MINERAL EIGHTS DUTY—(NEW CLAUSE).

HC Deb 28 September 1909 vol 11 cc1097-221

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George) moved, after Clause 13, to insert the following Clause:—

1. (1) There shall be charged, levied, and paid for the current and every subsequent financial year on the rental value of all rights to work minerals and of all mineral wayleaves, a duty (in this Act referred to as a Mineral Rights Duty) at the rate in each case of one shilling for every twenty shillings of that rental value.
2. (2) The rental value shall 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 1098 to be the sum which would have been received as rent by the proprietor in the last working year if the right to work the minerals had been 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.
3. (3) Every proprietor of any minerals and every person to whom any rent is paid in respect of any right to work minerals or of any mineral wayleave shall, upon notice being given to him by the Commissioners requiring him to give particulars as to the amount received by him in respect of the right or wayleave, as the case may be, and where the proprietor is working the minerals, in respect of the minerals worked, make a return in the form required by the notice, and within the time, not being less than thirty days, specified in the notice, and in default shall be liable to a penalty of fifty pounds to be recovered in the High Court.
4. (4) Mineral Rights Duty shall be assessed by the Commissioners and shall be payable at any time after the first day of January in the year for which the duty is charged, and any such duty for the time being unpaid shall be recoverable as a debt due to His Majesty from the proprietor of the minerals, where the proprietor is working the minerals, and in any other case from the immediate lessor of the working lessee. As between the immediate lessor and the working lessee, the duty shall be borne by the immediate lessor, notwithstanding any contract to the contrary.

Motion made and Question proposed, "That the Clause be read a second time."

Mr. LAURENCE HARDY

I had hoped the Chancellor of the Exchequer would have given us that explanation of this Clause which we have always been expecting, but which, I am sorry to say, we have never had, because the explanation he gave on the Resolution the other day, although technically upon the Mineral Rights Resolution, was, except for a very few words, directed to the Increment Value Duty, which came under a subsequent Resolution. Looking back at his explanations, the only thing, so far as I can see, which he really said in support of the extraordinary change of putting the tax on developed minerals instead of on undeveloped minerals was that it suited those interested in mining better. I shall be very glad to hear whether he has any authorised statement from the mine-owners of this country that they are in favour of this tax as it is placed upon the Paper. When the old Clause was swept out of the Bill we had two interesting speeches from that side of the House, but we did not have a word from the right hon. Gentleman himself in reference to the change. The only two speeches delivered from that side of the House exactly confirmed the views we held on this side of the House, that it is inevitable this new tax on developed minerals must fall upon the consumer and the industry. The hon. Member for Newcastle-under-Lyme (Mr. J. C. Wedgwood) was particularly strong. He said the proposed new tax would penalise production and in the long run would fall upon the consumer. When leases ran out owners would recoup themselves by charging extra royalties, and that must have the effect of raising the price of coal and be a serious blow to the industries of the country. The hon. Member for East Denbighshire (Mr. E. G. Hem-merde) also made a speech, but I think he made a rather more interesting statement outside the House at a meeting on 22nd July, when he said that if the Government substituted for the tax on undeveloped minerals a tax on mining royalties it would show they did not understand the meaning of their own measure, and it would be an extraordinarily foolish thing to do. So far, those are the opinions we have had from the opposite side of the House with reference to this tax. The other day the discussion rather went off on one portion of the tax, and the Chancellor of the Exchequer never alluded to the enlargement of the tax which has taken place since the Prime Minister first explained the substitution. Undoubtedly, at that time and at the time the right hon. Gentleman met the mine-owners, this tax was intended to be a tax purely upon the income of those who did nothing and risked nothing for the amounts they received. The Chancellor of the Exchequer said particularly:— I do not propose to impose a particle of additional expense upon the colliery proprietor; but I do not think it unfair, when the State needs money, that the mine-owners should be called upon to contribute their share. The Prime Minister also alluded to the fact that it was the gentlemen who had the first charge upon the whole mining industry, and who did not want to participate in the fortunes or risks of that industry, at whom they wanted to get. How are we to account for paragraph (b) of this Clause? It distinctly throws the burden upon the proprietor who is working his own minerals; upon the iron founder who has bought the minerals with the full intention of using them in connection with his industry. The relation is exactly the same when he buys so many tons underneath the ground as when he buys so many tons above the ground to carry on his industry. We never heard a word from the Chancellor of the Exchequer in reference to this particular part of the tax, this very essential and weighty part of the tax, and one which must certainly fall upon the industry and go counter to his own words that he did not propose to impose a particle of additional expense upon the colliery proprietor. I think we are justified in asking for some defence of this extraordinary change from a tax on undeveloped minerals to a tax on developed minerals, and those special minerals being worked in the interests of some of the oldest industries in the country. We have had no such explanation at present. Whether we shall obtain it now or whether we shall get it when we get further into the Clause I do not know; but at all events, we can claim, so far as this part of the tax is concerned, that it is entirely novel, that it has not been explained, and there has been no reason given for it. Certainly, in my opinion, it does require very careful explanation from the Government, especially in consideration of the line they have generally taken in reference to this particular matter.

4.0 P.M.

Then we also find that by Sub-section (3) the Government have put a tax on wayleaves. That seems to me an extraordinary proposition, unless the Government agree with the line taken by the hon. Member for Mansfield (Mr. A. B. Markham), which is shown in the Amendment which now stands on the Paper. Of course, if you are going to tax any contract between two individuals on the principle that if one of the two does not like it the second individual is to be taxed a larger amount in accordance with the disagreement of the other person, then that is entirely new to our mode of taxation. So far as wayleaves are concerned, we know it can have nothing to do with revenue, because the whole wayleaves I do not suppose now amount to more than when the Royal Commission sat. They then only amounted to £200,000 in the case of coal, and £14,000 in the case of iron-stone. A tax on £14,000, or even £200,000, is not a very material amount. I confess I could hardly conceive a less likely way to secure easier terms between the person who desires the wayleave and the person who grants it than by putting a tax on wayleaves only to be paid by the person who grants the wayleave. It is the last thing to induce him to make easier terms. We must remember these wayleaves are for the convenience of the mining industry. I am much more interested in the mining industry than in the grantors of wayleaves, but we ought to have some defence for an entirely new suggestion. It is really not a tax on minerals, but a tax on contracts and on certain easements given by one person to another. The Royal Commission was quoted the other day in reference to these wayleaves, and it must be remembered that that Commission, after very careful inquiry, and after hearing evidence on both sides, came to no real conclusion on the matter. All they did eventually was to recommend that there should be some court set up before which these cases could be taken. If there are particular cases of hardship I do not think you are likely to get rid of them by putting taxes upon wayleaves and by saying that they shall be paid by the person who is granting the privilege. That will probably result in preventing him even considering the application to grant the privilege. The wayleaves do not represent after all so much as would have been the cost had the minerals been carried over public railways in this country, and, therefore, there is not so much complaint on that ground. We have never had any defence of Sub-section (b). We have not had Sub-section (c) alluded to in connection with this Act, which involves entirely new legislation not in any way connected with the principles put forward to support these mineral rents or royalties. I therefore think we are justified in asking further explanations from the Chancellor of the Exchequer. I do not desire to extend this Debate, but I should like to remind the House, with reference to the Clause now before it, that there has been a good deal of talk in connection with this Bill about valuation. Let us remember, if there is to be valuation, it is not required under this Clause at all. It is just as well we should clear our minds on that question at once. When we proceed with the Valuation Clause it will be for the Government to show that the expenditure that they propose to incur on the valuation of minerals throughout the country is necessary. We think it is uncalled for, because the results to be obtained from it will be extremely small. So far as the main bulk of the money derived from minerals in connection with the Budget is concerned, no valuation at all is required. I therefore oppose the second reading of this Clause, because I do not think the tax is one that can be supported. It is, I believe, another case of attacking capital, and, at the same time, the cost must inevitably fall on the consumer in the end. It will hamper industry, and it is an entire injustice, and, on these grounds, I desire to oppose it.

Sir JOHN RANDLES

In discussing this matter the other night we got no explanation from the Chancellor of the Exchequer as to what his intention was in regard to who should pay this tax, and I should like to impress on the right hon. Gentleman the importance of this question from the point of view of the ironworker and the industrial worker, and not from the point of view of the Chancellor of the Exchequer, because, evidently, if he levies the tax he will collect it. I want to deal with it in regard to its bearing on a very large and important industry. So far as anything has been said till now in the course of these Debates I have never seen any probability of this tax being permanently paid by the royalty owner. It is quite fair and reasonable, from the point of view of the Chancellor of the Exchequer, to collect the tax on royalties from the royalty owner, but it is manifest to me, as it must be to him, that the royalty owner is not the man who, in the end, is going to pay this tax. It is going to be imposed as an additional burden on an industry which is carried on in competition with foreigners, who are competing with us in the markets of the world for a trade which is of vital importance to this country; and I think the right hon. Gentleman, before levying this tax, should satisfy himself that he is not imposing a burden—and I feel sure he does not intend to impose a burden—which will handicap our manufacturers in the wide-world competition for trade. If this tax is passed on from the royalty owner to the lessee, he, in his turn, must recover it in the price of the finished article. It means an additional tax on our steel manufactures, made from native ores, of from 3d. to 6d. per ton. As I have already pointed out, a tax of at least 3d. per ton, and possibly 6d. per ton, must have a deterrent effect in our efforts to secure orders in the open markets of the world. And this is no mere bogey; that it is not an imaginary burden, as I have tried to show the Chancellor of the Exchequer. So far he has given me no reply; he has said nothing, except to move the Closure. I have tried to show him that this 3d. or 6d. per ton upon our steel manufactures is a real burden. It takes at least two tons of our native ore—in some cases three tons—to make one ton of pig-iron. The royalty on that one ton of ore is certainly not less than 2s., I am speaking of hematite ore—it rises at times to as much as 2s. 6d., 3s., 4s., and 5s. per ton.

Mr. H. BELLOC

That does not touch the cost of production.

Sir J. RANDLES

I am talking of the cost of manufacturing the finished article. I confess I cannot understand how it does not touch the cost of production if an additional burden in the shape of a royalty of 2s. or 2s. 6d., running up to 4s. or 5s. per ton, is imposed on iron. As I have pointed out, it takes more than one ton of iron to make one ton of steel. Therefore, you have to put some additional amount on that ground. Then, if you take the coal, it probably requires three tons of coal to produce one ton of finished steel. It also takes a considerable quantity of limestone, on which also a tax is to be levied so far as the royalty is concerned. All the materials about iron and steel works are very largely minerals, and on these a further tax is to be paid. So I say that if you get 4s., 5s., and sometimes 6s. or 7s. per ton royalty—which, I grant, is too much—you are going to impose a burden upon this industry which is a calculable figure, and you will thereby increase the cost of producing the finished article. It certainly does add to the cost of steel manufacture, when the manufacturer has to pay an additional burden of even 3d., 4d., 5d., or 6d. per ton, and that item alone must affect us very considerably in competing for foreign orders. It may make a very considerable difference indeed in securing these orders which we require to keep our industries in operation.

Mr. J. WARD

Does not that also apply to royalties?

Sir J. RANDLES

Has the hon. Gentleman considered the effect of this Clause? One of the effects is that where the steel manufacturer has succeeded in abolishing the royalty—in getting rid of it—this is to be paid just the same as though he continued to hold the royalty. That is one of the things I cannot understand from hon. Members below the Gangway. They are continually saying "abolish the royalties." I should be only too pleased if they could show me how I can honestly do so. I do not like paying royalty rents. They are no help to me. I would abolish them at once if I could do so honestly, and if hon. Members will show roe how I can I shall be only too grateful. But where we have got rid of the royalty rents our steel manufacturers, in order to be able to compete with the foreigner, has often also purchased the freehold mining rights. Yet in that case you pile upon him an additional burden. If the Chancellor of the Exchequer would only say that where the manufacturer is working his own minerals, and paying his own royalties, there shall be no tax, there might be something to be said for the arguments of hon. Gentlemen below the Gangway. But the matter has not been; carried so far. The Chancellor of the Exchequer is placing taxation on minerals which are worked by persons who do not pay royalty rents equally with those who do, and I say that this is an additional burden placed on the manufacture of these commodities in competition with the manufactures of other countries. Our burdens are already severe—so severe that some people have been driven to look for remedies in other directions in order to afford some opportunity for our industries to compete on equal terms by an adjustment of tariffs. The Chancellor of the Exchequer is not in favour of that particular remedy, but, surely, if he does not approve of our remedy, he might at any rate refrain, in intention at least, from placing an additional burden upon these particular industries at home. So far as the principle of the tax is concerned, there is another point I should like to draw attention to. The right hon. Gentleman originally proposed to place upon us burdens under the form of taxing un-gotten minerals. That did not prove acceptable. He has now given us to understand that the burden will be just about doubled. If the amount of money which he was going to raise from these minerals in the first instance was sufficient for his purposes, how comes it he has now doubled the amount he expects to derive by charging royalties 5 per cent. when, according to his own forecast, 2½ per cent. would have been quite sufficient for his purposes? Surely he should take into consideration the question whether the tax should not have been 2½ per cent. rather than 5 per cent.? But, in addition to that burden, he is putting upon a particular industry by reason of this Royalty Tax, the agony is to be piled up by an Increment Tax on the industry. I cannot conceive it at all reasonable that any royalty owner, finding himself saddled with an Increment Duty, on signing his lease, will not take the fullest precaution to have that Increment Duty paid by the lessee, and if the lessee is to pay this duty how is he to recover it? There is only one way. He must either get more money for his finished product in order to pay the Increment Tax as well as the Royalty Tax, or he must sweat it out of the blood and bone of his workers, who are employed in this industry. [Cries of "Oh!" and laughter.] Hon. Members cry "Oh!" and laugh, but they do not laugh when they go down to their constituents and talk to them. They do not laugh when they tell them of the tax which is placed upon their industry and their labours when they allude to the 1s. tax on coal. They did not laugh at that. They talked about its evil effects to the workers, but when they talk about this tax they do not allude to its effects upon industry. [An HON. MEMBER: "Take it out of the profits of the manufacturers."] An Hon. Member says, "Take it out of the profits of the manufacturers," but if he knows anything about these industries he will be aware that it is a very difficult thing to make ends meet in them without taking into account the profits of the manufacturers, and in many industries there are no profits at all.

We are not all coal-owners, we are not all in receipt of large profits from coal, and the man who is feeling the pinch to-day is not the coal-owner but the manufacturer himself who buys the coal and the mineral, and then produces the products which must go into the world's markets in the finished form—not the raw material but the highly finished iron and steel, and finished in such a form as to compete with the skilled manufactures of other countries. I do not think the Chancellor of the Exchequer in intention wishes to put this burden upon our industries, and I think if he were convinced that these taxes would have this effect he would pause even at the eleventh hour. I would like him, therefore, if I could persuade him to do so, to go into this matter not from any partisan view or biassed view, but purely from the point of view of the manufacturer and the manufacturing industries of this country, trying to settle in his own mind that these burdens which are being imposed will not fall upon the backs of the workers in our industries, or that they will fall where he intends them to do. If he finds that they do fall upon the workers, I would ask him to abandon his tax, or alter it in some manner so that the incidence of it will fall where he intends it to fall, and so that the trade, the manufactures, and the export business of our country will not suffer by reason of his Finance Bill.

Mr. ATHERLEY-JONES

If the criticisms of the last speaker were well founded there would undoubtedly be very serious objections to this tax, but I can only conceive one case in which the result he predicts would follow, and that is where the-royalty owner would be able to exact a larger quantum of rent from the lessee of the mine. He might follow up if it were practicable the imposition of the tax or the incidence of the tax with an increase of rent, so that it therefore becomes a tax upon the produce instead of a tax upon the rent, but I have always understood that it was a very elementary principle of political economy that a tax on rent never affects produce. I have never heard that position disputed. Then the hon. Member says he will take the case of a man who has acquired the property rights in the mine; he works the mine as for a profit. Surely, he says, that is a tax upon the produce. Not at all; and if the hon. Member would consider it for a moment he would know that there was a fund out of which he purchased the property rights which is a charge upon the gross earnings of the mine. I agree that if he made a present of the capital value which he paid for the ground to the consumer, which no sane man would do, then that would be a tax upon the produce. I do not thank I need linger longer over the hon. Member's contention, because I think consideration on his pant will make him see that it is an absolutely untenable proposition. I do think, of course, that there may be aspects of this tax which are far more vulnerable than the one to which he refers, but we have had a most elaborate and careful inquiry made by a Royal Commission as to the incidence of the tax on royalties.

I say nothing about the tax on wayleaves, because I agree with what was said by the hon. Member opposite, that the amount realised from a tax on wayleaves is very insignificant, and the only persons who would derive any benefit from the relief of the tax on wayleaves would be the coal-owners, with whom I cannot profess much sympathy; and I must say, if there is any lapse in the proposals of the right hon. Gentleman, it is that the provisions of this Clause taxing royalty rents might have been extended over a wider field and perhaps with more justice tax the very large profits which are made by coalowners. But however that may be, that, of course, is not the question before us, and the fact is patent to all of us that this is the only country, I think I may say, in the civilised world in which there does not exist a tax upon royalties. The proprietary rights of the Crown are sometimes boasted to be still in effective force in this country, but the only proprietary rights which the Crown still retains are those in respect to precious metals, but this country was always singular among the nations of the world that no tax is imposed upon the rental of mines. If there is any harm in this tax it may probably be this, that it falls upon existing lessees, the men who have made their leases, and it might possibly have been that had this tax not fallen upon existing lessees there might have been arrangements made by which that burden might have been diffused over the coal-owners as well as the coal proprietors. I do think, however, that this tax stands out conspicuously from the others as a fair one. It is not extravagant in the amount which it seeks to impose, and I venture to protest against the assumption made not only by frivolous persons, but by really responsible persons, that the taxation of capital values—although this is not a taxation of capital values—impinges upon the principle of private ownership. It is as old as our fiscal system. It is as old as taxation itself that taxes should fall not merely on the mere annual fruits of a person's industry or upon the annual fruits of a person's accumulated wealth, but that taxes should fall upon wealth itself in certain cases. A very notable case was that of the licensing proposals of the late Government, where they levied taxes cognate in character to this very tax, and I am perfectly certain that this tax is one which the Chancellor of the Exchequer ought to be proud of, and I congratulate him on having imposed it.

Mr. WATSON RUTHERFORD

In contradiction to the views expressed by the last speaker, I am of opinion that this is one of the most unjust taxes that ever was imposed, and I am also of opinion that it is a tax upon capital. This proposal is one to confiscate to the State one-twentieth part of the value of British minerals. This is not a tax upon rent, as the last speaker said, but it is a tax upon capital for this reason, that the whole of the rents and royalties that are paid by any person working the coal constitute the price of the article. They are not a rent for permission to use ground for any purpose whatever; they are calculated upon the tonnage of the material that is taken away, and they are payments by instalments for the purchased article. In other words, the company or person who works the coal buys so much coal. It is not a lease under which he acquires his rights, and that is a misnomer which the document has got, and that has arisen entirely from calling a permission to mine coal and iron a lease, which it really is not. Therefore, his royalties are simply the payment for so much mineral taken away—the purchase price—and it is obvious that any tax upon that is a tax upon capital, because it is taking away a portion of the price of the article itself. I object to this tax, first, because it is a tax upon capital, and that is contrary, in my opinion, to all reasonable and proper taxation. There is no political economist who has been stronger upon this point than the late Mr. John Stuart Mill. Secondly, I oppose this tax because it is one upon raw material—that is, a tax upon the article as it lies in the earth—and if I have understood the policy of the present Government aright they have always cried out against taxes on raw material, and here we find them coming forward and deliberately putting a tax upon one of the most important of our raw materials. Thirdly, this is a tax upon food. I do not say it is a tax upon what is actually eaten in the shape of food, but it will turn out to be a tax, if it is considered carefully, upon the actual earnings and wages of a large portion of our population. Fourthly, it is a tax upon the consumer, because there can be no doubt whatever that as a canon of taxation it has always been contended by hon. and right hon. Gentlemen opposite, and I think there is very little doubt about it, that if you impose a tax upon any article whatever that tax inevitably finds its way to the consumer, and the consumer has got to pay it. These are the arguments, at all events, which we are met with when we suggest that some articles which come from abroad might reasonably be taxed, and surely if the argument is good as regards materials which come from abroad it ought to be equally good in regard to materials produced at home? Fifthly, this is a tax upon industry. The principal industries that we have in this country are those connected with iron and coal, upon which the present prosperity of the country has been built up, and which, unfortunately, during the last few years have been challenged successfully by the United States and by Germany, and we have gone now in point of output to the third place, whereas we were easily first two years ago. It is these industries with this history, that the Chancellor of the Exchequer now selects to make the object of this special taxation, which will be far-reaching in its pernicious effects in all branches of trade and business. Seventhly and lastly, it is not equitable, because it is a tax upon one class. In the first instance, for a year or two, the tax will fall upon mine-owners; why should they be selected? Of course, the answer is, that they command very few votes at present, and therefore they are an eligible class for taxation.

We often hear of unfair and exorbitant royalties and wayleaves. I know a good many myself. My professional occupation has brought me into contact with numerous contracts, and I know of many cases where, according to my own view, the mining royalties are excessive, and the wayleaves particularly are very objectionable. I could have understood it if this had been a Bill to put an end to that, and if the Government set up a Court of Equity where we could adjust these matters, and, if an exorbitant rent or way-leave were demanded, brought justice and equity to bear upon it, and fixed the proper figure. The proposal of the Government, however, is practically this: The mine-owners and the lordships who are taking these wayleaves are exacting exorbitant sums. They are robbing this industry; if so, why not stop the robbery? They say they do not want to stop it. They are going to crystallise it, and to make it legal to go on, and they are taking part of the robbery for their honesty. I cannot imagine a more immoral attitude from the point of view of legislation than that which the Government is taking up in regard to this matter. They want to share the plunder; here we have a tax on coal, iron, salt, clay, lead, tin, and, I suppose, all minerals in the country, but there is no suggestion of a corresponding Customs Duty. The Chancellor of the Exchequer himself has admitted in another part of the Budget the principle that if he imposes a tax of any kind upon an article of this sort which tends eventually to increase the price he should put on a Customs Duty. The tariff system is solely and preferentially imposed upon the British article. There are mines within eye-shot of the right hon. Gentleman's own constituency which are shut up and neglected, and the cottages are falling down, because they could not compete with the foreigner, and I suppose that is to be cured by putting on another tax. How about slates in the right hon. Gentleman's own constituency? Is that industry going to be made more difficult? I say it is. This is going to put an extra price upon British slates, which are to-day being crowded out of the market and unfairly handicapped by foreign importations. This is not the kind of way to conduct the finances of the country. I oppose this tax. I consider that of all these taxes this is the most unjust and the most unfair.

Mr. LLOYD-GEORGE

The hon. Gentleman who introduced this discussion rather complained that I had not explained something which he thought required explanation in this Clause. I thought I explained it the other night when we had a very lengthy Debate upon it, and such questions as were not cleared up have been fully answered by the Attorney-General. It is perfectly true that I devoted most of the time to an explanation of the Increment Duty, because its machinery was, in my judgment, a little more complicated. I do not think there is any complication here, and that is why I did not devote anything like the same time to mineral royalties as to the explanation of Increment Duty. Of all the remarkable speeches we have heard the most remarkable is that of the hon. Member (Mr. Rutherford). I should really like to know what his theory is, because he had at least seven theories, and no two of them were consistent. Let us take his sixth and final, and his seventh and last. He said he objected to this because it fell upon a small class instead of being distributed fairly. That stands by itself. Then he went on and said he objected to it because it fell upon a bigger class—

Mr. WATSON RUTHERFORD

I said a small class in the first instance.

