from the hon. Gentleman the Member for Paddington (Mr. Chiozza Money). I want the Committee to consider whether his point of view is either a just one in itself, or the point of view from which this question ought to be considered. He says that an estate of £25,000, or for the matter of that £20,000, must not be regarded as a small estate, and that my hon. Friend is out of court in pleading for any consideration for children inheriting part of the legacy in such an estate as that.
§ Mr. CHIOZZA MONEYI did not say anything of the kind.
§ Mr. AUSTEN CHAMBERLAINWell, then, I do not quite see the relevance of the observations which the hon. Member Advanced as an answer to my hon. and learned Friend, who pleaded that in such small estates special relief should be given to the children. The hon. Member says that you cannot consider these estates as small when you have regard to the number of people in this country who possess estates, and the much greater number who die without any estate at all. He solid that in the course of a year some 1972 700,000 deaths take place, amongst whom only 70,000 or 80,000 leave estates that are worth any inquiry by Somerset House. Has it occurred to him that many of those whom he includes in the larger figure are infants and children, and naturally have no estate? The relevance has that figure to the matter which we are discussing? The comparison is an idle one, and, in my opinion, in this case as in many others, clouds a naturally clear issue by too much study of irrelevant figures. I am not here to say that there are too many fortunes of over £15,000, or between £15,000 and £50,000. On the contrary, I regret there are so few. Like my hon. and learned Friend I do not complain that there are too many rich men in the country. I do say there are too many poor men. If you can increase the number of those who are comfortably off, especially in the moderate ranks, you are doing a service to the State. I do not think the State can do a great deal in that direction, but, at any rate, it should be careful to do nothing that tends in the opposite direction. How are these fortunes made? Some man, more enterprising than others of his fellows, or more intelligent or more thrifty, lays the foundation of a little fortune, which he leaves to his children. If they are of the same thrifty and industrious turn of mind, they are not content merely to transmit what they received, but they try in turn to transmit something more to their children; and so the individual fortunes and wealth of the country are built up. Like one of my hon. Friends who have spoken, I have no very strong feeling against the proposals if sufficient cause and necessity are shown for increasing the Legacy and Succession Duties when these fortunes go to strangers; but I do think that a case with which we are dealing, that of lineal descendants, rests upon an entirely different footing, and ought to be handled with much greater consideration by the Committee. In many cases, as was pointed out, additional charge involves hardship, and, even though it does not involve hardship, is it not right that you should show consideration which has hitherto been accorded to the direct and natural descendants of the testator?
It is a curious thing that these duties, which Sir William Harcourt removed at the time when he imposed a much more moderate rate of Death Duties, should be reimposed by his successor at a time when he is increasing the existing heavy scale of Death Duties. I do not know whether the right hon. Gentleman the Secretary of 1973 State for War would say, as he did yesterday, that this sum must be paid for the police protection which secures every transference of property. I think the insurance is getting too high for such security as the Government affords to the subjects of this realm, but whatever they may do for others, I appeal to them to have consideration for the case of the children. I must, in frankness and fairness, say I feel at least equally strong about the case of the husband and wife, and I should press for them when we come to the Amendment that raises that question; but I appeal now to the Government on the question before us to withdraw the proposal, which, I think, cannot be very important from the point of view of revenue, and which is, in my opinion, likely to have injurious effects on individuals and in its general results upon our social and family system.
§ Mr. LLOYD-GEORGEI feel it is not possible to deal with the whole of the Succession Duties in the Debate raised by this Amendment. If I did so I am afraid I should have to repeat a good deal of the material I am now putting before the Committee later on. What are the reasons which commended this proposal to the Government and also that commended the second proposals later down in the Clause to the Government? The first of these reasons is a financial one. A Finance Bill is a Bill for raising money. [Laughter.] Hon. Members laugh at that. The right hon. Gentleman the Leader of the Opposition admitted yesterday that at any rate this was a financial scheme. He criticised it, but he admitted it was a financial scheme. I do not think it is a desirable thing to put even 1 per cent. if we could avoid it either upon the children or upon the husband and the wife, but I cannot think of any better method of raising the money when you are about it. That is the first reason, and it is an argument that applies to both the proposals.
§ Mr. AUSTEN CHAMBERLAINCan the right hon. Gentleman tell us how much money this particular proposal will involve?
§ Mr. LLOYD-GEORGEYes, it is very difficult to estimate, and no one knows that better than the right hon. Gentleman himself. You can have nothing in the nature of a complete estimate because of if the exemption. That is what makes it difficult. If there were no exemptions it would be easy enough. The estimate is 1974 of the amount of money in the next year; you can get no money from these Duties for the first year. We anticipate we shall get £380,000 in the second year, and ultimately £600,000.
§ Mr. LLOYD-GEORGENo, we anticipate from the second part £190,000 next year, and ultimately £300,000, so that next year from the whole Sub-section we anticipate £570,000, and ultimately £900,000. What is our proposal? Our proposal is practically to restore the charge imposed by the Act of 1894. The right hon. Gentleman the Member for East Worcestershire says I am dealing much more sternly with this matter than did Sir William Harcourt. Sir William Harcourt raised a certain amount of money; I have to raise more; that is the real reason. I do not think it is an unfair proposal, seeing that the Exchequer requires the cash. What does it mean? In the first place, estates of £15,000 are exempt altogether. That is a very considerable exemption. That exemption is made not really so much on the ground of justice as to meet the case raised by the hon. Member for Kingston (Mr. Cave), when he said it was very hard when the breadwinner was gone and the family plunged in all sorts of griefs that they should have this additional charge put upon them. That argument would be ten times as strong if you applied it to smaller estates. When we exempt estates of £15,000 I think that argument loses a good deal of its force. After all, if a family are left with £15,000—I agree it is not so large, having regard to people's position in life, and so on—it is not a very hard case. The vast majority not only of the artisan class, but of the middle class, live very much under that amount. Take the 85,000 people whose estates passed in review last year. Of these 81,000 odd are under £15,000, and therefore there are only 4,000 estates to which this proposal would apply at all. That is a very considerable exemption, and ii is an exemption that will cover every real case of hardship. Children, after all, must be fairly well provided for if there as £15,000 left by the breadwinner. It is not really a case of hardship.
The hon. and learned Member spoke of the French law and of its attitude towards lineal descendants and towards the husband and wife. We propose to give the same measure to husband and wife as to the children, and if the hon. Member would look, he would find that on the 1975 whole that if you contrast the average treatment meted out to the husband and wife in France and to lineals and if the treatment meted out here it is much the same on the whole. Take the case given by an hon. Member of the £20,000 estate. I agree it is not a very considerable estate, but it is £20,000 net. What does that mean? It means that it will have it pay 1 per cent. upon £20,000, which is £200.
§ Mr. LLOYD-GEORGEWe are dealing now with the 1 per cent., and the 1 per cent. amounts only to £200 on a £20,000 estate. It is assumed at the present moment that is an addition to the Estate Duty; it is nothing of the kind. The legatee may be escaping altogether. The man who has enjoyed the estate may have contributed nothing up to the present unless he is residuary legatee. If he is residuary legatee he pays Estate Duty. He may have a legacy of £5,000, and pay nothing, and why should he not pay his £50 towards the expenses of the State? Take an estate of £20,000; the residuary legatee will be paying Estate Duty, but one of the legatees who has received £5,000 or £10,000 might be paying nothing, the whole burden falling upon the residuary legatee. Is it really unfair to call upon the legatee, who has escaped altogether up to now, to pay his contribution of 1 per cent. towards the expenses of the State? I do not think it is. This is a question of imposing taxes for raising money, and the whole point is this: Is it really unfair to call upon a man who gets a legacy of £5,000 from his father or his grandfather to pay £50 towards the upkeep of the State?
§ Mr. CAVEIf the night hon. Gentleman inquires he will find that tit is comparatively rare that children get a money legacy.
§ 6.0 P. M.
§ Mr. LLOYD-GEORGEBut the other children, at any rate, would take the residue. I do not think the hon. and learned Gentleman will find that what he has stated is usually the case. The usual case is that where £5,000 or £10,000 is given to one child, £3,000 or £4,000 is given to another child who has already received advances. It may be that a sum of money is advanced on the marriage of a daughter, and, therefore, a smaller legacy is given in the will. It is very rare that the legacy is divided between the whole of the children. 1976 I know the hon. and learned Member for Kingston has had great experience in this matter, but I think he will agree with me that the majority of the cases are whore direct legacies are given to the children. I do not think it is unfair where one child is called upon to pay to-day to call upon the other children to also pay something. This is not a very burdensome proposal, and I think it is perfectly fair to call upon these other legacies for a small portion of the duty.
§ Mr. PRETYMANI do not think it is reasonable or just that the right hon. Gentleman in discussing this question should confine himself to this particular duty. My head reels when it is trying to remember all the different taxes which are going to be imposed; in fact, one's life in the future will be mainly spent in dodging the tax collector. The hon. Gentleman put this tax down at 1 per cent., and says it will only amount in the instance which has been given to £200, and he takes the Estate Duty as if it was paid by one of the children, and this £200 by another. The right hon. Gentleman cannot narrow down his argument to this little pin-point and treat each one separately by itself. If he would enlarge the issue, and put it before us in its whole bearing, it would enable the discussion to be carried on upon better lines.
§ Mr. LLOYD-GEORGEI suggested1 that it would have been better if we could have taken the whole of these things into account. If we had had a longer Debate and surveyed the whole of these duties, and then determined the issue, I agree that would have been a better course. I agree that there is a difficulty in dealing with these taxes piecemeal, but you can-not take these Debates over and over again practically upon the same proposals.
§ Mr. PRETYMANThe right hon. Gentleman has interrupted me on a totally different point. I did not suggest that these different proposals should be debated together, because they could not be debated in that way. My point was that when the right hon. Gentleman was-defending a particular duty he treated it as an isolated case, and would not consent to treat it in the only fair way, which is as part of the whole duty levied upon that particular property. It is not fair to put to the House of Commons an addition to the Death Duty, as if it stood wholly by itself and not as part of the whole Death Duty levied upon that particular property. 1977 Surely the right hon. Gentleman does not contend for a moment that where a testator leaves a family of children, and where the Estate Duty is payable on the whole estate, the levy on that estate does not affect the whole of the legacies to the different children, and they are necessarily reduced in proportion. It cannot be otherwise. The testator knows what the law is, and he knows he has an estate of a certain gross amount to leave behind him. He knows that so much duty will be levied, and therefore his net estate will be reduced to that extent. If he has to provide for five children, does the right hon. Gentleman mean to suggest that he does not take the duty into account, and that the shares of each of the children will not be reduced by the amount of the duty levied on the whole estate? The Chancellor of the Exchequer cannot contend that. What becomes of his attempt to separate the Estate Duty and treat it as if it were something of no concern whatever, having nothing to do with the 1 per cent. duty levied on one of the children? It has everything to do with it, and the whole duty will fall upon estates of this character.
May I emphasise the fact that estates of this kind are largely the estates of men in business, and the values are very largely manufactured. Take the case of a tradesman in business in any great town. When you come to value that man's estate you have to take into account all kinds of things; you have to consider the debts which appear on his books, and I have had personal evidence given to me within the last few weeks of the extreme hardship which falls upon businesses of that character under the present law where the whole capital of the business is entirely locked up in the trade, and where the nominal capital which is taxed for duty often consists of thousands of pounds of debts, which are most difficult to recover, because the tradesman knows that if he proceeds against people who owe him money his custom will be very materially reduced. On the death of the head of a large business, consisting entirely of capital sunk in the business, the property is left, say, to the children, and the tax collector demands a considerable sum of ready money to be paid in Death Duties. That money has to be raised from the business; it has to be borrowed, and in one particular case which came to my notice of a tradesman supposed to be in a very large way of business, it took 10 years for the business to pay oft the debt incurred under the pre- 1978 sent scale of Death Duties. Of course, under the scale which is now proposed, the problem will be very much aggravated. I think it is a serious hardship that this 1 per cent. duty should be reimposed in addition to the enormously increased scale of Death Duties on small businesses of that character. This duty is being imposed upon property which exists largely on paper, but the duty has to be raised in cash and paid to the Chancellor of the Exchequer.
