1.—MINERAL RIGHTS DUTY.

HC Deb 22 September 1909 vol 11 cc503-53

"That there shall be charged for the current and every subsequent financial year on the rental value of all rights to work minerals and of all mineral wayleaves, a duty at the rate in each case of one shillling for every twenty shillings of that rental value.

The rental value to be taken to be—

1. (a) Where the right to work the minerals is the subject of a mining lease, the amount of rent paid by the working lessee in the last working year in respect of that right; and
2. (b) Where minerals are being worked by the proprietor thereof, the amount which is determined by the Commissioners of Inland Revenue to be the sum which would have been received as the rent by the proprietor in the last working year if the right to work the minerals had been let, and the minerals had been worked to the same extent and in the same manner as they have been worked by the proprietor in that year; and
3. (c) In the case of a mineral wayleave, the amount of rent paid by the working lessee in the last working year in respect of the wayleave."

These proposals represent an effort made by the Government, after consultation with many who are directly interested in mineral rights, to meet the objections which were raised to the proposals in reference to minerals originally included in the Finance Bill. It will not be necessary for me at this stage to enter into an elaborate explanation of the proposals; they have been on the Paper for some time, and hon. Members have doubtless examined them very carefully. The changes effected are in one or two respects considerable, but I think they are all in the direction of meeting the views of those who are interested in mineral property. The original proposal of the Government was—on the analogy of the charge upon the capital value of undeveloped land—first of all, on ascertaining the capital value of minerals, worked or unworked, to charge a halfpenny in the pound on that value. It was represented to us by a good many of those interested in mineral properties that that would not work well. They suggest that it would be very difficult to ascertain the capital value. At any rate, there was a considerable element of doubt and apprehension as to the magnitude of the tax, and that they would infinitely prefer something which was definite and something which was ascertainable. They also represented to the Government that they would prefer a tax upon sums which they actually received from their mineral rights rather than upon an examination of the prospective interests which they have in those properties. Well, the Government have met their views in that respect by substituting for a tax upon the capital value of mineral properties a tax upon the royalties and way-leaves actually received by the owners of those rights. It is true that that doubles the amount which we expected originally to receive from the halfpenny tax on the capital value of these rights. My estimate of the amount received this year by the tax upon mineral royalties is £350,000. But in exchange for that the Government have made one or two very substantial concessions. We propose to drop the Reversion Tax and the Increment Duty in respect of mines being worked. A criticism passed upon these two duties was in the first place, a question of security, and that therefore in very few cases could there be any reversion which was taxable at all. A criticism which was passed, I remember perfectly well, by the hon. Gentleman the Member for South-East Durham (Mr. F. W. Lambton), amongst others, was that this, being a wasting security, possibly the value of the property had been considerably diminished under the lease, and therefore a 10 per cent. tax on less than nothing would produce nothing. The criticism upon the Increment Duty was of the same character, that the mines, being worked, and the coal raised, the capital value of the property would possibly diminish from year to year, and that therefore no increment would be likely to arise. That is not the case in a good many mines. Many mines undoubtedly appreciate in value, even when they have started mining operations. But we were pressed by those interested in mineral properties rather to put on the royalty which we propose.

Mr. LAMBTON

No, no.

Mr. LLOYD-GEORGE

In view of what we were asked to do, the Government made up their minds that the taxation of mineral rights should rather take the form of a royalty than the form of an Increment Tax. I think the hon. Member considers that that fairly represents the views of those interested in those mineral properties.

Mr. LAMBTON

dissented.

Mr. LLOYD-GEORGE

I gather that that at any rate is not the view of the hon. Gentleman, who would infinitely prefer an Increment Duty on existing values than a royalty of 1s. in the pound. I do not think that is a view taken by those interested in collieries. I feel perfectly certain that is not so. What I was informed by certain high authorities on this subject was that they infinitely preferred something which was absolutely certain than have the apprehension of a tax which was dependent entirely upon a valuation of the unknown. Therefore the Government have decided to charge a duty of 5 per cent. on all royalties and wayleaves actually received by owners of mineral rights from the mines. In respect of existing mines the Government have decided from the working of the mines to eliminate the existing Clauses in regard to Reversion Duty and Increment Value Duty. With regard to the mineral properties which are not worked, the minerals and mineral properties will be valued in the usual way. No Undevelopment Duty will be charged upon them, but an Increment Duty will be charged. So that if mineral properties are sold for a larger sum than that at which they are valued Increment Duty will be charged in the usual way upon them. The same thing would apply in the usual way to Increment Duty at death. In respect of future mines the proposals of the Government are that the Increment Duty shall take the form of an annual commutation—that Increment Duty will be charged upon the minerals actually received. The way that will be arrived at will be that first of all there will be a valuation upon all the mining properties of the country. The annual equivalent of that value will be ascertained on a basis of 12½ years' purchase, which I am told is the usual amount.

Mr. PRETYMAN

There must be a valuation of ungotten minerals underground?

Mr. LLOYD-GEORGE

Certainly, a valuation of all the mineral properties of the country.

Sir E. CARSON

At the Government's expense?

Mr. LLOYD-GEORGE

Certainly. This annual equivalent will be ascertained on a basis of 12½ years' purchase, which I understand is the rule in regard to these properties. Then when the minerals come to be worked, the actual amount which is received by the owner of the property will be ascertained. The annual equivalent of the value will be deducted from that, and that will represent the increment. Twenty per cent. of that will be taken annually. I will put it into figures. Take a property which is valued at £12,500. One thousand pounds a year will represent the annual equivalent of the value of the mineral rights. Supposing that property is developed, and the owner receives, say, £3,000 by way of royalties and wayleaves in respect of one year's working, the £1,000 is deducted from the £3,000, and represents £2,000—the increment. The Government charge their Increment Duty upon the £2,000. Next year the royalties may go up to £5,000. The same deduction will be made of £1,000 from the £5,000.

Mr. PRETYMAN

Of £1,000?

Mr. LLOYD-GEORGE

Certainly, it is the original site value or, rather, the annual equivalent of the original site value. You take the Increment Duty as the difference between £1,000 and £5,000. If it goes down next year to £800 there will be no Increment Duty for that year, and if it goes down to £1,000 there will be no Increment Duty. Therefore, the owner is only charged in respect of what he actually receives over and above the annual equivalent of the original site value. Now, I think I have made that quite clear.

Mr. HARMOOD-BANNER

Will there be any taxes upon existing value?

Mr. LLOYD-GEORGE

No, you compound them for the Increment Duty upon existing mines and reversions on existing mines and Undeveloped Duty upon minerals by these taxes upon royalties and these Increment Duties upon future royalties—5 per cent. upon present royalties and an Increment Duty of 20 per cent. upon all future mines opened in this country. These are the proposals which the Government will substitute for the Clauses which are incorporated in the Bill now. I think I ought to say the Government have given due weight to all representations made to them by Gentlemen well versed in these things, and I ought to especially recognise the assistance given to the Government—but I do not wish to make it responsible in the slightest degree for the principle—I think it is fair to recognise the assistance given to the Government by two of the greatest authorities on mineral properties in the Kingdoms. Mr. Cooper, one of the greatest mineral possessors in the Kingdom, gave us invaluable aid. I do not say he is in the slightest degree responsible for suggesting the tax, possibly he would oppose it quite as much as any hon. Gentleman opposite, but he rendered the greatest assistance in framing the Clause. I must also recognise the assistance given us by Sir William Thomas Lewis, who knows as much about this subject as any man, and who has the very highest position in the coalfields of Wales and other parts of the United Kingdom.

Mr. PRETYMAN

I want to ask the right hon. Gentleman a question or two. The first question is that he has said nothing at all about Sub-section (b), and he has given no explanation of that new feature where there is to be a charge upon minerals worked by the owner himself and where there is no royalty. Then I should like to ask: Did I understand clearly that, taking the figures given by the right hon. Gentleman, where the annual equivalent of, say, £1,000, and let us say that for two or three successive years the royalty on a mine worked by the owner himself is £3,000, so that the value estimated to the owner of the minerals, if working them himself, is £3,000, will the duty to be paid each year be on the difference between £3,000 and £1,000? If that is so, what is the meaning of these words in the Resolution upon the increment: "The increment value shall be taken to be the sum by which in each year the rental value of the minerals exceeds the annual equivalent of the capital value of the minerals, or the capital value of the minerals on the last preceding occasion upon which Increment Value Duty has been collected."

Sir E. CARSON

Would the right hon. Gentleman also explain whether the taxes are applicable to quarries of granite and to iron?

Mr. LLOYD-GEORGE

That depends upon the interpretation of the words. I said these would be included, but when the right hon. Gentleman puts a question which involves a matter of law, I think he should address it to my right hon. Friend the Attorney-General.

Sir E. CARSON

Surely the right hon. Gentleman knows the intention.

Mr. LLOYD-GEORGE

The intention is to charge minerals. I am only responsible for the policy, and all I can say is that a case of the interpretation about these minerals entails an interpretation upon a question of law, and I am perfectly certain the right hon. Gentleman the Attorney-General will explain that.

Sir E. CARSON

This is a question of fact.

Viscount CASTLEREAGH

What is your estimate based upon?

Mr. LLOYD-GEORGE

I am trying to deal with the question of policy put to me by the hon. and gallant Gentleman opposite. We are simply now dealing with the Resolution to authorise us to proceed. All these questions of details will be examined when we come to the Clause itself. I am simply suggesting that the right hon. Gentleman should assume what is always assumed upon a Resolution that you should discuss the general principle upon it, and that minute questions of detail should be reserved for the Clauses when we come to them.

Sir E. CARSON

May I not discuss what is going to be taxed?

Mr. LLOYD-GEORGE

I do not want to enter into any sort of contention with the right hon. Gentleman about questions of that kind. I am desirous this question should be answered; but for the moment I should rather like to answer the main question, as I might call it, put to me by the hon. and gallant Member for Chelmsford (Mr. Pretyman). The first question, he puts is this: "How do you propose to deal with mines where the mineral rights are owned by the colliery proprietor, who is owner of the rights and is colliery proprietor as well?" It might be the case of a quarry in another part of the world, where the owner of the soil is also the quarry proprietor, and the same thing applies to a good many collieries. With regard to that the hon. and gallant Gentleman has quoted the Resolution, but, as he knows, you do not put the whole of the various Clauses into a Resolution. He will find, if he looks at the Clauses, that that is dealt with in Sub-section (b) of the Clause itself.

Mr. PRETYMAN

I asked for an explanation of the policy.

Mr. LLOYD-GEORGE

In that case you ascertain what the rent would be. There is no real difficulty in doing that, and I am assured by practical men that an owner working his own colliery keeps two sets of accounts. He keeps his accounts as a colliery proprietor and he keeps his accounts as owner. I was told that by the representative of a very considerable colliery. He debits himself with the royalty and wayleaves exactly as if they were belonging to somebody else outside, and he credits himself as colliery proprietor and estate owner. Very often there are questions of trusteeship and others which render that necessary. There is no difficulty. Take a neighbourhood where the charge is 6d. a ton on coal. You charge the person who owns the mineral right with that 6d., and therefore there is no difficulty at all in ascertaining what ought to be charged in that respect.

The hon. and gallant Member now asks me a question with regard to the Increment Duty and the case of £1,000 which I gave. He says that is to be compared with the last occasion upon which Increment Duty is charged. That means, supposing the site value of that property which I gave as an illustration had been £10,000 and before it was worked it was sold for £12,500, Increment Duty would be charged upon the capital of £2,500, and the last occasion, therefore, upon which Increment Duty would have been charged would have been that occasion. I want the Committee to quite understand what this means. Supposing the owner sells his mineral property for a larger sum than the valuation. The original valuation is £10,000, and he sells it for £12,500. In that case you charge, as I have already said, Increment Duty on the £2,500. Afterwards, when the mine is opened, you charge your annual Increment Duty by reference not to the original £10,000, but with reference to the £12,500, which is the last occasion upon which the duty was chargeable.

Sir JOHN RANDLES

I understood the right hon. Gentleman to say that if £1,000 a year was the standard of basis and it came to £3,000, increment would be payable on the £2,000 in the year. That might possibly happen for one, two, or three years, but in the fourth, fifth, and sixth years, owing to the mine not being worked in the same manner, there would be nothing or very little to tax, so that instead of paying on £2,000 or £3,000, there might not be more than £400, £500, or £600. Would there be an allowance made for the increment paid in the first, second, and third years over, the fourth, fifth, and sixth years, or in the later years running into the twelve and a-half years, because there might be an increment then which would actually on the average of the twelve and a-half years not have yielded more than £1,000 a year.