Mr. LLOYD-GEORGE

For two or three years. But I am only raising the tax at present for one year, and if we find eventually that it has been passed on to a set of people who ought not to pay it the resources of legislation are not exhausted. The hon. Member says that for two or three years at least it will fall upon a small class. Then he goes on and says his sixth objection is that it falls upon the largest class of all, the consumers. Then he says it falls upon a third class, those who are engaged in industry. After all, it is only £350,000; it is not multiplied by the number of classes it falls upon, and it either falls upon the small class or the larger class, or the largest class of all. Which is it?

Mr. WATSON RUTHERFORD

I thought I made it plain. In the first instance, and especially because it is made retrospective, on existing contracts, it will certainly fall upon the mine-owners; in the next instance it will fall upon the people engaged particularly in the industry, because it must raise the price; and eventually it will be paid by all the consumers.

Mr. LLOYD-GEORGE

It falls, in the first place, on a very small class—that the hon. Member objects to. In the second place, it is spread—that he objects to. He objects, in the third place, because it falls on the consumers—the largest class of all. I am very glad that for some years to come it is to be confined to the very class we want to reach. It will be time to consider then how to deal with mining royalty owners if they propose to pass the tax on to someone else. That is the problem which was met first of all when Schedule A was in force; there was a proposal that taxation should be put upon rents, and no doubt it was said that a tax on rents was a tax upon the agricultural industry. Then there was a clause providing that it should not be passed from the man who received the rent on to the man who paid it, and, so far as I know, during the 60 or 70 years that it has been in operation, it has not been passed on, and if it had been the Chancellor of the Exchequer might have found a way of confining it to the people on whom it was first imposed. The hon. and learned Gentleman said it was a tax upon capital and a tax upon food. I was glad to find he did not mean, in demonstrating that extraordinary proposition, that coal was an article of food. He said, however, that it was an article of fuel, and therefore that the tax falls on food. But why should it be a tax on food? Is any tax on rents a tax on food? Why should a tax on mining royalties be a tax on food and a tax on rent not be a tax on food?

I take note of one very remarkable admission by the hon. Gentleman (Sir John Randles). He said this imposes a very severe and crushing burden on industry, and that a shilling in the £ on royalties is just the sort of burden that is going to handicap us in competing with the foreigner. But what about 20 times that charge? I think the hon. Gentleman worked out a sum the other night. He said that in the case of steel it may amount to 6d. per ton. Has it ever occurred to him that a royalty means 20 times 6d. per ton? He thinks that 6d. is so serious a burden that it must interfere with our competition with the foreigner. The next time he goes to a Tariff Reform meeting will he say what a serious handicap to the industries of the country 10s. a ton is? I feel that the best thing for me would have been to sit down and listen to all these invaluable speeches, showing how this one-twentieth part of the royalty interferes with industry and handicaps it in competing with the foreigner.

Sir J. RANDLES

Does the right hon. Gentleman accept the figure of 6d. per ton? If he does, that carries my point as far as I wish.

Mr. LLOYD-GEORGE

I am basing my argument on the figure used by the hon. Gentleman. He says this will amount to 6d. per ton. He is himself responsible for the way he worked it out. I hope he will be as candid with his Tariff Reform audiences as he has been in the House of Commons. He ought to explain that that is only a twentieth of what the landlord charges. Sixpence to the State for old age pensions invalidity and "Dreadnoughts"—and that is going to interfere with trade. Ten shillings for the landlord—that is not going to interfere with trade. Has he gone round the country denouncing these royalties?

Sir J. RANDLES

Yes.

Mr. LLOYD-GEORGE

I am very glad to hear that, and I have no doubt my hon. Friend the Member for Newcastle will be glad to enrol him as a member of the Royalties Abolition League, or whatever the body is. I think the figures are very valuable as casting light upon our land system, but they have absolutely nothing to do with criticism of this tax. The hon. Member may depend upon it that the rents in the main are rack rents. I mean rack rents in the legal sense, that is to say, a man gets the best rent he can, whether for a house, farm, or mine. If he is able to get an extra sixpence, you may depend upon it that he will get it. The landowners have entrusted their affairs to some of the ablest managers in the Kingdom. Their business is to do the best they can for the properties they administer. Very often they administer for trusts. It is a great matter of bargaining between them, and you may depend upon it that if they could have got an extra 1d. or 2d., they would have got it long ago out of the mine-owners. We have taken care by a provision in the Bill that this tax shall fall upon royalties and royalty owners. That is the intention, and it has been as much carried out in this case as in the case of land. Although hon. Members opposite have used strong terms, I do not think that they themselves have made a serious attempt to demonstrate the injustice of the tax. This is the only civilised country in the world not deriving great revenue from its mines, and even some uncivilised countries are able to derive something from their mineral properties. Most of them are deriving something out of their minerals. Now, is it unfair and unjust that in this country we should put on this tax of 5 per cent.? In most countries the coal and other minerals belong entirely to the State, and the State derives great revenue from them. Somehow we, through the operation of the feudal system, have been deprived of this great national revenue. It is a fair source of revenue, and I cannot imagine anyone contending that when the State really is in need of money, a shilling in the pound is too much to ask in respect of these properties. For that reason I say that the Government have come to the right conclusion when they put a charge of 5 per cent. on the royalties of this Kingdom. To put this in the same category as a tax on coal is absurd. A shilling tax on coal would produce £2,000,000. This tax is estimated to produce £350,000. A tax on coal is a tax on the product itself; this tax is purely on the royalties which are paid to owners for permission to take the product. It is in a totally different category, and, therefore, I say we are perfectly justified in imposing this tax.

Mr. BONAR LAW

It always seems to me that the Chancellor of the Exchequer when dealing with the greatest difficulties gets over them, and that is saying a good deal. I expected to hear him defend the tax, but he has ignored all the difficulties connected with the subject. I should have thought, in the first place, that some little explanation would be required to justify this tax which is to be put more or less on the same commodity, but which undoubtedly will have an entirely different effect—and must be defended by entirely different arguments—from that which the tax originally proposed was intended to secure. Originally we were to put on the tax for the sake of encouraging home industry. That has been abandoned.

Mr. LLOYD-GEORGE

I never said so.

Mr. BONAR LAW

Then on what ground did the Chancellor of the Exchequer defend the original proposal? The right hon. Gentleman said that if people did not bring the coal we need into the market, we must stimulate them, and make them bring it in. Now this tax is not to have that effect. No one can say that the putting of a tax on coal actually brought into the market is going to stimulate anybody to bring coal into the market. Before I deal with the real crux of the question, the incidence of the tax, I should like to refer to the line of defence which the right hon. Gentleman took in replying to the very practical and able speech of the hon. Member for the Cockermouth Division of Cumberland (Sir John Randles), who knew what he was talking about. My hon. Friend gave figures to show that this tax will mean something like an additional cost in the manufacture of steel of sixpence per ton. The Chancellor of the Exchequer accepted the figure, or, at all events, he did not contra-diet it. He said, "That is all right, but what about the royalties, which are 10 or 20 times as much as that amount?" That would be a very pertinent argument if it were the intention of the State to appropriate these royalties, but what is the value of the argument if the right hon. Gentleman says, in effect, "This trade is already grievously overburdened to the extent of ten shillings. I am going to put another sixpence on it," for that is what the argument amounts to. Another thing which is worth referring to is that we do not know what minerals are. Every lawyer who has paid any attention to the subject knows that there is practically no one thing on which there is greater uncertainty. I have received a letter from a gentleman who knows as much about it as anybody else, and he states that it is impossible to say anything except that surface soil is not mineral, and that the law has got into a state of confusion on the subject. The Chancellor of the Exchequer was asked by the right hon. Gentleman the Member for Dublin University (Sir E. Carson), "Do you propose to tax clay?" The right hon. Gentleman replied, "I propose to tax minerals, and I refer the right hon. Gentleman to the Attorney-General." The Chancellor of the Exchequer is a lawyer, and perhaps he has a friendly feeling towards the legal profession, but I do not think it can be good for anybody but lawyers to have litigation forced upon them in this connection. If what the right hon. Gentleman proposes to do is to throw this Bill upon the country and then leave lawyers to fight out the question whether a particular substance comes under the tax or not, I can understand the answer he gave; but he is Chancellor of the Exchequer, and when a question is put to him, "Do you or do you not mean to tax a particular commodity?" I think he ought to be able to say yes or no, and not refer the question to lawyers.

5.0 P.M.

The hon. Member for North-West Durham said there were frivolous persons who spoke of this as an unjust tax. Well, I think one of the difficulties which the Chancellor of the Exchequer has to deal with is one which he has not even touched upon, and that is Sub-section (b) as it stands. The principle, as I understand, upon which this tax is based is perfectly clear, whether you agree with it or not. It is a new principle laid down for the first time in British politics. The Chancellor of the Exchequer in his Budget speech drew a distinction between our rights to different kinds of property. Some kinds of property we deserve, and other kinds we do not deserve. The right hon. Gentleman's henchmen carried the principle further in going about the country, and said, "We are going to levy a tax on property held but not deserved." That is the principle on which this tax is based, and it may be good or bad, but it is entirely novel. Hitherto everyone has considered that his right or title to any property depends upon the decision of a court of law. Now we know, on the authority of the Chancellor of the Exchequer, that our title to property does not depend upon the courts of law. It depends upon whether or not we deserve it. The people who are to decide whether or not we deserve it are the temporary majority of the House of Commons. That is the principle on which this tax will be levied. I do not need to tell the Chancellor of the Exchequer or any Member of this House that there is no economist in the world who does not agree with what was said by John Stuant Mill that any tax imposed on one kind of property while other property of similar value remains untaxed is unjust and equal to partial confiscation. Upon that principle this tax is unjust. But we have got a long way beyond that in these discussions. It used to be held that to prove that a tax was unjust was all that was necessary in order to have it fall through. Now we have got to prove not only that it is unjust, but that it is going to hit a class who can make their influence felt with the Government of the day. In connection with that I am going to refer to the question of clay as a curious illustration of the way in which the Central Liberal Association and the Government are working in harmony in this matter. A Peterborough newspaper reported that an hon. Member was going to put a question to the Chancellor of the Exchequer as to whether clay is mineral or not. The newspaper said, before the question had been put, that it had learned that the Chancellor of the Exchequer would consent to exclude brick-clay, which was very satisfactory to the Fletton district. I said at the outset that the really imporant thing—I am not going to talk as to whether this proposal is Socialistic or anything of that kind—is to decide on whom this tax is really going to fall. The Chancellor of the Exchequer made no reference whatever to the incidence of the tax in the case of colliery owners, steel manufacturers, or ironmasters who have bought the coal out and out, who own the coal, who pay no royalty, but who yet will have to pay the tax. On what principle, taking the principles which animate the right hon. Gentleman, does he tax the gentlemen who have bought from those who originally owned the minerals?

Mr. ATHERLEY-JONES

They pay interest on their purchase money.

Mr. BONAR LAW

That is a very luminous remark; and therefore they can afford to pay an additional tax.

Mr. ATHERLEY-JONES

For what they bought they still have to allocate something in the nature of interest on the capital which they have expended on the purchase money.

Mr. BONAR LAW

Quite so, and the tax is something additional. Now on what principle does the right hon. Gentleman tax those gentlemen? They are not the criminals. The criminals are sold, and have got beyond his clutches. I suppose he taxes these others because they are a kind of whipping-boy. He must hit somebody, and he hits them because he cannot get anybody else. There is, I admit, great doubt always about the incidence of almost any tax you like to make. It is always open to some modification which makes it not absolutely binding, but there can be no doubt whatever, and I do not think that the Chancellor of the Exchequer seriously will question, that in the case which I have named, where the owner of the steel or iron works of the colliery is also the owner of the royalties, the owner of the minerals, that if you put a tax on him you do tax the product just as much as if you add to his cost of production in any other way which it is possible to conceive.

Mr. BELLOC

You do not tax the products. You tax the man's income.

Mr. BONAR LAW

I will consider that point in a minute, that you take it out of his profit, merely remarking that whatever value there is in the argument would equally apply to any other addition to the cost of production. But can anyone tell me in what way a tax on a man who owns a mine and who pays no royalty to anyone and will have to pay this tax is not going to add to the cost of production just as much as an addition to wages or any other item which can be imagined in the cost of production? It is really not arguable. Any man who argues this is out of court. In this case the tax is not a tax on royalties; it is a tax on coal. It is obvious that that must tend to add to the price of the coal to the extent to which that kind of coal owner exists throughout the country. But the right hon. Gentleman dealt, and I am going to deal, with the case of the royalty owner pure and simple. I am ready to admit, though it may be said perhaps that I am giving away part of my case, but I really wish to put this matter as I see it, that if it were perfectly true that all coal produced in this country was produced from leases which could not be interfered with and the tax was then put upon a royalty which could not be altered, there need be and there would be no additional cost of production. In that case the colliery owner would be in precisely the same position as if there were no tax, and the tax would fall purely and simply upon the man who owned the royalty. It would still, I think, be unjust, but it would not interfere with the cost of production. But take it in conjunction with the fact that there is a great deal of coal which is worked by the owners of it who pay no royalties. What effect is that going to-have on the whole price of coal?

Everyone who knows anything about it knows that the price of an article of such general consumption surely is not regulated by the mine which produces at the cheapest rate. It is regulated by the rate at which the whole demand can be supplied. If, therefore, a considerable supply of the coat is taxed, it will evidently tend to raise the price of the whole supply of the country. [Several HON. MEMBERS: "Agreed."] I suppose that is referring to Tariff Reform. I cannot take up the time of the House by answering that now, but hon. Members should bear in mind what I have already said at the beginning, that you must take into account the circumstances connected with any particular tax, and you have to take into account the amount of competition, and that is precisely the factor which I have taken into account with regard to the incidence of this particular tax. I think it is quite possible that the Chancellor of the Exchequer did get from some colliery owners the idea that if there is to be a tax upon coal in any form, the best form is a tax upon royalties. The hon. Member for Mansfield (Mr. Markham) made a speech the other day which I had not the pleasure of hearing but which I read, and he strongly took that view. I presume his interest in coal is not that of one who has bought the minerals, but that, of one who works under royalties. I do not impute any more interested motives to the hon. Gentleman than anybody else. If I were in his case and looking at my own interest only, I should say you could not get a better tax. Not only will he pay nothing, but he will be in competition with the man who works his own coal, and has to pay the tax. Suppose that the hon. Member for Mansfield had a pit on which he paid royalties, and I was working a pit which I had bought out and out—

Mr. MARKHAM

Can the hon. Gentleman tell me three cases in the whole of the United Kingdom where the owner of minerals is working them?

Mr. BONAR LAW

I could tell the hon. Gentleman dozens of cases.

Mr. MARKHAM

Of coal?

Sir J. RANDLES

I do it myself.

Mr. LAURENCE HARDY

I do it also.

Mr. BONAR LAW

I know from my own experience that there are many cases where not only colliery owners but ironmasters own out and out their own coal, and work it. If I were a coal merchant working without any royalty, and if the hon. Member for Mansfield were working beside me under a royalty, and I was competing with him, the moment you put a tax on the royalties you put a tax on the man who is working the coal without paying royalties. The tax does not fall on the hon. Member for Mansfield, but falls on me, and the result is that his cost of production is lower than mine, and to him it is an advantage that this tax should be imposed. But consider the effect on the price of coal. In those circumstances the man who is working under a royalty has an advantage, and he can take it in one of two ways. He can take it either by under-selling me and getting a larger share of the trade, or he can take it in another way, and that is by being content with the same share of the trade, and in that way getting a slightly larger profit. And whoever does that the addition, not only in the case of the man who owns his coal, but in the case of the royalty owner, falls undoubtedly on the back of the man who consumes the coal. I do not contend that this is a tax which is going to ruin our industries. The amount is too small. All I contend is that it is a tax the incidence of which will undoubtedly to some extent at least fall upon coal. It is, therefore, not a tax upon royalties, but a tax on the raw material of every industry in the country. Take the other point that was put by the Chancellor of the Exchequer. He said that you may be perfectly sure that the royalty owner, if he could get more, would get more, and that he has already got the last farthing he could get. If the right hon. Gentleman is right the burden will, of course, fall entirely on the royalty owner. What is his ground for thinking that? He says it is rack rent; that they are already getting the last penny which they can get, and that whatever you put on it he cannot put on any more. Does anyone who has ever been in business in any shape or form believe that that is true?

Mr. BELLOC

It is generally true.

Mr. BONAR LAW

I have spoken of persons who have been in business. I have myself had some experience in that way, and I never sold anything without trying to get the biggest price. I and everyone who was ever engaged in business know this, that at any given moment, if I have an article to sell, iron, coal, or anything else you like, and I have an offer made to me for this, I never can be quite sure whether that is the utmost I can get or whether by waiting I might not get a little more. There is always uncertainty, and that is where the bargaining comes in, and the one who gives in in a case of this kind is the one who has the thickest end of the stick, and who must always give way. Take this case. Coal will be wanted; it is not an article you can do without. The man who owns these coalfields, unless the Chancellor of the Exchequer does what he threatens and takes his property away from him—

Mr. LLOYD-GEORGE

I never said that.

Mr. BONAR LAW

He told us this would be the policy of his scheme later on.

Mr. LLOYD-GEORGE

The hon. Gentleman was attributing to me quite inaccurately remarks which I did not make. What I did say was that if this royalty tax were transferred from the shoulders of the royalty owner on to the shoulders of the man who pays the royalty there were means by which that could be stopped.

Mr. BONAR LAW

That is exactly what the right hon. Gentleman did say. But I say that so long as you leave the property which has to be disposed of all in the hands of the individual, and so long as there is a demand for that, nothing you can do to keep it from him will prevent him getting the market value.

Take a case. The man who owns the mineral field says: "I am unable to give it for sixpence. Now there is a tax I want a little more. I will not give it to you except at a higher figure." What is going to happen? The coal-master goes away, and says: "I will not deal with you any more." But he makes a calculation, and thinks, "Perhaps after all it will pay me at 6½d." It is a question of who can wait the longest and who is the strongest; and in the end a bargain is made, very likely at a higher price, and at a higher price even though there were only these two and no one else competing. That is only part of the chain. The other end of the chain is the demand for the commodity, and the price which the buyer of that commodity has to pay is not fixed. Inevitably the man who works the coal would say: "There is being done at this mine what is being done at every other mine, and I will be able to pay a higher price in future, because coal is necessary, its price will rise, and I will be in a position to meet the extra cost I have to pay." Undoubtedly, therefore, from whatever point of view you like to look at it, this is a tax upon coal and nothing else. The Attorney-General, in speaking of this tax, referred to the Coal Tax. He said that any kind of tax must be partial, and that the Coal Tax was partial. His objection to it was that it taxed in a special way the people who own coal for export and did not tax the coal of those who had no export market. I think, to a great extent, that was a valid objection to the Coal Tax. But I think there is a far stronger one. Contrast the Coal Tax with this burden you are now imposing. The very injustice to which the Attorney-General referred had this effect, which was admitted by hon. Gentlemen who now sit on the benches opposite, and who opposed it, that it tended to prevent coal from going abroad, that it increased the home supply, and that the result would be, therefore, to lower the price of coal to our home industries. I think everyone admitted that to be the tendency of the Coal Tax.

Now you are putting an impost upon coal to a very small amount, I admit, and therefore it will not have a very great effect, but whatever the extent may be, you are putting on the impost in such a way that it must inevitably fall on every industry which is carried on in this country. I put it to anyone who is willing to look at this or any other question in an impartial way, whether that will not be the result. If you find a Government which, either because of its extravagance, or because of its adherence to obsolete fiscal methods, says, "Much as we would wish to spare all industries, we must put a tax on coal," I ask anyone in this House which is the more reasonable, a tax which will lower the price of coal for our own use, or a tax which will raise it to those who use it?

Mr. RUSSELL REA

We have heard a series of speeches enunciating some most extraordinary economic doctrines. It was said by one hon. Member opposite that a tax on royalties was a tax on capital, and that a tax on capital was always uneconomic and mischievous, but I deny, as a matter of fact, that it is a tax on capital. The hon. Member for Cockermouth (Sir J. Randles) maintained with perfect conviction that it is a tax which will fall upon the consumers of the article, and the hon. Member for Dulwich began by saying that this was a tax upon a class. His principal objection to the tax was that it was unjust—an unjust tax upon a small class.

Mr. BONAR LAW

I never said that.

Mr. RUSSELL REA

I am within the recollection of the House that the hon. Gentleman said it was unjust because it was levied on a class who were not strong numerically, and had small electoral influence. Then he joined the preceding speakers in arguing whether this tax would fall upon the consumer. If there is one thing absolutely certain in the principles of economics, and never been disputed, it is the law of rent, and that rent does not enter into price.

Mr. BONAR LAW

I have no night to speak, but as the hon. Gentleman has quoted economics, I would point out that Professor Marshall, if he will take the trouble to look up his book, especially says that royalty does not come under that category, and that a tax on royalty is a tax on production.

Mr. RUSSELL REA

If the hon. Gentleman quotes Professor Marshall, he will find by quoting him more fully that there are a good many qualifications of what he has stated. I wish to refer him to the Report of the Royal Commission, which was composed of most practical men, and they took the opinion of the economists, coming to the definite conclusion on the subject, as to whether royalty does enter into the price of coal or not. The conclusion we came to was that it was a direct tax on rent without a single modification. Rent appears, of course, at the extreme margin of cultivation—the margin of cultivation of coal, so to speak. The lowest and poorest quality of coal worked in this country does, as a matter of fact, pay a little royalty—a small and minute royalty—and that portion of royalty which is paid on the lowest quality of coal goes through the whole series, and to that extent there is a tax on the consumer. But that has been fixed now by the competition of the world, and any addition to that is a clear economic gain, which goes absolutely into the pockets of the royalty owners. Of course, I assume that the royalty owner charges the rack rent. That was denied by the hon. Member for Dulwich, but I appeal to anybody who has ever had to negotiate a colliery business whether the royalty owner does not get the fullest amount possible from the capitalist.

Mr. BONAR LAW

How can you tell?

Mr. RUSSELL REA

You must tell to the best of your abilities. Two men would use to the best of their ability their knowledge of the world and of the markets. The hon. Gentleman says that a man who charges 6d. now would in future charge 6½d. The whole of this question is argued extremely ably in the Report of the Royal Commission on Mines. I do not agree with the hon. Member for Cockermouth that royalties enter into the question in any degree; I believe that, and that if the royalty owners did not exact them the capitalists would get them. Take the case again and again referred to by the hon. Member for Dulwich, of the man who works his own minerals. That is a case which the Commissioners investigated, and they said that the man who worked his own minerals sold his coal exactly at the same price as his neighbours. He was a special royalty owner, and put his royalty into his pocket. The whole of the argument of the hon. Member for Dulwich was an argument against universally accepted economic doctrine. As to his comparison of the incidence of this tax with the incidence of the Coal Tax, it was, of course, fallacious. The inference drawn by the hon. Member for Dulwich was exactly the opposite of truth. We maintain that this tax does not in any degree raise the price of coal. The incidence of the, Coal Tax is a particularly interesting question, and the investigation of it has exercised the wit of many people. I myself believe that our monopoly of coal was not sufficient to enable us to put the whole of the tax on the foreigner. Authority and experience show that if this tax is put on the royalty owner it will end where it begins, and I consider that it is not only one of the most harmless but one of the most just of the series of taxes which we are imposing under this Budget.