I now come to another point of a totally different character, and it is one which raises a legal point. I believe I am correct in stating that Estate Duty has always been treated, and is in its essence a Death Duty levied upon the total estate of the deceased, without reference to the succession. Succession and Legacy Duty has always been treated on a totally different basis. It is not a duty on the magnitude of the estate, and ought not to be treated in that way. Legacy and Succession Duty have always been treated solely in reference to the amount as regards the person who takes the legacy or succession. To attempt to introduce here an increase of the duty on a principle of differentiation—
§ Mr. LLOYD-GEORGEWe reduce it.
§ Mr. PRETYMANThis is not a proposal to reduce the duty How can that be when they are not paying the duty now? Who is going to have it- reduced? Not one single individual. This tax is to obtain an excuse for raising the amount upon some people who comprise a large section of the community, and in order to get that excuse you are mixing up the procedure of law and mixing up Succession Duties and Death Duties. I would ask that somebody learned in the law on the Front Ministerial Bench should tell us how they justify the mixing up of the principles of the Estate Duty and the Succession Duty? When we come to the question of deductions and limitations it is quite contrary to the whole principle of the duty to base those deductions upon the amount of the estate from which the legacy or succession is derived. Clearly, under the principles of the Legacy and Succession Duty, this tax ought to be based upon the amount of succession and not on the amount of the estate from which the succession is derived. What the Government are doing in this case is that somehow or other, by confusing the law and confusing the issue, they are taking more money from estates which are passing direct to children. It is quite true, as the 1979 Chancellor of the Exchequer says, that he is raising money as a necessity of the State. That is a general argument which I admit the Chancellor of the Exchequer is justified in repeating. That, however, is not what I objected to last night, because it was a different argument altogether. The argument of the Chancellor of the Exchequer is that the necessity of the State knows no law, and that when the State wants money it must get it somewhere. "Must" is all very well, but "cannot" is its master. If the State has arrived at that point when you are actually reducing the capital of general estates from which the resources of the State alone can be derived, there must come a point when your exactions must cease. That point, if it has not already been reached, has very nearly been reached. [Cries of "Oh, oh!"] Hon. Gentlemen below the Gangway do not believe that statement, and think they are perfectly justified in their belief. Time, however, will prove that. If, after the imposition of these enormously increased duties and taxes, employment is maintained and the prosperity of the country is increased, then hon. Members may remind us of what we are stating to-day. If, however, it is found that, on the contrary, the enormous increase of these duties and taxes in every direction does reduce employment and does affect the general prosperity of the working classes of this country, then I hope they will do us the honour to remember the arguments which we have used to-day, and admit that they were justified, not from a selfish, but from a purely national point of view.
§ Mr. HALDANEThe speech of the hon. and gallant Member has been a little discursive, but that is not altogether his fault. He has travelled over the whole field of the Death Duties, but I want to recall the Committee to the point we are discussing here. The Amendment proposes to leave out from the word "be" to the word "levied." The meaning of the Amendment is to keep alive the exemptions of duty which the Act of 1894 created.
§ Sir EDWARD CARSONNot to keep alive, but to revive.
§ Mr. HALDANENo; it is intended to keep those exemptions alive. The Act of 1894 did two things. It exempted lineals from the payment of the 1 per cent. in the shape of Succession Duties in two cases. The first is the general case under Section 1 1980 of that Act. If Estate Duty had been paid that franked certain duties in the Schedule, and in the Schedule you will find specified the 1 per cent. Then, according to Section 5, Sub-section (2), the payment of duty on settled property with the 1 per cent. franked, to revive the analogy of last night, on the death of B, not only the Estate Duty which would otherwise have been payable then, but the 1 per cent. which the successor would have had to pay. It is proposed by this Bill as it stands to change that, and to say that, notwithstanding these exemptions, the 1 per cent. is to be paid. You must not take the substance of Sub-section (2) of Clause 42 of this Bill by itself. You must treat it in connection with what follows, and what we have tried to do in these provisoes is to distribute in as equitable a form as we can the exemptions under the principal Act. A lineal may get off, although he succeeds to a very large fortune, and, moreover, the burden of the Estate Duty may not fall upon him. The burden will fall upon the estate, whereas the duty of 1 per cent. is all he himself has to pay.
What will happen under the Clause as it now stands will be that, in the case where the principal value of the property passing on the death of the deceased and chargeable with Estate Duty (other than property in which the deceased never had an interest) does not exceed £15,000, no l per cent. is payable. Again, the 1 per cent. will not be payable where the amount or value of the legacy or succession, together with any other legacies or successions derived by the same person from the testator, intestate, or predecessor does not exceed £1,000, whatever may be the principal value of the property so passing uncharged able; and in the third place, where the person in succession is the widow or a child under the age of 21 years, and the amount does not exceed £2,000. The view taken by the Government is that these exemptions may be more fairly distributed than is the case under the existing system. I am not disputing we are raising taxes and taking more money. That is the very sad but actual essence of this Bill. What we are trying to do is to make a better distribution. The exemption of the 1 per cent. in all cases was not a fair distribution. It worked out very unevenly. We, therefore, abolish that, and make another distribution. The old point which the Committee is discussing at the present moment is this and nothing more: Are you to continue the old exemptions from the lineal duties which were created by 1981 Section 1 of the Finance Act of 1894 and by Section 5; and, if you do not continue them, are you to make the new distribution which is contained in this proviso? The point is a very narrow one. Are you to omit these special exemptions which only occur in the event of Estate Duties or Settlement Duty being paid? The sole question before the Committee relates to these two cases, and the case of the Government is that, although they are exacting more money, the system of distribution put in here is a fair and wise system.
§ Mr. J. W. HILLSI agree that the point in one respect is not a big one, but still it is a very important point of principle. The Chancellor of the Exchequer and the Secretary of State for War have both given us a good many reasons in support of their Clause, but they are all of them bad. I should like, first of all, to clear the ground of one or two smaller points. The Chancellor said it was not fair to compare the French law with the English law. He said the French law, no doubt, treats a lineal more favourably than the English law, but it treats the wife much less favourably, and therefore on the average the same justice is meted out in both countries. I do not think that is a very fair argument, but I agree it is a small point. The next point of the Chancellor was that now the legatee escapes all duty, and it is not fair because these legacies are a large amount. I do not think that applies in very many cases. In nearly all cases of personal property, apart from land, the property is divided equally among the children. They do not take specified legacies, but shares of the residue, and the Estate Duty therefore falls proportionately upon each. Of course, in the case of a house or a landed estate, a larger proportion of the personal fortune is left to the eldest son, the person who takes the estate; but in the very large majority of ordinary cases of fortunes in stocks and shares, and not in land, the property goes equally among the children, and therefore all pay the duty equally, and no one child benefits at the expense of the others. The Chancellor said we are really dealing with very few cases, because he proposed to exempt all estates of £15,000 and under. I do not think that is a fair argument. If the thing is wrong in principle, it does not matter very much that very few estates come under it. The chief argument of the Chancellor is that he has got to get the money somehow, and it seems to me this 1982 is the very worst way of getting it. You are taxing the fortune which goes from father to son, and I cannot conceive a worse way of raising your money. Surely it is no support for this tax that you have got to get the money somehow. You have got to defend this tax on its merits, and I should have thought the very worst way of collecting the tax was to collect it on money passing from father to son or grandson. By the first part of this Clause we have already considerably changed the duties between relations. Then tendency all round is to treat relations no more favourably than friends and strangers in blood. That is a totally wrong system. If an estate goes to a stranger in blood, that is luck for him, and it is quite fair he should pay something, but I do not think it fair to collect the money if it goes to a relation, and of all cases the very worst is when it passes from father to son.
§ Mr. S. O. BUCKMASTERMay I say a few words as to the magnitude of the evil which this Amendment is designed to remedy? It is alleged that the levying of a Succession Duty of 1 per cent. between rather and son will cause, as I gather from the hon. and gallant Member for Chelmsford (Mr. Pretyman), a serious depletion of the capital of the country, and will be productive of very serious consequences to the labour market of the world at large. I would like the Committee to consider for a few moments what this tax really is. For 41 years this tax of 1 per cent. on successions existed without complaint, from 1853 to 1894. It was in 1894 undoubtedly removed because of the imposition of the Estate Duty. It is now proposed to restore the Succession Duty. It is perfectly plain if what the hon. and learned Member who has just sat down (Mr. J. W. Hills) has said is true, that for 41 years this country was pursuing a disastrous policy, because he says the tax on succession under any circumstances from father to son is the very worst and most mischievous form of taxation we can find. If we propose these duties under the present Bill, who will be hurt, and to what extent? Let me take the case which I rather gathered excited the sympathies of the hon. Member—the case of the small estate. The first estate to be subject to this tax under any circumstances is that of the value of £15,000. Let me assume that the testator does what we know quite well is very rare, and leaves it all without exception to his family. If he has one son and that son takes £15,000, what has he to pay? One hundred and fifty pounds.
§ Mr. BUCKMASTERSo far as this tax is concerned he is asked to pay £150 and no more. Let me assume this man wants to live in idleness for the rest of his days, and he invests the £15,000, say in Consols. What is the payment he has made to the State for the protection he is going to receive for the rest of his life? It is £4 10s. per year. That is not a large sum for this man to pay for the privilege of being able, if he chooses, to live in idleness for the rest of his days. It appears to me hon. Members opposite entirely mistake the nature of these Succession Duties. As I understand it, the reason why you levy duties on the passing of an estate at death is that the man who inherits the estate has done nothing whatever to earn it. The amount being charged in this case, if he receives it all, is the sum of £150, or £4 10s. per year. If the testator
§ has many children and the estate is split up, they only have to pay an added fraction. If he has live, it will be £30. Is that a large sum, or a sum to excite the vituperation of the hon. and gallant Member for Chelmsford? I cannot imagine it will have the appalling influence upon the capital of the country that he suggests. Is it to be suggested a man is going to become thriftless and cease to make provision for his family because if he dies and leaves the whole of his estate to his children they will pay 1 per cent.? The magnitude of this matter has been entirely exaggerated, and I would urge upon the Committee to reject the Amendment.
§ Question put, "That the words proposed to be left out to the word 'and' ['or any other Act, and'] stand part of the Clause."
§ The Committee divided: Ayes, 226; Noes, 85.