Mr. LLOYD-GEORGE

I do not think that question will arise in practice, because there is always a dead rent charge. Suppose the mine has not been worked. I do not want to enter into an argument on these details, and my answer to the hon. Member's question now is that it will not arise, because there is always a dead rent charge; and I should be very much surprised if that dead rent would be less than the annual equivalent of what the property was worth before it was opened. The charge is made on exactly what they receive, and I think that is perfectly clear. I cannot help thinking that those interested in mineral rights will regard this as a perfectly fair transaction.

Mr. PRETYMAN

Taking again the figure which the right hon. Gentleman mentioned, supposing the owner made an arrangement in the lease by which he limited the output to £1,000, in that case he would pay no Increment Duty at all.

Mr. LLOYD-GEORGE

I do not know whether there is any man who would do anything so absurd, but should there be such a person in the United Kingdom who is not going to receive £3,000 because he will have to pay this increment, I shall be very much surprised, and I cannot conceive there will be any such person.

Mr. PRETYMAN

He spreads it over a longer period.

Mr. LLOYD-GEORGE

Well, if there is such a person I agree that is a way in which he might get out of it.

Mr. LAURENCE HARDY

I wish to put a question to you, Mr. Caldwell. Only one Resolution has been put, and I wish to know if we are to understand that we can discuss both the mineral Resolutions in this Debate? The right hon. Gentleman went fully into the question of the Resolution that is before the House.

Mr. LLOYD-GEORGE

I would suggest that we should follow the Rule we have followed up to the present with very good effect on other Resolutions, namely, that where the duties hang together we should have a discussion which will cover the whole field. I think that course would be infinitely better.

Sir E. CARSON

No, we have never done it before.

Mr. LLOYD-GEORGE

I beg the right hon. Gentleman's pardon, we have done it before. If the Committee desires to discuss these Resolutions separately I shall not object, but if that course is adopted I shall object to the discussion being taken over the whole field now. In this matter I am entirely in the hands of the Committee.

Mr. LAURENCE HARDY

I think it would be far better to discuss mineral royalties quite apart from the question of the Increment Duty.

The DEPUTY-CHAIRMAN

That is quite understood.

Mr. F. W. LAMBTON

This Resolution contains an absolutely new principle, and the Chancellor of the Exchequer has not said anything about it. The right hon. Gentleman has stated that these changes are in favour of the mineral owners, and he rather suggested that those owners asked for these new duties. I do not know who the persons he alludes to are, but I am sure they have never spoken in this House. Who are the persons who have told him that they are in favour of these new duties?

Mr. LLOYD-GEORGE

I think the hon. Member is rather misinterpreting what I said. I never said they were in favour of it, because they are not in favour of these duties, and naturally they object to all these taxes. What I said was that they prefer taxes on what they actually receive to taxes upon the valuation which was provided in the original Clause.

Mr. LAMBTON

I think the opening remarks of the right hon. Gentleman certainly went a little beyond that. Anybody would object to be taxed upon the problematical valuation which was originally introduced into the Bill. The Chancellor of the Exchequer says he does not want to go into questions of detail, but his whole speech has been devoted to questions of details. He has asked us to go into questions of principle, and I propose to say a few words on the principle. The principle the right hon. Gentleman is now introducing is not the same as that which was introduced in the earlier Clauses of the Financial Bill in Clause 12 and in Clause 15. I think the right hon. Gentleman might have said a word or two in memoriam of Clause 12, of which he was at one time so proud. I chink it was a beautiful Clause, and I do not know why the Chancellor of the Exchequer has dropped it, because it seemed to me to be one of the best scenes in the whole farce. Those who require a monument of the statesmanship and the draftsmanship displayed by the Government in the Finance Bill only need to look at Clause 12. I maintain, as I have maintained before, that the land legislation of this Government is based on Socialistic principles. I do not think the Chancellor of the Exchequer himself is a Socialist. He has too much sense of humour to be a Socialist, but there are Socialistic forces in this House—hon. Members below the Gangway, and they support this Bill entirely because it takes them a considerable step towards the realisation of their dreams, the nationalisation of land and of minerals, the destruction of family life, and other ideals which are dear to them. The Chancellor of the Exchequer makes use of these forces for the purposes of his own ambition, and he thinks he can check them when he wishes. I picture in my mind, with some degree of pleasure, the spectacle of the right hon. Gentleman standing on the edge of a deep pool struggling with an angry cormorant.

Mr. H. MYER

On a point of Order. Is the hon. Member in Order in discussing Socialism on this Resolution?

The DEPUTY-CHAIRMAN (Mr. Caldwell)

I understood the hon. Member was making a few general references, and that he was then coming to the Resolution.

Mr. LAMBTON

The principles of Socialism underlie most of the provisions of this Bill. I shall, of course, have to go outside the House to find the principles upon which these Clauses are advocated. The Prime Minister is seldom in the House, and I must refer to two speeches made outside the House: one at Southport, delivered by the Prime Minister—

The DEPUTY-CHAIRMAN

That is really outside the Resolution. I understood the hon. Member was making a general opening remark, and was then coming to the Resolution. He is not in order in discussing the principles of Socialism.

Mr. LAMBTON

Am I not in order in referring to a speech of the Prime Minister with regard to the taxation under this Bill?

The DEPUTY-CHAIRMAN

The hon. Member must connect it with this Resolution.

Mr. LAMBTON

How are you to know whether I am going to connect the speech of the Prime Minister with the Resolution until I have made some remarks?

The DEPUTY-CHAIRMAN

The hon. Member, in discussing the Resolution, may make a short reference to any matter outside of a general character, but he must not go into it in detail.

10.0 P.M.

Mr. LAMBTON

The speech of the Prime Minister was delivered at Southport with reference to the subject of land taxation, to which I am going to allude, and another speech was made by the Chancellor of the Exchequer. I am going to try to prove that the principles the Chancellor of the Exchequer advocated in one case and the principles the Prime Minister advocated in another are contrary to the principles of this Bill and the Resolution before the House, and I maintain I shall be in order in doing that. The speech of the Prime Minister was delivered with his usual lucidity at Southport, and the other speech was delivered at Limehouse by the Chancellor of the Exchequer in his style, decked out with all the choicest flowers of slang. The Prime Minister Minister at Southport laid down that the man who holds up land and minerals and does not receive the largest income he can ought to be taxed for not receiving that income. That is a principle of Socialism which leads a very long way. The Prime Minister imagines it is the duty of the State to see that land is used to the highest profit, and that the owner gets the biggest rent out of his property. That is going a long way towards Socialism. It is not only a question of money but of service to the State to which the principles of the Prime Minister might be applied.

Under these principles a man not only ought to give his income to the services of the State, but he ought to do other matters for the State with regard to his family. The Chancellor of the Exchequer, in a speech at Limehouse, held up those who lot their land on leases—men who do not hold their land from the public use—as blacklegs; and in other portions of speeches in this House he has said that all mineral lessors are rack-renters and extortioners. If the Prime Minister is right and the man who does not receive the largest income ought to be taxed for not receiving that income, he is using an argument absolutely contrary to the Chancellor of the Exchequer, who says those who do obtain the largest rent are rack-renters and extortioners. That is a serious charge for the Chancellor of the Exchequer to bring against a large class in this country, a class of men who only, after all, let their property and obtain an income to which they have a perfect right. It is a charge I resent. If they make it against me here, I am prepared to meet them on the floor of the House, and, if they make it against me outside, I shall immediately bring an action for libel. These are the sort of charges the Chancellor of the Exchequer has brought against large classes in this country, and more particularly against mineral owners. In his speech at Limehouse—[An HON. MEMBER: "The very best speech ever made." Another HON. MEMBER: "It hurts them."] Hon. Members below the Gangway admire that sort of speech. The Chancellor of the Exchequer is no doubt an artist of the impressionist school, a style I do not care much about myself. In some of these schools of art you do not know whether you are looking at a picture of the sea or of a field. The Chancellor of the Exchequer draws a picture in the blackest and darkest colours he can find, and holds it up to his audience and says, "That is a duke." He comes down to this House, unrolls the same canvas, and says, "Behold a benefactor." The right hon. Gentleman really uses language inside the House and language outside the House so contradictory. He is most courteous here and most discourteous outside. I suppose the object of these speeches outside the House—

The CHAIRMAN (Mr. Emmott)

I really do not see how this is relevant to the Resolution.

Mr. LAMBTON

The statement made with regard to mineral owners in the speech at Limehouse, to which I am referring, is that in which the right hon. Gentleman said that when he went to them and asked for a copper they turned upon him, called him a thief, and made their dogs bark at him. But is it true that the right hon. Gentleman is only asking for a copper? Upon what ground does he advocate this new tax upon royalty owners? Both the Chancellor of the Exchequer and the Prime Minister have endeavoured to point out that they only wish to place the burden on the shoulders of those best able to bear it. They seem to have got an impression, and they give it to the country, that the rich landowners and mineral owners do not bear the burdens they ought to. Hon. Members below the Gangway seem to think that is true, but I wish to ask why these mineral owners should bear a much higher rate of taxation than any other persons in this country? The right hon. Gentleman knows perfectly well that they bear their fair share of the burden of taxation at the present time, and I would like to remind the Chancellor of the Exchequer that only last Tuesday, in this House, in the discussion on the Death Duties, on the proposal to tax transfers of the property five years before death, he said:— If hon. Members wish to strengthen the law in seeing that property does pay its fair share upon the occasion of death, which is the occasion seized by the successive Governments as the proper opportunity upon which to take that toll, then I say that the only way to do it is to strengthen the hands of the Revenue Commissioners by extending the period within which gifts inter vivos cannot be made without payment at all. After all, death id simply taken as the occasion upon which to tax property. There are countries where capital is taxed annually. In some countries there is a tax of a small percentage on property annually, but instead of taxing property and capital annually, we have chosen to tax it at death. If that is to be evaded by means of gifts inter vivos in the way some very wealthy persons have clone within the last five or ten years, the only alternative open to any Government which desires to put a tax upon property would be by converting that tax upon the occasion of death into all annual tax upon property, otherwise property escapes altogether. I do not think that would be in the interests even of property-owners. I have conversed within the last few days with men who have paid very heavy Death Duties, and they have said to me that they consider it to be the fairest way they knew to make a contribution to the State in respect of property. These words prove that capital is already taxed at death. My right hon. Friend the learned Member for Dublin University at an earlier stage of the Debate cast some doubt on the way in which this property was valued by the Commissioners on death, and the Chancellor of the Exchequer said it was a fact that it was very easy to value ungotten minerals, and they certainly paid their share of the Death Duty to the Exchequer, like any other form of property. I maintain that mineral owners do now pay their taxes on capital value at the time of death, but, under this tax, you are going to make them pay something every year. You are going to charge them 1s. extra, in addition to the increased Death Duties, and also by this Bill, if they are rich men, you are imposing a Super-tax of 1s. 8d. I do not know upon what grounds the taxation of royalties is imposed. The Royal Commission of 1893 reported against the taxation of royalties, and that Report was signed by some Labour Members representing coal mining constituencies in this country. It was pointed out by the majority of the Commission that a tax upon royalties is really a tax upon capital, and there is no justification for it on the ground that they hinder the development of coal mines or any other minerals. Yet the right hon. Gentleman comes down and proposes to put a tax of 1s. in the £ on all minerals in this country. It is quite possible the right hon. Gentleman may say there ought to be a duty on the income received from royalties, because they are a form of property on which freeholders really do not spend much money. He has in some of his speeches put forward the idea that the freeholders receive huge sums of money from lessees who take all the financial responsibility, while the miners risk their lives, and yet I see that this Resolution does not exempt those owners who work their own minerals. Therefore that argument entirely falls to the ground.