Mr. SUMMERBELL

In the first place, I think this tax most reasonable and just, and that the Chancellor of the Exchequer should not relax his efforts in this direction in the least degree. I could not discover whether the hon. Member for Cockermouth was speaking as an iron and steel manufacturer or a royalty owner, and I was surprised at his speech, as also at the speech which followed. We are told by the hon. Member for Cockermouth that this sixpence is going to prevent the manufacturers of this country competing with foreign manufacturers, and going to create untold mischief in so far as this particular industry is concerned. It seems to me a most extraordinary thing that we should have Gentlemen proclaiming from these benches in this House against this sixpenny tax, and yet, at the same time, that they should continue for years to pay what was stated by the Chancellor of the Exchequer to be 10s. and by some Members on this side to amount to five, six, and seven shillings of royalty to the owners of royalties, and yet offer no complaint with regard thereto. If sixpence is going to kill it, what must this ten shillings of royalty be doing. I do wish, when they go round the constituencies, that they would just proclaim as hard against the royalties that are being levied to the extent of ten shillings as they are proclaiming in regard to this sixpenny tax. The hon. Gentleman (Mr. Bonar Law) said there was no use in arguing Socialism in this House in regard to this tax. I only wish he would argue it from the Socialistic standpoint. We have it from the hon. Member for Cockermouth that the royalties charged in regard to iron and steel amount to something like 7s.—that is, that the royalties on iron ore, coal, limestone, etc., make it up to 7s. per ton. I want to point out to the hon. Gentleman, because this is a matter that they always fail to tell the working classes of this country, that when he talks about Socialism from this particular standpoint he might tell the working classes that the manufacturers of this country are being severely handicapped to the extent of 5s. or 6s. per ton from this royalty in competing with the manufacturers in Germany. That in Germany Socialism is in full play, that the royalties there do not belong to the individual, but to the State, are levied by the State, and go to the relief of general taxation, and that they are something like 4d. to 1s. 4d. per ton, as against the 7s. mentioned by the hon. Member for Cockermouth. I would like if the hon. Gentleman and those going to the country for Tariff Reform would point this out to the working men of this country. They quietly submit to the 10s. levied by the royalty owners, and do not say a single word as to the 10s. or what is the case in Germany.

Mr. BELLOC

In the change from the proposed tax to the present tax on royalties this Government, and the Budget with it, and those who vote for it, as I certainly shall, have come to the crossways in the matter of taxation. We pledge ourselves by this much more than we do by the taxation on the increment of urban values to the principle that what economists, if I may allude to them, have called surplus values are a different kind of property from every other kind of property. That is the principle to which we pledge ourselves. I do not think there is any man in this House, if I may make a personal remark, who is so opposed by every principle, and by all his reading, to what is called Collectivism or Socialism. I detest it; but, on the other hand, the recognition of surplus values is a thing that is done in every healthy civilisation, and which is absolutely necessary to the advance of every civilisation. Surplus values can morally be taxed in a different manner and on a different principle from any other form of property. They have always been so taxed, save in this country, for the last few generations, and can always be so taxed. I very much regret to have to put before the Committee anything so nearly touching abstract economics. In the Debate we have just heard to-day we have heard things stated that might almost make some economists turn in their graves. At any rate, I have heard to-day things I never thought I should have heard, and least of all in Great Britain. I have heard, for instance, that the cost of production is affected by a tax upon rent, and I have heard as an argument in favour of that a quotation from the man who established the principle. He was not an Englishman, but a great resident in it, and he was Ricardo. I did not know that the principle could be attacked, but it has been attacked. In accepting this tax we are accepting the doctrine that one may tax surplus values in a different way from other forms of property. That was thought not only today, but at every epoch, and with it I heartily agree.

Let me turn to what will be the practical incidence of this tax. I fully recognise, in common with the hon. Gentleman (Mr. Bonar Law) and everybody who touches the question, that the practical incidence of the tax, for a short time at any rate in the life of a nation, which may be a long time in the life of a class, may fall in a manner very different from that which abstract economic science would demand. It is quite possible that the tax upon royalties, when the incidence is worked out in the workshop, may fall upon the capitalist who is exploiting the money as well as, or perhaps more than, upon the land-owner who has leased him the mine. I would assert as an absolute certainty that it cannot conceivably fall on the consumer of the coal or the consumer of iron or the consumer of any other metal. Is there no such thing as a world market? Are we not the country which admits all material, and how is it possible that a tax like that should be passed on to the consumer? It may conceivably fall upon the small and wealthy capitalist classes who exploit the money for a very short time. My contention is that it cannot under modern economic circumstances fall upon the general consumer. If there was no other argument there is this, that the tax is so small that it would be impossible to pass it on to the general burden of industry.

Finally, it will be asked whether the incidence of the taxation can be prevented from falling on the owner of the mineral where that owner is himself exploiting or leasing it to another. I should have thought that every economic authority, every economic argument, was in favour of his not being able to pass it on. The rule is plain and simple, unless the whole of economic science is wrong, that it cannot be passed on to the consumer, and if you tax rent—and royalty is a form of rent—it is paid by the owner of that rent, and not by the consumer. If it is going to be argued at this juncture in the British House of Commons that rent is not a surplus and that a tax can be passed on to the consumer, well then we may as well argue that the earth is flat or that the sun goes round the earth, or any other fallacy which might be listened to, but would not be received. We are discussing a perfectly plain principle whether surplus values can be taxed as a different kind of property from every other kind of property. I say they can, and I think that is the general opinion of society. You are now on the crossways in the matter, and in this particular detail we have changed our economic policy in this country, and I am glad of the change.

Mr. HUNT

The Free Trade Government in putting a tax on minerals are putting a tax on raw material. The Prime Minister said that the Income Tax was a burden on the trade of the country, and that it eventually affected wages. This tax on minerals is a tax both on trade and wages, and a tax on raw materials as well. We took off the export tax on coal because of foreign competition, but here you are going to put some on again, and ignore foreign competition altogether. Who is going to pay this tax? The Liberal party are always piling the taxes on land, and now they are at the same game, and putting a tax on our most important and valuable industry, and the source of most of our manufacturig industries. It shows what a Free Trade Chancellor does. He has taxed our most important raw material next to land. I would like to ask what is going to happen in the case of granite quarries, and in my Division there are big granite quarries? They are also very much hit by foreign competition. They have to pay very heavy rates and taxes, which come to a very considerable percentage, and to which the foreigner pays absolutely nothing. They have to pay from 10 to l5 per cent. on every £100 of granite they produce, while the foreigner pays nothing.

Now you are going to put another tax on the property. Are you going to equalise it by putting a tax on granite which comes from Norway and other places, or are you going to tax only the British producer? In the case of coal, it does not apply, because practically no coal is imported into this country. If a considerable amount of coal was imported, and the importation interfered with the work of our miners, a great many of them would very soon be as strong Tariff Reformers as I am. But there are other industries, such as those connected with clay, which will be affected. You are going to allow the products of clay made in Germany to come in here without paying a halfpenny. They will come in as manufactured goods free, while you put a tax upon your own raw material. And you call yourselves Free Traders! I should like to know particularly what the views of the Government are about pottery clay. Are you going to tax your own raw material and allow manufactured goods made of the same kind of stuff to come in from other countries absolutely free?

Mr. W. E. HARVEY

During this Debate I have heard laid down in regard to the coal trade some strange economics and peculiar principles which do not work out in practice. To say that mineral royalty charges have no influence on trade, on wages, or on industry is not accurate. We have also heard something with regard to wayleaves. I will give two concrete instances of the influence they have on trade. A colliery in my own county, having bought the mineral, worked it to its boundary. The mineral royalty outside the boundary then came into force; but before the first royalty owner, whose royalty had been worked out, would allow them to bring the coal through an eight-foot road to the pit bottom, which was 500 yards deep, he charged threepence a ton royalty. The acreage was worked out, and it was found impossible to pay it. Therefore, they went and sunk a new colliery at a cost of £100,000, expending capital which there ought to have been no need to expend, simply because of the exorbitant charge of the first royalty owner. The injustice is perfectly manifest to anyone who looks into the question. Then take a surface wayleave in my own Constituency, where there is a single line running to a station. It was leased as a way-leave to an iron works for £400 a year. The lease expired, and before they would renew it the wayleave owners demanded £1,800 a year. It was impossible to pay it, and that line is now overgrown with grass, practically useless, the company have lost orders, and the men have lost work. That is the way exorbitant wayleaves work out to the injury of employers and employed. Statements have also been made with regard to the action of this tax. It is not as if the rent is not being paid now; this exaction is already made. The tax is not upon something new, but upon royalties which are already being paid, and which we consider ought to have been taxed long ago. In my opinion it can be proved to demonstration that under present leases the royalty owners will have to pay. It is possible that there may be a change when fresh leases are entered into; the royalty owner and the colliery owner may then have to talk over this tax; but it will certainly fall on the royalty owner with regard to present leases. With my knowledge of mining life I believe that nearly all the coal in England, certainly five-sixths of it, is already leased, and the Royalty Tax will be paid by the royalty owner. Royalties are a source of income which has been too long neglected by the State. Tariff Reformers often call our attention to Germany, France, and other countries, but they never tell us the conditions of royalties in those countries. They talk about embargoes upon trade, but they have never tried to remove the embargo on the iron, steel, and coal trades caused by exactions in the way of royalties. Give us the same conditions in England as colliery proprietors and working men have on the Continent in the matter of royalties, and we shall have no need to fear any competition. Our working men are prepared to uphold their own anywhere on the same conditions. It is because the conditions have not been equal, and because there have been more exactions from the trade by those who have no real connection with it, that we have suffered. In other words, there are too many people in this country unconnected with trade who are getting something for nothing. It is time the Government turned their eyes in their direction, and, instead of trying to make the people pay more for their food, removed the embargoes which royalties have placed upon trade.

Mr. STAVELEY-HILL

I wish to ask the view of the Government in regard to clay, which is apparently covered by this Clause, and is, for the first time, called a mineral. So far as I know, it has never hitherto been classed as a mineral. In fact, I believe it has been specifically held that surface or subsoil clay is not a mineral. The Committee are aware that at present the brick and building trade is in a seriously depressed condition, and it is not a time when the Government should impose fresh taxation affecting it. If this tax falls upon the brick trade it will make it worse than it is even now, because many of the brick works, although closed down, have still to pay capital charges for installation, etc. Further than that, persons concerned in this trade put aside a sum every year for the exhaustion of the clay, and in that way pay back their capital. That, however, is not taken into account in the assessment for Income Tax, and if clay is considered by the Commissioners to be a mineral these unfortunate people will have to pay another 1s. in the £ Income Tax. I trust, therefore, that the Government will see their way so to amend this Clause as to exclude brick-clay from its operation.

6.0 P.M.

Mr. DUNDAS WHITE

I am very glad that the Government have selected mining royalties for taxation, because, in my opinion, nothing could be more fairly taxed. The arguments from the other side have proceeded upon what appears to me to be the fallacy that this is a tax upon industry. I would remind hon. Members who hold that view that the royalty owner is in no sense an industrialist. He has not put the minerals into the ground; he has not sunk shafts to ascertain whether they are there; he has not developed them. The whole outlay of capital and all the work has been done by other people. All that he has done is to be good enough to own the land and to exact a toll from those who are working the minerals. The economic position of the impost which the Chancellor of the Exchequer proposes is that it is simply a tax upon the toll which the royalty owner has exacted. If an hon. Member opposite is correct in saying that the tax works out on the average at 6d. a ton, the royalty must be 10s. a ton, and it seems to me very remarkable that hon. Members should complain of the extra burden, as they call it, of 6d. a ton, which is going to ruin the industry and have such widespread bad effects, when for years they have said absolutely nothing about this 10s. a ton. On this basis I maintain that the tax will not tend in the least to increase the price of coal. I will not enter into the economic question whether a tax on rent increases the price, but I should like to say a word from the practical standpoint. In the case of existing leases at a fixed royalty the cost will certainly not rise, because the royalty is already fixed, and the royalty owner cannot possibly shift the tax on to anyone else. And I maintain as regards even the new leases that the same will be the effect, because, after all, the amount of royalty that can be obtained depends generally upon supply and demand. I quite agree with what has been said that you cannot say exactly what that amount is. You never know whether you have absolutely got your highest price or not, but there is no doubt in actual practice that a man who has mineral land, and can ask royalties, makes as good terms as he thinks he can get. Supposing now under the new conditions he is letting the land again. The proposition the hon. Gentleman makes is that he will increase the royalty. I would like to know what would enable him to increase the royalty? That is the economic factor. They have never yet told us. The fact that there is a charge upon the royalty would not of itself enable the owner to increase the royalty. Only two things would enable him to increase the royalty. One of those things is the increase of price owing to the greater demand, and the other is the increased price owing to a shorter supply. That is the case whether we take coal, iron, granite, or anything else. With reference to what the hon. Gentleman the Member for a London Division says in the case of granite—and he has very fairly taken granite as a mineral which we produce and which we also import—if you, he said, put this tax on, why do you not put a similar tax upon granite brought in from abroad? The one thing which keeps the price of our granite so high is the royalties. Only a short time ago this House granted a Return showing the amount of certain royalties, and when we remember that the royalties in Norway are nothing, we can see what difficulties we work under. I press it a step further. Suppose that in order to encourage our granite we were to put a duty on imported Norwegian granite! What would be the result? The price of the imported Norwegian granite would go up, and the price of our granite would go up, and the result would be that when the lease of the granite quarries came to be made again the royalty would go up. Of course that is the basis of the whole system. I would like to point out that nothing yet has been said from the other side to show us what would enable the royalty owner to raise the royalty of this tax were imposed. The fact is that the royalty is really a rent. It is a rent paid for the use of land, a rent which is proportionate to the amount of mineral taken out, and it comes, generally speaking, under the general rule that the tax upon rent falls upon the man who owns the land, and upon no one else. When the Chancellor of the Exchequer proposed this tax I had some misgiving that there might be possibly a difficulty for another reason. If the tax were imposed on the royalties of minerals actually worked and we had no Increment Tax and no Undevelopment Tax, then the fact that the royalties would be reduced by the tax might possibly lead the owners of mineral land to hold their mineral lands back, whereas otherwise they might have let them. I do not think that difficulty will arise in practice at all for two reasons. The first is that the amount of the tax is so small as not to affect the matter. I do not think it is sufficient to influence royalty owners in considering whether the land should be let or not. Apart from the question of amount there is the very strong factor that it is proposed to accompany this by an Increment Tax. I confess in most cases a start will be made from a valuation of nothing, but gradually we will ascertain by the processes of the Bill what the minerals are worth, and there will be Increment Duty. With that Increment Duty, I believe, Mr. Emmott, that there will be no danger whatever of that to which I have referred. I venture to hope, indeed, that in some future Budget that in practice in the unused mineral lands, which people are willing to pay for, if only they can get them, that the principle of the Development Tax will be applied. For the reasons I have already given, I have very great pleasure in supporting this tax, which I think is one of the clearest and most just in the Finance Bill.

Mr. A. J. BALFOUR

I do not propose to detain the Committee very long, but the discussion I have heard in the House certainly does suggest one or two very brief comments. Take, for instance, the speech of the hon. Gentleman the Member for Dumbartonshire to which we have just listened. It may be divided into two parts. One part was that in which the hon. Gentleman dwelt at length with the thesis that if it is possible the owner of royalties will shift his tax upon others. Then the hon. Gentleman went on to say in answer to a speech made by my hon. Friend behind me that the reason British granite could not compete in the market with Norwegian granite was that the royalties upon British granite were high, and that there were no royalties upon Norwegian granite. In dealing with coal what the lessor gets from the mine in the way of royalties depends entirely upon the price of the article; when you are dealing with granite, the price of the article depends upon what the lessor of the mine gets.

Mr. DUNDAS WHITE

I hope the right hon. Gentleman will pardon my interruption. I think he has mistaken my argument. My point was that the existence of those royalties press so hardly on an industry as to make it unpayable to work mines; therefore, mines are not worked, and Norwegian granite comes in.

Mr. BALFOUR

That is exactly my argument. Of course, if the hon. Gentleman says that the owner of minerals refuses to allow them to be worked by making impossible terms, that is another matter. But that, again, is quite contradictory of the argument of the Chancellor of the Exchequer. What the Chancellor of the Exchequer said was that everybody got the most out of his property that he could. The hon. Gentleman says that the owners of granite quarries in England, Scotland, and Ireland are so foolish that they do not get anything out of mines which they might either work themselves, or allow somebody else to work for them. I think he will feel that he has not got his economic doctrine quite clear. I am aware that many people hold the view which was the view animating the first part of the hon. Gentleman's speech, that a tax upon rents must fall upon the owner of those rents. If that is his view, he must give up the view in the second part of his speech, in which he says that the price of granite is raised in a British mine beyond the price of Norwegian granite, and cannot compete against it, owing entirely to the royalty. These are two entirely contradictory doctrines, and I must ask him to select one of them. I am sure that when he has taken that one, that there is no one more capable of defending it than himself. There was a speech delivered by the hon. Member for Salford with considerable parade of orthodoxy in which he laid down in the most absolute terms, as I understood him, the same doctrine as the hon. Gentleman who has just sat down advanced in the first part of his speech, namely, that under no circumstances could any royalty affect prices, and under those circumstances, therefore, no tax upon royalties could be thrown upon prices. He did not really deal with that very satisfactorily, or with the case put to him by the hon. Gentleman the Member for the Cockermouth Division. My hon. Friend the Member for Cockermouth took the case where there was no rent paid at all, and where the owner of the mine is the man who works the mine; where the man who owns the minerals is the man who works the minerals. You tax him by imagining that he is paying rent, and it is on this imaginary rent that you levy your proposed toll.

This Budget deals in imaginary quantities with a greater delight even than a pure mathematician. Everybody is to be taxed, not upon what they have, but upon some ideal quantities or properties which they are supposed to have in the opinion of the Government. It is not a good plan. It is one which I think leaves considerable heart-burnings. I do not think it would be fair at this moment to take the case of a man who is working his own coal, iron, or both—or his own clay for the matter of that. Is it not true that you may be taxing industry when you put a tax upon this ideal rent which he would pay if the property belonged to somebody else instead of to himself? It seems to me that the hon. Member for Salford is quite wrong in his economics, flow far would he go? Take an illustration. Take the case of France, where the whole land of the country, or the greater part of it, is cut out into peasant holdings. Does he mean to say that no tax upon the profits of those owners could or would fall upon the industry of agriculture in France merely by the device of imagining that it belonged to large owners, and was let out by them? That seems to me a most inconceivable and extravagant proposition. Take the case put by my hon. Friend and see how it works out. A large coal and iron property is owned and worked by a company. You put a tax of so much upon all the iron and coal they raise. The tax need not be estimated upon what they manufacture. You go through this ideal process of saying what rent they will pay under circumstances which do not happen to exist. They do, of course, pay out of their profits, and no arrangement of book-keeping will make the tax paid out of anything else. That is a contingency which really cannot be avoided by calling the thing by a different name. You may call it rent if you like, you may go through all those imaginary processes which are going to be so familiar to the Government valuer, but in fact your tax will come out of their profits. I am now dealing with this abstract economic doctrine. Supposing that the nature of the seams they are working or the ore they are working is rather more costly than the other, and only just worth working, under the strict economic doctrine I suppose this tax would prevent the working of that margin. They would work only the most profitable proportion, and pro tanto the turn out of coal and iron ore, and the produce of these would so much diminish, and by so much would the employment of the men on these mines fall off. That I take is sound economic doctrine, and I present it to the hon. Member for Salford (Mr. Belloc) for his consideration. Of course it is perfectly true that the amount of these taxes compared with the total amount of the coal or iron, or clay, or lime, or salt, raised in this country is so small that possibly its economic effects may be practically lost, and have no effect in incidence upon the various interests of the country except for theoretical economists. I think small taxes do not have very great effect upon industries, but it must be remembered that avowedly this tax is intended to be taken out of the pockets of a very small class.

I am not going at this moment into the objections I feel for that mode of taxation. I think it is unjust, it was always thought to be unjust by previous Houses of Parliament, and it was always thought to be unjust as far as I know by theoretical writers. But let us put the injustice for the moment on to one side. It is a matter upon which I dwelt before, and I will not detain the Committee by dealing with it now. Let us consider the doctrine which underlies it, or at all events let us consider many of the arguments advanced in favour of it. We have this argument advanced by more than one Member—by the Member for Dumbartonshire, I think it was certainly indicated by him—and it was put forward in a perfectly uncompromising manner by the hon. Member for North Derbyshire, who, I believe, speaks with great authority on behalf of the miners of this country. What is their doctrine. Their doctrine is that you ought to treat in quite a different way the property which a man is using or working and the property that he owns and in respect of which he does not make any efforts. That is a doctrine which has loomed rather large in the policy of the Government. Is the Committee wise in attempting such a doctrine? I must say I think they are most unwise. Is it not to the public advantage that you should be able to supply, as it were, instruments of any industry a part in which the owner does himself work and another part in respect to which the owner does not work? I think it is an immense advantage. If I as an owner of agricultural land borrow on mortgage, in order to work the farm, to build on it, and to reclaim my property, the man from whom I borrow does nothing, and takes no share in the risk. He gets his interest, and sometimes get a very high interest. In the same way are you going to say that the owner of National Debt, or municipal debt, is a man who is, or ought to be, subjected to special favours on the part of the Chancellor of the Exchequer in the shape of taxation, because he has never done anything, and never does anything, and means to do nothing in respect to his property except to lend some of it to somebody eke on interest. What is the difference between the case of that man and the case of a man who has bought a coal field and intends to work it? It is not to the public advantage that you should discourage this form of holding property. I think it is an advantage that there should be this possibility of difference between the property in which you work and that in which you do not. I think it is an advantage and not a disadvantage.

I know those who are Socialists do not take that view, but I consider that it is the right view, and, mark you, it is the view upon which everybody interested in the thrift of the working classes repeatedly and ordinarily acts. You say let us have savings banks for the working classes to put their money into. That is a form of property that never carries with it any exertion. You say that the working classes should put their money into benefit secieties, but benefit societies invest their money in land and houses and other things which have been made. They lend on mortgage. Lending on mortgage means that you put your property to a use that causes no exertion on your part at all—and a very good thing, too. It is a most desirable thing in any organised industrial community that you should not merely have this kind of property in which people use their brains and muscle and energy and enterprise and risk in doing things which advance the economic welfare of the community, but that you should have side by side with that the possibility of those otherwise occupied to invest their money and of being able to feel that, invested, it is secure. I do not wish to weary the House too much with a discussion upon fundamentals, but I have heard this afternoon so much stress laid upon the argument that a man who owns a mine ought to have quite different treatment from a man who works it, because the one is only the owner and the other the worker, that I thought I ought not merely to receive silently what I think is bad economics, but that I should impress upon the mind of the Committee how much these speeches do to discourage a sense of security, and perhaps mostly in that kind of property in respect of which no work is expected from the owner, and in many oases in which no work could possibly be done by the owner. That is a broad and deep question of policy on which there may be differences of opinion. But at all events, those who think as I do upon the subject are bound now and then to make our voices heard in our Debates, and not to let go without question or comment such arguments as I have heard from more than one Member of this Committee, and to which I think the Government themselves have given a great deal of countenance, namely, that a wholly different system of public and economic ethics are to be applied in one kind of property than it is just and expedient to apply to another.

Mr. MASTERMAN

The right hon. Gentleman and the Committee will not expect me to deal in any detail with the final remarks which the right hon. Gentleman has made, partly because, as he himself told us, he has made them many times before—the main question has been a good deal thrashed out—and partly because the general mode of the argument advanced this afternoon has been exceedingly interesting, but has been of a very academic kind. In the latter part of his speech the right hon. Gentleman was dealing with the differentiation between earned and unearned incomes, and he was pointing out that it was a principle so dangerous to adopt—

Mr. BALFOUR dissented.