1985| Division No. 650.] | AYES. | [6.30 p.m. |
| Abraham, W. (Cork, N.E.) | Dillon, John | Isaacs, Rutus Daniel |
| Acland, Francis Dyke | Duckworth, Sir James | Jackson, R. S. |
| Agnew, George William | Duffy, William J. | Jardine, Sir J. |
| Allen, A. Acland (Christchurch) | Dunne, Major E. Martin (Walsall) | Jones, Sir D. Brynmor (Swansea) |
| Allen, Charles P. (Stroud) | Ellis, Rt. Hon. John Edward | Jones, Leif (Appleby) |
| Ashton, Thomas Gair | Erskine, David C. | Jowett, F. W. |
| Baker, Sir John (Portsmouth) | Essex, R. W. | Joyce, Michael |
| Baker, Joseph A. (Finsbury, E.) | Esslemont, George Birnie | Keating, Matthew |
| Balfour, Robert (Lanark) | Evans, Sir S. T. | Kekewich, Sir George |
| Baring, Godfrey (Isle of Wight) | Everett, R. Lacey | King, Alfred John (Knutstord) |
| Barker, Sir John | Falconer, James | Lamb, Ernest H. (Rochester) |
| Barlow, Sir John E. (Somerset) | Fenwick, Charles | Lambert, George |
| Barnard, E. B. | Ferguson, R. C. Munro | Lamont, Norman |
| Beauchamp, E. | Flynn, James Christopher | Law, Hugh A. (Donegal, W.) |
| Benn, Sir J. Williams (Devonport) | Foster, Rt. Hon. Sir Walter | Layland-Barrett, Sir Francis |
| Bethell, Sir J. H. (Essex, Romford) | Fuller, John Michael F. | Leese, Sir Joseph F. (Accrington) |
| Bethell, T. R. (Essex, Maldon) | Fullerton, Hugh | Lever, W. H. (Cheshire, Wirral) |
| Boulton, A. C. F. | Gibb, James (Harrow) | Levy, Sir Maurice |
| Bowerman, C. W. | Gill, A. H. | Lewis, John Herbert |
| Brace, William | Glover, Thomas | Lloyd-George, Rt. Hon. David |
| Branch, James | Gooch, George Peabody (Bath) | Lupton, Arnold |
| Brunner, J. F. L. (Lanes., Leigh) | Grey, Rt. Hon. Sir Edward | Luttrell, Hugh Fownes |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Guest, Hon. Ivor Churchill | Lynch, H. B. |
| Bryce, J. Annan | Haldane, Rt. Hon. Richard B. | Macdonald, J. R. (Leicester) |
| Buckmaster, Stanley O. | Hancock, J. G. | Maclean, Donald |
| Burns, Rt. Hon. John | Harcourt, Rt. Hon. L. (Rossendale) | Macnamara, Dr. Thomas J. |
| Burnyeat, W. J. D. | Harcourt, Robert V. (Montrose) | Macpherson, J. T. |
| Burt, Rt. Hon. Thomas | Hardy, George A. (Suffolk) | MacVeagh, Jeremiah (Down, S.) |
| Buxton, Rt. Hon. Sydney Charles | Hart-Davies, T. | M'Laren, H. D. (Stafford, W) |
| Byles, William Pollard | Harvey, W. E. (Derbyshire, N.E.) | M'Micking, Major G. |
| Cawley, Sir Frederick | Harwood, George | Maddison, Frederick |
| Charming, Sir Francis Allston | Haworth, Arthur A. | Mallet, Charles E. |
| Cherry, Rt. Hon. R. R. | Helme, Norval Watson | Marks, G. Croydon (Launceston) |
| Clough, William | Hemmerde, Edward George | Marnham, F. J. |
| Clynes, J. R. | Henderson, Arthur (Durham) | Massie, J. |
| Cobbold, Felix Thornley | Henderson, J. McD. (Aberdeen, W.) | Masterman, C. F. G. |
| Collins, Stephen (Lambeth) | Higham, John Sharp | Menzies, Sir Walter |
| Collins, Sir Wm. J. (St. Pancras, W.) | Hobhouse, Rt. Hon. Charles E. H. | Middlebrook, William |
| Condon, Thomas Joseph | Hogan, Michael | Molteno, Percy Alport |
| Corbett, C. H. (Sussex, E. Grinstead) | Holland, Sir William Henry | Money, L. G. Chiozza |
| Cornwall, Sir Edwin A. | Holt, Richard Durning | Morgan, J. Lloyd (Carmarthen) |
| Cotton, Sir H. J. S. | Hooper, A. G. | Morse, L. L. |
| Cox, Harold | Hope, John Deans (Fife, West) | Morton, Alpheus Cleophas |
| Curran, Peter Francis | Hope, W. H. B. (Somerset, N.) | Muldoon, John |
| Davies, Timothy (Fulham) | Horniman, Emsile John | Murphy, John (Kerry, E.) |
| Dewar, Arthur (Edinburgh, S.) | Howard, Hon. Geoffrey | Murray, James (Aberdeen, E.) |
| Dickinson, W. H. (St. Pancras, N.) | Hutton, Alfred Eddison | Myer, Horatio |
| Nicholls, George | Roch, Walter F. (Pembroke) | Trevelyan, Charles Phillips |
| Norman, Sir Henry | Roe, Sir Thomas | Verney, F. W. |
| Nussey, Sir Willans | Rogers, F. E. Newman | Villiers, Ernest Amherst |
| Nuttall, Harry | Rose, Sir Charles Day | Vivian, Henry |
| O'Brien, K. (Tipperary, Mid) | Rowlands, J. | Walsh, Stephen |
| O'Brien, Patrick (Kilkenny) | Runciman, Rt. Hon. Walter | Wardle, George J. |
| O'Connor, John (Kildare, N.) | Rutherford, V. H. (Brentford) | Warner, Thomas Courtenay T. |
| O'Donnell, C. J. (Walworth) | Scarisbrick, Sir T. T. L. | Wason, Rt. Hon. E. (Clackmannan) |
| O'Grady, J. | Schwann, C. Duncan (Hyde) | Wason, John Cathcart (Orkney) |
| O'Kelly, Conor (Mayo, N.) | Schwann, Sir C. E. (Manchester) | Watt, Henry A. |
| Parker, James (Halifax) | Seely, Colonel | White, Sir George (Norfolk) |
| Partington, Oswald | Shackleton, David James | White, J. Dundas (Dumbartonshire) |
| Perks, Sir Robert William | Shaw, Sir Charles E. (Stafford) | White, Sir Luke (York, E.R.) |
| Pickersgill, Edward Hare | Shipman, Dr. John G. | White, Patrick (Meath, North) |
| Pointer, J. | Snowden, P. | Whittaker, Rt. Hon. Sir Thomas P. |
| Ponsonby, Arthur A. W. H. | Stanger, H. Y. | Wiles, Thomas |
| Price, Sir Robert J. (Norfolk, E.) | Stanley, Albert (Staffs, N.W.) | Williams, J. (Glamorgan) |
| Priestley, Sir W. E. B. (Bradford, E.) | Stanley, Hon. A. Lyulph (Cheshire) | Williams, W. Llewelyn (Carmarthen) |
| Radford, G. H. | Stewart, Halley (Greenock) | Williamson, Sir A. |
| Raphael, Herbert H. | Stewart-Smith, D. (Kendal) | Wilson, Henry J. (York, W.R.) |
| Rea, Rt. Hon. Russell (Gloucester) | Strachey, Sir Edward | Wilson, P. W. (St. Pancras, S.) |
| Rees, J. D. | Straus, B. S. (Mile End) | Wilson, W. T. (Westhoughton) |
| Rendall, Athelstan | Strauss, E. A. (Abingdon) | Winfrey, R. |
| Richards, Thomas (W. Monmouth) | Summerbell, T. | Wood, T. M'Kinnon |
| Ridsdale, E. A. | Taylor, John W. (Durham) | Young, Samuel |
| Roberts, Charles H. (Lincoln) | Taylor, Theodore C. (Radcliffe) | |
| Roberts, G. H. (Norwich) | Tennant, H. J. (Berwickshire) | |
| Robertson, Sir G. Scott (Bradford) | Thomas Sir A. (Glamorgan, E.) | TELLERS FOR THE AYES.—Mr. |
| Robinson, S. | Thorne, G. R. (Wolverhampton) | Joseph Pease and Captain Norton. |
| Robson, Sir William Snowdon | Thorne, William (West Ham) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Faher, Capt. W. V. (Hants, W.) | Peel, Hon. W. R. W. |
| Anson, Sir William Reynell | Fell, Arthur | Pretyman, E. G. |
| Anstruther-Gray, Major | Fletcher, J. S. | Rawlinson, John Frederick Peel |
| Arkwright, John Stanhope | Forster, Henry William | Renton, Leslie |
| Balcarres, Lord | Foster, P. S. | Renwick, George |
| Baldwin, Stanley | Gibbs, G. A. (Bristol, W.) | Roberts, S. (Sheffield, Ecclesall) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gordon, J. | Rutherford, Watson (Liverpool) |
| Banbury, Sir Frederick George | Gretton, John | Salter, Arthur Clavell |
| Banner, John S. Harmood- | Haddock, George B. | Scott, Sir S. (Marylebone, W.) |
| Baring, Capt. Hon. (Winchester) | Hardy, Laurence (Kent, Ashford) | Sheffield, Sir Berkeley George D. |
| Barrie, H. T. (Londonderry, N.) | Harris, Frederick Leverton | Stanier, Beville |
| Beach, Hon. Michael Hugh Hicks | Harrison-Broadley, H. B. | Starkey, John R. |
| Bowles, G. Stewart | Hay, Hon. Claude George | Staveley-Hill, Henry (Staffordshire) |
| Butcher, Samuel Henry | Heaton, John Heniker | Stone, Sir Benjamin |
| Carlile, E. Hildred | Hill, Sir Clement | Talbot, Lord E. (Chichester) |
| Carson, Rt. Hon. Sir Edward H. | Hope, James Fitzalan (Sheffield) | Thomson, W. Mitchell-(Lanark) |
| Cave, George | Joynson-Hicks, William | Thornton, Percy M. |
| Cecil, Evelyn (Aston Manor) | Kerry, Earl of | Valentia, Viscount |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Keswick, William | Walker, Col. W. H. (Lancashire) |
| Clark, George Smith | Kimber, Sir Henry | Walrond, Hon. Lionel |
| Coates, Major E. F. (Lewisham) | King, Sir Henry Seymour (Hull) | Warde, Col. C. E. (Kent, Mid) |
| Courthope, G. Loyd | Lambton, Hon. Frederick William | Wilson, A. Stanley (York, E.R.) |
| Craig, Charles Curtis (Antrim, S.) | Long, Col. Charles W. (Evesham) | Winterton, Earl |
| Craig, Captain James (Down, E.) | Lyttelton, Rt. Hon. Alfred | Wyndham, Rt. Hon. George |
| Craik, Sir Henry | M'Arthur, Charles | Younger, George |
| Dalrymple, Viscount | Mason, James F. (Windsor) | |
| Dickson, Rt. Hon. C. Scott | Moore, William | TELLERS FOR THE NOES.—Mr. Walter Guinness and Mr. J. W. Hills. |
| Doughty, Sir George | Morpeth, Viscount | |
| Douglas, Rt. Hon. A. Akers- | Nicholson, Wm. G. (Petersfield) | |
| Faber, George Denison (York) | Pease, Herbert Pike (Darlington) |
§ Mr. EVELYN CECILmoved to leave out from Sub-section (3) the following words: "and the duty shall also be levied and paid in cases where the person taking the legacy or succession is the husband or wife of the testator, intestate, or predecessor as in cases where the person taking the legacy or succession is a lineal ancestor or descendant of the testator, intestate, or predecessor."