I would ask what about the freeholder who works his own colliery, in which he sinks hundreds of thousands of pounds? He is treated under this Resolution in exactly the same way as the lessor of the colliery. That is the sort of argument which the right hon. Gentleman produces in the country when he speaks of the huge sums they realise. I must say I do not think the lessees have done so very badly on the whole, and in the counties with which I am more particularly associated I do not think it can be shown that the present system is responsible for one single acre of coal land being held up. Both the royalties and the wayleaves are reasonable. Is the right hon. Gentleman sure that he is not imposing a tax upon public railways in regard to these wayleaves? Are they to be charged under this Resolution? If so it will be a serious consideration for the railway companies of this country. I do not think the right hon. Gentleman has thoroughly thought out this subject. These mineral Clauses have been drafted very hurriedly and have been brought in very hurriedly. Reference has been made to Mr. Cooper, who has suggested many Amendments. I must say, if the right hon. Gentleman had thought over these Mineral Clauses before he brought them in they would have been better drafted. It seems to me that the only principle which actuates the Government in this matter is the principle of taking as much as possible from landowners and mineral owners. The right hon. Gentleman says he wishes to get so much cut of them, and he proceeds to do so. In the first place, he proposes to impose his extraordinary tax upon un-gotten minerals, and when that has to be given up he suggests this tax upon royalties, which is to bring him in a sum of £350,000. In this way he has taken one of the steps he had in view towards the nationalisation of minerals. I do not know why minerals should be nationalised more than any other form of property, or why mineral owners should have this very heavy tax put upon them. Some Members of the Government seem to think it does not matter how much they tax the propertied classes in this country. I think it was the Foreign Secretary who suggested that if they grumbled at these taxes it was open to them to let their houses, their shootings, and their fishings, with all their amenities. But who is going to take the houses, shootings, and fishings? Where are the rich men who can do that? And if they are in existence why are they not already taxed? If the Foreign Secretary and the Chancellor of the Exchequer will stroll any night round the Opera House at Covent Garden, and look at the names on the doors of the boxes they will see that land and mineral owners are not the only persons who enjoy amenities in this country. Why should these mineral owners be treated in this excessively harsh manner? It amounts to an increase of 1s. on their Income Tax, but why should they pay higher Income Tax than everybody else in the country? It is, however, not an Income Tax really, because minerals are a wasting property, and they ought to be treated as capital, and every shilling charged on minerals is so much out of a man's capital. It has been pointed out by Lord Cairns and others that minerals cannot be treated in the same way as either urban or agricultural land, because there the land is supposed to be returned in as good a condition as it left you. The case of minerals deals, however, with a wasting property, and yet the right hon. Gentleman proposes to tax the owners of it more than anybody else. I really do not know on what principle the right hon. Gentleman has proceeded, and I hope he will before this Resolution is passed get up and tell us what it is. I want to know on what principle it is really possible to suggest that these minerals should be taxed. We had a Royal Commission on royalties, and a wild proposal was made by some hon. Member of this House, who pointed out that the Glasgow Trades Council passed a resolution for the nationalisation of minerals. It was suggested that in regard to mining royalties compensation should be given, but Mr. Keir Hardie said he would allow no compensation on the ground that no one has created minerals. I think the right hon. Gentleman has used some expression of the same sort here, but he did not use the same argument which he used with regard to the other Land Taxes that they were due to the community. That was the ground on which his Land Taxes were proposed, and this Resolution differs from the others in that respect. The Chancellor of the Exchequer says that the value the landlord receives is through the exertions of the community, but it has been said that minerals were not made by the community, but were placed there by Providence for the good of the country. In the Commission it was pointed out to Mr. Keir Hardie that although some Colonies had taken the minerals, respect was paid to the rights already acquired, and he replied that he thought they took their traditions from this country when it was at its worst, and when the Lords recognised the rights of private ownership and made the law to suit themselves. But does the right hon. Gentleman the Chancellor of the Exchequer say that the minerals do belong to the country, and is he going to upset the law under which mineral property has been held in this country for the last 300 years or not? Does he mean that the State has the right to take part of these minerals or does he not? At the present moment he is only taking 1s. in the pound, or 5 per cent., but if he is entitled to 5 per cent. the State is entitled to 100 per cent., and hon. Gentlemen below the Gangway may point out that he is illogical.

In all other countries and in the United States and the Colonies the position in regard to property in minerals is exactly the same as in this country, except in a very few cases, and there the royalty is recognised, and I maintain this is not taxation, but confiscation of the property of mineral owners, and there is no getting out of it. May I point out what was said by an American witness who was asked about mining royalties in America when it was suggested that it would be a good thing for the State to resume possession of minerals by taking the property away from the rightful owner. If it was going to remain at 5 per cent. and extra taxation for one year was required to pay for "Dreadnoughts," I do not suppose mineral owners would object to it. But why should mineral owners pay for "Dreadnoughts" more than anyone else? All mineral owners are not rich. The right hon. Gentleman refused to define minerals at all. As long as he only hits a few Super-tax men it is all right, but the moment you come down on poor men who own them in small properties he is very shy of defining them. Dr. Raymond, asked as to the effect of the State asserting rights over these minerals, said it would mean confiscation and anarchy. In America they would have to go a great many hundred years further on towards ruin before the State would confiscate private property.

I hope we are not getting towards ruin in this country. The Government is laying down principles which will be extended by hon. Members below the Gangway and their supporters opposite if ever they get the chance, which will amount to confiscation undoubtedly, and confiscation is what they desire. Why the present Government should throw itself into the hands of the Socialists in this manner I cannot conceive. Really, I think the right hon. Gentleman might show us some justification for this tax. When I see hundreds and thousands of rich men—richer men than mineral owners—escaping the extra taxation altogether under the Budget, there seems to be something behind the Resolution which is most suspicious. I honestly believe the reasons behind this Resolution are the reasons I have adduced, that the Government do not wish to maintain private property in land, and are advancing step by step towards the ideals of the Socialists below the Gangway—the destruction of private property. I believe the destruction of private property will lead to the destruction of the country, and I most cordially desire to see a Resolution of this sort thrown out by the House.

Mr. A. B. MARKHAM

The Committee has listened to a very remarkable speech. Will they allow me to give the other side of the case, based more on the actual facts from the Report of the Royal Commission? The hon. Gentleman said these proposals were purely Socialistic, and were an attack on the land-owning classes. What is the justification for that? What is the present tax paid by mineral owners towards the upkeep of the State, and towards meeting the proportion they ought to pay of the cost of old age pensions for which this money is required? The average amount of royalty, according to the Report of the Royal Commission, amounts to 6d. per ton. That Commission reported 17 years ago, and I believe that the average royalty has since that time considerably increased, but for the purpose of my argument I will assume that it is 6d. per ton. What does this Bill ask the landowners to pay on that royalty? Five per cent., which is equivalent to.3d. What do the colliery owners pay in taxes laid upon them by the State for the maintenance of the districts in which the collieries are situated, for the relief of the poor, and for the upkeep of roads, and also for compensation? A sum of not less than 3½d. in the £, taking the average profits made by colliery owners year by year throughout the whole country. I do not think that can be denied. My contention is that the landlord stands in equally as good a position as the colliery owner, while, on the other hand, the owner of the minerals risks nothing. He embarks nothing. He is a sleeping partner, taking his pecuniary profit without any risk. Be that as it may, my point is this. Taking an average of years the landowners are in as good a position for making money as the colliery owners, but then the colliery owners pay on the basis of 3½d. in the £, or twelve times more to local taxation, and they look after their people through the compensation fund. Now when you ask the landlords to contribute a little more than a twelfth of a penny towards the cost of old age pensions—towards the men who have actually won this wealth for them—we are told that that is confiscation and robbery.

Mr. LAMBTON

The colliery proprietors are on the same plane.

Mr. MARKHAM

They are both on the same plane in some respects. I am putting myself in the position for the moment of the colliery lessee, and I say that this tax on royalties only represents a twelfth of a penny to the landowners for the upkeep of the districts in which the collieries are situated. The hon. Member opposite referred a great deal to robbery. I do not wish to go into a historical review of the ownership of minerals. If I did so I would occupy too long a time, but I will merely say in passing that under the Inclosure Acts passed through this House by a House of landlords enormous tracts of land have been enclosed by lords of the manor without a single farthing of compensation being given for the enclosures. In my own district of Nottinghamshire lands have been alienated from the public. These lands are to-day being worked as mineral properties. They are lands which were stolen from the public, and if the term "robbery" is to be used in regard to minerals it should be used with respect to the people in the country, the lords of the manor, who got these properties enclosed. We have heard a great deal lately about poor but honest dukes in relation to this question of minerals. I know very little of dukes. From what I do know of them they are honest, but to say that they are poor men, so far as mineral royalties are concerned, is to state what is not a fact. I represent a district called the Dukeries district, of which Mansfield is the centre. It is a highly mineralised district. Practically the bulk of the minerals is held by four dukes—the Duke of Newcastle, the Duke of Portland, the Duke of Devonshire, and the Duke of Rutland—so far as royalties are concerned. Take the case of the Duke of Newcastle. A few miles from where I live a colliery was sunk by the Wigan Coal and Iron Company, upon which, I believe, they spent no less than half a million of money. They have not calmed a single farthing upon this large capital, though the colliery has been working for something like 14 years, but the company who are working the colliery have overpaid to the landlord in royalties the sum of over £100,000. The minimum rents reserved in this lease granted by the Duke of Newcastle to the Wigan Coal and Iron Company are £10,000 a year. The company met with great difficulties—water rushes, faults, and so on, and owing to these difficulties the minimum rent has accumulated to over £100,000. Therefore the Duke of Newcastle is drawing from that one particular colliery alone £10,000 a year, and you only ask in this Bill that he should pay a small proportion of that rent to the State. While the people who are actually working the coal have not got one-tenth part towards meeting that rent, do you think that the Duke of Newcastle reduced royalties? Not at all. Application has been made to reduce these royal ties, but they have not been reduced.

Come to the case of the Duke of Portland. As a landlord in my district he has fulfilled his obligations in an admirable way to the public. But in referring to the dukes as poor men I think that Lord Rosebery was hardly correct in stating the facts, because in my Constituency the owners of one colliery alone pay the Duke of Portland £50,000 per annum. The Mansfield Colliery alone raises 23,000 tons of coal in a week, and that one week for that particular colliery represents £500 to the Duke. The Duke owns great numbers of collieries in Nottinghamshire, Derbyshire, the North of England, and Scotland. To say that these men are poor and cannot stand this tax is, to say the least of it, an exaggeration. The Duke of Devonshire, as a landlord, as far as I know, is always willing to do all he can for the public interest. We all know he is honest. I do not blame him for taking what he gets from me. I make more money than I pay the duke for the coal. But although he is an admirable landlord he has not embarked any of the capital. In the case of the Mansfield colliery I ought to say, though I do not know what became of the company afterwards, that the Duke of Portland is receiving a larger rental from the colliery than the owners are receiving in the shape of profits. The division of the burdens should be more equal as between the owners of minerals and the colliery owners. As to the question of wayleaves, I do not wish to be considered by the Committee as using an offensive term, for I do not desire to be offensive, when I say that wayleaves are neither more nor less, in an aggravated form, than legal blackmail, and the facts are sufficiently remarkable which show how a great industry of this country is robbed day by day by these people. The owner of a small piece of land is able to extort large sums for wayleave. If the hon. Member who last spoke would read the Report of the Royal Commission he would see that every other country in Europe 20 years ago, when this Report was issued, had dealt with this question of wayleave, but in this country it is not until 1909 that any proposal whatever has been made to deal with this growing evil of wayleaves. The Royal Commission condemned wayleaves as an injustice. Legislation was suggested, and it was proposed that a judicial tribunal should be set up; but for 19 years nothing has been done. The industrial side, the economic side, of the coal trade has never received from this House any consideration or any legislation whatever for many years past. I will read what the Royal Commission reported in relation to this question. I think hon. Members, before they go about the country talking of robbery and spoliation, would do well to see what the Report of the Royal Commission, published 20 years ago, says on this question of wayleaves. On page 22 of the final Report of that Commission it was stated that it was seen, on reference to the mining system in foreign countries, that throughout the Continent of Europe there were compulsory powers to take land acquired for the purpose of carrying minerals to market obtainable after inquiry by a Department of the Government charged with the business, full compensation, in some cases double the ordinary value of the land taken, being charged to the proprietor of the land taken. I know of a case whore a piece of land not as large as this room to-day yields to the owner of that land £800 per annum. I do not wish to bring in the names of individuals in these matters relating to wayleaves, but if any hon. Member desires I can give him personally the name of a man who has made a large fortune by studying the maps of collieries, buying up small plots, and then blackmailing those companies and making money out of them.