Mr. MASTERMAN

The inference I drew from his statement was certainly that he was stating that the Government was making a distinction between earned and unearned increment, but if the right hon. Gentleman dissents from that statement I will not pursue that point. It seems to me that the particular point which the right hon. Gentleman was trying to make was rather in opposition to the point made by the great majority of speakers upon the other side. The right hon. Gentleman was pleading against taxing royalty owners—the body of men who apply their capital to the purchase of royalties. The whole argument I heard from everyone on the other side up to the speech of the right hon. Gentleman was that the royalty owner would pass on the tax, and that it would finally be added to the price of the commodity. Therefore I must confess I should have welcomed any opinion the right hon. Gentleman might have given us as to the economic position of the hon. Member for Dulwich, whom I heard earlier in the Debate. He was, as he always is, eloquent, fluent, and ingenious, but I join with my hon. Friend the Member for Salford that I never heard a more amazing sweeping away of everything that was ever recognised as established in economics than that performed by the hon. Member for Dulwich—I mean the sweeping away of the recognised opinions on Free Trade of course in the minds of a certain section of economists, not the opinion of hon. Members opposite, Never till this moment have I heard in this House or outside so definite and deliberate a challenge to the economic theory of rent.

Mr. BONAR LAW

I have already pointed out that the economists to whom the hon. Member is referring have stated that the theory applied to production and consumption does not apply at all to royalties.

Mr. MASTERMAN

The hon. Gentleman mentioned the name of my old teacher Professor Marshall, but in altogether too summarised a way. But that can be found out by anybody familiar with his writings. Let me take his statement as it stands. First as to the present lessee. No one I suppose will state in this House that a lessee upon whom this Royalty Tax is imposed can shift this Royalty Tax to the colliery proprietor, to the lessor of the present lease. That would be illegal if it were done.

Sir JOHN RANDLES

I gave a case that came within my own knowledge in which the effect was to modify a lease in that respect.

Mr. MASTERMAN

The second case given is more complicated—I refer to the case of the owners working their own property. The right hon. Gentleman stated that there were no possible means by which the tax levied upon what he called imaginary royalties would not cause an increase in the cost of production. This can have nothing whatever to do with the cost of production. Unless the coal is sold at less than the price paid for the royalties in the open market it can have no effect upon the price when it is sold. As far as the information reaches me, there is no difference in the price of coal sold in the British or the world's market and sold in similar quantities raised by proprietors working their own ground and that produced under a lease. The right hon. Gentleman referred to the case of a colliery where the coal was very poor in quality. May I point out that the same conditions will apply under Sub-section (3) in the case of coal of poor quality, where the proprietor is working the mine himself as in the case of coal of poor quality under a lease? The proportion of the royalty taken by the State will vary in one case as much as in the other. The high authorities who have been consulted assure the Chancellor of the Exchequer that there is no practical difficulty in the separation of these two entities. There is no difficulty in the matter as between the colliery proprietor who is working the colliery himself and the proprietor who is working under a lease. It is usual to keep the accounts of the royalty apart from the cost of the working separate, and even if that were not so, there would be no difficulty in assigning the amount of the royalty in a specific case.

I have been asked will it be possible in the case of a new lease for the royalty owner to put an extra half-penny equivalent to this upon the colliery proprietor. There I submit that the business experience of the hon. Member for Dulwich is not really relevant to the issue, because that business experience will occur as much to-morrow as it is occurring to-day. Of course, the whole question turns upon whether the royalty owner is receiving an economic rent or not. In the case of the landlord, very often an extra amount put on the rent can be shifted on to the tenant, and why? Because, in many cases, the tenants are paying philanthropic rents and not economic rents. Directly you get an economic rent, if the royalty owner or the landlord exacts as much as he can in the condition of the market in which the contract is made, that cannot be affected by the fact that the landlord wishes to exact another penny or another sixpence on the price. The market may vary, and, supposing the market is in a certain condition, it may appear to be due to the fact that this extra halfpenny has been put on the royalty, but it will not be due to that. A tax on corn may coincide with the diminution of the price of bread. There are times when the royalty owner is at the top in the bargain, and when that takes place it goes down into shillings and pence. In that case a royalty owner will be able to exact a higher royalty, but he would be equally able to do so if the halfpenny were not put on. This might be equally true where the general standard of comfort might induce the owners of royalties to demand more from an industry which could not help paying it. There will be other cases in which the colliery proprietor will be on the top, and in the normal course of events he would be able to make the landlord satisfied with a less royalty than he is getting now. In that case he would be able to do this quite apart from this tax.

Mr. G. RENWICK

I wish to ask the Chancellor of the Exchequer a question about the incidence of this tax. The right hon. Gentleman is going to visit my Constituency shortly, and I wish to know if it is the intention of the Government to leave corporate bodies outside the incidence of this tax. This is an important matter to every ratepayer in my Constituency, because the Corporation of Newcastle is a large owner of royalties. They let the land to colliery owners, and, consequently, if a tax is put upon royalties, every ratepayer in Newcastle—and they number 45,000—will have to pay a proportion of this tax. The popular view seems to be that this is a tax upon rich men only, but I have yet to learn that the 45,000 ratepayers whom I represent are rich. I know that many of them are unfortunately very poor, and they will deeply resent it if these royalties which now go to the reduction of the rates are to be taxed, and if they are called upon to pay a proportion of these royalties to the State. As the Chancellor of the Exchequer is going to visit Newcastle on Friday week, I ask him to put himself into a position to answer that question, because he can rely upon it that he will be tackled on that point.

Then there is the case of the Forest of Dean. Is the right hon. Gentleman aware that in the Forest of Dean there is a large amount of coal raised which belongs to the freemen there? For generations those freemen have worked the coal, and they have worked it very near the surface. The time arrived four or five years ago when it was no longer possible to work the coal near the surface, and the freemen joined together, and agreed to lease the working of the coal on a 63 years' lease, and the royalties under the lease went to the freemen. The result of this proposal will be that every-one of those freemen will have to pay this royalty tax. That is another case where this will be a tax upon the poor man and not upon the rich. I know several cases where small landowners work the coal under their own land, and in these cases every little farmer and labourer in the district supplied by these collieries will be affected. I hope the Chancellor of the, Exchequer will treat me rather differently than he usually does when he moves the closure instead of answering my questions.

Mr. LLOYD-GEORGE

I cannot recall any instance in which I have refused to answer any specific questions put to me unless they happen to be questions which have been put, perhaps 50 times in the course of the Debate.

Mr. RENWICK

I do not usually put such questions.

Mr. LLOYD-GEORGE

From long habit, which has now become an instinct, when such questions are repeated I do not answer them. The questions which the hon. Member has put to me are of a specific character. I am not quite sure that I have gathered the facts correctly, but I understand him to say that in Newcastle the corporation own land upon which royalties are paid. May I point out to the hon. Member that under Clause 24 no royalty can be charged in respect of such land. Clause 24 provides that "no duty under this part of this Act shall be charged in respect of any land or interest in land held by a rating authority."

Mr. RENWICK

Does that include royalties?

Mr. LLOYD-GEORGE

Certainly. The hon. Member can now go back and explain this point to the 45,000 ratepayers in Newcastle, and he can tell them that I have provided for their comfort in this respect, and they will not be charged a halfpenny piece. With regard to the other cases mentioned by the hon. Member, if they are the owners of the royalty they will be charged this duty whatever their position is. Hon. Gentlemen opposite seem to think that this is a vindictive tax against large landowners, but it is not so, because, under this Clause we are taxing royalties, and the freemen of the forest of Dean will be taxed just in the same way as other people.

Mr. W. ABRAHAM (Rhondda Valley)

The Committee will perhaps pardon me for saying a word or two upon this question. I am always interested when the Leader of the Opposition puts questions to this House, and to-night he has put two. One was: Will this tax affect the capitalist who is using his money in buying royalties? I do not think this House need trouble itself about the effect of the tax upon that gentleman, because, if he succeeds in, the future as well as his predecessors have succeeded in the past, he will be a very fortunate gentleman indeed. I know two or three gentlemen who have used their capital in the Valley I have the honour of representing to purchase royalties, and I happen to know that they are receiving every year much more in royalty rents than they paid for the whole. I do not think we therefore need trouble about them. The other question was: Will it affect and impede trade? I think that is a question which needs consideration. Some lecturers on Tariff Reform, in discussing this question in the country, have been using very largely the Report of the Commission on Royalty Rents, showing that the gentlemen who signed that Report evidently did not want any change. No, because the Government of the day were wise enough to provide in the terms of reference that the answer should be the right one. That Commission, if I remember rightly, found that the average amount of royalty in South Wales was 8d. per ton. That means that the gentleman who gives his consent for the colliery owner to work the coal receives no less than £33,333 for every million tons of coal worked. It is folly for anyone to say that he cannot possibly bear a little taxation on that £33,000. But will it impede trade? The Report said it did not impede it. The only man this tax will affect will be the gentleman who receives his royalty. It cannot affect trade in any way. The royalty is already fixed, and there are different amounts. The colliery owner near the property upon which I have the honour, or rather the privilege, of living paid 1s. per ton royalty, whilst the workman who worked the coal only got 1s. 1½d. per ton. The colliery owner had to compete in the same market as others, and pay the same wages as others. The owner of the land receiving the royalty is the one great man in the Rhondda Valley who has the power to rent his land or to refuse to rent it. He has the power to say what shall be the rent for the land on which every workman in the colliery lives. He has everything in his own hands, and he is the master of the whole position. I am sorry to say that under the law of England now he has the power to refuse, if he wishes, to renew the lease of the colliery, and to send us all away. What possible complaint can he have against paying to the State a small contribution for all that power, all that privilege, and all the money the State allows him to receive, instead of getting a little more for himself. I think the facts of the case are much more interesting to this House than the doctrine.

Mr. F. W. LAMBTON

The hon. Member who has just spoken quoted the Report of the Royal Commission in favour of his argument. He told us that the royalties in South Wales averaged, according to the Royal Commission, 8d. per ton.

Mr. W. ABRAHAM

I think it is 8d.

Mr. LAMBTON

The hon. Member has made a mistake. The average was 6d., and the maximum was 9d. The hon. Member seems to have lived near a colliery which had a higher maximum than that given in the Report of the Royal Commission. I think he stated it was 1s. 1d. [An HON. MEMBER: "No, 1s."]

Mr. W. ABRAHAM

The difference between 6d. and 9d. is not very great, but I said 8d.

Mr. LAMBTON

If the difference between 6d. and 9d. is not very great, some of the remarks of hon. Gentlemen opposite about excessive royalties fall to the ground. I think the difference is enormous. The hon. Member cited a particular colliery where the royalty was 1s., and he asked why the owners of the royalties should not be taxed? I agree that the owner of royalties is a fortunate man, but that is no reason why he should be specially taxed. There are a great many fortunate and a great many unfortunate people, but if you tax people because they are fortunate we shall get into even a greater mess than we are at the present time. The hon. Member, in talking of this colliery in South Wales, seems to have forgotten the lessee. If the owner of the royalties receives 1s. per ton, what must the colliery have been worth to the lessee? There seems to be an assumption that landowners fix the royalty as rent, but a royalty is not rent. Lord Cairns and other eminent persons have said that a royalty is not a rent, but really a deferred sale. Therefore, the person who fixes the royalty fixes it by means of offering his coal into a market to a buyer. A £1,000 worth of royalty at 6d. per ton means that £40,000 worth of coal has to be sold, and instead of the lessee paying £1,000 down he says: "I will pay you as the coal comes to the surface at 6d. per ton." That is a sale outright, and the coal is carried away and sold in the market. It is not a rent in any sense. The owner of good wheat land might offer his wheat for sale in the same way. A £1,000 worth of wheat at 2s. per quarter would mean 20,000 quarters. If he sold his wheat as a man sells his coal the result would be that, instead of receiving £1,000 down, he would receive 6d. per quarter on the corn thrashed and sold and bought in the market. I maintain that this system is to the advantage of the lessee. The Chancellor of the Exchequer made a remark that this royalty system was owing to the feudal system of the country.

Mr. LLOYD-GEORGE

I did not say that in the sense that the hon. Gentleman says it.

7.0 P.M.

Mr. LAMBTON

I find, on looking at this Report of the Royal Commission, that in all English-speaking countries this feudal system exists exactly in the same way as it exists here. In the United States and all our Colonies coal is the property of individuals, and royalties are allowed and charged exactly in the same way as they are charged in this country. They charge what they like, and get a royalty on the produce exactly in the same way as they do in the Forest of Dean. The right hon. Gentleman says that royalty owners do not pay anything to the State, but he has told us over and over again that minerals pay on their capital value in the Death Duties, and they also pay Income Tax. I maintain they pay the same proportion of taxation as any other property owners. They really pay more, because they pay Income Tax on a wasting property. I do not say coal-owners are not able to pay extra taxation if it is thought right to tax extra that particular class; but I say lessees are equally well able to pay this duty. Why there is this keen desire on the part of hon. Gentlemen opposite to put this tax on royalty owners and not on the workers of the coal I really do not understand. It has been proved by the hon. Member for Dulwich that the tax upon coal is not a tax upon persons; whether it will be passed on to the consumer I do not know. The tax you are imposing now is a tax upon the sale of coal by the proprietor of that coal. It may be passed on to the consumer or not. According to this Clause the only way in which it can be passed on to the consumer would be by means of the mineral royalty. I think the Leader of the Opposition pointed out what the economical result would be of the mineral royalty. Really this Mineral Clause is like one of those new puzzles which are the fashion nowadays. I do not know whether we have yet all the pieces laid on the table. When they are laid on the table, and when the whole thing is pieced together, it may appear more sensible than it is now, but at present I must confess it seems to me most unjust, and I hold that this is a tax which ought not to be passed by the House of Commons.

Question put, "That this Clause be read a second time."

The Committee divided: Ayes, 234; Noes, 87.

Division No. 739.]	AYES.	[7.5 p.m.
Abraham, William (Rhondda)	Haldane, Rt. Hon. Richard B.	O'Donnell, C. J. (Walworth)
Adkins, W. Ryland D.	Hall, Frederick	O'Grady, J.
Agnew, George William	Harcourt, Robert V. (Montrose)	O'Malley, William
Alden, Percy	Hardie, J. Keir (Merthyr Tydvil)	O'Shaughnessy, P. J.
Allen, A. Acland (Christchurch)	Hardy, George A. (Suffolk)	Parker, James (Halifax)
Allen, Charles P. (Stroud)	Harmsworth, Cecil B. (Worcester)	Partington, Oswald
Ashton, Thomas Gair	Harmsworth, R. L. (Caithness-sh.)	Paulton, James Mellor
Asquith, Rt. Hon. Herbert Henry	Hart-Davies, T.	Pearce, Robert (Staffs, Leek)
Atherley-Jones, L.	Harvey, W. E. (Derbyshire, N.E.)	Pease, Rt. Hon. J. A. (Saff. Wald.)
Baker, Sir John (Portsmouth)	Haslam, Lewis (Monmouth)	Philipps, Owen C. (Pembroke)
Balfour, Robert (Lanark)	Hazel, Dr. A. E. W.	Pirie, Duncan V.
Barker, Sir John	Healy, Timothy Michael	Pointer J.
Barnard, E. B.	Hedges, A. Paget	Ponsonby, Arthur A. W. H.
Barran, Sir John Nicholson	Helme, Norval Watson	Power, Patrick Joseph
Barry, Redmond J. (Tyrone, N.)	Henderson, J. McD. (Aberdeen, W.)	Price, C. E. (Edinburgh, Central)
Beauchamp, E.	Henry, Charles S.	Rea, Rt. Hon. Russell (Gloucester)
Belloc, Hilaire Joseph Peter R.	Higham, John Sharp	Rea, Walter Russell (Scarborough)
Benn, W. (Tower Hamlets, St. Get.)	Hobart, Sir Robert	Rees, J. D.
Bennett, E. N.	Hobhouse, Rt. Hon. Charles E. H.	Richards, T. F. (Wolverhampton, W.)
Berridge, T. H. D.	Hodge, John	Roberts, Charles H. (Lincoln)
Bethell, Sir J. H. (Essex, Romford)	Holt, Richard Durning	Roberts, G. H. (Norwich)
Birrell, Rt. Hon. Augustine	Hope, John Deans (Fife, West)	Robson, Sir William Snowdon
Black, Arthur W.	Hope, W. H. B. (Somerset, N.)	Roch, Walter F. (Pembroke)
Boland, John	Horniman, Emslie John	Roe, Sir Thomas
Boulton, A. C. F.	Howard, Hon. Geoffrey	Rogers, F. E. Newman
Bowerman, C. W.	Hudson, Walter	Rowlands, J.
Bramsdon, Sir T. A.	Idris, T. H. W.	Russell, Rt. Hon. T. W.
Branch, James	Illingworth, Percy H.	Rutherford, V. H. (Brentford)
Brigg, John	Isaacs, Rufus Daniel	Samuel, Rt. Hon. H. L. (Cleveland)
Bright, J. A.	Jenkins, J.	Schwann, Sir C. E. (Manchester)
Brunner, J. F. L. (Lancs., Leigh)	Johnson, John (Gateshead)	Seely, Colonel
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Jones, Sir D. Brynmor (Swansea)	Shackleton, David James
Burns, Rt. Hon. John	Jones, Leif (Appleby)	Shaw, Sir Charles E. (Stafford)
Burt, Rt. Hon. Thomas	Jones, William (Carnarvonshire)	Sheehy, David
Byles, William Pollard	Jowett, F. W.	Sherwell, Arthur James
Causton, Rt. Hon. Richard Knight	Joyce, Michael	Shipman, Dr. John G.
Cawley, Sir Frederick	Keating, M.	Silcock, Thomas Ball
Channing, Sir Francis Allston	Kekewich, Sir George	Simon, John Allsebrook
Cleugh, William	King, Alfred John (Knutsford)	Snowden, P.
Cobbold, Felix Thornley	Laidlaw, Robert	Stanger, H. Y.
Collins, Stephen (Lambeth)	Lamb, Edmund G. (Leominster)	Steadman, W. C.
Collins, Sir Wm. J. (St. Pancras, W.)	Lamb, Ernest H. (Rochester)	Stewart-Smith, D. (Kendal)
Compton-Rickett, Sir J.	Lambert, George	Straus, B. S. (Mile End)
Condon, Thomas Joseph	Lamont, Norman	Summerbell, T.
Corbett, A. Cameron (Glasgow)	Layland-Barratt, Sir Francis	Taylor, John W. (Durham)
Corbett, C. H. (Sussex, E. Grinstead)	Lehmann, R. C.	Thomas, Sir A. (Glamorgan, E.)
Cotton, Sir H. J. S.	Lever, A. Levy (Essex, Harwich)	Thorne, G. R. (Wolverhampton)
Cowan, W. H.	Levy, Sir Maurice	Tomkinson. James
Cross, Alexander	Lewis, John Herbert	Toulmin, George
Cullinan, J.	Lloyd-George, Rt. Hon. David	Trevelyan, Charles Philips
Dalziel, Sir James Henry	Lough, Rt. Hon. Thomas	Verney, F. W.
Davies, Ellis William (Elfion)	Lundon, T.	Vivian, Henry
Davies, Timothy (Fulham)	Lupton, Arnold	Wadsworth, J.
Davies, Sir W. Howell (Bristol, S.)	Macdonald, J. M. (Falkirk Burghs)	Walker, H. De R. (Leicester)
Dewar, Arthur (Edinburgh, S.)	Maclean, Donald	Ward, John (Stoke-upon-Trent)
Dewar, Sir J. A. (Inverness-sh.)	MacVcagh, Jeremiah (Down, S.)	Ward, W. Dudley (Southampton)
Dickinson, W. H. (St. Pancras, N.)	McVeigh, Charles (Donegal, E.)	Wardle, George J.
Duckworth, Sir James	M'Callum, John M.	Warner, Thomas Courtenay T.
Duncan, C. (Barrow-In-Furness)	M'Kean, John	Wason, Rt. Hon. E. (Clackmannan)
Duncan, J. Hastings (York, Otley)	M'Laren, Sir C. B. (Leicester)	Wason, John Cathcart (Orkney)
Dunne, Major E. Martin (Walsall)	M'Laren, H. D. (Stafford, W.)	Waterlow, D. S.
Edwards, Sir Francis (Radnor)	M'Micking, Major G.	Watt, Henry A.
Essex, R. W.	Mallet, Charles E.	White, J. Dundas (Dumbartonshire)
Evans, Sir S. T.	Markham, Arthur Basil	White, Sir Luke (York, E.R.)
Everett, R. Lacey	Marnham, F. J.	Whitehead, Rowland
Falconer, J.	Massie, J.	Whittaker, Rt. Hon. Sir Thomas P.
Ferens, T. R.	Masterman, C. F. G.	Wiles, Thomas
Ferguson, R. C. Munro	Menzies, Sir Walter	Wilkie, Alexander
Fiennes, Hon. Eustace	Molteno, Percy Alport	Williams, J. (Glamorgan)
Findlay, Alexander	Montagu, Hon. E. S.	Williamson, Sir A.
Foster, Rt. Hon. Sir Walter	Montgomery, H. G.	Wilson, Hon. G. G. (Hull, W.)
Fullerton, Hugh	Morse, L. L.	Wilson, Henry J. (York, W.R.)
Gibb, James (Harrow)	Muldoon, John	Wilson, P. W. (St. Pancras, S.)
Glendinning, R. G.	Murray, Capt. Hon. A. C. (Kincard.)	Wilson, W. T. (Westhoughton)
Glover, Thomas	Murray, James (Aberdeen, E.)	Wood, T. M'Kinnon
Gooch, George Peabody (Bath)	Myer, Horatio	Yoxall, Sir James Henry
Greenwood, G. (Peterborough)	Nannetti, Joseph P.
Guest, Hon. Ivor Churchill	Nicholson, Charles N. (Doncaster)	TELLERS FOR THE AYES.—Captain
Gulland, John W.	Nuttall, Harry	Norton and Mr. Fuller.

NOES.
Arkwright, John Stanhope	Guinness, Hon. R. (Haggerston)	Powell, Sir Francis Sharp
Balcarres, Lord	Guinness, Hon. W. E. (B. S. Edm'ds.)	Pretyman, E. G.
Baldwin, Stanley	Hamilton, Marquess of	Randles, Sir John Scurrah
Balfour, Rt. Hon. A. J. (City, Lond.)	Hardy, Laurence (Kent, Ashford)	Ratcliff, Major R. F.
Banbury, Sir Frederick George	Harris, Frederick Leverton	Rawlinson, John Frederick Peel
Banner, John S. Harmood-	Harrison-Broadley, H. B.	Renton, Leslie
Baring, Captain Hon. G. (Winchester)	Hay, Hon. Claude George	Renwick, George
Beckett, Hon. Gervase	Helmsley, Viscount	Roberts, S. (Sheffield, Ecclesall)
Bowles, G. Stewart	Hermon-Hodge, Sir Robert	Ropner, Colonel Sir Robert
Butcher, Samuel Henry	Hill, Sir Clement	Rutherford, John (Lancashire)
Carlile, E. Hildred	Hills, J. W.	Rutherford, Watson (Liverpool)
Carson, Rt. Hon. Sir Edward H.	Hope, James Fitzalan (Sheffield)	Salter, Arthur Clavell
Cecil, Evelyn (Aston Manor)	Hunt, Rowland	Smith, Abel H. (Hertford, East)
Cecil, Lord R. (Marylebone, E.)	Joynson-Hicks, William	Stanier, Beville
Clive, Percy Archer	Kennaway, Rt. Hon. Sir John H.	Starkey, John R.
Clyde, J. Avon	Kimber, Sir Henry	Staveley-Hill, Henry (Staffordshire)
Cochrane, Hon. Thomas H. A. E.	King, Sir Henry Seymour (Hull)	Stone, Sir Benjamin
Courthope, G. Loyd	Lambton, Hon. Frederick William	Thomson, W. Mitchell- (Lanark)
Craig, Captain James (Down, E.)	Lane-Fox, G. R.	Tuke, Sir John Batty
Craik, Sir Henry	Law, Andrew Bonar (Dulwich)	Valentia, Viscount
Dalrymple, Viscount	Lockwood, Rt. Hon. Lt.-Col. A. R.	Walker, Col. W. H. (Lancashire)
Dickson, Rt. Hon. C. Scott	M'Arthur, Charles	Warde, Col. C. E. (Kent, Mid)
Douglas, Rt. Hon. A. Akers-	Magnus, Sir Philip	Willoughby de Eresby, Lord
Faber, George Denison (York)	Mildmay, Francis Bingham	Wilson, A. Stanley (York, E.R.)
Faber, Capt. W. V. (Hants, W.)	Morrison-Bell, Captain	Wortley, Rt. Hon. C. B. Stuart-
Fell, Arthur	Newdegate, F. A.	Wyndham, Rt. Hon. George
Fletcher, J. S.	Nicholson, Wm. G. (Petersfield)	Younger, George
Gardner, Ernest	Oddy, John James
Gooch, Henry Cubitt (Peckham)	Parker, Sir Gilbert (Gravesend)	TELLERS FOR THE NOES.—Sir
Gretton, John	Pease, Herbert Pike (Darlington)	A. Acland-Hood and Mr. H. W. Forster.