I think this is a much stronger case than the one we have just been discussing, because the relationship of the parties is closer. What is perhaps still more re- 1986 markable is this. It is the first time that any duty of this kind, so far as I am aware, on property passing between husband and wife has been proposed in this country. The husband and wife, in the eye of the law, are a single person. That is the doctrine of the old common law. It is to be found in Coke upon Littleton and Black-stone, and all the other old law text-books It is also a doctrine founded upon ecclesiastical law. Husband and wife in the eye of the law are one person, with an absolute identity of interests. That is the basis on which our law has always gone. 1987 No doubt certain exceptions have in modern times been made, but what is to be noted about particular exceptions is that they have always been made for the benefit of the wife. There is no exception to that at all, until we get to the present one, which is not going to be made for the benefit of the wife or any other party, but solely to enable the Chancellor of the Exchequer to gain more money. The exception is therefore made to the detriment of the wife and of the husband. The exceptions that have been made to the old common law for the wife are such as appear in the Married Women's Property Acts and similar exceptions, such as that the wife is a competent, but not a compellable, witness, and that communications between husband and wife are privileged and confidential, and cannot be compelled to be given in evidence. All these exceptions draw no sort of distinction between husband and wife, and they have been made especially for the benefit of either party. Now we are face to face with an exception deliberately made to the detriment of both parties. That is by no means the strongest point of my case. There is a much stronger argument, to which I hope the Chancellor of the Exchequer will devote his attention, and that is that the property of the husband and wife are lumped together for the purposes of Income Tax, except so far as the wife earns her own income separately, so that by this lumping together the Chancellor of the Exchequer may get a higher rate of tax. Now we are going to calculate on quite a different basis, and the Chancellor of the Exchequer proposes that the properties of the husband and wife shall be separately treated for the purposes of Legacy and Succession Duty, so that duty shall be paid if either of them dies. Really there is no limit to the grasping rapacity of the Chancellor of the Exchequer. Let us at least have the same basis of calculation in these two cases. If the Chancellor of the Exchequer desires to lump together the property of a husband and wife for the purpose of the Income Tax, let them be lumped together equally for the purposes of Legacy and Succession Duty. I cannot understand, except on the very bald defence made just a moment ago that he wants money, why there should be any reason for differentiating between the two bases of calculation, and I hope if any alteration is made it will not be so drastic an alteration as this. I would strongly urge that no alteration ought to be made, 1988 that it is not equitable, and that it is treating husband and wife in a totally different way to that in which they have previously been treated. Therefore I say no alteration ought to be made at all. If there is to be any alteration, although I should entirely deprecate any, I would suggest to the Chancellor of the Exchequer that husband and wife should be on the same basis as children have been heretofore, and that there should be no legacy or Succession Duty if Estate Duty has been already paid.
§ Mr. LLOYD-GEORGEThe hon. Member thinks that wives ought to be exempted from this additional impost, on the ground that husband and wife are treated as one person so far as Income Tax is concerned. I agree, on the face of it, it does seem unfair that where the State can charge an increased Income Tax, by treating husband and wife as one, it should do so, but where it can, as in the case of Death Duties, get a greater taxation by treating them separately, then it deals with them in that manner. I agree in that way the State is rather unfair, but I am not responsible for that. At the present moment, if the whole of the property is left to one, it may have to pay 5, 10, or 15 per cent. duty, and I simply extend the principle. I am not making a new law, I am not differentiating for the first time, but this principle has been in existence for 100, or 120 years, or at least, since the first imposition of Death Duties. I simply say that, finding that principle in operation, I propose to act upon it. The hon. Member says that if the existing rule is to be changed at all, he hopes the alteration will not be so drastic as this one, but I cannot imagine a method which is less drastic than the one adopted by the Government. I do not want to enter now into the various exceptions. I have previously explained them, and the Secretary of State for War has also entered into them more fully than I have done. These exceptions will protect widows in really hard cases, and the character of them has been fully stated. As a rule, when the wife inherits property, she inherits it as a gift for life. It is not often that it is made an actual gift. She does not inherit the actual corpus of the estate, and it is not her own, and she only has a life interest in it. That is why the duty only produces £300,000, and I confess that anyone would naturally imagine that property passing from husband to wife, or wife to husband, 1989 would yield a good deal more than that sum. The reason why it does not, is that there are very large exemptions, and, in the second place, it is rare that the wife should come into the property absolutely, as a share is usually given to the wife for life, and at her death the property passes to the children. The 1 per cent., if it is upon property in which she has the sole interest, is really a very small burden, and I really do not think it is a very great demand to make upon a husband or wife, where property worth over £15,000 passes, that they should make this small contribution to the revenue.
Mr. BALFOURI think in the few observations which it is necessary to make upon this tax neither the Secretary of State for War nor I need look at it except from a purely external and impartial standpoint. I think the Chancellor of the Exchequer had rather a disagreeable task to perform, when he was defending this particular part of the Budget, and he was endeavouring, as I understood him, to rely upon precedents as a defence. It is ordinarily a very good defence, and one which we all have to go back to, when reason utterly fails us. Although I agree with the Chancellor of the Exchequer, however, that there are precedents which are in his favour, I would ask whether he is justified in deliberately going against precedent, as I think he is doing. I understand from those who are more learned in the history of this subject than I am, and who have really studied the cases, that really the Chancellor of the Exchequer is pursuing a new path, on which he will find it very difficult to find any sign-post erected by his predecessors. In these cases, therefore, I think he ought to be more careful. It is quite true that he has excepted the smaller estates. So far so good, but cases may be very had in regard to the larger estates also and is there not gross incongruity, in treating husband and wife as one flesh when you get a little more out of them and treating them as quite separate, when you think that by that expedient you can also get more out of them? It seems to me so utterly absurd to arrange your whole system of taxation not on any single principle except the solitary principle of how to get as much out of the taxpayer as you possibly can, treating him in one category, when you think you will get more out of him and treating him in another and contradictory category when you think that that course will reap a larger harvest to the Exchequer. I do not know 1990 what the Secretary of State for War is going to say on the subject, but I have no doubt he has armed himself with all the arguments to be brought forward, and I think he needs rather a good case to defend the position taken up by the Chancellor of the Exchequer. The Chancellor of the Exchequer gave no defence whatever to this, which is the main argument which we advance against the proposition he laid down. You fine husband and wife because they live together, and then you proceed to fine them because they do not die together. I am afraid that really is quite true, but you cannot treat them as two separate individuals when you are considering their estates for purposes of Death Duties and as a single joint individual for the purposes of Income Tax. Just because it suits you financially, you are taking an entirely different view of the relation of husband and wife, as far as property is concerned, in the two cases.
§ Mr. LLOYD-GEORGEI am not responsible for that state of things. It exists without distinction at the present moment, as far as the Death Duties are concerned. Take the residue. If the residue passes to the wife she may pay 5, 10, or 15 per cent. upon it in Death Duty. All I am doing is that I am extending that principle by an additional 1 per cent.
Mr. BALFOURAgain, that is a difficulty into which the Chancellor of the Exchequer puts us. He sometimes mixes up all the duties which can fall upon property at the time of anyone's decease, and at another time he draws a sharp distinction between Estate, Legacy and other duties which accrue at the time of, or in consequence of, death. I am sure I am not wrong in saying that he is imposing, I do not say a new Death Duty, but a new Succession Duty, and he is doing so because he draws this distinction between the property of husband and wife. If he really is going to try to get money in this way, I do not think he ought to treat the incomes as being one. I think he should make his Budget self-contained in that respect. I do not care, for my own part, which way he puts it, but I do not think he ought to embody in different parts of his Bill principles which are perfectly impossible to reconcile one with another when the only ground he himself brings forward is that by this utterly illogical proposition he gets a little more money into the Exchequer. I have the highest sympathy with the financial difficulties in which the Chancellor of the Exchequer finds himself 1991 but I do not think that this utter abandonment of principle and logic can involve the best way of promoting the interests of the State.
§ Mr. HALDANEThe right hon. Gentleman says that this proposal introduces an entirely new principle of taxation, but it really does not do so. At the present time, suppose somebody has £10,000 and leaves it to his wife, she has to pay Estate Duty as executrix.
§ Mr. PRETYMANThe right hon. Gentleman has put in the word "executrix," and the real point is that the lady pays as executrix and not as successor.
§ 7.0 P.M.
§ Mr. HALDANEShe pays out of money which is left to her, and this proposal of the Chancellor of the Exchequer does not introduce any new principle. The Leader of the Opposition speaks as if this is something quite new. Who was it who first introduced this principle? Not my right hon. Friend, but, if my memory does not deceive me, the Chancellor of the Exchequer in 1780. I am not perfectly certain who that was, but in 1780 the first Legacy Duty Act came into operation, and under that wives were taxed. You cannot say there is any question of principle in this, particularly in days when wives' estates are being more and more recognised every year as separate from those of their husbands. We think the distribution, taking these other proposals into account, is a fair distribution.
§ Mr. RAWLINSONAs one Who has brought this matter before the House on the occasion of every Budget for many years, may I remind the Chancellor of the Exchequer that both he and his predecessor in office, now the Prime Minister, have promised the most careful consideration for what they have admitted to be a gross injustice under the present law, and instead of amending the present law the Chancellor is adding to the injustice which exists? The Secretary of State for War said, "What would the public say to any such point as that?" What would the public say to the present state of taxation between husband and wife? For the purposes of the £700 exemption, the £160 exemption, and under the exemption of earned incomes up to £3,000 a year, you tax, not only the man's income, supposing he is earning £2,000 a year, you would take that into account, and you add all the pro- 1992 perty which his wife has as well, and you treat the two as having a joint income and as being one person. I have never heard any defence put forward for that absolute act of injustice. I will put down my customary Amendment on that point when we come to the Income Tax. Unless that or some similar Amendment is accepted you are treating them for taxation purposes as one person, and that is very hard on professional men who are earning something near the scale of exemption. When it comes to Succession and Legacy Duties it is true that if the husband leaves the whole of his property to his wife she is in one sense exempt from the whole taxation, because Estate Duty has to be paid, but that certainly is a very different matter from putting a Legacy Duty or a Succession Duty on her in respect of the money which goes to her as distinguished from the Estate Duty, and that is the novel proposal which has been put forward for the first time by this Clause. Looking at it from the abstract point of justice, surely it is a wrong tax to put on, and in the case of a professional man you will probably find that the wife is the loser by the death of her husband. When the capital, such as it is, comes to her you are probably taxing her at a time of her life when she can least afford it. The man may have saved up just enough money to enable his wife and children to keep up appearances, and it is just at that moment in their career, when the wife can least afford to pay it, that you are putting on this Succession and Legacy Duty for the first time. Surely the Government ought to give relief either on one side or the other? Personally I should prefer to have the relief upon the Income Tax rather than on this. A very large number of people who are interested in the matter say this is the greater injustice of the two—putting the tax on at the time of the death. I appeal to the Chancellor of the Exchequer, if it is only going to bring in this very small sum of £300,000, not to inflict this additional injustice.
§ Mr. SAMUEL ROBERTSI think this proposal is much worse than the last in the case of the children, and that was bad. I think the relations between husband and wife are so close and so different from any other relationship that there ought to be a differentiation not only for Legacy and Succession Duty but also for the whole of the Estate Duty. At present the wife has to pay Estate Duty, but here you are putting a new duty on altogether, and, 1993 therefore, emphasising the grievance, which I think ought not to exist. May I give another reason why the new tax should not be put on. The difference of age between husband and wife is much less than the difference of age between parent and child. Therefore the period of enjoyment of the property after the duty is paid is very much less than the period of enjoyment in the case of parent and son. Probably one will survive the death of the other for only a short period, but for that short period we put on an extra tax of 1 per cent. That is a very real grievance which the Government ought to consider.
§ Mr. JOYNSON-HICKSI want to ask the Chancellor of the Exchequer whether he is really going to support the Secretary of State for War in the precedent which he gave us? It shows the pass to which the Liberal party has come when the only precedent they can give for this act of injustice is to go back to the time of the Tory Lord North. I suggest that we have improved upon Lord North. We on this side of the House, at all events, are not committed to the precedents of Lord North. Since Lord North's time we have abolished that injustice. Parliament has progressed. The Secretary of State does not realise, perhaps, the state of progression of modern Parliaments. We have given Lord North the go-by many years ago, and it is rather hard on the right hon. Gentleman's followers that he has to go back to Lord North in order to find a precedent to re-establish this which is admitted on all hands to be an injustice. The Chancellor of the Exchequer's defence was that he was not responsible for it, but he will be responsible after this Bill. There is an Amendment moved to exempt the wife from Legacy Duty, and I have an Amendment down on the Paper to remedy the injustice to the wife in regard to Income Tax. Therefore, the right hon. Gentleman cannot get out of it after this Bill is passed, and he will be responsible for inflicting an additional injustice in the case
§ of a wife in regard to Estate Duty, and he will be responsible as Chancellor of the Exchequer for not removing the injustice, if he does not remove it, when we come to the question of the Income Tax.