Mr. LAMBTON

There are sharp people in every condition of life.

Mr. MARKHAM

The Chancellor of the Exchequer has referred to the question of Mr. Cooper on this very question of wayleaves at the Royal Commission. The question put was:— You will correct me if I am wrong, is it your view that the amount of wayleave a man is entitled to should be equivalent to the injury done to the recipient of the wayleave, by the exercise of it, and should not be measured by the injury he is able to inflict on others, supposing it to be previously determined that the wayleave is a necessity for the property to be developed and worked? The reply to that was:— Exactly, I think so.

Mr. STUART-WORTLEY

Is the hon. Member in order in dealing with the relations of lessor and lessee when the Resolution deals with the relations of the lessor and the Government?

Mr. MARKHAM

The Resolution proposes 5 per cent. on wayleaves. I am going, though I am not in order, to move a Resolution to increase the tax, before I sit down to hand to the Chancellor of the Exchequer a Resolution which I hope he will personally move, where in cases of blackmailing that this tax shall be increased. My argument is directed to that.

The CHAIRMAN

I think the levying of a tax of 5 per cent. enables him to some extent to raise the question.

Mr. MARKHAM

Even if these wayleaves were admitted by the Royal Commission, they recommended legislation should be introduced forthwith to deal with them, and that was 19 years ago. My contention is that the only possible way in which this matter can be dealt with is in the Finance Bill, because the only way you can deal with wayleaves is to tax the men who levy this blackmail.

Mr. LAMBTON

asked a question which could not be heard in the Gallery.

Mr. MARKHAM

If the hon. Member will refer to other evidence, he will find that Mr. Cooper says that that is not so. When asked whether this fact was not taken into account by the lessee, Mr. Cooper replied that, in many cases, the lessee would not be able to take it into consideration. Personally, if I have to pay a wayleave, I endeavour to get the coal cheaper, but I do not always succeed. I make the best bargain I can. I do not say that a man should not have a fair rent for the right of wayleave; but this is a case where landlords are receiving something like half a million of money for the granting of a privilege which does not do them the remotest injury, which does not effect any severance of property, and which personally they do not even know is being availed of. The question is whether it is in the public interest that a man, by virtue of his rights as an owner of land, should be able to impose such heavy charges on the largest industry in the country. What I ask the Chancellor of the Exchequer to consider is some such Amendment as the following: "Provided, nevertheless, that where the mineral undergound wayleave rent exceeds 10 per cent. of the value of the royalty or mineral carried by virtue of such wayleave, an additional duty of 2s. for every 20s. of that rental value shall be charged, levied, and paid for each and every complete additional 10 per cent. paid in excess of 10 per cent. of the value of such royalty or mineral."

Earl WINTERTON

Is it in order for an hon. Member to suggest to the Chancellor of the Exchequer an Amendment which he himself cannot move, to read out such Amendment, and to proceed to discuss it?

The CHAIRMAN

It is perfectly in order, in Committee of Ways and Means, in a discussion of this sort, for an hon. Member to say that, whilst approving the tax as far as it goes, he would desire to see a larger tax proposed. That is what I understand the hon. Member to be doing. It would not be in order to go into the whole relations between lessor and lessee, but to suggest that the tax is not enough is quite in order.

Earl WINTERTON

But the hon. Member distinctly read out an Amendment which he suggested the Chancellor of the Exchequer should move.

The CHAIRMAN

There is no point of order in that. The hon. Member might just as well have put his suggestion into his speech instead of putting it into the form of an Amendment.

Mr. MARKHAM

The effect of my Resolution—which perhaps if the Government cannot accept now they may find their way later to consider fully, which I think is fair—is that where a wayleaf owner charges more than 10 per cent. on the actual value of the royalty, that for every completed 10 per cent. of the actual value of the coal carried on his property an additional tax of 2s. shall be added, and paid accordingly. I have already shown that in every country in Europe the right which exists in this country of the landowners to charge these ridiculous, these monstrous wayleaves, is not allowed. Therefore I do hope that the Chancellor of the Exchequer will give due consideration to the matter, so that sooner or later this question may be dealt with. The only way possible to deal with it is by a Finance Bill.

Let me say in conclusion that the kind of speech made by the hon. Member who last sat down does not help the cases of the landowner or the mineral owners. The royalty owner, let the House remember, does not even know of the existence of coal under the surface of his property until the mining prospector has got his nose on it. When the hon. Gentleman talks of robbery, the destruction of human life, and so on, he is unfair and unjust. We on this side of the House are treated as a kind of pirates and robbers; but there are people that go snivelling about the country. I believe that every duke that makes a speech and grumbles and growls against this tax is worth several thousand votes each time to the other side. I do not think that that can be contradicted. [An HON. MEMBER: "It is." Another HON. MEMBER: "That is your view."] One word on the question of the definition of minerals. It is said that clay ought to be excluded from the operation of this Section. I believe hon. Members have been putting pressure upon the Government to let the owners of brick-clay free, but I do not see any reason whatever why they should be let off free. I know a case where the ordinary rate paid is eighteen-pence per thousand bricks—an hon. Friend says 2s., but I put it at eighteenpence—as the royalty the owner receives. I am working a quarry connected with a colliery where the amount received for clay comes to £1,500 per acre. The value of the clay is due to the proximity of a railway. All the increases in value of coal mines come with the building of a railway, and go into the pocket of the landlord. I know a case in Doncaster which is paying at the rate of £20,000 a year now out of land which four years ago the owner did not know contained any coal at all. Take the whole great coalfields of Nottingham, Derbyshire, and Yorkshire. Twenty or 25 years ago the coalfields there were of no value whatever, but these same coalfields to-day are paying incomes of tens and hundreds of thousands of pounds per annum, and as these mines hardly existed 20 years ago, they have not, in nine cases out of ten, paid Death Duties. In the great majority of cases the value of these minerals for the purpose of Estate Duty is practically nil. These great coalfields, extending for miles, possess minerals of enormous value, the very existence of which was not known 20 or 25 years ago. Therefore I say, so far as the future is concerned, let the people who have minerals on their land pay their fair proportion of the windfalls that come to them.

11.0 P.M.

Mr. F. B. MILDMAY

The coal question undoubtedly looms biggest in connection with this Resolution; but that question has been ably argued by the hon. Member behind me, and I will not dwell upon this branch of the subject except to say that it has been conceded that the original suggestion of a tax upon ungotten coal was impossible and absurd. But the tax now proposed as its substitute is not such an ideal tax as hon. Gentlemen opposite would have us believe. It is a tax on production, a tax which will ultimately be transferred to the consumer, not perhaps in connection with existing leases, but certainly as far as new leases are concerned owners will endeavour to charge extra royalties to recoup themselves. The tendency must be towards an increased coat to the consumer, and so the tax will be felt in every industry throughout the country and in every household which uses coal. It cannot be denied that the Government has already done much by legislation to raise the price of coal. This increased price will of necessity be severely felt next winter by every buyer, and the resultant increased costs of production will be severely felt in every industry. Apart from the question of coal, I am strongly of opinion that the House ought not to consent to any such Resolution involving the taxation of minerals as long as the Government absolutely refuse to put any definition of minerals in their Bill. Without such a definition, considerable uncertainty must of necessity prevail in view of the discordant judgments of the court, and the very varying definitions laid down by authorities. Surely it is the first duty of the Government, it is the first duty of hon. Members, to see that no legislation leaves the House in an ambiguous form. I maintain it is wrong to leave any individuals in a state of uncertainty as to whether or not they will be subject to taxation. The new Clause does so leave them, and the House is aware that nothing so militates against enterprise as uncertainty.

Apparently the Government contemplate with equanimity the necessity that the initial definitions of the term "minerals" should be ascertained by litigation. This is desperately hard on those individuals on whom is thrown the obligation of obtaining for others a legal definition of the term; and it is an obligation which the House has no right to throw on any individual. The Chancellor of the Exchequer just now, when asked whether granite and clay would be counted as minerals, said he did not think it was the duty of the Government to give a reply to that question. How did the right hon. Gentleman arrive at the estimate of £350,000? He must have included granite and clay. I hope the Chancellor of the Exchequer will be able to tell us definitely whether in that estimate he did include a return for granite and clay. Surely it is the duty of the right hon. Gentleman to make up his mind in regard to the definition of minerals and not refuse to answer these questions.

Mr. LLOYD-GEORGE

I never suggested that the questions should not be asked. I only suggested that the hon. and learned Gentleman opposite, might ask questions of interpretations of law of the Attorney-General rather than myself.

Mr. MILDMAY

The right hon. Gentleman has made an estimate, so he ought to be in a position to give us a reply. Perhaps he will kindly give us that reply later. We have, at any rate, by question and answer, gathered that common brick-clay and granite are to be looked upon as minerals. Is it right that common brick-clay should be looked upon as a mineral? It has never yet been held by the courts of law to be a mineral. During the past 20 years every effort has been made by the owners of common brick-clay to obtain compensation for it as reserved minerals in compulsory sales to railway companies, and such efforts have always been frustrated by the courts, which have consistently held that such clay is not a mineral. There can be no doubt whatever that at the end of existing ageements the owners of common brick-clay will take care they get a higher royalty so as to recoup themselves the tax, and thus in the end the cost of the production of bricks is bound to increase, and that increased cost will fall upon the consumer. In my own neighbourhood, in Plymouth, and the surrounding country, the building trade has been considerably depressed of late. There is no sign of improvement, and, in these circumstances, a tax on common brick-clay must mean the closing down of many brick works, and the throwing of many working men out of employment.

Similarly, with regard to granite, we were led to believe that will be looked upon as a mineral, and will be taxed in the same way. The worst feature of these new taxes upon building materials is that foreign materials can, none the less, come into this country without being subjected to any similar tax. I cannot understand the ever-readiness of certain politicians on the opposite side of the House to clap fresh taxation on the home producer to any extent, while they are up in arms at the mere idea of submitting the foreigner to the same taxation. Cannot they see that by substantially taxing the home producer and allowing the foreigner to come in free of this taxation, they are to the extent of the tax protecting the foreign importer in the home market, and they are to the extent of the tax handicapping the home producer in his competition with the foreigner. It is not a question of protecting our own people; it is only a question of equal conditions of competition in our own markets, and I have always been of opinion that it is the first duty of the Government to make certain its own industrial population shall compete on absolutely equal terms with the foreigner, at any rate in our own markets. I can only say further that the proposed taxation of coal will eventually increase the cost of production in every industry throughout the country; and it is certain by taxing bricks and other building materials you will hamper and handicap the building industry, which we all know is in a very serious condition at the present time, a condition which, if it is worsened, will bring about a state of matters which the House must look upon with concern. Under the circumstances I have described it seems to me the duty of the House to reject the Resolution.

Mr. LAURENCE HARDY

We had just now an interesting speech from the hon. Member for the Mansfield Division of Nottingham (Mr. Markham), in which he showed clearly that he was a very apt pupil of one Member of the Cabinet—the President of the Hoard of Trade. He evidently agrees that in imposing these vindictive taxes it is necessary to go to the sources from which income is derived. But when rent is so often mentioned it is well to remember that after all it is only a relative term. As applied to minerals it must be borne in mind that the money received is for the coal in the ground which can only be got once and paid for once. It should also not be forgotten that many of those who are affected by this tax will also have to pay the Super-tax under this Budget, and they will by that means be contributing considerably to the provision for the deficit. I should have thought it very undesirable for proprietors who work their own collieries and provide the necessary capital to be subjected to this additional taxation. With reference to the curious change of position which we have to face at the present moment. I think it is really remarkable that five months practically after the Chancellor of the Exchequer brought in his Budget he should be proposing to the House two new resolutions in regard to new taxes. His explanation, as I understood it, was that he was endeavouring to meet the views of those who were interested in collieries, who preferred to pay something clear out of what they received. But what occurred on the occasion when a deputation of colliery owners waited on the right hon. Gentleman does not bear that out.