Mr. SAMUEL ROBERTS moved in Subsection (1) to leave out the words "all rights" ["rental value of all rights"] and to insert instead thereof the words "the right."

This Amendment raises the question which I ventured to mention yesterday afternoon when the Mineral Resolution was brought on. The Amendment is really contained in the three Amendments which stands in my name, but the last gives really the substance of the whole proposal. It reads:—"Provided that no Mineral Rights Duty shall be charged where the minerals or the right to work the minerals was purchased by the proprietor before the thirtieth day of April, nineteen hundred and nine, for the purpose of working the minerals in the ordinary course of the trade or business of such proprietor."

The effect of the Amendment is this, that where the proprietor or colliery owner or company have bonâ fide purchased the minerals in lieu of paying royalty for them, and that purchase has been completed before the introduction of the Budget they shall not be charged Mineral Rights Duty. I claim the support of the Chancellor of the Exchequer for this Amendment, because he will recollect that when he met a deputation of the Mining Association he was most emphatic in saying that his object was not in any way to tax industry, but that it was to tax the receiver of the royalty who did nothing but receive. He said he would be quite happy to receive any suggestion to make it perfectly clear on the face of the Bill that the only interest he wanted to get at was the interest of the royalty owner, and not that of the colliery proprietor. When he was reminded by a member of the deputation that there was an Amendment on the Paper in the name of Mr. Lambton which had that object, the right hon. Gentleman repeated that it embodied a principle which he was perfectly willing to accept. And in a later speech the right hon. Gentleman said he did not propose in the slightest degree to impose a particle of additional expense on the colliery proprietor. His words were perfectly clear: "It is only fair that royalty owners who receive their rents so easily should be called upon to contribute their share towards the money we want." It is perfectly clear that when the right hon. Gentleman spoke these words, he meant that the tax should fall on the receiver of royalty, and that it should not be placed upon the industry. But, in the case I am putting, the coal will have been purchased in the ordinary course before the introduction of the Budget, but if the provisions of this Section are to become law, the result will be that the colliery proprietor will have to be taxed, not on the actual rent which he is paying, because he is Hot paying any rent on the coal, but he is to be taxed on what the Commissioners choose to think he ought to pay as rent for the coal which is underneath the surface. It is an imaginary thing, and you are going to tax upon an imaginary amount which the Commissioners think it is right that he should pay. On these grounds I ask the right hon. Gentleman to consider what I have said, that this will be found to be distinctly a tax upon industry. This tax must come out of the profits of the colliery company. It cannot come out of the profits of anybody else, and the tendency will be at all events to raise the price of coal, and finally the consumer will have to pay his share I think the right hon. Gentleman will see my point, and I hope when he has taken into consideration the arguments which I have laid before him and also his own words to the deputation he will consider the Amendment favourably.

The ATTORNEY-GENERAL (Sir William Robson)

I do not think my right hon. Friend has stated anything inconsistent in the speech to which reference has been made with that which he has stated on other occasions and with that which I am about to say to-night. We are dealing in this Amendment with the colliery proprietor who previous to the Budget both owned the minerals and worked them. And the hon. Member says you are under these circumstances putting a tax upon the man who works the minerals, and you are therefore taxing the industry. I think the hon. Member is confusing and treating as one two separate capacities. We have to deal with those who own minerals and also with those who rent them. We have to put a tax upon the receipts of those who own the royalties, and we can put a tax upon them quite as easily even although the owner of the royalties happens to work the minerals himself or the lessee purchases the interest which entitles him to work the minerals. Merely combining the two capacities does not make them indistinguishable, and does not prevent the State from following the capacity which it wants to tax. It would be in a high degree inequitable if we were to say when a tax is put upon royalty that it may be evaded if the working colliery proprietor purchases the superior interest. Why should a tax be extinguished by a process of that kind? The interest can be just as easily followed as before, and the tax has just the same reasons as it had before. The hon. Gentleman says he wishes to limit it to cases before the Act passed. I do not think that makes any difference. We do not exempt other cases before the Act passed. On the contrary, we take the mines that were being worked at the date of the Act and bring them into this category. Those which are not working at the date of the Act may come into a less fortunate category. But there is no reason why, because before the date of the Act the colliery worker chose to buy the superior interest he should be put upon any superior footing to those who did not work their colliery before the Act, but who have retained the superior interest. The hon. Member has said it is a tax upon industry. It is no more a tax upon industry because a man owns and works a colliery than it is when one man owns it and another man works it. It does not prevent the operation of the ordinary economic law, because the colliery proprietor buys the superior interest, and it is not a matter with which I am at present concerned. Then the hon. Member went on to speak of this as a case which involved a hypothesis, and said that when you had got a man who worked and owned the colliery you had to assess him upon a hypothetical basis, and upon an imaginary thing. That argument has been so often answered that I hope he will not think me disrespectful if I do not answer a contention which has been so often advanced and replied to. Of course, it is hypothetical, but it is by no means difficult to assess. It is the commonest sort of case, and it happens in the case of almost every valuation, and in this case the valuer can say what would be the amount which the man would have to pay if he did not own the royalty himself.

Mr. E. G. PRETYMAN

The learned Attorney-General says he can see no reason for making a distinction between a colliery proprietor who has paid the value to the original owner of it, and one who has not, and that it may be possible to value the interest. That merely proves the difficulty into which you get by attempting to put a tax upon something which is elusive, and which you call a royalty. You have to value it by entering into another region, and I think before you have done you will have to follow it still further. But look at it in this way. The owner of that royalty who has bought it in order to work the mine has paid full value for it, but now the State comes down and says "part of this royalty belongs to us and you have to pay for it again," with the result that the owner has to pay that royalty twice over. I cannot see there is any escape from that, and that is a reason surely, and a very valid reason, why this tax should not be imposed upon it. The person from whom he has bought it, the previous owner, has taken the money and gone away, and you cannot trace it. What you want to do is to tax the royalty, and where it has been sold to the worker of the mine you cannot follow it. It is in the hands of his predecessors, and it is merged in his other capital, and, therefore, you are going to hunt down the unfortunate worker who has bought the mine, and you are going to make him pay twice over. I think that that is a very unfortunate proceeding on the part of the State.

Then there is the argument that there is no difference whatever whether you place the tax upon the fixed royalty, which is secured under lease, and where the worker of the mine is during the currency of the lease secured against increase of that royalty or against any tax imposed in this particular form, and whether you place it upon the man who is working the mine. The hon. and learned Gentleman said that that was the same thing economically. He may be able to prove that as an economic theory, but he never will be able to persuade any business man of the fact. It is perfectly clear when you are dealing with a product in the nature of coal, which is not subject to foreign competition, because we have a monopoly of the coal supply of this country, that it is a different thing to dealing with the product which is subject to competition. It is perfectly recognised that the cost of labour is a factor in the cost of production, and as the cost of production rises the price to the consumer must rise also, and here you introduce another factor into the cost of production, and if a rise in the wages of the colliery increases the price of coal, an increased tax which is put upon the producer of the coal will produce a similar result. No economic theory will persuade me of anything to the contrary, but if you are dealing with a product which is subject to fierce foreign competition you get into a different region altogether, and you will in a certain part of that industry cause unemployment and drive the weaker part of the industry to the wall by taxation.

That is the result of putting burdens upon those trades where you have foreign competition. You drive out the weaker vessel, and he withdraws from the competition, and you reduce it to that extent. In this case a different argument applies. You are not open to foreign competition, but you increase the general cost of production; you will not throw out the weaker competitor, but you increase the general cost of the supply of the article which is limited, and therefore you increase the price. I do not see how any appeals to principles of political economy can alter its practical effects which you have to face. It may be possible to place this tax on royalties for the purpose of raising money, but to think that this will not be passed on to the consumer is an absurdity, and the argument of the Attorney-General falls to the ground, to my mind, on both counts. He cannot avoid the fact that this is a double payment because the payment already made to the owner cannot be followed for the purposes of taxation. Then, again, he has failed to make good his argument that this will not fall upon the consumer, and I think I have shown, although I could not prove, that the whole of the burden will in future fall upon the consumer, that it is impossible for the right hon. Gentleman to prove that none of it will. I defy the Attorney-General to prove that none of it will fall upon the consumer, because in the long run it must do so. You have power by this Amendment to some extent to limit the effect of the tax, and I hope the Government will, on second thoughts, see their way to adopt it.

Mr. MARKHAM

May I point out that the burden which has been referred to by so many speakers as hampering industry, and as having to be sweated out of the bones and blood of the worker amounts at the most to.3 of a penny. The Report of the Coal Commission takes the average royalty throughout the country at 6d.—5 per cent. of 6d. is equivalent to.3 of a penny, or a little over a ¼d. In my own experience I know cases, though they are few and far between, where the owner of the minerals works the mines himself. There are many cases of coal mines where the lessees purchase a small piece of coal to avoid having to pay wayleaves, but nearly all the large industrial companies in this country are lessees, and are not owners of the minerals. So that to say that this tax will not be borne by the mineral owners but by the manufacturing industries is not correct. During the last 10 years, owing to deep working, the tendency has been to increase the length of leases. All leases of deep mines practically have been taken for some time past for a period of 99 years, and I do not think there is a single steam coalfield in the whole of South Wales with first-class coal good enough to go on the Admiralty list which is not leased. On all this coal which is at present let for long periods of years the tax will be borne by the lessor. Taking the country as a whole, I agree that when leases fail in, unless the Chancellor of the Exchequer at the time makes a new provision to enable the burden to be borne by the lessor, the lessor will no doubt shift it on to the consumer. But sufficient for the day is the evil thereof. For a good many years to come a great part of the tax will be borne by the mineral owner, and not by the consumer, nor will it form any appreciable burden on the trade.

Mr. LAURENCE HARDY

The last part of the speech of the hon. Gentleman was directed to the leasehold part of the question, but did not deal with the very limited question raised by the Amendment, which really only deals with bonâ fide purchases by those who are working minerals in the ordinary course. The hon. Gentleman has said there are very few persons who own and work coal, but I know a great number of iron companies and steel companies who have gone in for buying their own coal and working it for the use of their particular industry. For the last few years the company with which I am associated, in order to obtain small colliery properties next to pits which they have opened, has bought these small properties at the full value of the coal, but now it is proposed that in these cases the tax should be paid again; and it seems very hard that where people have purchased property outright they should be taxed on the royalty which they have paid for, and which you cannot follow in any way. I know two cases of my own personal knowledge within the last two years of that character in which, I suppose, this royalty rent will have to be paid. I think myself that the arguments of the Attorney-General and others are always directed solely to the question of coal. Undoubtedly it is the largest question, but the question of ironstone and iron ore is a peculiarly difficult one, and it undoubtedly tells very much more heavily upon the industry than, perhaps, in the case of coal. Ironstone and iron ore come under quite a different category, and though there is a strong case, I rather think the Government took their advice rather too exclusively from gentlemen, however eminent, who have been solely connected with coalfields rather than with the other minerals which are involved in this particular tax. It has been always said it is very easy to reckon the royalty which has to be paid by the proprietor, and that it in no way affects the product of the industry; and that even if it did apply in the case of coal it is not nearly so easy to apply in the case of the other minerals which have been referred to, upon which it would be extremely difficult to fix the royalty. You have no standard to go by. In many cases they are worked by the proprietor. If you take the industries in connection with lime or marl, or the cheaper minerals, which we are told come under the tax, they are in many cases worked by the proprietors, and it would be extremely difficult to estimate what royalty could fairly be put upon them, and in some cases, I am sure, the royalty would be a distinct hindrance to the working of these particular minerals. There is certainly a good deal to be said for the Amendment both from the point of view of ironstone and of other minerals. I know many instances where there would be an injustice caused, and I hope the Government may see their way to adopt some words which would in some way secure justice.

Mr. WATSON RUTHERFORD

I desire to give an illustration of the injustice which this Amendment seeks to cure. In the part of Lancashire with which I am intimately acquainted the amount of coal under the surface is known practically to a ton. In all the coalfields round St. Helens the exact thickness and extent of the seams are known and the amount of coal under any given acreage of land is practically a certain quantity. I desire to take the case of two colliery companies. I will give their names to the right hon. Gentleman afterwards if he asks for them. One company simply takes a lease of the coal. They acquire the coal, and pay for it by instalments as they get it out. That is my theory as to what a coal lease means. The other colliery company, knowing exactly the amount of coal under a certain acreage of land, pay for it out and out. This is not a supposititious case, but one which happens every day. The first company, which takes an ordinary lease, will not pay any of this tax in respect of the existing lease. The whole of the tax will clearly fall upon the lessor, and he will pay one-twentieth of all he gets over to the State. The second company, which has paid cash for the coal, will have to pay the whole of the tax, although it has paid for the coal. That is a simple illustration of a case of extreme hardship which the Government have now created by applying the whole of this Clause to existing con- tracts, as between two companies competing in business for contracts where a small fraction of 1d. turns the contract. It is no answer to say this is a small thing. Many of these colliery companies get up hundreds of thousands of tons in the course of the year, and if they did not they could not pay their way. The tax will come to a very substantial sum. The Government has no right to so impose this tax as to create

a distinct injustice and inequality between competing people, who ought to be treated by the State on exactly level terms. I think the amount is considerable, but whether it is small or great the principle is the same.

Question put, "That the words all rights' stand part of the Clause."

The Committee divided: Ayes, 210; Noes, 76.

Division No. 740.]	AYES.	[7.45 p.m.
Abraham, W. (Cork, N.E.)	Findlay, Alexander	Marnham, F. J.
Abraham, William (Rhondda)	Fullerton, Hugh	Mason, A. E. W. (Coventry)
Adkins, W. Ryland D.	Furness, Sir Christopher	Meagher, Michael
Agnew, George William	Gibb, James (Harrow)	Menzles, Sir Walter
Alden, Percy	Glendinning, R. G.	Middlebrook, William
Allen, A. Acland (Christchurch)	Glover, Thomas	Molteno, Percy Alport
Allen, Charles P. (Stroud)	Gooch, George Peabody (Bath)	Montagu, Hon. E. S.
Ashton, Thomas Gair	Greenwood, G. (Peterborough)	Montgomery, H. G.
Asquith, Rt. Hon. Herbert Henry	Gulland, John W.	Morse, L. L.
Atherley-Jones, L.	Hall, Frederick	Murray, Capt. Hon. A. C. (Kincard.)
Baker, Sir John (Portsmouth)	Harcourt, Robert V. (Montrose)	Murray, James (Aberdeen, E.)
Balfour, Robert (Lanark)	Hardie, J. Keir (Merthyr Tydvil)	Myer, Horatio
Barker, Sir John	Hardy, George A. (Suffolk)	Nannetti, Joseph P.
Barnard, E. B.	Harmsworth, Cecil B. (Worcester)	Nicholson, Charles N. (Doncaster
Barnes, G. N.	Harmsworth, R. L. (Caithness-sh.)	Norman, Sir Henry
Barran, Sir John Nicholson	Harvey, W. E. (Derbyshire, N.E.)	Nuttall, Harry
Barry, Redmond J. (Tyrone, N.)	Haslam, Lewis (Monmouth)	O'Donnell, C. J. (Walworth)
Beauchamp, E.	Hedges, A. Paget	O'Grady, J.
Bell, Richard	Helme, Norval Watson	Parker, James (Halifax)
Belloc, Hilaire Joseph Peter R.	Henderson, J. McD. (Aberdeen, W.)	Partington, Oswald
Bennett, E. N.	Higham, John Sharp	Paulton, James Mellor
Berridge, T. H. D.	Hobart, Sir Robert	Pearce, Robert (Staffs, Leek)
Bethell, Sir J. H. (Essex, Romford)	Hobhouse, Rt. Hon. Charles E. H.	Pease, Rt. Hon. J. A. (Saff. Wald.)
Black, Arthur W.	Hodge, John	Philipps, Owen C. (Pembroke)
Boulton, A. C. F.	Hope, W. H. B. (Somerset, N.)	Pirie, Duncan V.
Bowerman, C. W.	Horniman, Emslie John	Pointer J.
Bramsdon, Sir T. A.	Howard, Hon. Geoffrey	Ponsonby, Arthur A. W. H.
Brigg, John	Hudson, Walter	Power, Patrick Joseph
Bright, J. A.	Hyde, Clarendon G.	Price, C. E. (Edinburgh, Central)
Brunner, J. F. L. (Lancs., Leigh)	Idris, T. H. W.	Rea, Rt. Hon. Russell (Gloucester)
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Illingworth, Percy H.	Rea, Walter Russell (Scarborough)
Burns, Rt. Hon. John	Isaacs, Rufus Daniel	Rees, J. D.
Byles, William Pollard	Jenkins, J.	Richards, T. F. (Wolverhampton, W.)
Causton, Rt. Hon. Richard Knight	Johnson, John (Gateshead)	Ridsdale, E. A.
Cawley, Sir Frederick	Jones, Sir D. Brynmor (Swansea)	Roberts, Charles H. (Lincoln)
Clough, William	Jones, Leif (Appleby)	Roberts, G. H. (Norwich)
Cobbold, Felix Thornley	Jones, William (Carnarvonshire)	Robson, Sir William Snowdon
Collins, Stephen (Lambeth)	Jowett, F. W.	Roch, Walter F. (Pembroke)
Collins, Sir Wm. J. (St. Pancras, W.)	Joyce, Michael	Roe, Sir Thomas
Compton-Rickett, Sir J.	Keating, M.	Rogers, F. E. Newman
Condon, Thomas Joseph	Kekewich, Sir George	Rowlands, J.
Corbett, A. Cameron (Glasgow)	King, Alfred John (Knutsford)	Russell, Rt. Hon. T. W.
Corbett, C. H. (Sussex, E. Grinstead)	Laidlaw, Robert	Rutherford, V. H. (Brentford)
Cotton, Sir H. J. S.	Lamb, Edmund G. (Leominster)	Samuel, Rt. Hon. H. L. (Cleveland)
Craig, Herbert J. (Tynemouth)	Lamb, Ernest H. (Rochester)	Schwann, Sir C. E. (Manchester)
Cross, Alexander	Lambert, George	Seely, Colonel
Cullinan, J.	Lament, Norman	Shackleton, David James
Dalziel, Sir James Henry	Layland-Barratt, Sir Francis	Shaw, Sir Charles E. (Stafford)
Davies, Ellis William (Eifion)	Lehmann, R. C.	Shipman, Dr. John G.
Davies, Sir W. Howell (Bristol, S.)	Lever, A. Levy (Essex, Harwich)	Silcock, Thomas Ball
Dewar, Arthur (Edinburgh, S.)	Levy, Sir Maurice	Simon, John Allsebrook
Dewar, Sir J. A. (Inverness-sh.)	Lewis, John Herbert	Snowden, P.
Duckworth, Sir James	Lloyd-George, Rt. Hon. David	Stanger, H. Y.
Duncan, C. (Barrow-In-Furness)	Lundon, T.	Stead man, W. C.
Duncan, J. Hastings (York, Otley)	Lupton, Arnold	Stewart-Smith, D. (Kendal)
Dunne, Major E. Martin (Walsall)	Macdonald, J. M. (Falkirk Burghs)	Summerbell, T.
Edwards, Sir Francis (Radnor)	Maclean, Donald	Taylor, John W. (Durham)
Essex, R. W.	MacVeagh, Jeremiah (Down, S.)	Thomas, Sir A. (Glamorgan, E.)
Evans, Sir S. T.	McVeigh, Charles (Donegal, E.)	Thompson, J. W. H. (Somerset, E.)
Everett, R. Lacey	M'Callum, John M.	Tomkinson, James
Falconer, J.	M'Laren, Sir C. B. (Leicester)	Toulmin, George
Ferens, T. R.	M'Laren, H. D. (Stafford, W.)	Trevelyan, Charles Philips
Ferguson, R. C. Munro	Mallet, Charles E.	Wansworth, J.
Fiennes, Hon. Eustace	Markham, Arthur Basil	Walker, H. De R. (Leicester)
Ward, John (Stoke-upon-Trent)	White, J. Dundas (Dumbartonshire)	Williamson, Sir A.
Ward, W. Dudley (Southampton)	White, Sir Luke (York, E.R.)	Wilson, P. W. (St. Pancras, S.)
Wardie, George J.	Whitehead, Rowland	Wilson, W. T. (Westhoughton)
Wason, Rt. Hon. E. (Clackmannan)	Whittaker, Rt. Hon, Sir Thomas P.	Wood, T. M'Kinnon
Wason, John Cathcart (Orkney)	Wiles, Thomas	TELLERS FOR THE AYES.—Captain
Waterlow, D. S.	Wilkie, Alexander	Norton and Mr. Fuller.
Watt, Henry A.	Williams, J. (Glamorgan)
NOES.
Acland-Hood, Rt. Hon. Sir Alex. F.	Forster, Henry William	Pease, Herbert Pike (Darlington)
Balcarres, Lord	Gardner, Ernest	Powell, Sir Francis Sharp
Baldwin, Stanley	Gooch, Henry Cubitt (Peckham)	Randles, Sir John Scurrah
Balfour, Rt. Hon. A. J. (City Land.)	Gretton, John	Ratcliff, Major R. F.
Banbury, Sir Frederick George	Guinness, Hon. R. (Haggerston)	Rawlinson, John Frederick Peel
Banner, John S. Harmood-	Guinness, Hon. W. E. (B. S. Edmunds)	Renton, Leslie
Baring, Captain Hon. G. (Winchester)	Hamilton, Marquess of	Renwick, George
Beckett, Hon. Gervase	Hardy, Laurence (Kent, Ashford)	Ropner, Colonel Sir Robert
Bowles, G. Stewart	Harris, Frederick Leverton	Rutherford, John (Lancashire)
Carlile, E. Hildred	Hay, Hon. Claude George	Salter, Arthur Clavell
Carson, Rt. Hon. Sir Edward H.	Hill, Sir Clement	Smith, Abel H. (Hertford, East)
Cecil, Lord R. (Marylebone, E.)	Hills, J. W.	Stanier, Beville
Clive, Percy Archer	Hunt, Rowland	Staveley-Hill, Henry (Staffordshire)
Clyde, J. Avon	Joynson-Hicks, William	Stone, Sir Benjamin
Coates, Major E. F. (Lewisham)	Kennaway, Rt. Hon. Sir John H.	Thomson, W. Mitchell- (Lanark)
Cochrane, Hon. Thomas H. A. E.	Keswick, William	Tuke, Sir John Batty
Courthope, G. Loyd	Kimber, Sir Henry	Valentia, Viscount
Craig, Captain James (Down, E.)	King, Sir Henry Seymour (Hull)	Walker, Col. W. H. (Lancashire)
Craik, Sir Henry	Lambton, Hon. Frederick William	Willoughby de Eresby, Lord
Dalrymple, Viscount	Lane-Fox, G. R.	Wortley, Rt. Hon. C. B. Stuart-
Davies, David (Montgomery Co.)	Law, Andrew Bonar (Dulwich)	Wyndham, Rt. Hon. George
Dickson, Rt. Hon. C. Scott-	Lockwood, Rt. Hon. Lt.-Col. A. R.	Younger, George
Douglas, Rt. Hon. A. Akers	Mildmay, Francis Bingham
Faber, George Denison (York)	Morrison-Bell, Captain
Faber, Capt. W. V. (Hants, W.)	Newdegate, F. A.	TELLERS FOR THE NOES.—Mr. S. Roberts and Mr. Watson Rutherford.
Fell, Arthur	Nicholson, Wm. G. (Petersfield)
Fletcher, J. S.	Oddy, John James

Mr. F. NEWDEGATE

I beg to move, after the word "minerals" ["rental value of all rights to work minerals "], to insert the words "not being of a less value than four shillings per ton."