§ Mr. AUSTEN CHAMBERLAINThis is a matter of some gravity from the fiscal point of view. No one who has occupied the position of Chancellor of the Exchequer and who has had his mind directed to these matters can fail to see that there is a growing sense of injustice about the present arrangements of Income Tax as they concern husband and wife. It has caused some irritation and some criticism for a long time past, and, as the tax is altogether higher, naturally the grievance is more felt, and the agitation for its removal becomes strengthened. I have not voted, either in opposition or in office, for any alteration of Income Tax law in that respect. I see the greatest difficulties in doing what some of my hon. Friends and hon. Members on the other side of the House have asked, and treating the incomes of husband and wife as totally distinct incomes for the purpose of abatement under the Income Tax Acts. I am anxious that whoever is in the position of Chancellor of the Exchequer should be able to maintain the present Income Tax Regulations in that respect. I think you will make a serious hole in the Income Tax, and give relief to a great number of people who have no particular claim upon your sympathy if you are unable to maintain the present Income Tax view of the property of husband and wife. It is on that pure fiscal ground that, for the sake of a, trifling revenue, you are destroying the ground on which you stood in preserving a very substantial revenue elsewhere that I urge the Government to accept the Amendment.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 212; Noes, 85.
1997| Division No. 651.] | AYES. | [7.15 p.m. |
| Abraham, W. (Cork, N.E.) | Barnard, E. B. | Brunner, Rt. Hon. Sir J. T. (Cheshire) |
| Acland, Francis Dyke | Barran, Rowland Hirst | Bryce, J. Annan |
| Agnew, George William | Beauchamp, E. | Buckmaster, Stanley O. |
| Allen, A. Acland (Christchurch) | Benn, Sir J. Williams (Devonport) | Burns, Rt. Hon. John |
| Allen, Charles P. (Stroud) | Berridge, T. H. D. | Burnyeat, W. J. D. |
| Ashton, Thomas Gair | Bethell, Sir J. H. (Essex, Romford) | Buxton, Rt. Hon. Sydney Charles |
| Baker, Sir John (Portsmouth) | Bethell, T. R. (Essex, Maldon) | Byles, William Pollard |
| Baker, Joseph A. (Finsbury, E.) | Boulton, A. C. F. | Cawley, Sir Frederick |
| Balfour, Robert (Lanark) | Bowerman, C. W. | Channing, Sir Francis Allston |
| Baring, Godfrey (Isle of Wight) | Brace, William | Cherry, Rt. Hon. R. R. |
| Barker, Sir John | Branch, James | Clough, William |
| Barlow, Sir John E. (Somerset) | Brunner, J. F. L. (Lanes., Leigh) | Clynes, J. R. |
| Cobbold, Felix Thornley | Jowett, F. W. | Robson, Sir William Snowdon |
| Collins, Stephen (Lambeth) | Joyce, Michael | Roch, Walter F. (Pembroke) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Keating, M. | Roe, Sir Thomas |
| Corbett, C. H. (Sussex, E. Grinstead) | Kekewich, Sir George | Rogers, F. E. Newman |
| Cornwall, Sir Edwin A. | Lamb, Ernest H. (Rochester) | Rowlands, J. |
| Cotton, Sir H. J. S. | Lambert, George | Runciman, Rt. Hon. Walter |
| Cox, Harold | Lamont, Norman | Scarisbrick, Sir T. T. L. |
| Cullinan, J. | Law, Hugh A. (Donegal, W.) | Schwann, C. Duncan (Hyde) |
| Curran, Peter Francis | Layland-Barratt, Sir Francis | Schwann, Sir C. E. (Manchester) |
| Davies, Timothy (Fulham) | Leese, Sir Joseph F. (Accrington) | Seely, Colonel |
| Dewar, Arthur (Edinburgh, S.) | Lever, W. H (Cheshire, Wirral) | Shackleton, David James |
| Dickinson, W. H. (St. Pancras, N.) | Levy, Sir Maurice | Shaw, Sir Charles E. |
| Duckworth, Sir James | Lewis, John Herbert | Shipman, Dr. John G. |
| Duffy, William J. | Lloyd-George, Rt. Hon. David | Snowden, P. |
| Dunne, Major E. Martin (Walsall) | Luttrell, Hugh Fownes | Stanger, H. Y |
| Ellis, Rt. Hon. John Edward | Lynch, H. B. | Stanley, Albert (Staffs, N.W.) |
| Erskine, David C. | Macdonald, J. R. (Leicester) | Stanley, Hon. A. Lyulph (Cheshire) |
| Essex, R. W. | Maclean, Donald | Stewart, Halley (Greenock) |
| Evans, Sir S. T. | Macpherson, J. T. | Stewart-Smith, D. (Kendal) |
| Everett, R. Lacey | M'Laren, Sir C. B. (Leicester) | Strachey, Sir Edward |
| Falconer, James | M'Laren, H. D. (Stafford, W.) | Straus, B. S. (Mile End) |
| Fenwick, Charles | Maddison, Frederick | Strauss, E. A. (Abingdon) |
| Ferguson, R. C. Munro | Mallett, Charles E. | Summerbell, T. |
| Flynn, James Christopher | Marks, G. Croydon (Launceston) | Taylor, John W. (Durham) |
| Foster, Rt. Hon. Sir Walter | Marnham, F. J. | Taylor, Theodore C. (Radcliffe) |
| Fuller, John Michael F. | Massie, J. | Tennant, Sir Edward (Salisbury) |
| Fullerton, Hugh | Masterman, C. F. G. | Tennant, H. J. (Berwickshire) |
| Gibb, James (Harrow) | Menzies, Sir Walter | Thomas, Sir A. (Glamorgan, E.) |
| Gill, A. H. | Middlebrook, William | Thompson, J. W. H. (Somerset, E.) |
| Glover, Thomas | Molteno, Percy Alport | Thorne, G. R. (Wolverhampton) |
| Gooch, George Peabody (Bath) | Morgan, J. Lloyd (Carmarthen) | Thorne, William (West Ham) |
| Grayson, Albert Victor | Morse, L. L. | Trevelyan, Charles Philips |
| Grey, Rt. Hon. Sir Edward | Morton, Alpheus Cleophas | Verney, F. W. |
| Haldane, Rt. Hon. Richard B. | Muldoon, John | Villiers, Ernest Amherst |
| Hancock, J. G. | Murray, James (Aberdeen, E.) | Vivian, Henry |
| Harcourt, Rt. Hon. L. (Rossendale) | Myer, Horatio | Walsh, Stephen |
| Harcourt, Robert V. (Montrose) | Newnes, F. (Notts, Bassetlaw) | Wardle, George J. |
| Hardy, George A. (Suffolk) | Nicholls, George | Warner, Thomas Courtenay T. |
| Harmsworth, R. L. (Caithness-sh.) | Nuttall, Harry | Wason, Rt. Hon. E. (Clackmannan) |
| Hart-Davies, T. | O'Brien, K. (Tipperary, Mid) | Wason, John Cathcart (Orkney) |
| Harvey, W. E. (Derbyshire, N.E.) | O'Brien, Patrick (Kilkenny) | Watt, Henry A. |
| Harwood, George | O'Connor, John (Kildare, N.) | White, Sir George (Norfolk) |
| Haworth, Arthur A. | O'Donnell, C. J. (Walworth) | White, J. Dundas (Dumbartonshire) |
| Helme, Norval Watson | O'Grady, J. | White, Sir Luke (York, E.R.) |
| Henderson, Arthur (Durham) | Parker, James (Halifax) | Whittaker, Rt. Hon. Sir Thomas P. |
| Henderson, J. McD. (Aberdeen, w.) | Partington, Oswald | Wiles, Thomas |
| Higham, John Sharp | Perks, Sir Robert William | Williams, J. (Glamorgan) |
| Hobhouse, Rt. Hon. Charles E. H. | Pointer, J. | Williams, W. Llewelyn (Carmarthen) |
| Holland, Sir William Henry | Ponsonby, Arthur A. W. H. | Wilson, Henry J. (York, W.R.) |
| Holt, Richard Durning | Price, Sir Robert J. (Norfolk, E.) | Wilson, J. W. (Worcestershire, N.) |
| Hooper, A. G. | Priestley, Sir W. E. B. (Bradford, E.) | Wilson, P. W. (St. Pancras, S.) |
| Horniman, Emslie John | Raphael, Herbert H. | Wilson, W. T. (Westhoughton) |
| Howard, Hon. Geoffrey | Rea, Rt. Hon. Russell (Gloucester) | Winfrey, R. |
| Hutton, Alfred Eddison | Rees, J. D. | Wood, T. McKinnon |
| Isaacs, Rufus Daniel | Rendall, Athelstan | Young, Samuel |
| Jackson, R. S. | Richards, Thomas (W. Monmouth) | |
| Jardine, Sir J. | Roberts, Charles H. (Lincoln) | |
| Jones, Sir D. Brynmor (Swansea) | Roberts, G. H. (Norwich) | TELLERS FOR THE AYES.—Mr. |
| Jones, Leif (Appleby) | Robertson, Sir G. Scott (Bradford) | Joseph Pease and Captain Norton. |
| Jones, William (Carnarvonshire) | Robinson, S | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Craig, Captain James (Down, E.) | Hills, J. W. |
| Anson, Sir William Reynell | Craik, Sir Henry | Hope, James Fitzalan (Sheffield)) |
| Anstruther-Gray, Major | Doughty, Sir George | Joynson-Hicks, William |
| Arkwright, John Stanhope | Douglas, Rt. Hon. A. Akers- | Kerry, Earl of |
| Balcarres, Lord | Faber, George Denison (York) | Keswick, William |
| Baldwin, Stanley | Fell, Arthur | Kimber, Sir Henry |
| Banbury, Sir Frederick George | Fletcher, J. S. | King, Alfred John (Knutsford) |
| Banner, John S. Harmood- | Forster, Henry William | King, Sir Henry Seymour (Hull) |
| Baring, Capt. Hon. (Winchester) | Foster, P. S. | Lambton, Hon. Frederick William |
| Beach, Hon. Michael Hugh Hicks | Gibbs, G. A. (Bristol, W.) | Lee, Arthur H. (Hants, Fareham) |
| Bowles, G. Stewart | Gordon, J. | Long, Col. Charles W. (Evesham) |
| Bull, Sir William James | Gretton, John | Lowe, Sir Francis William |
| Carlile, E. Hildred | Guinness, Hon. W. E. (B. S. Edm'ds.) | Lyttelton, Rt. Hon. Alfred |
| Castlereagh, Viscount | Hamilton, Marquess of | MacCaw, William J. MacGeagh |
| Cave, George | Hardy, Laurence (Kent, Ashford) | M'Arthur, Charles |
| Cecil, Lord R. (Marylebone, E.) | Harris, Frederick Leverton | Mason, James F. (Windsor) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Harrison-Broadley, H. B. | Moore, William |
| Chaplin, Rt. Hon. Henry | Hay, Hon. Claude George | Nicholson, Wm. G. (Petersfield) |
| Cochrane, Hon. Thomas H. A. E. | Heaton, John Henniker | Parker, Sir Gilbert (Gravesend) |
| Courthope, G. Loyd | Hill, Sir Clement | Parkes, Ebenezer |
| Peel, Hon. W. R. W. | Stanier, Beville | Walrond, Hon. Lionel |
| Pretyman, E. G. | Starkey, John R. | Warde, Col. C. E. (Kent, Mid) |
| Renton, Leslie | Staveley-Hill, Henry (Staffordshire) | Williams, Col. R. (Dorset, W.) |
| Renwick, George | Stone, Sir Benjamin | Wilson, A. Stanley (York, E.R.) |
| Roberts, S. (Sheffield, Ecclesall) | Talbot, Lord E. (Chichester) | Wyndham, Rt. Hon. George |
| Rutherford, Watson (Liverpool) | Thomson, W. Mitchell-(Lanark) | Younger, George |
| Salter, Arthur Clavell | Thornton, Percy M. | |
| Scott, Sir S. (Marylebone, W.) | Valentia, Viscount | TELLERS FOR THE NOES.—Mr. |
| Sheffield, Sir Berkeley George D. | Walker, Col. W. H. (Lancashire) | E. Cecil and Mr. Rawlinson. |
§ Mr. MITCHELL-THOMSONI beg to move, in paragraph (a), to leave out the words "in which the deceased never had an interest," and to insert instead thereof the words "of which the deceased was not competent to dispose."