The right hon. Gentleman told the Mining Association that he assumed that they preferred a tax on rents and royalties to one on ungotten minerals. But Mr. Ellis, speaking for the deputation, said they had no authority to express that view, and he clearly showed that they neither asked for that nor deemed it the best plan at the time the Chancellor of the Exchequer was probably aware that his proposed tax on ungotten minerals was impracticable, and therefore it cannot fairly be said the change was due to the views of those interested in the question. Then he explained that although he was going to receive more money under this proposal, it was in consideration of the advantages he was giving to colliery owners. It seems to me rather remarkable that when he summed up these concessions, they consisted of the abandonment of the Reversion Duty and the abandonment of the Increment Value Duty on existing worked minerals. When I asked him only a week ago what was the estimate which was made with reference to these two matters, he said the yield of the mineral taxes was £175,000, but no definite estimate had been made in regard to the Reversion Duty or the Increment Value Duty, so clearly the amount of money to be obtained was not such a large quantity that it affected his estimates in any way, and I think we all know perfectly well from the discussions in this House and in the country that the Reversion Duty was really inapplicable to minerals at all, and that there was hardly a case which could be found in which the Reversion Duty could bring anything to the Exchequer. It would be a very large expense to find out the facts, and it could not possibly bring any revenue which was commensurate to the outlay. Therefore again I do not think his contention that he has been giving very much will stand.

It is a very remarkable thing that whereas his Budget estimate was £175,000 it is double that now—£350,000; but then it has to be taken into consideration that he is to give away half to the local authorities, and therefore he gets £175,000 for the Exchequer still; while he takes £350,000 from the mineral owner, and while he does not lose by the transaction, he gets the same amount for himself as he did when he did not propose to give anything to the local authorities. Why should mineral owners have to pay twice over what, in the right hon. Gentleman's original Budget speech, he thought was sufficient to take from them? They are already, in my opinion, very heavily taxed. There is no doubt that as far as those who come under Schedule B are concerned, they are enormously taxed at the present time. The Chancellor of the Exchequer did not allude very much to that particular point when asked a question. He only alluded to the fact that there was no difficulty in obtaining the royalty from the proprietors. I quite admit that it is perfectly easy to obtain particulars of what royalty value the proprietor takes, but that does not go to the principle. How are you going to explain why when a man buys coal under the ground he should be treated any differently to the man who buys coal above ground, when he is going to use it for exactly the same purpose. Take a proprietor who is at the same time an ironmaster. I can speak from experience. He does not always lease the coal; he may buy it outright. In a case which I specially know of we have very largely bought the coal outright, and, in our opinion, having paid for the value of the coal, we have just as much right to use it for the object we bought it for—namely, to make iron—and as the raw material of our industry as a man who buys the coal above the surface from any coal merchant in the country. We have bought the coal out and out under the ground; he has bought the coal above ground, but equally it is bought to carry on one of the oldest industries in this country, and I cannot for the life of me understand why this Government, which holds up its hands in horror at taxing raw material, in this instance put a tax upon iron and coal which is being used by the proprietor for the objects of his business, and without which he cannot possibly carry out that industrial proceeding. At all events it requires a good deal more explanation than the Chancellor of the Exchequer gave us.

I should like to ask the right hon. Gentleman how it is possible to make a valuation of all mineral property unless he has made up his mind what are minerals. I should like to hear how he can propose to tax minerals like stone, which is used for roads, or marl, which I believe is considered to be a mineral, or sand, because certainly in rural districts it will be found a great inconvenience in many places if people find they are going to be taxed upon the quarries for minerals which are used mainly for the convenience of people near by, and only a very small amount charged for them. This taxation would compel owners to close them altogether, at great inconvenience to those interested. I hope the right hon. Gentleman will consider some proposal to exclude such very cheap minerals as these from the incidence of his tax. We have had no explanation as to the justice of putting this extra Income Tax on this particular form of material. It is really making the Income Tax 2s. 8d., and if you take into consideration the Income Tax, and the mineral Royalty Tax, and the Increment Tax, which we are now told is going to fall upon minerals in all cases, we must see that the Government are carrying out by a side wind the nationalisation of minerals. I was a little surprised not to see the President of the Local Government Board undertaking the defence of this part of the Budget. He once brought in a Bill for the nationalisation of minerals, and he would have been a very fit person to conduct a Resolution of this character, which is leading on, taken in consideration with the other taxes which fall upon minerals, to that nationalisation which was his ideal twenty years ago. After all, minerals are not a reproductive property. You can only take them once, and if you tax them constantly you may very soon get the whole value out of them. In endeavouring to gain popularity by inflicting taxation upon sources of revenue which may not be popular with certain classes of the country, we are following very different lines from what finance has followed in other years. I strongly object to this particular duty. I object to it quite as strongly as to the original proposal. It may be more easy to obtain, but I do not think that it is more just in principle. So much for the merits of the proposal. As to the details on which it is defended, I hope the Government will give us more information than they have done up to the present time.

The ATTORNEY-GENERAL (Sir W. Robson)

The hon. Member for the Ash-ford division of Kent (Mr. Laurence Hardy) has asked the Government to give more definite information as to what will fall within the scope of the tax, and he said it would be difficult to estimate the amount to be obtained from the tax unless it was clearly understood how minerals are to be defined. I do not think the difficulty which has raged round the definition of the word "minerals" is altogether justified. There has not been very much doubt as to what is included in the term "minerals" except in the case of clay, and there, I must admit, there has been in the courts considerable diversity of opinion, and there may still be some difficulty in applying the term to clay. I should be sorry to show any lack of appreciation of the excellent speech of the hon. Member for Mansfield (Mr. Markham), and yet I must say that I myself, and I think the Government, entertain considerable doubt as to the advisability of including clay in the category of minerals. There are reasons which I think entitle clay to something of differential treatment. [HON. MEMBERS: "Election reasons."] If hon. Members think we have considered the case of clay with a view to electoral possibilities, I am afraid I canot alter their view; but I do not think the country or any sensible man will pay the slightest attention to that suggestion. There are reasons why clay should not be included in the definition of minerals. It is a matter which the Government are ready to consider in the most favourable and sympathetic way.

Mr. LAURENCE HARDY

Is it the intention of the Government to give us a definition of minerals?

Sir W. ROBSON

The courts have given a series of definitions, and I think they will be quite sufficient for our purpose. What I said was that courts had shown some doubt on the subject, and that there is considerable diversity in the definitions they have given regarding clay. The difficulties which have beset the courts in this matter in the past may beset the administration and collection of this tax in the future.

Mr. W. PEEL

May I ask what is the estimate of the yield of the tax?

Sir W. ROBSON

I must ask the hon. Member to consider whether I am the proper person to whom that question should be addressed. I do not frame the estimates. That work is done by others. The hon. Member who spoke last put some questions which seemed to echo the argument of the hon. Member who spoke first. He said that we are on the way to the nationalisation of minerals by putting a tax of 5 per cent. on royalties. That is manifestly ridiculous, and I take it that criticism is quite in the spirit of hon. Members on the other side of the House. He also complained of the proposals not on any grounds special to themselves, but because he said they were obvious Socialism. He asked why should mineral owners be taxed more than any other people. The same question was put by the hon. Member for Ashford. Why should a man who buys coal under ground be taxed more than the man who buys it above ground? Both these hon. Members seem to have in mind the same ideal abstract tax which is to fall with absolute equality upon all men of all ranks. I do not know where these marvellous taxes are to be found. We do not know of any such tax; we have not sought for such a tax. We recognise that taxes must take something out of somebody's pocket. Take the tax which almost all of the hon. Members opposite have supported, the Coal Export Duty. It was a sectional tax like every duty which we are proposing now. I would like hon. Members to apply to their favourite tax which they would like to reimpose the questions which they put on this tax. Why should the man who exports coal be taxed more than the man who sold the coal in the home market? Why should men who sold coal above ground be taxed more than the man who sold under ground?

Mr. LAURENCE HARDY

Why do the Government tax raw material when they buy it under ground any more than when they buy it aground?

Sir W. ROBSON

They call the owner of the royalty a raw material. We tax the owner of the royalty. He is taxed in his capacity as owner. The questions against this tax are put without considering how the same questions should be applied in relation to the taxes of which they are the most ardent champions. If you are to have sectional taxes at all—and in my opinion you cannot do without it—you must have taxes which, by themselves, will fall in unequal degrees on different classes with different means. You cannot avoid it. There exists no tax which would satisfy all the questions put by hon. Members to-night. The hon. Member for South-East Durham (Mr. Lambton) said that if the State has a right to take 5 per cent. of the royalty it has a right to take the whole royalty. Did the hon. Gentleman really think of what he was saying when he put such a question as that?

Mr. LAMBTON

Certainly.

Sir W. ROBSON

Has he ever voted for a 5 per cent. tax on incomes, and did he regard that as showing an obviously vindictive socialistic intention to take 100 per cent.?

Mr. LAMBTON

That applies to everybody.

Sir W. ROBSON

If the hon. Member believes that to take 5 per cent. on the annual value of any class of property is Socialism, I think he will see, if he reflects, that, having voted for the Income Tax, he has been a Socialist all these years without realising it. I do not mean to take up any argument as to Socialism. I do not think there is any hon. Member on that side of the House more earnestly convinced against Socialism as a political scheme than I am, and I do not see why hon. Members should apply the term Socialism to these proposals. Here is a tax, not on raw material, not on trade, not on enterprise; it is a tax placed on a class of the community and a kind of property eminently fitted at least to share in the general burdens of the State. It is attacked because it falls upon property, and no other reason is given. Is it wise, is it prudent, to let the country believe that a tax of this kind is Socialism. If they convince the people of this country that this tax is Socialism then they may range themselves among the most effective champions of that political creed to be found in this country. I hope myself that hon. Members opposite will take that more carefully into consideration than they have done. The hon. Member for South East Durham and the hon. Member for Ashford ask why should the royalty owner pay more than other people. Let us put that question into the mouth of the colliery proprietor who works the colliery. He says, "Here I am paying a rent which is a very great and appreciable burden on every ton of coal I raise to the surface. Why should I pay rates when the owner pays no rates. [An HON. MEMBER: "He does."] The owner of the minerals pays a small amount, but the colliery proprietor pays a very large amount. Undoubtedly the latter is able in some measure to recoup himself from the consumers in a larger degree than the mineral owner is able to do, but that does not abolish the inequality. You have every kind of protest from hon. Members opposite when the tax is applied to the detriment of the royalty owner, but they do not protest when it falls as a burden upon the colliery worker. It is then an excellent thing.

If hon. Members confined their remarks to the argument that it is already highly taxed, and that it is taxed according to their contention, and not by any means my own view, in a higher and greater measure than other kinds of property, at least they would have an intelligible argu- ment. But when they try to put it on general grounds, what does it lead to? It leads to this, that you must not tax property at all, but you may tax trade, you may tax labour, but you must not tax property at all. What is legitimate fiscal policy when applied to labour, and trade begins to be Socialism and confiscation the moment it is applied to property. When hon. Members push their views and their claims of property to exemption I think we are bound to ask what do they mean. Do they mean that any further tax on property is confiscation; and that a tax can only be made on property by reason of Socialist views? If that is what they mean then let us have it stated in clear and explicit terms; and if it is not then let them admit that they agree that taxes on property are proper taxes, and that it is merely a question of degree whether or not they are fair. I could understand an argument based, as I have said, on the question of degree, but not an argument which seeks to fortify itself by first principles and appeals to what is not an argument at all, but a term of abuse in the mouths of those who use it. On those considerations I think the tax has not been successfully impeached in any of the speeches this evening. It has been criticised in a degree less than I expected, for a new tax where you have to devise new machinery and to consider all kinds of contingencies and possibilities that are not present to the minds of permanent officials because they have not administered taxes like it before, one is apt to anticipate a high degree of criticism, and to expect one would not have a perfectly drafted or very good scheme of tax. Judging from speeches this evening there is not much to say against our tax on that score.

Mr. LAMBTON

Speak on the details.

Sir E. CARSON

I think it is a somewhat remarkable thing that after the number of weeks we have been engaged in these Budget discussions we are now going back on the thirty-second or thirty-third evening to Financial Resolutions, nine in number, three upon the Paper, and six, I understand, in the right hon. Gentleman's pocket, and of which we know nothing, in order that we may try to prop up this Budget which no doubt was thoroughly considered before the right hon. Gentleman ever brought it in. I think it is a fair observation to make that one assumes that a Budget, of so far-reaching consequence as this is, was thoroughly considered and thoroughly thought out by the right hon. Gentleman before he brought it into this House. And it is remarkable that almost without a word of apology to the House, or almost without a word of explanation to the House, the right hon. Gentleman gives the quietus to the thoroughly considered Clause 12 and the other ones relating to the ill-considered provisions as to the ungotten minerals, and now starts tonight this new and thorny subject as regards royalties. But perhaps the most remarkable thing of all when I asked the right hon. Gentleman in the few observations he gave us at the opening what it was he was going to apply it to, he said, "Really, that is a matter you must not ask me. I am only Chancellor of the Exchequer, and do not be mixing up your idea of my legal knowledge, which I have long since parted with, but turn your attention to the Attorney-General and ask him what it is we mean to tax by the provisions of this Resolution." The right hon. Gentleman said further, "Oh, that is a question of law." But it is not a question of law. It is a question of fact.