The object of this Amendment is to exclude from the tax minerals which are not of very great value. The minerals I would specially mention are gravel, sand, rough stone, granite used in road-making, chalk, refuse banks at collieries, road metal, common clay, and so on. I cannot think it is the object of the Chancellor of the Exchequer to tax all these things. Many hon. Members on this side of the House have asked for a definition of minerals, and we have never yet got a straightforward answer to our question. As far as I can tell, as matters stand at the present time, a landowner may sell a bit of land where there is sand, and part of the stipulation on selling the land may be that the sand may be worked and used for brick-making or other purposes. As the Bill stands at present, I take it that this Mineral Tax would fall on sand. I recollect only a short time ago selling a small bit of land to a building syndicate near my own home, and part of the stipulation was that they should have the right to work the sand in connection with that piece of building land. It surely cannot be the case that the Chancellor of the Exchequer would expect these people who have bought the land to pay the Mineral Duty, or that I, as the vendor, should pay Increment Duty or other duties in connection with it. There is a quantity of rough stone about the country of no very great value. It is to be found in Gloucestershire, the Peak of Derbyshire, and in the Highlands of Scotland, and it is used for building houses. That might come under the definition of minerals, and the owner of the stone might be taxed, as the Bill stands at present. I cannot conceive that that is the object of the Chancellor of the Exchequer. In the case of pit-heaps, the materials are often used for making a common sort of brick, and it is of great importance to get the pit-heaps away, far they are only an eyesore in the neighbourhood. If these pit heaps are to be charged Mineral Duty, I say it is an absurdity. Next I come to the case of road metal. I fancy that road metal at the quarry banks costs on an average about 1s. 6d. per ton. Surely it is not the object of the Chancellor of the Exchequer to increase the cost of road metal at a moment when he talks of developing roads throughout the length and breadth of the country. Chalk would probably be considered a mineral under this Clause, and surely it would not be to the benefit of the community at large that it should be so con- sidered. I come now to the case of common clay, about which there is a very strong feeling in the country, because brickmakers feel they cannot stand more taxation. I do not refer to the finer fireclay, and so on. I am sorry that the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) is not in his place, because he has been fighting very hard for the Land Taxes, and particularly for the tax on the better kinds of clay, and I am sure that out of poetical justice he would oppose these being removed from the scope of the tax to be imposed by the Chancellor of the Exchequer. As regards common clay, I and other Members of the House have received very strong representations from our constituents. I have in my hand two letters on the subject. One is from a brick-makers' association protesting against common clay being subject to the tax on minerals. I think the Chancellor of the Exchequer on 14th September received a deputation, who pointed out the hardship which would arise by putting the tax on common clay used for the making of bricks. Is that to be exempted?

Mr. LLOYD-GEORGE

I said so the other night.

Mr. NEWDEGATE

There is nothing on the Paper to indicate that the Clause will be amended in that sense. Hon. Members on this side of the House have asked questions over and over again as to whether brick-clay was to be included in minerals, and on more than one occasion the Chancellor of the Exchequer or his satellite has answered that brick-clay is to be included. I am very glad that owing to the representations made to the Chancellor of the Exchequer commonsense has been instilled into the brain of those responsible for the Bill. I hope now that common clay is to be excluded from the purview of the Bill the Chancellor of the Exchequer will kindly exclude those other minerals which are of no great value, and which do not keep bloated dukes or aristocrats in affluence. I believe it will be for the benefit of the community to exclude the less valuable minerals from the purview of the Bill.

Mr. BALFOUR

The right hon. Gentleman has told us that common clay is to be excluded from the duty. May I ask whether the Government have any Amendment in their head? They surely have had time enough to tell us what they mean by minerals? They have been asked incidental questions as to what they do mean to include in the term minerals, and surely after all the months they have had this subject under their consideration they can now tell us what they do not mean to include. Now we are actually discussing an Amendment to the Clause, and we learn from an interruption across the Table that the Government mean to put down an important Amendment without having done us the simple courtesy of putting it on the Paper before it comes up.

8.0 P.M.

Mr. LLOYD-GEORGE

What an extraordinary speech the right hon. Gentleman has delivered to the House. We ought not to make any more concessions unless we give notice! Is that the attitude of an Opposition which wants to criticise? Is it criticism with a view merely to improve the Bill or criticism with a view merely to destroy the Bill? Does the right hon. Gentleman suggest that we ought not to accept any Amendment which is on the Paper at the present moment? We are receiving representations from day to day from various interests. We are weighing them as we are bound to weigh them. We are receiving representations from Members of the House of Commons and criticisms in the House of Commons, and are we not to give weight to them? Even now that is all we are doing. We are merely considering and giving due weight to suggested Amendments.

Mr. BALFOUR

It is most reasonable that the right hon. Gentleman should appeal to argument, but until this subject was brought under discussion now we did not hear that the Government were going to make this concession on one of the subjects touched on by my hon. Friend. Are we really to be told that it is only since last night they have been convinced of this? If that is so—

Mr. LLOYD-GEORGE

The right hon. Gentleman was not here the other night when we had a Debate on this subject, and my hon. and learned Friend the Attorney-General promised that it would be considered favourably.

Mr. BALFOUR

That only makes it worse. My hon. and learned Friend has determined to make this concession, and yet the intention to do so was not put down on the Paper. It is perfectly inexplicable.

Sir W. ROBSON

What I said some days ago in answer to an argument addressed to me on the subject of clay was that I thought clay had a somewhat different character from other minerals. I said there had been considerable doubt on the part of the courts as to how and when clay should be included in minerals, and that the question of whether clay should be included or not would receive not only the careful but the sympathetic attention of the Government. That is what I said. I do not think there is any doubt of the significance of a statement like that, that this would receive the careful and sympathetic consideration of the Government. I do not see why, when the Government state their intention which was so clearly foreshadowed, that it should now be treated as a subject-matter of complaint.

Mr. ERNEST H. LAMB (Rochester)

I want to ask the Chancellor of the Exchequer to continue his conciliatory attitude in this matter, notwithstanding the remarks of the Leader of the Opposition. I wish to support the hon. Member for Warwick (Mr. Newdegate), and to ask the right hon. Gentleman if he cannot see his way to make some concession, so that the duty shall not be charged in respect either of clay or brick-earth or sand or gravel, and especially that he should concede the exemption to chalk and limestone. And I urge the matter of chalk more especially to-night, because it is so essential to the very existence of the cement industry of this country. It is known to all the Members of this House the very narrow margin on which the cement industry is at present working, and we should bear in mind the very small contribution from this duty, that could not possibly be of any advantage to the Exchequer, and I would ask the Chancellor of the Exchequer to take this into his earnest consideration in the hope that he will concede this point Chalk is essential to the existence of the cement industry. This duty on chalk and clay means very little to the Exchequer, but it may mean all the difference between success and failure to many of the cement works in this country.

Mr. LLOYD-GEORGE

I have been considering for some time the question submitted to the judgment of the Committee by the hon. Member for Warwick and my hon. and learned Friend the Attorney-General. I find that he said very clearly the other night that the Government had considerable doubt as to the advisability of including clay in the category of minerals. He first of all expressed a doubt as to whether clay should be included in any event, and that there were reasons why clay should be the subject of differential treatment. That, I think, was a perfectly clear indication of the intentions of the Government that clay should not be included, and if there were any doubts at all about the law of the matter we should accept an Amendment on the Paper dealing with this matter. There are several Amendments on the Paper, and I think that the Government ought to be free to accept Amendments even without putting them down themselves. I hold very strong views about that. I have been much longer in Opposition than I have been a Member of the Government, and I hold very strongly that the Government should give consideration to all Amendments put down by the Opposition, and where they can see their way to make concessions, to do so. The difference between a tax on clay and chalk and a tax on coal is merely a question of administration—a question of the revenue which is raised, a question whether it is worth all the trouble and inconvenience and cost to the taxpayer, and whether the inconvenience and cost to the taxpayer are compensated for by the amount of money which the revenue gets. The argument has been advanced from both sides of the House, and has been urged on me by various Members who are interested in the matter, that perhaps a tax on clay and chalk would harass certain industries and will not produce much revenue, and that these substances should therefore be exempted. There is a precedent for it, and it is a Conservative precedent. It is a precedent where, after a general statement that all minerals are subject to certain conditions, stone, clay, gravel, and sand are excluded. There is a great deal to be said for that; and when we come to the Amendments later on I shall be prepared to give favourable consideration to all those Amendments. I shall consider the various matters submitted, but, on the whole, I shall consider them from the point of view that it is not worth our while to go to the expense and trouble of collecting the small sums which would be available in these cases, and certainly not worth the trouble and expense to the taxpayer. After all in these cases the test is very fair in the Amendment, though I could not possibly accept it in that form. The total value of the material is a small one, and most of that value is not like coal. Coal in itself is a valuable by the labour and expense put into it. It is not like coal. Coal in itself is a valuable mineral. Labour is a very considerable proportion, it is true, but when you come to chalk and gravel and sand and common brick-clay—

Mr. LANE-FOX

Lime?

Mr. LLOYD-GEORGE

I should say lime and chalk would be pretty much in the same category, but I should rather like to consider that point.

Mr. NEWDEGATE

And stone?

Mr. LLOYD-GEORGE

That is a totally different thing. You may have ordinary common stone, of no value at all, except the value given by the labour put upon it, but you may have very valuable granite. I should have to consider that. That is why I have not mentioned stone. Very valuable granite is really a mineral in the essential sense of the term, but when you come to these cheaper substances, then I think the hon. Gentleman made a good case for exempting sand and chalk and common brick-clay.

Mr. NEWDEGATE

The stone I had in my mind was stone for road-making.

Mr. LLOYD-GEORGE

It is possible to draw some distinction in the case of clay. There are certain qualities of clay which are a valuable mineral, such as fire-clay and china-clay, which is valuable and has an increasing value; and if it is possible to draw distinction between the sort of road metal referred to by hon. Members and the more valuable stone which I have described, then I am prepared to consider that. For the present I think I shall confine my statement to the four articles which I have mentioned. I could not accept the Amendment in this form. I am not quite sure that it might not complicate matters by what it might include or might leave cut. It is infinitely better to follow the precedents which have been set by other Acts of Parliament and specifically mention the things which are to be excluded. To include these things would, I think, only cause trouble and inconvenience to various industries and to the building trade, and would bring little into the revenue, and, therefore, I do not think it worth while to include them The precedent I had in my mind was the Irish Land Act. There they used the words "minerals," to begin with. That is our precedent for not putting it in the form of the Amendment; and then there is the proviso that this Sub-section shall not apply to any stone, gravel, sand or clay. I do not know whether there is any chalk in Ireland. At any rate, it is not here. That is my precedent for taking that course.

Mr. BONAR LAW

I am not going to say anything about the point as to whether or not, since the right hon. Gentleman's mind is clearly made up, he might not have put an Amendment on the Paper for one reason, if for no other, to save those Members who were going to make speeches about it the trouble, perhaps, of preparing those speeches. I must say that more extraordinary reasons for accepting an Amendment have never been given in this House than those which have just been stated by the Chancellor of the Exchequer. What are those reasons? We have been listening all the afternoon to the argument put forward by the principal economists of weight and authority on the other side of the House, telling us that by no possibility can Royalty Tax fall on industry. Everybody on that side of the House was quite clear about that, and they seemed to think it just as absurd to assert the contrary as to say that the earth is flat. An hon. Member gets up and makes an appeal to the Chancellor of the Exchequer not to put this Royalty Tax on clay, because the industry in which it is used is cut so fine, and depends so much on the most minute items of cost that, if this tax were imposed, it would really ruin the industry. This after all we have listened to this afternoon. Then the Chancellor of the Exchequer gets up, convinced by the strength of these arguments. He does not quite dare to say that royalty does fall on industry, but he goes very near it. He says, "I am not going to put this tax upon clay because it will affect the building trade." No man engaged in the building trade is going to pay this royalty. It will be paid by the owner of the minerals just as much as the royalty on coal will be paid by the owner of the minerals. The tax cannot reach the building trade if the theory of hon. Members opposite be true, yet that it will reach the building trade is one reason the right hon. Gentleman gave us why he makes this exception. We had another reason, more extraordinary still. He said coal is a valuable mineral, and that clay depends altogether on the labour involved. I suppose the right hon. Gentleman really had some idea that what he said had some foundation in fact. Surely the royalty on clay is in precisely the same position as the royalty on coal. I say that the right hon. Gentleman simply gives away the whole case which was being made on the other side this afternoon. I am very glad to see these concessions. I think it shows a little return to common sense. If the right hon. Gentleman really does believe that a Royalty Tax on clay, owing to the value of clay, is going to yield an extremely small amount, if he does believe that it is going to affect the industry on which it is imposed, then what can we say of a Minister who, having admitted that, deliberately allows the same tax, subject to the same objection, to be placed on the raw material of every industry which is carried on in the country?

Mr. R. WHITEHEAD

We are extremely grateful to the Chancellor of the Exchequer for the concession he has made. We are not only grateful to him for it, but we cordially assent to the reasons which he has advanced for it. The hon. Member for Dulwich delivered an economic argument this afternoon which he desired to repeat this evening, but the fact is that in his arguments, which he spins out for our edification, he seems to forget the facts, or if he does not forget them he must be ignorant of them. For example, he said it was inconsistency on the part of the Chancellor of the Exchequer to say that this duty, in so far as it was on chalk and cement, would fall upon the manufacturer. He says that is inconsistent with what the Chancellor of the Exchequer advanced this afternoon. If the right hon. Gentleman takes the Thames and Medway—two important regions where cement is manufactured—he will find that three-fourths of the output of the chalk used in the manufacture of cement come from quarries owned by the manufacturers themselves, and he would see that under the framework of this Clause this tax would necessarily fall on them as manufacturers. Therefore the Chancellor of the Exchequer a moment ago was perfectly accurate in giving that as a reason why he should make this special concession in favour of an industry of this kind. The concession is in no way inconsistent with the general argument which was advanced this afternoon. We feel that though the tax would not press in so hard a way as to ruin the industry or anything of that kind, nevertheless a tax of small amount, such as this is, when trade is in a depressed condition, is undoubtedly inconvenient, and therefore we are very grateful indeed to the Chancellor of the Exchequer for having made a concession which will relieve us from a tax which would have brought in so very little revenue to the country.

Earl WINTERTON

Speaking as one representing a constituency in which there is a large number of brickfields and lime works, I desire to say that we are not in the least grateful to the Chancellor of the Exchequer for these concessions, though we are pleased that at the eleventh hour he should have seen the absurd folly of attempting to tax articles which are included under the word "minerals" when used in a general sense. If the right hon. Gentleman had not promised to reconsider this matter so far as a great part of the South of England is concerned, there is hardly an individual farmer who would have escaped the tax, for the simple reason that on nearly every farm in some field or other chalk, flint, gravel, and clay are found and worked. It is stretching a point to say that we are grateful to the Chancellor of the Exchequer. Though I, at any rate, am pleased that he has decided to make an alteration in the definition of the Clause, I cannot be grateful to him, for I cannot conceive that any Chancellor of the Exchequer could really imagine that there could be embodied in law such a monstrous proposal. The right hon. Gentleman, in the speech he has just delivered, clearly shows how little attention he has given to this Clause. He gave flints as an example, I think, of what ought to be exempted. This Bill has now been before the Committee for four or five months, and it is not until this evening that the Chancellor of the Exchequer realises the fact that it is one that would have affected, not only large, but small industries, and that a very large number of farmers who dig sand, or lime, or flints on their farms for their own use would have been taxed. I venture to think that the people who were affected by this Clause should not have been left in doubt for so long. I myself have constantly put questions to the right hon. Gentleman asking him for a definition of "minerals." We were suddenly told that we should be informed when we came to the Bill. I can see no earthly reason why this should not have been done months ago, and why when the Bill was originally before us some definition should not have been put in. The result has been that the industry of brickmaking all over the country has been affected, and it has added to the distress and unemployment already caused by other parts of the Budget. It has had a more serious effect on the building industry to have this tax hanging over it, because the Chancellor of the Exchequer and the Attorney-General, may I say with all respect, have not taken the trouble to consider the effect of their own Bill.

Mr. JAMES ROWLANDS

I did not expect the hon. Member who has just spoken to thank the Chancellor of the Exchequer but I do think sometimes Ministers should be thanked when their attention is drawn to a particular issue and when they take action on it. I desire, on the contrary, to thank the Chancellor of the Exchequer for the concession which he has made. It was our duty, representing various constituencies in which these great industries are, to bring his attention to them. The particular class of mineral that I was asked to bring before the House is one of very low price indeed. In fact, the Amendment which I put on the Paper shows that it is not one of four shillings per ton but only eighteenpenee. That really covers a large portion of the chalk industry. I dare say a great many Members would be surprised to hear that chalk is produced at one shilling per ton and delivered three-quarters of a mile away. There are leases in the granting of which the condition was made that the chalk shall be delivered at that price, so that, therefore, the farmer who owns a chalk quarry is unable in any way whatever to increase the price. When you have a margin of a shilling per ton, and wages and rents and everything is paid out of it, you will see that the industry is one which has not a very large margin. I think there is a good deal to be said for the argument of the Chancellor of the Exchequer as to the amount of product there is to be got from a particular tax. It is not a novel thing to object or to argue against the collection of a tax when you find that the cost of collecting it will leave you no margin whatever for the revenue. This happens to be one of those cases. I do not know any other case where the margin is so light as it is in chalk, and I do not think that any other case could be brought up. With regard to the principle, I do not deny that it is the same in either case. The question is the value of the product, and what would be the effect of collecting the tax. I thank the Chancellor of the Exchequer for the concession which he makes, and it will not be necessary for me now to move my Amendment.

Mr. SCOTT DICKSON

I would ask the Attorney-General to convey to the Chancellor of the Exchequer a request that he should not close the question as far as granite is concerned, because as far as I have heard the discussion to-night a great part of all that has been said in support of clay is equally applicable as far as Scotch granite is concerned. I would impress upon him as far as I can that he would take into consideration the question whether granite should not also be treated in the same way as he proposes to treat the minerals which have been mentioned. I confess for myself I have a feeling of sympathy for those interested in the coal industry, and all that depends on it, and that really means industry of all kinds, but where there are so many in the House capable and willing to speak on behalf of clay and chalk there is apparently nobody able to take up the united case of coal. I am quite sure a great part of the argument would be equally applicable to coal as it is to clay.

Mr. MARKHAM

I am afraid I cannot join in the chorus of congratulation, and I very much regret the action of the Chancellor of the Exchequer. If he continues as he has begun to shed parts of this Clause in the same way as he has done in this instance there will be very little of it left. It is very nonsensical, the argument of the Chancellor of the Exchequer, that this tax would be difficult to collect, and would be impossible to collect. What are the facts? The facts are that it is the simplest tax, a Royalty Tax, to collect of any tax in existence. The owner when he pays his rent, no matter what class of rent it is, is bound by law to deduct from that rent the amount due in the form of Income Tax, and to remit that to the Inland Revenue. What would happen in this case? This Bill provides that in these mineral taxes the lessee shall deduct the royalties and pay them direct to the Exchequer. Now in the case of a company with which I am connected, roughly speaking, the company produces half a million bricks per week, and the royalty on this would average 6d. per ton, or rather equal to the average royalty of coal. In another case the royalty on clay is equal to 8d. or 9d. per ton. Why should those people escape? On the ground, we are told, that this tax is difficult to collect. Why there is no cost to the Exchequer at all. Either the owner or the lessee would make this return, and would add this particular tax to the money which he has got to remit for the Income Tax, so that there will be no cost thrown on the revenue. Three or four nights ago the Chancellor of the Exchequer said that this was the easiest of taxes to collect. I really think that the hon. Member for Dul-wich (Mr. Bonar Law) has all the best of the argument. If these taxes would fall on the clay and sand industry they must equally fall on the coal industry. How can you draw a distinction? The Chancellor of the Exchequer takes up an absolutely illogical position. In the town of Mansfield and adjoining towns there are sand quarries where the sand sells for a great deal more than the coal does, and in some cases the owners get enormous royalties, and they are all to escape scot free. The actual price of that sand amounts to a great deal more, in come cases considerably more, than the price of slack. What is the justice of that? Forsooth, we are told there is a difficulty in collecting the tax. What it comes to is this: There is pressure put on the Government by those different interests, and it is simply a question of yielding to this pressure. If the tax is just, as I maintain it is, then it ought to be put on mineral owners, irrespective of pressure put by them on the Government. Therefore I deeply regret that the Government have given way on this tax, and I can see no justification for the action taken.

Mr. LAURENCE HARDY

I agree with a great deal the hon. Member has just said. I am afraid I do not agree as far as the actual concession is concerned. He likes the tax—I dislike it. Therefore I am very glad a certain number of people are being relieved of the burden thrown upon them. I am glad to have such a strong argument to use in other parts of the Clause. I think that people ought to remember when we pressed originally for a definition of minerals, and when the Government declined to give us any opinion, it was on ungotten minerals. But surely the Government might have made up their mind on this point, because I do not think even their ingenuity could discover means by which you could value the whole of the ungotten chalk, sand, gravel, and other minerals of that character in this country. In any way which is appreciable, or which would be appreciable, or could be considered practical the Clause has been brought into practical regions. I am very glad that the Government have given way on this point. I hope they will seriously consider the manner in which they are going to frame the Amendment which is promised.

I would urge the Chancellor of the Exchequer to give very careful attention to the question whether marl ought not also to be exempted. In many parts of the country marl is a very useful product for the agricultural industry. It is used for making cement; it is a very cheap material; in Staffordshire, at any rate, it is of of considerable importance; and I think if chalk is exempted marl ought to be also, because it is very much of the same character. I would also support the claim put forward in favour of the exemption of the commoner classes of stone, such as those used for road materials. In some districts it would be a serious matter if a tax were put upon stone pits which are open merely for the convenience of the neighbourhood; such pits would probably be closed in the event of such a tax being imposed, with all its attendant inconveniences of valuation and so forth. I am not sure whether flints ought not also to be exempted, as in many parts of the country they are actually collected from the fields, people paying a royalty for the collection of them for road-making. The Government having once departed from the consistent position, all these matters ought to be carefully considered.