This Sub-section proposes exemptions from the duty in certain cases. The first of those cases is that of an estate of which the principal value passing at death does not amount to more than £15,000. I do not know what the intention of the draftsman was in putting in the words "other than property in which the deceased never had an interest," but the intention of the words I propose to insert is perfectly clear. The words as they stand in the Clause are very obscure Let me put the case which I wish to deal with. A man has been for some years a life renter of a considerable property under a previous disposition. Perhaps he has very little property of his own. He may have only £10,000 of his own, and at his death he leaves that which is his own to his widow or child, and the life rent flies off to a different branch of the family altogether. The property that passes to the wife or child, amounting to £10,000, is all that he is competent to dispose of. I think the Government mean, at all events they ought to mean, that there ought to be an exemption from the payment of the Legacy Duty in that case. The whole idea underlying the payment of this duty is that the duty is in respect of some property of which the testator has been able to direct the disposition. Here the disposition is made by somebody else, and it only affects this man in so far as he holds a life rent. Nothing he could do could alter that by a jot or tittle. It was the dead hand that made the disposition, and although undoubtedly this man had a life interest in the estate he could not dispose of that interest. If the Government mean the words in the Clause to apply to property in which he never had a disposable interest, I think the words I propose are better than those in the Clause.
§ Mr. HALDANEWhat the hon. Member proposes to do is to take a value quite different from that assumed in the case 1998 to which the paragraph (a) applies. We are dealing here with the duty on estates, and we are making exemptions in the case of certain estates which are of a value which does not exceed £15,000. It very often happens that property passes on a testator's death in which he had no disposable interest, but yet might be of very great value. If the words proposed by the hon. Member were accepted the result would be that in the case of a man who was a life renter a valuable property might on his death pass to his wife or his son, and, being just under £15,000, duty could not be charged. In that case, although it was property of which he was not competent to dispose, it might be property which would bring the estate within the dutiable limit under this Clause.
§ Mr. CAVEThe argument of the Secretary of State for War was rather an attack on the words proposed to be put in than a defence of the Bill as it stands. I venture to say that my hon. Friend (Mr. Mitchell-Thomson) has put his finger on a real defect in this Clause. The object of this particular exemption, as I understand, is to relieve from the extra duty small estates passing to the wife or child if the total estate passing does not exceed £15,000. See how that applies in the caste of the life renter instanced by my hon. Friend. He is the life renter of a large estate, and he may have £1,000 or £2,000 a year out of it. On his death that estate passes away to another branch of the family, and the actual estate of the deceased is a good deal under £15,000. It may not represent more than a few thousands passing to the whole of his family. In that ease all that the children get is very small indeed. It might amount to no more than £1,000 a-piece, and yet the effect of the Clause as it stands is to impose payment of duty on these children. Surely that is not what the Clause means. I agree that where an estate does pass from the life renter to the children the effect of the words would be to exempt the estate, and that, of course, I do not ask. What I do suggest is this: Words ought to be inserted subsequently dealing with the point raised. Where, as the result 1999 of dispositions made by other people, the children get a very small legacy and the estate passing to the children is a great deal less than £15,000, such a case, I think, ought to be exempted. I have not forgotten Sub-section (b) that where a particular child gets less than £1,000 he is exempted. But I may point to the case in which a child gets no more than £1,000, and yet the estate as a whole is very much less than £15,000. Suppose, for instance, a man's income passes wholly from him to a collateral branch, except say, perhaps, £2,000 which he has saved, and suppose he leaves that £2,000 to his two children, they each of them will get £1,000, but they will not be protected by Sub-section (b), nor will they be protected by Sub-section (a) as it stands. The effect will be that upon that very small estate the extra duty will be levied. I would suggest that the point might be met in the Bill either at this stage or later on.
§ Mr. LLOYD-GEORGEI think the hon. and learned Gentleman sees that the words proposed by the hon. Member (Mr. Mitchell-Thomson) would bring in cases which we could not possibly exempt. For instance, we might have a man with a life interest in a settled property which might be worth half a million, while his own property, of which he alone could dispose, might not be worth £10,000, and that half million might pass to these very children. There might be many cases of that kind. But, if you take the case where a testator has only a life interest in the property, which passes away from him on his death to another branch of the family or even to strangers, and the property which passes to his own family is under £15,000, I think that this amply safeguards cases of that kind. The hon. and learned Gentleman himself admits that words of this description are very dangerous, but I promise to consider the point very carefully. I see the point which has been raised by the hon. and learned Gentleman, and I will endeavour to see if words can be inserted.
§ Mr. MITCHELL-THOMSONI quite recognise the force of what the right hon. Gentleman has said, and I do not wish to press the matter now. I appreciate the point made against the precise form of my Amendment; but, of course, there is no difficulty in meeting that later on. What I do want to emphasise is the real hardship which will remain under this Clause unless you alter it. That is to say, if the 2000 property over which a man may have no power of disposition whatsoever is going to be taken into account, in assessing a duty, or rather in preventing a property from being exempted from duty, in the case of estates which may be very small indeed there may be great hardship on the immediate successors. I am glad that the right hon. Gentleman has agreed to consider the matter, and I would ask leave to withdraw.
§ Amendment, by leave, withdrawn.
The EARL of KERRYmoved in Sub-section (2), paragraph (a), to leave out the word "fifteen" ["fifteen thousand pounds"] and to insert instead thereof the word "twenty."
The object of this Amendment is to raise the limit of the property on which duty shall not be levied from £15,000 to £20,000. The Secretary of State for War just now said that where the duty was being raised the Government were endeavouring to distribute it in the most equitable manner possible. It is because I do not altogether agree in admitting the accuracy of this contention that I move this Amendment. I would like specially to call the attention of the Committee to the fact that there is no graduation in the Legacy and Succession Duty. I have no doubt that in future years Legacy and Succession Duty will be graduated with 1 per cent. as a starting point, but as there is no graduation now the duty is the same for an estate of £1,000 as for an estate of £1,000,000. It does seem rather hard if you admit the principle of graduation in the matter of Estate Duty, that no relief should be given in respect of the small income. The only way to get a system of graduation is by remission in the case of the smaller estates. Small estates by universal consent are those on which the Estate Succession Duties press most hardly, and on no size of estate do they press more hardly than on those between £15,000 and £20,000. I would call the attention of the Committee to the fact that on that particular size of estate the two duties together have been raised from 4 per cent. to 6 per cent. That will fall very hardly on those who succeed to estates of this size. Surely after all an estate of £15,000 or £20,000 is not a large estate from the point of view of income. At 3½ per cent. it would only come to £700 a year. The Government have said a great deal about lifting the burden from the shoulders of those who are less capable of bearing it, and I claim for my Amend- 2001 ment that it merely carries out better than they have done the principle to which they have given their adherence.
§ Mr. LLOYD-GEORGEThe question raised by this Amendment is not one of principle at all. It is purely a question, not exactly of machinery, but of the extent to which you will make exemption. Personally, I cannot see any particular reason for raising the figure to £20,000. The Noble Lord might have used exactly the same argument in favour of exemption to £25,000. His argument, as far as I followed it, was that it hits the estates between £15,000 and £20,000 very hard. He might have made the same observation in reference to estates between £20,000 and £25,000. Therefore I am bound to look at it purely from the fiscal point of view, relieving hard cases as far as the Exchequer can afford it. Exemption to £15,000 has made a very severe inroad upon the amount which might be derived from what I regard as a perfectly fair impost. If it is extended to £20,000 it will cost a considerable sum, and in the case of concessions made by the Exchequer I have got to consider the respective value and merits of the various demands made in reference to this Bill. I do not think that the money which would be lost in accepting this Amendment would really be well spent from the point of view of making concessions, and therefore I cannot see my way to accept the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. AUSTEN CHAMBERLAINmoved, in paragraph (c), after the word "the" ["the widow"] to insert the word "husband."
I move formally this Amendment, which stands in the name of the hon. Member for Stepney (Mr. Leverton Harris), without saying anything in its favour, but merely to obtain an explanation from the Government why they have not so drafted the Bill as to give the husband the relief which they give to the wife. I do not understand the reasons, and until I know them I will not undertake to comment upon them.
§ Mr. LLOYD-GEORGEI think the reasons have already been stated as arising from considerations of the hard case of the death of the breadwinner and the head of the family. I do not think there is the same case for a compassionate allowance as far as the husband is concerned as there 2002 is in the case of the widow. Where the breadwinner has disappeared, you do not want to increase her burden more than is absolutely necessary, and a really good case is made for exemption in her favour. But this does not apply in the other case at all. The husband may be an exceedingly wealthy man. He may be a man earning a very large income, and the wife may leave a small property of, say, £3,000. I do not think that there should be exemption in such circumstances, and that is really the reason why the difference has been made.
§ Mr. AUSTEN CHAMBERLAINI do not feel strongly in the matter, and I do not care to press it to a Division, but I may say that the Chancellor of the Exchequer's reason is a bad one. He says that in certain cases the husband may be a man of great fortune if the wife dies leaving a small property. That is perfectly true; but, in another case, the wife may be the person of fortune, and the husband may be a person of very small means, and the property of the wife may pass away from the family altogether. Therefore I do not think the reasons given are good, but I do not feel sufficiently strongly on the matter to press the Committee, and, therefore, I ask leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Mr. JOYNSON-HICKSmoved to leave out of paragraph (c) the words "under the age of twenty-one years."
I do not see why the exemption should depend upon the age of the child. Really a child of twenty-one may be just as much in need of money as the child under twenty-one. The one is just as much the child of the testator as the other, and why should not the child of twenty-one have the benefit of being free from this tax? I cannot see the reason for putting in these extraordinary words "under the age of twenty-one years." A young man of twenty-one may find £2,000 of far more use to start him in life than the child of two or three years, and similarly, the girl of 23, 24, or 25, who is just going to get married. I merely move the Amendment for the purpose of ascertaining from the Chancellor of the Exchequer the reasons for this curious provision.
§ Mr. LLOYD-GEORGEThis provision is really to cover the case where small children are left, and where the testator has provided money to bring them up. I do not think it affects the case of boys or 2003 girls of 21 years of age. I do not see that persons of 21 years of age have the right to come to the State for relief on the ground that they are poor and needy, and that a £2,000 legacy is necessary to keep them from starvation or even to complete their education. Therefore I do not see any reason why the Amendment should be made. Otherwise you might get a person who is a millionaire, and who might be 30 or 40 years of age, and thoroughly well established in life, claiming this sort of sympathetic exemption on the ground that he was a child.
§ Mr. JOYNSON-HICKSMay I point out that the child who is a millionaire at the age of three is just as likely to be well provided for as the millionaire aged 30.
§ Mr. LLOYD-GEORGEI did not say the person was a millionaire, but might be a millionaire, and evidently he would not come under the same category as the child under 21 years of age.