This House wants to know what it is going to tax, and it has a right to insist on knowing. What, in the charming speech to which we have just listened, with its interesting though somewhat irrelevant dissertation on Socialism, did the Attorney-General say we were going to tax? He said, "It is all thoroughly defined by the decisions of the courts." I hope that conveyed a great deal to hon. Members. But is it so? Only recently there was a case in the House of Lords, occupying five days, and I am not sure whether it is yet over, in which their Lordships were trying to make out what were minerals. At present it is absolutely unsettled whether sandstone, for instance, is a mineral. What, then, are you going to tax? Why are you shirking the subject-matter of your tax? If the legal decisions are in this condition, surely the first thing we ought to do is to rescue the term out of the chaos and confusion in which it is, and to put its meaning plainly on the face of the Resolution and of the Bill. The Attorney-General knows as well as I do that everyone of these decisions in relation to minerals depends not on general principles at all, but on the particular document, whether a lease or an agreement, to which they happened to apply. The legal decisions which have been given do not in the least assist us when we come to consider whether under the term "minerals" we are taxing a particular kind of mineral under a taxing Act, such as this will be. Do you mean to tax granite as a mineral?

Mr. MARKHAM

Yes.

Sir E. CARSON

The Member for the Government below the Gangway says "Yes."

Mr. MARKHAM

If the right hon. Gentleman refers to the Report of the Royal Commission, he will see that granite is described as a mineral.

Sir E. CARSON

I am aware of that, though I did not know that a Report was an Act of Parliament. But I will take the answer of the hon. Member, because he made a very able speech on the taxation of minerals, and gave us a great deal of information as an oppressed colliery tenant—

Mr. MARKHAM

I did not say so.

Sir E. CARSON

Who has done very badly in the matter of royalties—

Mr. MARKHAM

I did not say so.

Sir E. CARSON

And has apparently been unable to see that there is any justice in the receipt of royalties at all. He says that granite is to be included. Have hon. Members considered the sad and pitiable condition in which granite quarries in this country, and those who work them, are at this moment? Not long ago, when Solicitor-General, I had to attend an inquiry in Devonshire, where the War Office were taking land in which there was a granite quarry. We had several days' investigation as to the value of the quarry, and I wish the Attorney-General in his leisure time would read the evidence then given. It was proved as regards Norwegian granite that you can, not merely quarry the stone, but, what is a great deal worse for employment in this country, dress the stone and have it ready to be placed in its position in any building, even in Aberdeen, where there are good granite quarries, at a far less price than you can raise, dress, and work the mineral for in Aberdeen. An hon. Gentleman says "Hear, hear." What are you doing? Under these conditions you are putting an additional tax upon the production of granite and the employment of men who work the granite in this country, while you are putting absolutely no corresponding tax at all upon the introduction of granite from foreign parts. You are giving foreign granite the preference. An hon. Member behind me asked for a return of the diminution of employment in the granite quarries within the last two or three years. Within that period the diminution in employment has been about 7,000 men. It is in the face of facts like these that you single out this one class of property, minerals, for the purpose of putting an additional tax on, which, in either way you look at it, must in the end add to the cost of production, and make it more difficult to compete with the foreign producers. The same thing exactly applies to the ironstone quarries. If I am rightly informed the great majority of the ironstone used in this country is produced abroad. Here, again, in the face of facts of this kind, you are putting on an additional tax which makes it far more difficult in the future for ironstone to be raised in this country, and compete with foreign iron.

Then there is the remaining question which the Attorney-General dealt with in a somewhat superficial way—if he will allow me to say so. According to him, we are going to have differential treatment with regard to clay—I suppose he means brick earth and that kind of thing. He told us there were reasons for it. He gave us none. Personally, as I dislike the whole thing, I am very glad that there should be exceptions, but why one particular kind of mineral is to be exempted I fail entirely to see. The Attorney-General gave us no reason, but very much resented an interjection of somebody who suggested that it was on account of votes. I do not know that that is a matter that any Government need resent. I suppose we are all here to try as far as possible to fulfil the wishes of the people. I have no doubt that the Government have thought that a larger number of people, perhaps, were interested in clay than in granite, and they take that as their permission to deal with the matter thus. I hope they will not be offended with us when we translate what they call the policy of the people into a policy of votes. That is all. I am surprised that in dealing with the account of this tax so much has been said about royalties. So far as the argument goes there is nothing properly to be said about royalties except for the purpose of confusion. The owner working his own mine is placed in exactly the same position. You are going to tax them both. It used to be a question of ungotten minerals and royalties, and I remember the graphic way in which the Chancellor of the Exchequer used to say: "Could not these men who have not spent anything throw us a copper and give us something towards the revenues of the country." But that is all abandoned now. It is the man who does everything, who pays everything, who risks his capital and his liabilities in opening up a mine who pays. I do not know whether the Chancellor of the Exchequer has any experience of the risks involved in the opening of these mines. I think if he had he would know that a man who spends £100,000 or £200,000 in the opening of these mines very often runs very great risks. Let us get rid of the cant about the man who does nothing and risks nothing. You are selecting out a man who has risked his capital just as well as the man who does nothing.

12.0 P.M.

Therefore, let us argue it upon its true basis. What is it you are really asking him to do? You have said to him over and over again in the course of these Debates: Why should not the owner of this kind of property pay his contribution towards the expenses of the State? They always omitted the fact that he is paying exactly the same amount of duties as everybody else; they forget entirely if he is a man receiving an income of £5,000 he pays 1s. 2d. Income Tax, and if he has over that sum he pays 1s. 8d. What you are really doing is this: You are going to say to a man who derives his income from these sources you must pay 2s. 8d. in the £ Income Tax, but a man who derives his income from any other source has got to pay 1s. 2d. or 1s. 8d. in the £ Income Tax. That is what I object to. The Attorney-General asked, Are we not to tax property at all? We say if you tax property at all you ought to do it in a way that is equitable over all classes of property. In the case of a man who spends his capital opening up mines, giving employment and incurring risks, you have no more right to put an additional shilling Income Tax upon him than you have upon the man who speculates in shares in mines or anything else, and makes an enormous sum in the process. It is the selection of this particular class for special taxation that requires justification. What is the difference between producing coal and producing anything else? You are putting a shilling additional Income Tax upon this class because they are engaged in a particular trade. That is what this proposal comes to, and that is the objection we have to your tax. In addition to all that, observe how you are piling up the expense of valuation in the course of this Finance Bill. Here is a new valuation. I have long since given up counting the number of valuations we are to have under this Bill. Now the Chancellor of the Exchequer tells us, as if it were a matter of no importance to the taxpayer, that we are now going to have the whole of this mineral wealth valued.

Mr. LLOYD-GEORGE

It is not a new valuation at all. It is already provided for in the Bill.

Sir E. CARSON

Is it the same as the valuation for ungotten minerals?

Mr. LLOYD-GEORGE

Certainly. The right hon. Gentleman thinks he has just discovered this for the first time. I said so distinctly in the course of my speech.

Sir E. CARSON

I was under the impression that we had got rid of the idea of valuing the ungotten minerals of this country. All I can say is that I think this will lead to a good many days discussion, because we shall want some principle laid down upon which you are going to value ungotten minerals. I thought this taxing of ungotten minerals had been given up for the sake of simplicity, and that the Government had decided to get at something tangible and certain. Now we are told after all these promises and all this delay we have to go back to our old friend the ungotten minerals, and we are to be placed once more in the same state of uncertainty. We are now only dealing with the financial resolution, but the statement of the Chancellor of the Exchequer has opened up a most interesting vista of discussion in this House, and I hope the Government will not grudge us full time for Debate as this is a matter of considerable interest and very considerable moment. On each occasion when the Increment Tax has to be paid the owner of the coal will have to proceed as best he can to combat and dispute the valuation put upon him by the Government valuer. All these are matters which will require considerable discussion when we come to the Clauses in the Bill dealing with this subject.

It is a very remarkable thing, and has been pointed out by an hon. Member who preceded me, that the tax which was to produce £175,000 is now to produce £350,000. The fact as to how much or how little is wanted for the year never seems to make the least difference. After all, what does it matter, a few hundreds or a few millions here or there; it makes no difference. The hon. Member for the Mansfield division (Mr. Markham) made an interesting contribution to the Debate on the question of wages. He made a speech of a most misleading character as regards people outside this House. After all, it does not matter inside the House, because everybody votes according to the way he is told; nobody is really misled by speeches of that kind. He used the objectionable phrase, which has now become a Parliamentary one—blackmailer. I think it would be better if the hon. Gentleman and the Chancellor of the Exchequer would allow us to keep that phrase for the Old Bailey. He said owners of mineral wayleaves use their position for the purpose of extracting all they can from the man who is working the colliery. I do not think anyone has any sympathy with the man who uses his position unfairly.

Mr. MARKHAM

If the hon. and learned Gentleman will read the Clause, Sub-section (2), paragraph (a), he will see that wayleaves are to be charged where the right to work the minerals is the subject of a mining lease, the amount of rent paid by the working lessee in the last working year in respect of that right.

Sir E. CARSON

What has it got to say to the tax? The more blackmail, the more tax I suppose. It is levying a tax on the earnings of a blackmailer. That is what it comes to. How does that get rid of the mischief? If he is an unscrupulous man, he will pass it on, and the last state of the colliery worker will be worse than before. It has no application to this tax whatsoever. If a man uses his property or position for extorting money in that kind of way, all I can say is I shall have no hesitation whatever, if any Bill is brought before the House, in giving my vote to take care no such thing will be possible. I believe every honourable man would scorn and condemn such a use of porperty. The tax does not alleviate it in any way, and therefore I assert it is really no argument in its support, neither is it a fair way of representing it to the people to say: "Here we have blackmail; what are we to do? Are you going to stand up against this tax?" You might as well say that if a tax is put upon burglars you can go about the country defending it. [An HON. MEMBER: "You lock up burglars."] That is the point. You get rid of the mischief in that case, but you do not do it by participating in the burglar's ill-gotten gains.

The Attorney-General seemed to think it was a complete answer to my hon. Friend the Member for S.E. Durham (Mr. Lambton)—who complained that the Government were putting this tax upon capital and that there was nothing to prevent it being increased to any extent—to reply that the same argument exactly applied to the Income Tax. I venture to think there is no analogy whatever. In the first place one is a tax on capital and the other is a tax on income. Again, in the case of the Income Tax you are not singling out any particular trade, business, or individual for taxation; you make the tax applicable to everybody. But when you single out one single individual or class of individuals who may be few in number and who may have very little voting power, then I say you are trenching on all those sound doctrines on which hitherto the taxation of the country has been based; you are setting up a system which accordingly, as people understand that without affecting themselves, they may go on increasing the tax they will be encouraged to do so until what at the commencement was a very small sum, eventually becomes so large as to be ruinous to the person on whom the burden is imposed.

I am not going to follow the Attorney-General into the dissertation he gave on the question of Socialism. He said, with a show of great indignation, "I am not a Socialist." Well, he does not look like one, I admit. He also says there is great danger in applying this term Socialism to such taxation as this. But does the hon. and learned Gentleman read the newspapers? Does he read the speeches of hon. Members below the Gangway? Does he know what their opinion is? Has he not read how they claim this to be a victory for Socialism? Has he read the criticisms of men far away from our political life who have examined these proposals on economic grounds rather than on political grounds? Does he not know the conclusions at which they have arrived? Hon. Members below the Gangway who represent Labour may interrupt, but they have had the candour to admit that this is the introduction of the very principles they as Socialists desire to see introduced. Contrast the statement of the hon. and learned Gentleman made with so much indignation with the assertion of hon. Members below the Gangway that these are the very foundations of the principles which they are advocating. I look upon this as a very serious Resolu- tion. Of course one cannot discuss it in detail now, but when we come to the Clauses I am sure the right hon. Gentleman will think that it would be proper that we should very minutely examine them in Committee.