Mr. G. A. HARDY

I do not think the Government need be deterred at the want of gratitude on the part of the Noble Lord opposite (Earl Winterton). In all parts of the House there is really a deep sense of gratitude for the concession which the Government have made, and, although hon. Members opposite may not express it in actual words, in their hearts they are very grateful that the Government have seen their way to meet them on this matter. I do not see why we should pretend to split logic over these questions, and to ask why, if the tax is imposed on one commodity, it should not be imposed on another. In this particular instance we are dealing with a trade largely owned—probably to the extent of quite three-fourths—by the people who dig the clay. Much of the clay industry is in a terribly distressed condition, and any burden imposed upon an industry in that state must do it harm. We do not find the iron or coal trade in the same depressed condition. We are dealing with an entirely different set of circumstances, and, though it may be logical that if it is right in one case it ought to be right in the other, we have to put logic on one side and deal with the actual facts. By so doing the Government have earned the gratitude, not only of most of the Members of the House, but of the brickworkers and of those connected with the clay industry in the country.

Mr. G. L. COURTHOPE

The hon. Gentleman opposite (Mr. G. A. Hardy) says that in our hearts we are full of gratitude to the Government. Personally I have no such feeling. I admit we are full of satisfaction that clay and some other minerals, whose names we may perhaps learn at a more or less remote date, are to be exempted from the duty, but the state of things to which the hon. Member has referred makes me incapable of feeling gratitude for this tardy concession. It is quite true that the brickfields and clay works have been of late in an extremely de-pressed condition, and in my part of the country a feeling almost of panic has arisen since the proposals of the Bill and the proposed new Clause appeared. If the Government had not made up their minds definitely to tax common clay and certain other so-called minerals, I think, in the interests of all these industries which are struggling, in many cases in vain, to keep their heads above water, the promised concession should have been made earlier. One thing for which I feel gratitude is the speech of the hon. Member for Mansfield (Mr. Markham), which has absolutely knocked the bottom out of the argument of the Government in favour of the Mineral Duty as regards coal. That speech will be very useful not only in future discussions here, but in the country outside. We are entitled to ask the Government to remember that the proposed duties have relatively a much heavier effect on minerals which are worked in surface quarries than they will have upon coal. That is an argument in favour of an Amendment imposing a limitation by value rather than by the names of different minerals. In the case of surface quarries, such as sand, clay, and marl, the value to the royalty owner is much nearer the total value to the final purchaser than it is in the case of coal, and although a further penny or halfpenny in the ton on an article for which the consumer in the South of England may pay 25s. per ton is a relatively small matter, in the case of commodities such as road stone, flint, chalk, and other cheap minerals, it is a very serious consideration indeed. I hope the Government will consider whether they cannot accept an Amendment such as I have suggested. The Chancellor of the Exchequer himself gave a strong argument in favour of this course when he said that the difficulty of dealing with stone and granite was that some forms of granite were very valuable, and ought not to escape. Another argument in its favour was his reference to the value of china-clay. These are strong reasons in favour of accepting an Amendment imposing a limit of 4s., or 3s. 6d., or 3s. a ton rather than exempting minerals by name. I wish to put in a further argument in favour of the exemption of road stone and gravel. The Chancellor of the Exchequer must be aware that a great many quarries of road stone and gravel have had to be closed, and there are many others just able to go on. In such cases as those the imposition of such a tax as this would not be trifling. In view of the very fine margin in large contracts, where the figure sometimes goes into a small fraction of one penny, it would probably make just the difference between a quarry remaining open and the contracts going abroad. I do think that is a serious consideration, and I hope the Government will really bear it in mind.

Sir W. ROBSON

As a rule it is controversially somewhat dangerous to defend a concession, because you do not often do so without appearing to affect the general argument of your case. Although the Government have made concessions, it does not generally deprive itself particularly of logic; and it is sometimes vain enough to hope that there may be gratitude for those concessions. But I have never known gratitude repudiated with such force as in the course of this Debate. As one hon. Member said: "It is a very good concession," but "remember," "observe," "we are not going to be grateful for it." I did think there was a streak of gratitude in the speech of the hon. and learned Gentleman the Member for Glasgow, but I find on a more careful attention that his attitude was that well-known sort that arises entirely from the hope of favours to come. He said not that he was grateful, but that he would be grateful. Other Members took a somewhat different line, for while asking for further concessions they indicated quite clearly that they had not the smallest intention of being grateful. They were not grateful, nor, they said, would they be grateful. Why is it? I thought it showed on the part of hon. Members opposite a confidence which cannot be shaken in the Christian spirit of my right hon. Friend the Chancellor of the Exchequer. They know perfectly well if he thinks he can afford a concession he will make it. If he thinks a concession just he will make it, whether or not it be made, as it usually is, a matter of condemnation and repudiation of gratitude on the part of hon. Members opposite. They even make a grievance of it. The hon. Member for Dulwich said that really the Government might announce Amendments a little earlier in order to save Members the trouble of preparing their speeches.

We are obliged to frame our concessions according to the needs of the revenue. There may be some cases in which the tax falls a little harder than in others. Although there is some reason for imposing it, there is no very strong reason for differentiating between one article and another. We want money, therefore we have to impose a tax upon particular cases. That is really the substance of the speech of my right hon. Friend. In the cases where we have made concessions, he indicated there were reasons which completely took these articles out of the particular tax itself. There were reasons in those cases that some revision should be made. I daresay I share the weakness of my right hon. Friend. As we have included chalk, I think we might as well include limestone. I think probably limestone will be included, though I am not at all sure. Having said that much, I think we must not irritate hon. Members opposite, not excite the indignation of which we have been the objects during the last hour or so by proceeding with any further concessions.

Sir GILBERT PARKER

I was not in the House at the time this concession was granted, but I do know that hon. Members interested in the industries to which concessions have been given have presented their case with cogency and reason. The hon. and learned Gentleman who has just sat down has said that the position of the concessionaires showed ingratitude. Well, let me say, at any rate, that I can express a sense of gratitude that the Government is open to reason. On behalf of the trades which were oppressed by this tax being imposed I may express a sense of gratitude. Will the right hon. Gentleman allow me to state why that gratitude which we feel deserves rather a larger expression on the part of the Government, and why Members on this side limit the extent of it? When it was first proposed to tax royalties and wayleaves the arguments used by Members sitting on that Front Bench, and by the Chancellor of the Exchequer, was that these royalties and wayleaves oppressed manufacturers and workmen. Well, we have shown—I tried to show yesterday, under great difficulties, and I am afraid I was out of order—that the manufacturer purchases the land in which the coal, chalk, or clay is embedded, and has, as it were, compounded for the royalties and become the owner of the soil. Now if the Government found, when they made their proposal, that a tax, such as a royalty, oppressed trade, why in the world do they further seek to oppress trade by taxing the manufacturer who has compounded for the royalty, and the workman who works for the manufacturer? That is why we say that this concession should not be granted alone to clay, or chalk, or limestone, but to all those minerals which are worked by the proprietor. I do not want to labour that argument, because I am afraid I should be out of order in expanding it. I only want to explain to the Attorney-General why our sense of gratitude is limited. We believe the Government is unjust and unfair in taxing the manufacturer and the workman, and that it is unjust and unfair to so tax was evidenced by the arguments of the Government themselves when they proposed to tax royalties and wayleaves at the beginning. Now, when these royalties and wayleaves are absorbed in the property owned by the manufacturer, the Government still propose to tax industry and to put pressure upon trade by this tax, which will be collected from the owner, and therefore from the workman. That is the position we take up. The position of the Government I believe to be wholly illogical and wholly unsound, and I for one, while extremely grateful that the Government have seen their way to lift this tax off industry, realise to the full that the Government have shifted their ground without reason, and have been guilty of the very thing they have charged the original owner of property with—taxing trade and industry.

Mr. H. G. MONTGOMERY

I should like to say a word about this proposed tax as I represent a constituency largely engaged in the clay working. We have had the case put before us to-night of the rich colliery proprietor who is very desirous of paying royalty upon what he makes. I should like to put before the House the position of the small man. Throughout the length and breadth of the country there are men engaged in the task of making bricks and tiles. There is scarcely any Member of this House who has not some constituents or another engaged in this operation. Many of these men have at considerable expense purchased pieces of land, and they and their sons are engaged in the same operation. What I want is to ask whether these men are to be put upon the same footing as the great ones of the earth who sit idly by and draw their royalties upon the minerals produced. We have been told that all royalty owners ought to be subjected to this task, but in the case of a man who has purchased his royalty, or has redeemed it, and who does not pay rent, you are simply putting a tax upon industry. We have been told in this House and outside it that the Chancellor of the Exchequer intended to fit the burden to the broader backs, but I do not think in this case of putting a tax upon humble workers of the clay he will be doing that.

We were also told by the Prime Minister at Birmingham that this Finance Bill would not mean a hampering of industry. But if a tax is put upon these humble workers it will be hampering of industry indeed. You might just as well tax the produce of a small holding. I cannot agree with the hon. Gentleman who spoke last upon the other side when he stated that the china-clay industry was in a very depressed condition at the present moment because of this tax hanging over its head. When you take china-clay you have a mineral which is of some value in itself. When you take common brick-clay, it has no value whatever in itself until it is made into bricks. Further, china-clay in itself is a marketable article which can be exported to the markets at home and abroad and has a value of itself. You cannot say the same of common clay. You must expend labour upon it before it becomes of any practical value. Some people have been very anxious to have clay declared to be a mineral, and a few years ago there was a case tried in the House of Lords upon that issue. One of the parties was a gentleman who at one time occupied a seat in this House, and he had an action against a railway company, and he was most anxious to have clay declared a mineral, but the law said it was not a mineral. And having settled the question in that way, at a cost of some thousands of pounds, you are now going to have that decision reversed. I add my meed of praise to the Chancellor of the Exchequer for having made this concession, which I am sure will be much appreciated.

9.0 P.M.

Mr. HARMOOD-BANNER

I should like to associate myself with several hon. Members who have spoken, in my astonishment at the proposals of the Government as regards the change, the allowance which it has made for these various substances. The learned Attorney-General said there was no logic in this concession, but he thought it was expedient. I should be rather inclined to say that it shows a species of logrolling, and I am bound to say that the arguments given to the House remind me very much of that system, because these concessions have all gone to contituencies where industries relating to clay or salt or lime, to which they are applicable, are in existence. I thought this tax was to be a tax which was to fall upon the lessor, and not upon the lessee. The wicked lessor who lets his land has now to contribute to the State, and whilst it appears that at Rochester and some other towns the lessor has parted to the lessee this ownership, and the ownership is now in the hands of the lessee, I am sure that is not the case to any great extent throughout the country. I am a lessee of two clay-pits. I pay my lessor, and I do not really see why my lessor is to be let off this tax except in so far as I consider the whole system is a bad one, and ought not to be applied to any minerals. But because in certain districts three-fourths of the small owners who own their own minerals and apply their political pressure upon the Government, the lessor, who in all other cases is bound to pay his royalty, is to be let off. If that is not logrolling I do not know what logrolling is. I am glad to observe that a certain amount of sanity has been introduced into the minds of some hon. Members opposite, who have now come to see that if the lessee has to pay it means a tax upon industry, and consequently a tax upon the consumer, and therefore the Chancellor of the Exchequer is not to apply his tax to certain substances. On that plea at present the coal should be free, because it was never in a more parlous condition than it is at present, when it hardly pays the cost of production, and therefore we may rightly claim that it should be let off as well as clay and lime and other produce which has been knocked off. But that is not the reason. The reason is because the greater number of the clay lessees sit upon the other side of the House, and, therefore, the pressure comes. The election is soon coining on, and the clay lessees are treated in this manner because they are so numerous behind the Government, and because seats are in danger. I claim if taxation is applied to the lessor it ought to be applied to all lessors; it should be applied to my lessor in the North of England just as well as it is applied to coal in other parts of the country. I am not astonished to hear from the learned Attorney-General that there is no logic in the proposition. Therefore I am grateful. I am not like some other hon. Members who are not

grateful for this concession. I am grate-ful because it has a personal application. Still, I do not approve of it, because I consider there ought to be absolute equality in the application of this principle.

Sir W. ROBSON 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, 192; Noes, 62.

Division No. 741.]	AYES.	[9.5 p.m.
Abraham, William (Rhondda)	Glover, Thomas	Myer, Horatio
Adkins, W. Ryland D.	Gooch, George Peabody (Bath)	Nicholson, Charles N. (Doncaster)
Agnew, George William	Greenwood, G. (Peterborough)	Norman, Sir Henry
Allen, A. Acland (Christchurch)	Gulland, John W.	Nuttall, Harry
Allen, Charles P. (Stroud)	Hall, Frederick	ODonnell, C. J. (Walworth)
Ashton, Thomas Gair	Harcourt, Robert V. (Montrose)	O'Grady, J.
Atherley-Jones, L.	Hardle, J. Keir (Merthyr Tydvil)	Parker, James (Halifax)
Baker, Sir John (Portsmouth)	Hardy, George A. (Suffolk)	Partington, Oswald
Balfour, Robert (Lanark)	Harmsworth, R. L. (Caithness-sh.)	Pearce, Robert (Staffs, Leek)
Barnard, E. B.	Hart-Davies, T.	Pease, Rt. Hon. J. A. (Saff. Wald.)
Barnes, G. N.	Harvey, W. E. (Derbyshire, N.E.)	Pirle, Duncan V.
Barran, Sir John Nicholson	Haslam, Lewis (Monmouth)	Pointer, J.
Barry, Redmond J. (Tyrone, N.)	Hedges, A. Paget	Ponsonby, Arthur A. W. H.
Beauchamp, E.	Helme, Norval Watson	Priestley, Arthur (Grantham)
Bell, Richard	Henderson, J. McD. (Aberdeen, W.)	Rea, Rt. Hon. Russell (Gloucester)
Belloc, Hilaire Joseph Peter R.	Higham, John Sharp	Rea, Walter Russell (Scarborough)
Benn, W. (Tower Hamlets, St. Geo.)	Hobart, Sir Robert	Rees, J. D.
Bennett, E. N.	Hobhouse, Rt. Hon. Charles E. H.	Rendall, Athelstan
Berridge, T. H. D.	Hodge, John	Richards, T. F. (Wolverhampton, W.)
Black, Arthur W.	Hope, W. H. B. (Somerset, N.)	Roberts, Charles H. (Lincoln)
Boulton, A. C. F.	Horniman, Enslie John	Roberts, G. H. (Norwich)
Bowerman, C. W.	Howard, Hon. Geoffrey	Robson, Sir. William Snowdon
Bramsdon, Sir T. A.	Hudson, Walter	Roch, Walter F. (Pembroke)
Brigg, John	Hyde, Clarendon G.	Roe, Sir Thomas
Bright, J. A.	Idris, T. H. W.	Rogers, F. E. Newman
Brunner, J. F. L. (Lancs., Leigh)	Illingworth, Percy H.	Rowlands, J.
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Isaacs, Rufus Daniel	Russell, Rt. Hon. T. W.
Burns, Rt. Hon. John	Jenkins, J.	Rutherford, V. H. (Brentford)
Burt, Rt. Hon. Thomas	Johnson, John (Gateshead)	Samuel, Rt. Hon. H. L. (Cleveland)
Byles, William Pollard	Jones, Sir D. Brynmor (Swansea)	Scarisbrick, Sir T. T. L.
Cawley, Sir Frederick	Jones, Leif (Appleby)	Schwann, Sir C. E. (Manchester)
Channing, Sir Francis Aliston	Jones, William (Carnarvonshire)	Seely, Colonel
Clough, William	Jowett, F. W.	Shackleton, David James
Collins, Stephen (Lambeth)	Kekewich, Sir George	Shaw, Sir Charles E. (Stafford)
Collins, Sir Wm J. (St. Pancras, W.)	Laidlaw, Robert	Sherwell, Arthur James
Compton-Rickett, Sir J.	Lamb, Ernest H. (Rochester)	Shipman, Dr. John G.
Corbett, A. Cameron (Glasgow)	Lambert, George	Silcock, Thomas Ball
Corbett, C. H. (Sussex, E. Grinstead)	Lamont, Norman	Simon, John Allsebrook
Cotton, Sir H. J. S.	Layland-Barratt, Sir Francis	Snowden, P.
Cross, Alexander	Lehmann, R. C.	Stanger, H. Y.
Davies, David (Montgomery Co.)	Lever, A. Levy (Essex, Harwich)	Steadman, W. C.
Davies, Ellis William (Eifion)	Levy, Sir Maurice	Stewart-Smith, D. (Kendal)
Davies, Sir W. Howell (Bristol, S.)	Lewis, John Herbert	Summerbell, T.
Dewar, Arthur (Edinburgh, S.)	Lloyd-George, Rt. Hon. David	Taylor, John W. (Durham)
Dewar, Sir J. A. (Inverness-sh.)	Lupton, Arnold	Thomas, Sir A. (Glamorgan, E.)
Duckworth, Sir James	Macdonald, J. M. (Falkirk Burghs)	Thompson, J. W. H. (Somerset, E.)
Duncan, C. (Barrow-In-Furness)	Maclean, Donald	Tomkinson, James
Duncan, J. Hastings (York, Otley)	M'Callum, John M.	Toulmin, George
Dunne, Major E. Martin (Walsall)	M'Laren, H. D. (Stafford, W.)	Trevelyan, Charles Philips
Edwards, Sir Francis (Radnor)	Mallet, Charles E.	Verney, F. W.
Essex, R. W.	Markham, Arthur Basil	Wadsworth, J.
Everett, R. Lacey	Marnham, F. J.	Walker, H. De R. (Leicester)
Ferens, T. R.	Menzies, Sir Walter	Walsh, Stephen
Ferguson, R. C. Munro	Middlebrook, William	Ward, John (Stoke-upon-Trent)
Findlay, Alexander	Molteno, Percy Alport	Ward, W. Dudley (Southampton)
Foster, Rt. Hon. Sir Walter	Montagu, Hon. E. S.	Wardle, George J.
Fullerton, Hugh	Montgomery, H. G.	Warner, Thomas Courtenay T.
Furness, Sir Christopher	Morse, L. L.	Wason, John Cathcart (Orkney)
Gibb, James (Harrow)	Murray, Capt. Hon. A. C. (Kincard.)	Waterlow, D. S.
Glendinning, R. G.	Murray, James (Aberdeen, E.)	Watt, Henry A.
White, J. Dundas (Dumbartonshire)	Wilkie, Alexander	Wood, T. M'Kinnon
White, Sir Luke (York, E.R.)	Williamson, Sir A.	Yoxall, Sir James Henry
Whitehead, Rowland	Wilson, Hon. G. G. (Hull, W.)
Whittaker, Rt. Hon. Sir Thomas P.	Wilson, P. W. (St. Pancras, S.)	TELLERS FOR THE AYES.—Captain
Wiles, Thomas	Wilson, W. T. (Westhoughton)	Morton and Mr. Fuller.
NOES.
Acland-Hood, Rt. Hon. Sir Alex F.	Goulding, Edward Alfred	Ratcliff, Major R. F.
Balcarres, Lord	Guinness, Hon. R. (Haggerston)	Rawlinson, John Frederick Peel
Baldwin, Stanley	Guinness, Hon. W. E. (B. S. Edmunds)	Renwick, George
Banner, John S. Harmood-	Hardy, Laurence (Kent, Ashford)	Roberts, S. (Sheffield, Eccleshall)
Baring, Captain Hon. G. (Winchester)	Hill, Sir Clement	Rutherford, John (Lancashire)
Bull, Sir William James	Hills, J. W.	Rutherford, Watson (Liverpool)
Carlile, E. Hildred	Joynson-Hicks, William	Salter, Arthur Clavell
Carson, Rt. Hon. Sir Edward H.	Kennaway, Rt. Hon. Sir John H.	Smith, Abel H. (Hertford, East)
Clyde, J. Avon	Kimber, Sir Henry	Stanier, Seville
Coates, Major E. F. (Lewisham)	King, Sir Henry Seymour (Hull)	Starkey, John R.
Cochrane, Hon. Thomas H. A. E.	Lambton, Hon. Frederick William	Staveley-Hill, Henry (Staffordshire)
Courthope, G. Loyd	Lane-Fox, G. R.	Stone, Sir Benjamin
Craig, Captain James (Down, E.)	Law, Andrew Bonar (Dulwich)	Thomson, W. Mitchell- (Lanark)
Craik, Sir Henry	Meysey-Thompson, E. C.	Valentia, Viscount
Dickson, Rt. Hon. C. Scott	Mildmay, Francis Bingham	Walker, Colonel W. H. (Lancashire)
Doughty, Sir George	Morpeth, Viscount	Warde, Col. C. E. (Kent, Mid)
Douglas, Rt. Hon. A. Akers-	Morrison-Bell, Captain	Winterton, Earl
Faber, George Denison (York)	Newdegate, F. A.	Wortley, Rt. Hon. C. B. Stuart-
Fell, Arthur	Nicholson, Wm. G. (Petesfield)
Forster, Henry William	Pease, Herbert Pike (Darlington)	TELLERS FOR THE NOES.—Sir
Gardner, Ernest	Powell, Sir Francis Sharp	Gilbert Parker and Viscount
Gooch, Henry Cubitt (Peckham)	Randles, Sir John Scurrah	Dalrymple.

Mr. NEWDEGATE

I ask leave to withdraw my Amendment.

The DEPUTY-CHAIRMAN

There can be no intervention during the putting of the Question.

Question, "That those words be there inserted," put, and negatived.

Mr. LAURENCE HARDY moved, in Sub-section (1), to leave out the words "and of all mineral wayleaves."

At present we have had no information from the Government as to the reason of the inclusion of wayleaves. If we take the argument used in reference to the previous Amendment, that the whole question is a matter of revenue, and we really consider whether it is a convenience or not for the State to collect it, then there can be no argument for the collection of a tax on wayleaves, because, as was pointed out by the Royal Commission, the whole of the wayleaves on coal only amounts to £200,000, so that it means a very small tax—£10,000—while, if you take wayleaves on ironstone, they only amount to £14,000, and that means that that would only bring in £700. There is, therefore, so far as the Exchequer and "Dreadnoughts" are concerned, no reason for this additional tax on wayleaves. I assume that the tax on wayleaves has been added for the reasons given in speeches from the other side of the House in connection with the injustice done by the charging of excessive wayleaves on coal, ironstone, or other minerals. I am perfectly willing to admit that injustice may be done in some cases, Being interested in minerals, I have myself suffered great injustice from one lessor with whom I had to do, but I do not think the best way of dealing with this matter is to put a tax on wayleaves and insist that it shall be paid by the person who receives the rent for the wayleaves. After all, you are not taxing minerals in this case at all, you are going altogether outside minerals. We are told this tax was put on the thing and not on the person, but in this case you are not only not taxing minerals, but you are taxing a contract entered into by two persons for the very great convenience of one party. It certainly seems to me a very curious way to make it easier for lessees to get easements which are requisite for their industry from other persons not in any way connected with the industry at all to say to those other persons: "If you come to this agreement with your neighbour, we are going to tax you because you have done it." So far as I am concerned, if a wise measure was brought in following on the lines of the Report of the Royal Commission for dealing with cases where an entirely excessive use was made of the powers of owners by arbitration, I am not saying but that I should be in favour of it. That, however, is entirely a different matter. We have had cases of injustice produced this afternoon. The hon. Member for North Derbyshire (Mr. W. E. Harvey) mentioned some. They only confirm my contention that you ought not to tax these wayleaves. You only render it more difficult to obtain these concessions. You render the industry of coal and iron mining more difficult, because you throw extra hindrances upon these agreements to be made, and, as I have said, there is no real consistency between taxing them and the Mineral Eights Duty, as it is called. Therefore, as there is practically no revenue to be obtained out of it, as it is an outside matter altogether, and as it will be an hindrance to the industry, I beg to move the Amendment which stands in my name.