§ Mr. PRETYMANWill the right hon. Gentleman alter the age to 25 years? At the age of 21 young men are starting in life, many of them as officers in the Army. I do not wish to press the Chancellor of the Exchequer too much, for I acknowledge there is something in what he said, but I think the exemption might be extended to 25 years of age.
§ Mr. LLOYD-GEORGEI will see what can be done on Report.
§ Mr. CAVEIt is very often found that legacies are given to children up to the age of 25 for maintenance and so on, and 25 years of age is becoming the recognised age at which dependence ceases.
§ Mr. JOYNSON-HICKSI had intended to press the Amendment to a Division, but after the undertaking given by the right hon. Gentleman to consider it on Report, I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. GIBBSmoved, in paragraph (c), to leave out the word "two" ["does not exceed two thousand"], and to insert instead thereof the word "five."
The right hon. Gentleman referred to the case of the widow, and there are widows left with no more than £80 a year. Two thousand pounds at 4 per cent. is £80 a year; and supposing a widow is left with children and is suffering all the privations and hardships consequent upon the death 2004 of the breadwinner, it will be very hard if she is called upon to pay this duty. I think the Government should take those cases into consideration.
§ Mr. LLOYD-GEORGEI hope the hon. Member will not press his Amendment. This is an increase of from £2,000 to £5,000—a very substantial increase. I have already promised to consider the case of the child of 25 years of age.
§ Amendment, by leave, withdrawn.
§ Mr. CAVE (for the Earl of Kerry)moved, in Sub-section (4), to leave out the words "first succession under the disposition arises," and to insert instead thereof the words "disposition made."
I do not quite understand why a distinction is made between the three cases, which is rather important. The Committee will see that this Section is to take effect in the case of Legacy Duty only where the testator dies after 30th April of this year. That is the first case, and there I agree the Bill is not retrospective, except, of course, to the 30th April of this year. The second case is where a "succession arises by devolution of law," and there it only takes effect where the death occurs after 30th April last. There, again, the Bill is not retrospective. But look at the third case, "arising under a disposition only if the first succession under the disposition arises on or after that date." There a real distinction is made between cases which ought to have no difference between them. A settlement by deed was made perhaps ten years ago, and the life tenant does not die until this year or next year; then this extra duty attaches. Why is it not provided that in every case the duty only attaches where the settlement under which the succession arises is made after 30th April last? You are treating the cases on a different footing altogether. In the first two cases you do not make the duty retrospective, and in the third case you practically do so. I ask the Government to treat the three cases in the same way, and confine the duty in the last case to instances where the disposition under which the succession arises is made after 30th April this year.
§ The ATTORNEY-GENERAL (Sir William Robson)This Amendment is very important from the fiscal point of view, and it would mean a loss to the revenue in the first year which we cannot afford.
§ Mr. PRETYMANDo I understand where a disposition is made by will, and under that will the first succession has taken place, namely, the first life in the settlement, then no duty will be charged during the run of that settlement when the person has succeeded under the same settlement, the settlor having died before 30th April, then the increased duty would not be leviable?
§ Mr. LLOYD-GEORGEindicated assent.
§ Mr. PRETYMANWhy is the difference made against the settlement where the settlement is by will and not by deed? A man might make a settlement by will or by deed in a marriage settlement say, during the lifetime of his daugther, with remainder to her children. The first succession would not be the first who took from him under the deed, but would be the second life under the settlement—namely, the first child. My hon. Friend's Amendment is to assimilate two cases of succession by will and succession by deed.
§ Mr. HALDANEI think the words as they stand are right. Sub-section (4) does three things. It is to take effect "where the testator by whose will the legacy is given, or the intestate on whose death the Legacy Duty is payable, dies on or after the thirtieth of April," and then "in the case of a succession arising through devolution by law," and "in the case of a succession arising under a disposition, only if the first succession under the disposition arises on or after that date." Therefore, you do not take as the date when you are going to tax the date when the instrument created the succession. What you took was the date of the succession itself. That was the scheme of the Act of 1853.
§ Mr. CAVEI think the effect of the Bill is to make the date so arbitrary that I shall ask the Committee to support this. Amendment.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 200; Noes, 63.
2007| Division No. 652.] | AYES. | [8.10 p.m. |
| Abraham, W. (Cork, N.E.) | Davies, Timothy (Fulham) | Jones, William (Carnarvonshire) |
| Acland, Francis Dyke | Davies, Sir W. Howell (Bristol, S.) | Jowett, F. W. |
| Agnew, George William | Dewar, Arthur (Edinburgh, S.) | Joyce, Michael |
| Allen, A. Acland (Christchurch) | Dickinson, W. H. (St. Pancras, N.) | Kekewich, Sir George |
| Allen, Charles P. (Stroud) | Duckworth, Sir James | King, Alfred John (Knutsford) |
| Ashton, Thomas Gair | Duffy, William J. | Lamb, Ernest H. (Rochester) |
| Baker, Sir John (Portsmouth) | Dunne, Major E. Martin (Walsall) | Lambert, George |
| Baker, Joseph A. (Finsbury, E.) | Erskine, David C. | Lamont, Norman |
| Balfour, Robert (Lanark) | Essex, R. W. | Layland-Barratt, Sir Francis |
| Barker, Sir John | Evans, Sir S. T. | Leese, Sir Joseph F. (Accrington) |
| Barlow, Sir John E. (Somerset) | Everett, R. Lacey | Lever, W. H. (Cheshire, Wirral) |
| Barran, Rowland Hirst | Falconer, J. | Levy, Sir Maurice |
| Beauchamp, E. | Fenwick, Charles | Lloyd-George, Rt. Hon. David |
| Benn, Sir J. Williams (Devonport) | Ferguson, R. C. Munro | Luttrell, Hugh Fownes |
| Berridge, T. H. D. | Flynn, James Christopher | Macdonald, J. R. (Leicester) |
| Bethell, Sir J. H. (Essex, Romford) | Foster, Rt. Hon. Sir Walter | Maclean, Donald |
| Bethell, T. R. (Essex, Maldon) | Fuller, John Michael F | Macnamara, Dr. Thomas J. |
| Boulton, A. C. F. | Fullerton, Hugh | Macpherson, J. T. |
| Brace, William | Gibb, James (Harrow) | MacVeagh, Jeremiah (Down, S.) |
| Branch, James | Gill, A. H. | M'Laren, H. D. (Stafford, W.) |
| Brunner, J. F. L. (Lanes., Leigh) | Glover, Thomas | Maddison, Frederick |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Gooch, George Peabody (Bath) | Mallett, Charles E. |
| Bryce, J. Annan | Haldane, Rt. Hon. Richard B. | Marks, G. Croydon (Launceston) |
| Buckmaster, Stanley O. | Hancock, J. G. | Marnham, F. J. |
| Burns, Rt. Hon. John | Harcourt, Rt. Hon. L. (Rossendale) | Menzies, Sir Walter |
| Burnyeat, W. J. D. | Hardy, George A. (Suffolk) | Middlebrook, William |
| Burt, Rt. Hon. Thomas | Harmsworth, R. L. (Caithness-sh.) | Molteno, Percy Alport |
| Buxton, Rt. Hon. Sydney Charles | Hart-Davies, T. | Money, L. G. Chiozza |
| Byles, William Pollard | Harvey, W. E. (Derbyshire, N.E.) | Morgan, J. Lloyd (Carmarthen) |
| Cawley, Sir Frederick | Harwood, George | Morse, L. L. |
| Channing, Sir Francis Allston | Haworth, Arthur A. | Morton, Alpheus Cleophas |
| Cherry, Rt. Hon. R. R. | Helme, Norval Watson | Murray, James (Aberdeen, E.) |
| Clancy, John Joseph | Henderson, Arthur (Durham) | Myer, Horatio |
| Clough, William | Henderson, J. McD. (Aberdeen, W.) | Newnes, F. (Notts, Bassetlaw) |
| Clynes, J. R. | Higham, John Sharp | Nicholls, George |
| Cobbold, Felix Thornley | Hobhouse, Rt. Hon. Charles E. H. | Nussey, Sir Willans |
| Collins, Stephen (Lambeth) | Hogan, Michael | Nuttall, Harry |
| Collins, Sir Wm. J. (St. Pancras, W.) | Holland, Sir William Henry | O'Brien, K. (Tipperary, Mid) |
| Corbett, C. H. (Sussex, E. Grinstead) | Holt, Richard Durning | O'Connor, John (Kildare, N.) |
| Cornwall, Sir Edwin A. | Howard, Hon. Geoffrey | O'Donnell, C. J. (Walworth) |
| Cotton, Sir H. J. S. | Hutton, Alfred Eddison | O'Grady, J. |
| Cox, Harold | Jardine, Sir J. | O'Kelly, Conor (Mayo, N.) |
| Cullinan, J. | Jones, Sir D. Brynmor (Swansea) | Parker, James (Halifax) |
| Curran, Peter Francis | Jones, Leif (Appleby) | Partington, Oswald |
| Pearce, Robert (Staffs, Leek) | Shipman, Dr. John G. | Wardle, George J. |
| Perks, Sir Robert William | Snowden, P. | Warner, Thomas Courtenay T. |
| Pointer, J. | Stanger, H. Y. | Wason, Rt. Hon. E. (Clackmannan) |
| Ponsonby, Arthur A. W. H. | Stanley, Albert (Staffs, N.W.) | Wason, John Cathcart (Orkney) |
| Priestley, Sir W. E. B. (Bradford, E.) | Stanley, Hon. A. Lyulph (Cheshire) | Watt, Henry A. |
| Radford, G. H. | Stewart, Halley (Greenock) | White, Sir George (Norfolk) |
| Raphael, Herbert H. | Stewart-Smith, D. (Kendal) | White, J. Dundas (Dumbartonshire) |
| Rea, Rt. Hon. Russell (Gloucester) | Straus, B. S. (Mile End) | White, Sir Luke (York, E.R.) |
| Rees, J. D. | Strauss, E. A. (Abingdon) | White, Patrick (Meath, North) |
| Rendall, Athelstan | Summerbell, T. | Whittaker, Rt. Hon. Sir Thomas P. |
| Richards, Thomas (W. Monmouth) | Taylor, John W. (Durham) | Wiles, Thomas |
| Roberts, Charles H. (Lincoln) | Taylor, Theodore C. (Radcliffe) | Williams, J. (Glamorgan) |
| Roberts, G. H. (Norwich) | Tennant, Sir Edward (Salisbury) | Williams, W. Llewelyn (Carmarthen) |
| Robertson, Sir G. Scott (Bradford) | Tennant, H. J. (Berwickshire) | Wilson, Henry J. (York, W.R.) |
| Robinson, S. | Thomas, Sir A. (Glamorgan, E.) | Wilson, J. W. (Worcestershire, N.) |
| Robson, Sir William Snowdon | Thomasson, Franklin | Wilson, P. W. (St. Pancras, S.) |
| Roe, Sir Thomas | Thompson, J. W. H. (Somerset, E.) | Wilson, W. T. (Westhoughton) |
| Rogers, F. E. Newman | Thorne, G. R. (Wolverhampton) | Winfrey, R. |
| Rowlands, J. | Thorne, William (West Ham) | Wood, T. M'Kinnon |
| Runciman, Rt. Hon. Walter | Trevelyan, Charles Philips | Young, Samuel |
| Schwann, C. Duncan (Hyde) | Verney, F. W. | |
| Schwann, Sir C. E. (Manchester) | Villiers, Ernest Amherst | TELLERS FOR THE AYES.—Mr. |
| Shackleton, David James | Vivian, Henry | Joseph Pease and Captain Norton. |
| Shaw, Sir Charles E. (Stafford) | Walsh, Stephen | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Faber, George Denison (York) | Moore, William |
| Anson, Sir William Reynell | Fell, Arthur | Morpeth, Viscount |
| Anstruther-Gray, Major | Fletcher, J. S. | Parkes, Ebenezer |
| Balcarres, Lord | Forster, Henry William | Pretyman, E. G. |
| Baldwin, Stanley | Foster, P. S. | Renwick, George |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gardner, Ernest | Roberts, S. (Sheffield, Ecclesall) |
| Banbury, Sir Frederick George | Gibbs, G. A. (Bristol, West) | Rutherford, Watson (Liverpool) |
| Banner, John S. Harmood- | Gordon, J. | Salter, Arthur Clavell |
| Baring, Capt. Hon. G. (Winchester) | Guinness, Hon. W. E. (B. S. Edmunds) | Sheffield, Sir Berkeley George D. |
| Bull, Sir William James | Hamilton, Marquess of | Stone, Sir Benjamin |
| Burdett-Coutts, W. | Hardy, Laurence (Kent, Ashford) | Talbot, Lord E. (Chichester) |
| Carlile, E. Hildred | Hill, Sir Clement | Thomson, W. Mitchell-(Lanark) |
| Cecil, Evelyn (Aston Manor) | Hope, James Fitzalan (Sheffield) | Thornton, Percy M. |
| Chaplin, Rt. Hon. Henry | Joynson-Hicks, William | Valentia, Viscount |
| Coates, Major E. F. (Lewisham) | Kerry, Earl of | Walker, Col. W. H. (Lancashire) |
| Cochrane, Hon. Thomas H. A. E. | Kimber, Sir Henry | Walrond, Hon. Lionel |
| Courthope, G. Loyd | King, Sir Henry Seymour (Hull) | Warde, Col. C. E. (Kent, Mid) |
| Craig, Captain James (Down, E.) | Law, Andrew Bonar (Dulwich) | Williams, Col. R. (Dorset, W.) |
| Dalrymple, Viscount | Lee, Arthur H. (Hants, Fareham) | |
| Dickson, Rt. Hon. C. Scott | MacCaw, William J. MacGeagh | TELLERS FOR THE NOES.—Mr. |
| Doughty, Sir George | Mason, James F. (Windsor) | Cave and Mr. Hicks Beach. |
| Douglas, Rt. Hon. A. Akers- | Meysey-Thompson, E. C. |
§ Question put, "That the Clause stand part of the Bill."