Mr. JAMES TOMKINSON

An hon. Member who spoke recently evidently addressed the Committee in the character and from the standpoint of a lessee of coal and not an owner of coal, and consequently as a payer and not as a receiver of royalty. I wish to say a few words in the character of a humble receiver of royalty, though not to a large extent on coal and granite of which the right hon. Gentleman has just spoken. I must say I was almost amazed to hear the statement of the, right hon. Gentleman in regard to the granite industry of this country. He said it was in a most parlous state, that it was being forced out of existence to some extent by foreign granite, which could be brought here on more favourable terms and in a cheaper manner than our own granite, and he appeared to be perfectly ignorant of the fact that I am speaking within the facts when I say that nine-tenths of the product of the granite industry of this country is used for purposes for which foreign granite cannot be used at all, namely, for the making of our roads, both our main and other roads. That has set up an industry of enormous proportions.

Sir BERKELEY SHEFFIELD

May I ask the hon. Gentleman if he could give the actual returns of the number of ships which come back in ballast with granite into the port of Hull?

Mr. TOMKINSON

In the county of Warwickshire there are enormous quantities of granite supplied for making roads, and it is the same all over the Midlands. Large quantities are turned out every year to make roads all over the country, and as for foreign granite ruining English trade it is perfectly absurd to say so. There is a mountain that I know well which has been almost disfigured by quarrying. I have seen the accounts of one of the great firms working it and that trade is positively increasing. They supply granite all over the country, and there is an enormous new industry in supplying small stone for the ballast of railways all along the line. The right hon. Gentleman's idea about the decadence of the granite tirade is wholly unfounded. My experience is that the royalty generally charged upon granite is about 3d. a ton and a 5 per cent. tax upon that will amount to something little more than half a farthing per ton.

When the Budget was first introduced, I said I thought the proposal to tax the capital value of ungotten minerals would be found to be very difficult and possibly impracticable. I am very glad a change is made. I think, as a receiver of royalties, the tax is fair, just and reasonable, and they are a kind of property which can fairly be called upon to contribute to the necessities of the country; therefore, I give it my hearty support and approval, and so far from regarding it as a proposal that is Socialism in a dangerous sense or one hostile to the possessor of property, it is much more likely to be a corrective and preventive of Socialism.

Mr. KEIR HARDIE

I do not intend to discuss Socialism except to say that the more this Budget is denounced as a Socialistic Budget, the more popular it becomes. The more hon. Gentlemen who are opposed to the Budget insist upon calling this Socialism, the more rapidly does the membership of our Socialistic organisations increase. As a matter of fact I think of resigning as our work is being so effectively done by our opponents. There is one aspect of this question which the speakers on this side have been emphasising, that the tax in the form in which it is now proposed will bring in almost double the amount of its original form. When it was a tax on ungotten minerals it was estimated to bring in £170,000 a year, now the estimate is that it will bring in something like £350,000 a year. Those who opposed a tax on ungotten minerals must be sorry that they have leapt from the frying pan into the fire. A tax of £170,000 was a bitter pill to swallow, but a tax of £350,000 must be more bitter still. I rise for the purpose of calling attention to one aspect of the case which I have not heard mentioned in the course of the Debate. This is a tax on mineral royalties. Let it be understood that this is not a tax on minerals. It is not a tax even on profits. It is a tax on mineral royalties, which require to be paid whether profits are earned or not, and in some cases even where the mines are not worked, and neither the colliers receive wages nor the colliery owners dividends. The point to which I wish to direct attention is that this tax is following an example which is almost universal over the rest of Europe.

There is nothing new in this form of tax. In France, Belgium, Germany, and other European States, the State reserves the minerals—it separates the minerals from the surface of the soil and grants a concession to work the minerals on certain conditions. What are these conditions? The first is that a small surface rent has to be paid to the State for the whole of the concession whether the mine is being worked or not. The surface rent figure is a halfpenny an acre in France. In Belgium it is a considerably higher sum. There 1½d. an acre has to be paid. In addition to the surface rent paid to the State—not to the private owner of the land—in France there is a royalty paid to the State of 5.50 per cent. on the net produce of the mine. All that is being charged here is 5 per cent. on the royalties. The charge in France, therefore, is very much higher than that proposed to be imposed under the proposal now before us. In Belgium in addition to the surface rent there is a charge of five francs an acre and 3½ per cent. on the net produce of the mine. These facts are taken from the report of the Royal Commission on Mining Royalties. In that report it is pointed out that in addition the colliery owners in these countries are heavily assessed for local rates and taxes. In Prussia the royalty paid to the State is 2 per cent. on the sales. I am quite certain that the Chancellor of the Exchequer will be very glad indeed to give those who are opposing his proposal the choice of any of those examples which they care to select. In every case the result would be that a very largely increased amount would come to the Exchequer.

On the general principle of the tax let me take a case with which I am familiar and which obtained publicity some years ago. I refer to the case of the Duke of Hamilton, who is the recipient of mineral royalties, or was some years ago, to the extent of over £100,000 a year. He owns most of the land on which the town of Motherwell is built. He leases the surface of the land to the people to build houses and to the municipality to erect a town hall. Then he proceeds to let the minerals under the surface. He gets ground rents for the surface and he gets mineral royalties on the minerals. But the result of working the minerals is to destroy the property on the surface and to cause the collapse of the houses. It causes the collapse of the town hall, and the ratepayers of Motherwell are assessed for the purpose of making good those repairs, while the man who draws the ground rents and the mineral royalties gets off scot-free. Is it too much to ask in a case like that, which is being repeated now in Staffordshire, where a whole village is disappearing, that this man, who is reaping an advantage from the surface and from the minerals, shall be called on to pay 5 per cent. out of his mineral royalties to the State which protects him in this form of robbery? Hon. Members on this side of the House are greatly concerned about the preservation of the sacred rights of property. There have been many cases where workmen out of their savings of a lifetime have built little cottages for themselves, and have been ruined by underground workings without a penny compensation, and now that it is proposed to take 5 per cent. from the income of the man who is responsible for this it is called spoliation and robbery and Socialism and confiscation.

Reference has been made to the condition of the granite industry, and the right hon. Gentleman the Member for Dublin University made it appear that this tax was imposing a fresh burden on the granite industry. But that is not the case. All that this tax is doing is to impose itself not upon the industry, but upon the rent which the quarry owner pays to the owner of the land for the right to work the granite. Whether this tax is imposed or not, the rent has still to be paid. If hon. Gentlemen want to give the granite industry a chance, let them remove the royalties. Let the industry be worked free of royalties and then this tax will not operate, for there will be nothing to place the tax on. A tax in the form now proposed is not a tax upon industry, is not a tax upon profit, is not even a tax upon property. It is a tax upon income received from property which comes to the recipient without either expense or effort on his part.

I am one of those who hold that there is something wrong in the State parting with all its natural resources, from which it ought to derive a revenue, and giving it into the hands of private individuals, and it says little for the patriotism of which we hear so much, of property owners, that they, who have benefited so much from the State, should make such a sordid outcry when 5 per cent. of that which they have done nothing to create. I hope some hon. Members who object to that statement will show us what they have done to create it. They have not created the minerals, that much is certain. [An HON. MEMBER: "Nor has the State."] That is just the point. All the persons who claim ownership in these things have not created them, and therefore the benefit from them shall be collective and not individual. The owners have not risked their lives in mining coal, and they may consider themselves fortunate that they have so long escaped from contributing their quota to the maintenance of the State. The tax now proposed is very moderate. I am glad the Chancellor of the Exchequer has changed the form of the tax, which, in its present form, is better than in its original form. We on this side of the House will certainly give it hearty support.

Sir JOHN RANDLES

The question, at any rate for the moment, is who will pay this tax. Some hon. Members appear to think that it will be paid by nobody but the royalty owner, that it will not fall on the consumer, and that the man who first pays the tax out of his own pocket will not recoup himself and will not recover the amount of the tax. My experience is entirely contrary to that theory. I know it is the custom in connection with mining leases for the worker of the colliery or the iron ore mine to ask for certain privileges. It is within my knowledge that the royalty owner has said—"Yes, I will give you these privileges that you ask for, but I am going to make it a condition that the Lloyd-George taxes shall be paid by you, whatever they may be, in some form or other." That has already been done. Therefore I say that this tax is not going to remain on the backs of the royalty owners but on the backs of the men who work the minerals. This doctrine does not suit hon. Members below the Gangway, because many of their supporters and friends in the country are men who work in collieries and iron and steel works, and I want it to be realised that the burden will really fall on their shoulders. If this burden is placed on the lessees it will in the case of many concerned amount to something between £8,000 and £10,000 a year. Of that, nearly £8,000 is in respect of iron ore. The burden of our iron ore industry is going to be very substantial indeed. I reckon it will make a difference of between 3d. and 6d. per ton on every ton of steel manufactured out of iron ore. That is a tax on our industry. You may think that a matter of 3d. to 6d. on one ton of steel is of no importance, but very often it means the difference between an order going for perhaps 50,000 tons of steel to the foreigner and out of this country, and the difference between 50,000 tons of steel being manufactured in this country and abroad, and means the difference of happiness and contentment and employment in our country. That is not a small matter.

Mr. KEIR HARDIE

I would like to ask on what figures he bases his calculation that this tax will increase the price of steel 3d. to 6d. per ton. The figures given at the Royal Commission do not bear out a statement of that kind.

Sir J. RANDLES

The royalty on a ton of ore will at any rate be 2s. per ton, and I think the hon. Member will note that that figure is rather within than outside the mark. It takes two tons of ore or perhaps a little more to make a ton of iron. Then take your royalty, about 4s. to 4s. 6d., on the iron ore. Then you have a royalty on the coal and on the lime stone, and you are going to put a royalty on the fire, clay which you use in furnaces. If you reckon them up, when you have got your iron, and remember it takes more than a ton of iron to make a ton of steel, I think hon. Members will find that 3d. is the bottom figure. According to the price of materials under the sliding scale, it may reach not only 3d., but it may reach in cases 6d. I think that the hon. Gentleman will find, if he will go through thy calculations, that I am not very far from the mark. I believe I am within the mark. That being the case, I think that at any rate, whatever the Chancellor of the Exchequer may think about it, he might have found some form of taxation which would have made it certain that the burden could not be placed upon those who work the raw material.

If we must have a tax on the owners of royalties, and I do not say it

because I do not pay royalties, we are going to have a Super-tax, then let us have a Super-tax in the way of Income Tax. Then I think the Chancellor may possibly be paid by the royalty owner; but if you put it in this form of a specific tax on the mineral that the royalty owner must pay he looks straight away at the very outset for somebody else to place it on, or else he is not a human being. It is human nature. Every man will try if you will place a burden on him to place it somewhere else. My friends below the Gangway know that if rates and taxes go on, the man who pays the weekly rent is paying every penny of those rates and taxes. He does not actually pay to the tax collector, but pays it to the landlord who collects his rent, and he is perfectly aware that in the five or six shillings he pays in rent there is included an amount for rates and taxes. That is what is going to happen here. An hon. Gentleman opposite, speaking as a royalty owner, said he did not mind this tax. From his point of view, perhaps, he has seen his way to putting it on to somebody else, and he may be well assured that the working men at the bottom will pay. The funny thing about the whole matter is that the working men are being fooled into believing that the landlords are going to pay all these taxes, and that they themselves are going to escape scotfree.

Mr. LLOYD-GEORGE rose in his place and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 128; Noes, 53.