2008§ The Committee divided: Ayes, 192; Noes, 62.
2009| Division No. 653]. | AYES. | [8.17 p.m. |
| Abraham, W. (Cork, N.E.) | Burt, Rt. Hon. Thomas | Evans, Sir S. T. |
| Acland, Francis Dyke | Buxton, Rt. Hon. Sydney Charles | Everett, R. Lacey |
| Agnew, George William | Byles, William Pollard | Falconer, J. |
| Allen, A. Acland (Christchurch) | Cawley, Sir Frederick | Fenwick, Charles |
| Allen, Charles P. (Stroud) | Channing, Sir Francis Allston | Flynn, James Christopher |
| Ashton, Thomas Gair | Cherry, Rt. Hon. R. R. | Foster, Rt. Hon. Sir Walter |
| Baker, Sir John (Portsmouth) | Clough, William | Fuller, John Michael F. |
| Baker, Joseph A. (Finsbury, E.) | Clynes, J. R. | Fullerton, Hugh |
| Balfour, Robert (Lanark) | Cobbold, Felix Thornley | Gibb, James (Harrow) |
| Barker, Sir John | Collins, Stephen (Lambeth) | Gill, A. H. |
| Barran, Rowland Hirst | Collins, Sir Wm. J. (St. Pancras, W.) | Glover, Thomas |
| Beauchamp, E. | Corbett, C. H. (Sussex, E. Grinstead) | Gooch, George Peabody (Bath) |
| Benn, Sir J. Williams (Devonport) | Cornwall, Sir Edwin A. | Haldane, Rt. Hon. Richard B. |
| Berridge, T. H. D. | Cotton, Sir H. J. S. | Hancock, J. G. |
| Bethell, Sir J. H. (Essex, Romford) | Cox, Harold | Harcourt, Rt. Hon. L. (Rossendale) |
| Bethell, T. R. (Essex, Maldon) | Cullinan, J. | Hardy, George A. (Suffolk) |
| Boulton, A. C. F. | Curran, Peter Francis | Harmsworth, R. L. (Caithness-shire) |
| Brace, William | Davies, Timothy (Fulham) | Hart-Davies, T. |
| Branch, James | Davies, Sir W. Howell (Bristol, S.) | Harvey, W. E. (Derbyshire, N.E.) |
| Brunner, J. F. L. (Lancs., Leigh) | Dewar, Arthur (Edinburgh, S.) | Harwood, George |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Dickinson, W. H. (St. Pancras, N.) | Haworth, Arthur A. |
| Bryce, J. Annan | Duckworth, Sir James | Helme, Norval Watson |
| Buckmaster, Stanley O. | Duffy, William J. | Henderson, Arthur (Durham) |
| Burns, Rt. Hon. John | Dunne, Major E. Martin (Walsall) | Henderson, J. McD. (Aberdeen, W.) |
| Burnyeat, W. J. D. | Essex, R. W. | Higham, John Sharp |
| Hobhouse, Rt. Hon. Charles E. H. | Myer, Horatio | Stewart-Smith, D. (Kendal) |
| Hogan, Michael | Newnes, F. (Notts, Bassetlaw) | Straus, B. S. (Mile End) |
| Holt, Richard Durning | Nicholls, George | Strauss, E. A. (Abingdon) |
| Howard, Hon. Geoffrey | Nussey, Sir Willans | Summerbell, T. |
| Hutton, Alfred Eddison | Nuttall, Harry | Taylor, John W. (Durham) |
| Jardine, Sir J. | O'Brien, K. (Tipperary, Mid) | Taylor, Theodore C. (Radcliffe) |
| Jones, Sir D. Brynmor (Swansea) | O'Connor, John (Kildare, N.) | Tennant, H. J. (Berwickshire) |
| Jones, Leif (Appleby) | O'Donnell, C. J. (Walworth) | Thomas, Sir A. (Glamorgan, E.) |
| Jones, William (Carnarvonshire) | O'Grady, J. | Thomasson, Franklin |
| Jowett, F. W. | Parker, James (Halifax) | Thompson, J. W. H. (Somerset, E.) |
| Joyce, Michael | Partington, Oswald | Thorne, G. R. (Wolverhampton) |
| Kekewich, Sir George | Perks, Sir Robert William | Thorne, William (West Ham) |
| King, Alfred John (Knutsford) | Pointer, J. | Trevelyan, Charles Philips |
| Lamb, Ernest H. (Rochester) | Ponsonby, Arthur A. W. H. | Verney, F. W. |
| Lambert, George | Priestley, Sir W. E. B. (Bradford, E.) | Villiers, Ernest Amherst |
| Lamont, Norman | Radford, G. H. | Vivian, Henry |
| Layland-Barrett, Sir Francis | Raphael, Herbert H | Walsh, Stephen |
| Leese, Sir Joseph F. (Accrington) | Rea, Rt. Hon. Russell (Gloucester) | Wardle, George J. |
| Lever, W. H. (Cheshire, Wirral) | Rees, J. D. | Warner, Thomas Courtenay T. |
| Levy, Sir Maurice | Rendall, Athelstan | Wason, Rt. Hon. E. (Clackmannan) |
| Lewis, John Herbert | Richards, Thomas (W. Monmouth) | Wason, John Cathcart (Orkney) |
| Lloyd-George, Rt. Hon. David | Roberts, Charles H. (Lincoln) | Watt, Henry A. |
| Luttrell, Hugh Fownes | Roberts, G. H. (Norwich) | White, Sir George (Norfolk) |
| Macdonald, J. R. (Leicester) | Robertson, Sir G. Scott (Bradford) | White, J. Dundas (Dumbartonshire) |
| Maclean, Donald | Robinson, S. | White, Sir Luke (York, E.R.) |
| Macnamara, Dr. Thomas J. | Robson, Sir William Snowdon | White, Patrick (Meath, North) |
| Macpherson, J. T. | Roe, Sir Thomas | Whittaker, Rt. Hon. Sir Thomas P. |
| M'Laren, H. D. (Stafford, W.) | Rogers, F. E. Newman | Wiles, Thomas |
| Maddison, Frederick | Rowlands, J. | Williams, J. (Glamorgan) |
| Mallet, Charles E. | Runciman, Rt. Hon. Walter | Williams, W. Llewelyn (Carmarthen) |
| Marks, G. Croydon (Launceston) | Schwann, C. Duncan (Hyde) | Wilson, Henry J. (York, W.R.) |
| Marnham, F. J. | Schwann, Sir C. E. (Manchester) | Wilson, J. W. (Worcestershire, N.) |
| Menzies, Sir Walter | Shackleton, David James | Wilson, P. W. (St. Pancras, S.) |
| Middlebrook, William | Shaw, Sir Charles E. (Stafford) | Wilson, W. T. (Westhoughton) |
| Molteno, Percy Alport | Sherwell, Arthur James | Winfrey, R. |
| Money, L. G. Chiozza | Shipman, Dr. John G. | Wood, T. M'Kinnon |
| Morgan, J. Lloyd (Carmarthen) | Snowden, P. | Young, Samuel |
| Morse, L. L. | Stanger, H. Y. | |
| Morton, Alpheus Cleophas | Stanley, Albert (Staffs, N.W.) | TELLERS FOR THE AYES.—Mr. |
| Murray, James (Aberdeen, E.) | Stanley, Hon. A. Lyulph (Cheshire) | Joseph Pease and Captain Norton. |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Douglas, Rt. Hon. A. Akers- | Meysey-Thompson, E. C. |
| Anson, Sir William Reynell | Faber, George Denison (York) | Moore, William |
| Anstruther-Gray, Major | Fell, Arthur | Morpeth, Viscount |
| Balcarres, Lord | Fletcher, J. S. | Parkes, Ebenezer |
| Baldwin, Stanley | Forster, Henry William | Pretyman, E. G. |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Foster, P. S. | Renwick, George |
| Banbury, Sir Frederick George | Gardner, Ernest | Roberts, S. (Sheffield, Ecclesall) |
| Banner, John S. Harmood- | Gibbs, G. A. (Bristol, West) | Rutherford, Watson (Liverpool) |
| Baring, Captain Hon. G. (Winchester) | Gordon, J. | Salter, Arthur Clavell |
| Beach, Hon. Michael Hugh Hicks | Guinness, Hon. W. E. (B. S. Edmunds) | Sheffield, Sir Berkeley George D. |
| Bull, Sir William James | Hardy, Laurence (Kent, Ashford) | Stone, Sir Benjamin |
| Burdett-Coutts, W. | Hill, Sir Clement | Thomson, W. Mitchell- (Lanark) |
| Carlile, E. Hildred | Hills, J. W. | Thornton, Percy M. |
| Cave, George | Hope, James Fitzalan (Sheffield) | Valentia, Viscount |
| Cecil, Evelyn (Aston Manor) | Joynson-Hicks, William | Walker, Col. W. H. (Lancashire) |
| Coates, Major E. F. (Lewisham) | Kerry, Earl of | Walrond, Hon. Lionel |
| Cochrane, Hon. Thomas H. A. E. | Kimber, Sir Henry | Warde, Col. C. E. (Kent, Mid) |
| Courthope, G. Loyd | King, Sir Henry Seymour (Hull) | Williams, Col. R. (Dorset, W.) |
| Craig, Captain James (Down, E.) | Law, Andrew Bonar (Dulwich) | |
| Dalrymple, Viscount | Lee, Arthur H. (Hants, Fareham) | TELLERS FOR THE NOES.—The |
| Dickson, Rt. Hon. C. Scott | MacCaw, William J. MacGeagh | Marquess of Hamilton and Lord E. Talbot. |
| Doughty, Sir George | Mason, James F. (Windsor) |