Division No. 709.]	AYES.	[12.50 a.m.
Acland, Francis Dyke	Channing, Sir Francis Allston	Elibank, Master of
Ainsworth, John Stirling	Clough, William	Essex, R. W.
Allen, A. Acland (Christchurch)	Collins, Sir Wm. J. (St. Pancras, W.)	Evans, Sir Samuel T.
Allen, Charles P. (Stroud)	Cooper, G. J.	Falconer, James
Baring, Godfrey (Isle of Wight)	Corbett, A. Cameron (Glasgow)	Ferguson, R. C. Munro
Barnes, G. N.	Corbett, C. H. (Sussex, E. Grinstead)	Fuller, John Michael F.
Barran, Sir John N. (Hawick B.)	Craig, Herbert J. (Tynemouth)	Gibson, James Puckering
Barry, Redmond J. (Tyrone, N.)	Crosfield, A. H.	Glover, Thomas
Beaumont, Hon. Hubert	Crossley, William J.	Gulland, John W.
Benn, W. (Tower Hamlets, St. Geo.)	Dalziel, Sir James Henry	Harcourt, Rt. Hon. L. (Rossendale)
Bennett, E. N.	Davies, David (Montgomery Co.)	Harcourt, Robert V. (Montrose)
Berridge, T. H. D.	Davies, Timothy (Fulham)	Hardie, J. Keir (Merthyr Tydvil)
Bowerman, C. W.	Davies, Sir W. Howell (Bristol, S.)	Harmsworth, R. L. (Caithness-shire)
Bramsdon, Sir Thomas A.	Dewar, Arthur (Edinburgh, S.)	Harwood, George
Brodie, H. C.	Duckworth, Sir James	Haworth, Arthur A.
Burns, Rt. Hon. John	Duncan, C. (Barrow-in-Furness)	Hedges, A. Paget
Byles, William Pollard	Duncan, J. H. (York, Otley)	Helme, Norval Watson
Causton, Rt. Hon. Richard Knight	Edwards, Sir Francis (Radnor)	Henry, Charles S.
Herbert, Col. Sir Ivor (Mon., S.)	Montgomery, H. G.	Shaw, Sir Charles Edward
Higham, John Sharp	Murray, Capt. Hon. A. C. (Kincard.)	Strachey, Sir Edward
Holland, Sir William Henry	Nicholls, George	Summerbell, T.
Hooper, A. G.	Norman, Sir Henry	Thorne, G. R. (Wolverhampton)
Horniman, Emslie John	Nussey, Sir Willans	Tomkinson, James
Howard, Hon. Geoffrey	Nuttall, Harry	Trevelyan, Charles Philips
Jenkins, J.	O'Donnell, C. J. (Walworth)	Verney, F. W.
Jones, Leif (Appleby)	Parker, James (Halifax)	Walsh, Stephen
Joyce, Michael	Partington, Oswald	Ward, John (Stoke-upon-Trent)
King, Alfred John (Knutsford)	Paulton, James Mellor	Waring, Walter
Laidlaw, Robert	Pearce, Robert (Staffs, Leek)	Wason, Rt. Hon. E. (Clackmannan)
Lamont, Norman	Pearson, W. H. M. (Suffolk, Eye)	Wason, John Cathcart (Orkney)
Layland-Barratt, Sir Francis	Pointer, Joseph	White, Sir George (Norfolk)
Lehmann, R. C.	Pollard, Dr.	White, J. Dundas (Dumbartonshire)
Lever, A. Levy (Essex, Harwich)	Priestley, Arthur (Grantham)	White, Sir Luke (York, E. R.)
Levy, Sir Maurice	Radford, G. H.	Wilkie, Alexander
Lloyd-George, Rt. Hon. David	Richards, T. F. (Wolverhampton)	Williams, J. (Glamorgan)
Lough, Rt. Hon. Thomas	Roberts, Charles H. (Lincoln)	Williamson, Sir Archibald
Macpherson, J. T.	Roberts, G. H. (Norwich)	Wilson, Hon. G. G. (Hull, W.)
M'Laren, H. D. (Stafford, W.)	Robinson, S.	Wilson, Henry J. (York, W. R.)
Mallet, Charles E.	Robson, Sir William Snowdon	Wilson, W. T. (Westhoughton)
Markham, Arthur Basil	Roch, Walter F. (Pembroke)	Wood, T. M'Kinnon
Marnham, F. J.	Russell, Rt. Hon. T. W.
Masterman, C. F. G.	Samuel, Rt. Hon. H. L. (Cleveland)	TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.
Middlebrook, William	Seddon, J.
Montagu, Hon. E. S.	Seely, Colonel
NOES.
Anson, Sir William Reynell	Faber, George Denison (York)	Randles, Sir John Scurrah
Arkwright, John Stanhope	Fell, Arthur	Ratcliff, Major R. F.
Balcarres, Lord	Forster, Henry William	Renton, Leslie
Baldwin, Stanley	Guinness, Hon. R. (Haggerston)	Rutherford, John (Lancashire)
Banbury, Sir Frederick George	Hardy, Laurence (Kent, Ashford)	Rutherford, Watson (Liverpool)
Banner, John S. Harmood-	Harrison-Broadley, H. B.	Salter, Arthur Clavell
Baring, Capt. Hon. G. (Winchester)	Hay, Hon. Claude George	Sheffield, Sir Berkeley George D.
Beckett, Hon. Gervase	Heaton, John Henniker	Smith, Hon. W. F. D. (Strand)
Bowles, G. Stewart	Hope, James Fitzalan (Sheffield)	Thomson, W. Mitchell- (Lanark)
Bridgeman, W. Clive	Hunt, Rowland	Walker, Col. W. H. (Lancashire)
Brotherton, Edward Allen	Keswick, William	Warde, Col. C. E. (Kent, Mid)
Burdett-Coutts, W.	Lambton, Hon. Frederick William	Williams, Col. R. (Dorset, W.)
Campbell, Rt. Hon. J. H. M.	Lane-Fox, G. R.	Wilson, A. Stanley (York, E. R.)
Carlile, E. Hildred	Lockwood, Rt. Hon. Lt.-Col. A. R.	Wortley, Rt. Hon. C. B. Stuart-
Carson, Rt. Hon. Sir Edward H.	Mildmay, Francis Bingham	Younger, George
Castlereagh, Viscount	Morrison-Bell, Captain
Clyde, James Avon	Nicholson, Wm. G. (Petersfield)	TELLERS FOR THE NOES.—Sir
Courthope, G. Lloyd	Pease, Herbert Pike (Darlington)	Alexander Acland-Hood and Vis-
Douglas, Rt. Hon. A. Akers-	Peel, Hon. Wm. Robert Wellesley	count Valentia.

Question put accordingly. The Committee divided: Ayes, 127; Noes, 52.

Division No. 710.]	AYES.	[12.56 a.m.
Acland, Francis Dyke	Dalziel, Sir James Henry	Helms, Norval Watson
Ainsworth, John Stirling	Davies, Timothy (Fulham)	Henry, Charles S.
Allen, A. Acland (Christchurch)	Davies, Sir W. Howell (Bristol, S.)	Herbert, Col. Sir Ivor (Mon., S.)
Allen, Charles P. (Stroud)	Dewar, Arthur (Edinburgh, S.)	Higham, John Sharp
Baring, Godfrey (Isle of Wight)	Duckworth, Sir James	Holland, Sir William Henry
Barnes, G. N.	Duncan, C. (Barrow-in-Furness)	Hooper, A. G.
Barran, Sir John Nicholson	Duncan, J. Hastings (York, Otley)	Horniman, Emslie John
Barry, Redmond J. (Tyrone, N.)	Edwards, Sir Francis (Radnor)	Howard, Hon. Geoffrey
Beaumont, Hon. Hubert	Elibank, Master of	Jenkins, J.
Benn, W. (Tower Hamlets, St. Geo.)	Essex, R. W.	Jones, Leif (Appleby)
Bennett, E. N.	Evans, Sir Samuel T.	King, Alfred John (Knutsford)
Berridge, T. H. D.	Everett, R. Lacey	Laidlaw, Robert
Bowerman, C. W.	Falconer, James	Lamont, Norman
Bramsdon, Sir T. A.	Ferguson, R. C. Munro	Layland-Barratt, Sir Francis
Brodie, H. C.	Fuller, John Michael F.	Lehmann, R. C.
Byles, William Pollard	Gibson, J. P.	Lever, A. Levy (Essex, Harwich)
Causton, Rt. Hon. Richard Knight	Glover, Thomas	Levy, Sir Maurice
Channing, Sir Francis Allston	Gulland John W.	Lloyd-George, Rt. Hon. David
Clough, William	Harcourt, Rt. Hon. L. (Rossendale)	Lough, Rt. Hon. Thomas
Collins, Sir Wm. J. (St Pancras, W.)	Harcourt, Robert V. (Montrose)	Macpherson, J. T.
Cooper, G. J.	Hardie, J. Keir (Merthyr Tydvil)	M'Laren, H. D. (Stafford, W.)
Corbett, A. Cameron (Glasgow)	Harmsworth, Cecil B. (Worc'r.)	Mallet, Charles E.
Corbett, C. H. (Sussex, E. Grinstead)	Harmsworth, R. L. (Caithness-shire)	Markham, Arthur Basil
Craig, Herbert J. (Tynemouth)	Harwood, George	Marnham, F. J.
Crosfield, A. H.	Haworth, Arthur A.	Masterman, C. F. G.
Crossley, William J.	Hedges, A. Paget	Middlebrook, William

Montagu, Hon. E. S.	Roberts, Charles H. (Lincoln)	Waring, Walter
Montgomery, H. G.	Roberts, G. H. (Norwich)	Wason, Rt. Hon. E. (Clackmannan)
Murray Capt. Hon. A. C. (Kincard.)	Robinson, S.	Wason, John Cathcart (Orkney)
Nicholls, George	Robson, Sir William Snowdon	White, Sir George (Norfolk)
Norman, Sir Henry	Roch, Walter F. (Pembroke)	White, J. Dundas (Dumbartonshire)
Nussey, Sir Willans	Russell, Rt. Hon. T. W.	White, Sir Luke (York, E. R.)
Nuttall, Harry	Samuel, Rt. Hon. H. L. (Cleveland)	Wilkie, Alexander
O'Donnell, C. J. (Walworth)	Seddon, J.	Williams, J. (Glamorgan)
Parker, James (Halifax)	Seely, Colonel	Williamson, Sir A.
Partington, Oswald	Shaw, Sir Charles E. (Stafford)	Wilson, Hon. G. G. (Hull, W.)
Paulton, James Mellor	Strachey, Sir Edward	Wilson, Henry J. (York, W. R.)
Pearce, Robert (Staffs, Leek)	Summerbell, T.	Wilson, W. T. (Westhoughton)
Pearson, W. H. M. (Suffolk, Eye)	Thorne, G. R. (Wolverhampton)	Wood, T. M'Kinnon
Pointer, J.	Tomkinson, James
Pollard, Dr. G. H.	Trevelyan, Charles Philips
Priestley, Arthur (Grantham)	Verney, F. W.	TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.
Radford, G. H.	Walsh, Stephen
Richards, T. F. (Wolverhampton, W.)	Ward, John (Stoke-upon-Trent)

NOES.
Anson, Sir William Reynell	Faber, George Denison (York)	Randles, Sir John Scurrah
Arkwright, John Stanhope	Fell, Arthur	Ratcliff, Major R. F.
Balcarres, Lord	Forster, Henry William	Renton, Leslie
Baldwin, Stanley	Guinness, Hon. R. (Haggerston)	Rutherford, John (Lancashire)
Banbury, Sir Frederick George	Hardy, Laurence (Kent, Ashford)	Rutherford, Watson (Liverpool)
Banner, John S. Harmood-	Harrison-Broadley, H. B.	Salter, Arthur Clavell
Baring, Captain Hon. G. (Winchester)	Hay, Hon. Claude George	Smith, Hon. W. F. D. (Strand)
Beckett, Hon. Gervase	Heaton, John Henniker	Thomson, W. Mitchell- (Lanark)
Bowles, G. Stewart	Hope, James Fitzalan (Sheffield)	Walker, Col. W. (Lancashire)
Bridgeman, W. Clive	Hunt, Rowland	Warde, Col. C. E. (Kent, Mid)
Brotherton, Edward Allen	Keswick, William	Williams, Col. R. (Dorset, W.)
Burdett-Coutts, W.	Lambton, Hon. Frederick Wm.	Wilson, A. Stanley (York, E. R.)
Campbell, Rt. Hon. J. H. M.	Lane-Fox, G. R.	Wortley, Rt. Hon. C. B. Stuart-
Carlile, E. Hildred	Lockwood, Rt. Hon. Lt.-Col. A. R.	Younger, George
Carson, Rt. Hon. Sir Edward H.	Mildmay, Francis Bingham
Castlereagh, Viscount	Morrison-Bell, Captain	TELLERS FOR THE NOES.—Sir
Clyde, James Avon	Nicholson, Wm. G. (Petersfield)	A. Acland-Hood and Viscount
Courthope, G. Loyd	Pease, Herbert Pike (Darlington)	Valentia.
Douglas, Rt. Hon. A. Akers-	Peel, Hon. W. Robert Wellesley