Sir W. ROBSON

A tax on wayleaves stands on practically the same basis as a tax on royalties. There is scarcely any argument that has been used or could be used with regard to the tax on royalties which would not apply with equal force, and perhaps in many cases with greater force, to a tax on wayleaves. The hon. Gentleman has said that a tax on wayleaves is in truth nothing but a tax on contracts, and he objects to a tax on contracts.

Mr. LAURENCE HARDY

No; I said it was entirely outside this tax.

Sir W. ROBSON

I notice that, although he appeared to object to the tax on wayleaves, he went on to suggest a variation in contracts which would be more serious than any tax. He admitted there were cases where wayleaves imposed a hardship upon a man who was carrying on his industry, and he said he had no objection to dealing with cases where the persons entitled to the wayleaves uses his rights in some oppressive degree by arbitration. I think arbitration, which may deprive a party to a contract of some of its intended benefits, is a more serious and a more unusual interference with a contract than any tax would be. The tax on wayleaves, as I have said, is certainly as defensible as the tax on royalties. A tax on wayleave rents is a tax on that which the owner receives in respect of a wealth he has never made. He sometimes allows it on terms which are extremely oppressive, and the tax which is imposed is not a large one, as the hon. Gentleman himself has pointed out. I confess he somewhat surprised me as to the small amount which the tax will bring in.

Mr. LAURENCE HARDY

I only referred to the Reports of the Royal Commission.

Sir W. ROBSON

I have no doubt. I am not casting any doubt on the hon. Gentleman. That, however, does not affect the essential justice of the tax. A tax on wayleaves stands exactly on the same footing as the tax on royalties, and the Government sees no reason why they should give way.

Sir GILBERT PARKER

I support the Amendment because I object to the principle of taxing facilities for trade, and that is exactly what the taxation of the Government means. It means taxing facilities for trade and industry, and it is proposed by a Government whose main principles are the principles of Free Trade and of the open door. They refuse to tax anything coming from outside, because they say it hampers trade, but they tax trade facilities within in order to get revenue. The main basis on which they do this is that the owners of wayleaves ask too much for leave to pass over or through their property. But surely the Government are not going to share in their iniquity? Do they take up that position? A man does an unjust thing in charging for wayleaves, and the Government, instead of proceeding by reasonable means—that is by arbitration—impose a tax. The hon. and learned Gentleman really put my hon. Friend in a false position. He did not suggest that an arbitration court should interfere with contracts. What is suggested is that when a difficulty arises concerning the completion of a contract, and the mining lessee found it difficult to complete his contract because of the demand of the owner of the way-leave, it should be referred to arbitration. But that is a very different thing to meddling with the contract. I put it to the hon. and learned Gentleman, as a logician, is it not the case of the Government announcing that they are proposing taxation on animal equipage for the benefit of the country at large? If they undertake to remedy that they would receive very strong support. Instead of that, however, they propose taxation of a nature which cannot commend itself to hon. Members on either side of the House. I repeat that the action of the Government in taxing facilities for trade and industry is a thing which will rebound upon them in the future when they are endeavouring to establish their doctrine of Free Trade.

Mr. MARKHAM

I wish to ask whether railway companies receiving money under these circumstances will have to pay a like contribution? I can cite a case on the Great Western Railway Company where the owners of minerals receive 3d. per ton for coal carried over a section of the railway. I received a letter this morning from the solicitor of a colliery of which I am a lessee. I want half an acre of land, and he said they would grant me wayleaves, but the terms represent something like £6,000 to £9,000. That may be reasonable, so far as wayleaves go, but it is a charge of from £6,000 to £9,000 for the privilege of carrying coal over a certain distance. If this is to be paid I think it only right and proper that the Chancellor of the Exchequer should take a share of the plunder in such a case as that.

Mr. STUART-WORTLEY

We want to understand whether this is a case of finance or revenge.

Mr. JOHN WARD

It is a case of restitution.

Mr. STUART-WORTLEY

At any rate it is a case of some word beginning with the letters "re." It is not finance at any rate; it is not business. The Attorney-General pretends that he cannot see that, but the fact remains that it is. My hon. Friend behind me is arguing that this tax, if imposed at all, will not diminish but will increase the difficulties of making terms with the owners of wayleaves. That is bad business. It is not common-sense. It is only by getting at the motive that a moderately decent case can be made out for this tax. The pretence is that it would be impossible for this tax to be laid on the shoulders of the lessee by the lessor, be cause the lessor is not in a sufficiently strong position. But, unfortunately for that argument, the Attorney-General has said, in general terms, that the rates on mineral royalties are not paid by the lessor. We know that they are collected from the occupier, and, more than that, the Attorney-General meant that not only are they collected by the lessee but that he is in such a weak position that he cannot afford to pass them on to the lessor. You cannot argue that the lessor is in such a weak position that he cannot pass them on to the lessee. These arguments are types of the absurd arguments which underly this proposal.

Mr. J. WARD

I should like to ask whether the term "wayleaves" includes wayleaves on the surface as well as underneath. Is it proposed to deal with cases like that which we have constantly brought to our attention—the case of the Great Western Railway Company, where, just outside Newport, the owner, occupier, or landlord, without doing anything whatever, so far as I can understand, for the public for the sake of industry, levies blackmail to the tune of something like £20,000 a year upon the company for allowing it to take minerals over a certain part of the railway. I certainly think a transaction of this nature should come within the cognisance of this proposed tax. I should like to call attention to the fact that the hon. Member for Gravesend stated that where you tax the owner of a mining royalty you immediately proceed to cripple industry. It seems to me that if that argument were carried to its logical conclusion, it would mean you would destroy the Income Tax and every other tax that applies to royalty owners, because the argument was if the Government imposed their tax on the mining royalty owner the royalty owner immediately proceeded to pass it on on to the proprietor, or occupier, who would pass the tax on by means of a reduction of wages, so that it filtered down to the working men in the pit. It is a moral certainty that the mine owner passes everything on to the occupier of the mine. He gets every cent out of him that he can. He does not say to the colliery proprietor, "I will not charge you quite so much royalty because there is no tax on royalties "; he gets his pound of flesh whether there is any tax or not. I think it is nearly time that the State took some share of this plunder.

Mr. NEWDEGATE

Would the hon. Member be kind enough to tell us who is the lucky person who gets £20,000 a year for minerals being carried over one mile?

Mr. G. H. ROBERTS

I should like to explain that in connection with their line to Newport Dock the Great Western Railway Company had not only to pay an extortionate charge for the land for a short piece of line, but the landowner also stipulated for wayleaves, under which he charges a halfpenny a ton for all minerals, carried over the line. I do not know the exact figure that the owner receives, but it ranges between £15,000 and £20,000 a year. I agree with my hon. Friend that a charge of that sort ought to come within the scope of this tax, and I would like to have the opinion of the hon. and learned Gentleman as to whether it does. We have heard a great deal about these taxes being imposed upon industry, but I think we must take the standpoint that this taxation is necessary owing to the increase of State expenditure. There are two methods of raising the money by taxation, and it may either be done by placing it upon those who are able to bear it or by increasing the tax on the commodities of life. For my part, I agree that the Government are moving in the right direction, because if they had put the taxation on the commodities necessary to support life it would have meant the accentuation of the poverty and the aggravation of the great social problem by which we are confronted at the present time. It is not my intention to make a speech on the subject, but I should like some reply to the case which I have mentioned.

Sir W. ROBSON

Perhaps I may explain at once that this Clause refers only to the mineral wayleaves, and does not refer to the surface wayleaves. Therefore, an Amendment with regard to surface wayleaves will not be in order, and the wayleave to which the hon. Member for Stoke referred is, I take it, of that character. I do not regard the question of those wayleaves, however, as being within the scope of the Clause.

Mr. WATSON RUTHERFORD

I think, perhaps, it has been lost sight of by the Committee in discussing this Amendment that there are three distinct kinds of wayleaves. I will not refer to the surface wayleaves, of which I know a great many, but which do not come within this Clause. The first kind of wayleave created is one which does excite and is bound to excite the indignation of everybody who has studied the subject, and it is this kind of wayleave that hon. Members below the Gangway have been referring to. It is the wayleave which occurs when the unfortunate colliery or mineral owner finds himself "cornered" and obliged to pay an exorbitant sum to somebody else for getting his minerals away. Unfortunately, that has occurred in one or two places in this country, because as the law stands to-day it gives the man who is the owner of a piece of land which is essential to somebody else's necessities a position under which he is entitled to extort his own terms, and then we have this outcry against wayleaves. It is very infrequent in its happening, and I do not think that all wayleaves ought to be judged by that standard at all, because there are hundreds of wayleaves which are perfectly reasonable transactions. As to the other category which I have mentioned I think I am right in saying that the British Islands is the only civilised country to-day where such are possible. Even in Russia and other places abroad where my business causes me to make arrangements the State has the right to regulate the amount charged for wayleaves, and if the point of this discussion was to bring an element of justice into those transactions—if that was the point, which it is not at all—I do not think there is a man on this side of the House who would not join with Members on the other side to put that question right. But as I said that is not the point. That is not what the Government are proposing to do, which is to tax all wayleaves, whether they are reasonable or, as in these two or three cases which have been quoted, unreasonable.

The second kind of wayleaves are those where mutual facilities are granted by adjoining colliery owners for a nominal sum, and because this is done the Government come down and say, "You must pay a special tax, because you are giving one another facilities to run over a few miles of road or railway." I think that is a most unreasonable proposition, and that kind of wayleave comes within the description of the hon. Member for Gravesend (Sir G. Parker), who said the Government were actually going to tax trading facilities. The wayleave, which is of a most ordinary kind, is where a colliery owner spends a large amount of money in putting down shafts, erecting engines, and so forth, and ventilating, and the proprietor of another colliery happens to acquire from an adjoining owner some minerals underneath the ground which require to come up through the first colliery owner's shaft. Then the owner of the mineral has to pay under a wayleave for getting the coal or mineral. It is a common practice under those circumstances for some small sum to be charged by way of wayleave, and we object to this indiscriminate taxation of all these wayleaves, whether they are a great convenience or not just because there happen to be one or two cases which people know of where exorbitant terms have been charged. It seems to me to be rather an unreasonable proposal when there is no discrimination made in respect of the different classes of wayleaves, and it seems to me to be a tax upon trading facilities which no Government and no Liberal Government ought to adopt.

Mr. ARNOLD LUPTON

I am rather surprised to hear people talking of this as a tax upon industry and a tax upon the people who work the mines of the country. It is just a small fraction of an enormously heavy tax which is levied by the owners of the soil who put a tax of 6d. a ton on and make a complaint that the Government want to take one-twentieth part of it from them. I hope the Government will make no concessions whatever. I entirely disagree with putting on a tax and then having it whittled away. Once you begin allowing a thing to be whittled away there is very little left. I am one of those poor chaps who have to pay these things as an agent for people who work mines. If you have a tramway on the surface you have to pay a wayleave before you can get your coal away. Sometimes you have to pay a wayleave for the right to draw the minerals up the shaft. If the industry of this country can stand the wayleaves which are paid to the owners of the soil the owners of the soil can bear the very insignificant percentage which the Government is asking.

Mr. MARKHAM

I think we ought to have the Chancellor of the Exchequer here, because this is a very important point. I do not think the Attorney-General can be aware that these wayleaves were estimated to produce £200,000 in 1879. The bulk of that was derived from Durham—£97,600, principally in respect of surface wayleaves. The instance I gave a few minutes ago of half an acre of land is merely bringing coal over a portion of the landlord's surface. Surely a case of that kind ought not to escape. The bulk of the wayleaves are surface wayleaves. Has the Attorney-General read the Definition Clause as relating to minerals?

Sir W. ROBSON

That makes it perfectly clear.

Mr. MARKHAM

I do not think it is perfectly clear. Legal gentlemen always differ so much on the construction of any clause that, after all, the layman has to work the thing in the long run. The definition is:— The expression 'mineral wayleave' means any wayleave, airleave, or water-leave granted to or enjoyed by a working lessee for the purpose of access to or the conveyance of minerals or the ventilation or the drainage of his mine or otherwise in connection with the working of the minerals. The surface wayleave is in connection with the minerals, and it has access to the screens in many places, where very often the screens happen to be on different land from where the coal is actually worked. Before the Clause is passed, in view of the magnitude of the question and the fact that the bulk of the wayleave royalty owners are going to escape scot-free, I hope the Attorney-General will give us some indication that he will bring the matter before the Chancellor of the Exchequer with the view of having the Clause amended, if the definition is what the Chancellor has said. May I make a personal explanation as to what fell from the hon. Member below the Gangway, who referred to Lord Tredegar? I happen to be a lessee of Lord Tredegar, and in the whole of the United Kingdom I believe there is not a single landlord who has carried out his obligations to the public in a more generous way than he has. The company I am connected with, which is Lord Tredegar's largest company, some years ago was in difficulties, and Lord Tredegar gave us £50,000 to help us to sink a colliery and let us off our rents for a period of years to get us out of our difficulty. If any landlord has fulfilled his obligations to the public it is Lord Tredegar, above all others.

Mr. G. N. BARNES

I wish to associate myself with the last two speakers in the appeal to the Attorney-General that this matter may be reconsidered. The statement we have just heard came as a revelation to me, because nine men out of ten in this House thought when this was proposed the other day it would apply to surface wayleaves as well as those underground. Having regard to the fact that there is no essential difference between a surface and an underground wayleave and that each is based upon a monopoly and the power of the landlord to exact this tribute from the people working the mine, they ought to be upon the same footing and both subject to this tax. May I say, with the concurrence of my colleague, that when he mentioned the name of Lord Tredegar it was simply as an illustration, and not as casting any slur upon him. We make a strong appeal to the Attorney-General to have the matter further considered, with a view to including surface wayleaves as well as those underground, and so making this proposal at least consistent.

Mr. STUART-WORTLEY

I do not dispute in the least that it is quite as possible, in regard to surface wayleaves, for the owner to be unreasonable as it is in regard to underground wayleaves. But is there not this profound difference between the two, that where you have to grant a surface wayleave you are granting the surface out and out? You are making it impossible to grow anything or build anything on the surface for whatever length of time the wayleave is granted. Is not the owner hit in respect of the profit he is making out of what he is getting on the surface by some one or other of the taxes already contained in other parts of the Bill? Surely it will not be proposed to tax him a second time over.

Sir GILBERT PARKER

If the Attorney-General is right in his interpretation of the Clause it would appear that, for instance, wayleaves to slate quarries, chalk quarries, and clay land were all excluded from the intention of the Government when they drafted this Clause. We do not support the taxation of wayleaves, but it is well to understand exactly what the Government mean. If the Government mean to exclude wayleaves for quarries, for chalk, clay, and slate, they are certainly not in the position of drawing a distinction between one kind of wayleave and another which was not apparent to any single Member of the House who read the Clause or has read this definition.

Sir W. ROBSON

I have not the slightest objection to the meaning which hon. Members think ought to be given to the expression "wayleaves." I took the two cases put to me by my hon. Friend the Member for Stoke-on-Trent (Mr. John Ward). One was the case of a road made by a railway company, and the other was the case of a road to docks. My duty is to construe the Clause as drafted. My business is to see that the drafting carries out the intention of the Government. I do not know what minerals were comprised in the original estimate of the Chancellor of the Exchequer. It may very well be that the Clause as I interpret it requires modification in order to include all the wayleaves which the Government intend to include. I do not say that this Clause as drafted includes all the wayleaves possible. If you are dealing with the way-leave to a quarry, or with a mine worked for some considerable area of the surface, otherwise than by the shaft, I think that in such cases this definition would apply. That is a matter which will have to be considered when I have an opportunity of conferring with those by whom the estimate was framed as to what precisely they mean to include.

Mr. NEWDEGATE

I think what has been said by the Attorney-General shows how loosely this Bill is being conducted in the House of Commons.

Sir W. ROBSON

That observation is quite without justification. As a law officer I have a duty to perform to the House. It is for me to say what the meaning of the Clause is as drafted, and I must object to charges of carelessness. They are unfair.

Mr. NEWDEGATE

The last thing I would wish is to be discourteous to anyone, and especially to the Attorney-General. One of his own supporters, the hon. Member for Mansfield (Mr. Markham) drew attention to the definition of "mineral wayleave" on page 28 of the White Paper, which is as follows: "The expression 'mineral wayleave' means any wayleave, airleave, or water-leave granted to or enjoyed by a working lessee for the purpose of access to or the conveyance of the minerals or the ventilation or drainage of his mine or otherwise in connection with the working of the minerals." That was what led me to refer to the matter. In connection with a good many collieries roads have been constructed at great expense by the proprietors of the mine in order to get the coal away. I know cases where the proprietors of the mine owning the royalties have gone to great expense in order to connect the collieries with a canal. This should be made absolutely clear, for it would foe unfair that owners who have constructed ways between collieries and canals should pay a tax on wayleaves because the coal is taken away by these wayleaves. I think we ought to know exactly what the Government do mean without any doubt at all. I think we ought to have the Chancellor of the Exchequer here or some Member of the Government who knows what the Bill means. It should not be left in the hands of members of the legal profession who are not quite sure what the Bill means.

Mr. J. WARD

There is no doubt that the two cases to which I drew attention are quite exceptions. I quite see the difference between a road into a dock and a road in connection with a colliery. While the Attorney-General's statement may be correct in regard to the cases to which I called attention, I think at the same time that the position taken up by the hon. Member for Mansfield (Mr. Markham) is also absolutely correct. There may be a wayleave in connection with a mineral property, even though it is on the surface. I should like that to be definitely stated. I should like also if the Attorney-General would make a statement that some consideration will be paid even to the two cases I mentioned. They are not novel cases. I think, therefore, the definition requires some alteration. I may call attention to the fact that this is very often a form of wayleave which is least necessary for the working of the minerals or any industrial operation at all. I remember one case where some ballast had to be fetched across a field for the purpose of doing certain railway work. The ballast was a mile away from the railway, and none could be got nearer, but because it had to be taken over one corner of the field the whole operations had to be stopped for weeks while a settlement was being made as to how much should be paid for allowing the ballast to be taken over that corner. If proprietors put obstacles in the way of trade in that way I think the State should take cognisance of the fact and make wayleaves the subject of taxation. I hope the Attorney-General will give the Committee an assurance that this subject will be considered in the light of the discussion which has taken place.

Sir W. ROBSON

I understand that the case mentioned by the hon. Member for Mansfield was one where a claim was made by a railway company.

Mr. MARKHAM

The case is this, I am connected with a colliery company which is situated on a branch of the Great Western Railway. It is a purely mineral line. In respect of that line the railway company paid £5,000 a year merged into a fixed rent of 3d. per ton. After the equivalent of £5,000 has been paid they pay in addition 3d. a ton. I ask in that case, where the owners of the minerals are receiving 3d. a ton, would the railway company be charged? In the case of the clay and these other minerals, would the exemption which the Chancellor has promised to give in respect of the general duty on these minerals apply to wayleaves, or would the wayleaves be payable in respect of all these minerals?

Sir W. ROBSON

It was not the intention that such wayleaves should be paid in respect of minerals. It would be very undesirable that they should be minerals for the purpose of taxing wayleaves and yet not minerals for the purpose of this duty. I want to point this out, in my own justification, that the two cases which were referred to are cases in which wayleaves were not paid in connection with the working of the mine. In one case they were for the entry to a dock, and in another case they were paid by the railway company, and not by the working lessee at all, and, therefore, not in connection with working the minerals. Frequently, where these individual cases are quoted, as Members accustomed to dealing with such points know, the particular case only covers a very small area. These two eases will not be within this, and, therefore, it was assumed that even a wayleave would be exempted. I was leaving the general subject over and just dealing with the particular instances to which my attention was directed of surface wayleaves.

Mr. LAMBTON

The hon. Member for Stoke (Mr. John Ward) gave an instance of carrying ballast under contract to a railway, and said that a heavy wayleave had to be paid for carrying it across a portion of a field, but he did not tell us whether that field belonged to the proprietor of the ballast.

Mr. J. WARD

It belonged to a third person.

Mr. LAMBTON

So a third person was to be allowed to make a road over the property without having to pay for it. That is what it amounted to. A wayleave is only a payment for making or using a road across the property. Is the colliery proprietor or lessee of minerals who desires a short cut to a railway or a port or anywhere he likes to be allowed, according to the hon. Member for Stoke or according to the Attorney-General, to make use of the road without payment? The hon. Member said that sort of thing ought to be taxed.

Mr. J. WARD

Certainly.

Mr. LAMBTON

There is no reason why a man who owns a road across which minerals are to be taken should be taxed any more than the man who owns a road which is used for carrying corn. The road facilitates trade, and the man is entitled to payment for it. Most of these surface wayleaves are carrying minerals at a lower rate than if they had been sold right out. In the North of England there are a good many railway lines for the purpose of carrying minerals. It has been found that, according to the Report of the Royal Commission, these lines carry minerals at a lower rate than they would have done if the proprietors of the minerals had come to Parliament and obtained power to make a railway. To allow these wayleaves to be taxed would be absolutely unjust.

Mr. NEWDEGATE

I would ask the Attorney-General to give me an answer about canals. It is down in connection with wayleaves.

Sir W. ROBSON

What is it that you refer to when you talk about canals? It is a rather wide subject.

Mr. NEWDEGATE

The case which I named a short time ago is this. Suppose a man has a colliery which he is developing, and in order to get the coal by waterway as well as by railway he makes a canal over some portion of the land near the colliery, and he has been put to considerable expense to do so. He then, say, leases the colliery to a company, and then charges so much wayleave on all the coal which is carried along by that canal which he has made over some portion of the land from his colliery to the main canal over which the coal can get away to be dispersed to various parts of the country. Although put to great expense in making this canal, is he now, according to this Bill, to be asked to pay a wayleave duty?

Sir W. ROBSON

I should doubt whether the hon. Member has described what is, correctly speaking, a waterway at all. A charge like that for carrying along a railway or private canal is not a water-leave. A water-leave is not, after all, an expression fully unknown to the law. There are very many cases on the border line, but the hon. Member seems to have put a case below the border line—an ordinary case of a charge or toll to a person conveying goods along a canal or road for the benefit of the owner.

Mr. NEWDEGATE

What is meant by a water-leave?

The CHAIRMAN

This really arises on the Definition Clause.

Mr. LAURENCE HARDY

The Attorney-General accused me of a great want of gratitude in another Amendment. I was hoping to be able to say that I had considerable gratitude towards him for his definition of wayleave just now, but I am afraid that his late conclusions have rather

helped my idea as to what he actually did mean when he defined the word. If the surface wayleaves were left out I think it would meet a good deal of my contention. With reference to the particular case which was given you, I do not think you can make the slightest distinction between that canal and a private railway line, such as was mentioned by the Royal Commission, and which really forms the main problem of the wayleaves which are described by that Commission. They say these are practically public railways. If they were public railways you would have to take it merely as the cost of carriage over those public railways. The main part of these wayleaves happen to come from Northumberland and Durham. It would be very desirable that we should have an answer definitely on that point. The Attorney-General was hardly fair to me, I thought, when he answered me by making it appear as if I claimed that the law of contract should be set aside. As he well knows, what I alluded to in connection with wayleaves was the considered opinion of the Royal Commission suggesting that a Court, something like the Railway Commission, should be set up to which cases could be referred which were clearly of the character which has been described to us. That is what I alluded to. It is rather curious that the very last line of this very Clause which we are discussing says the difference is to be "borne by the immediate lessor notwithstanding any contract to the contrary." Therefore, when we consider the Clause, they are not so very regardless of the law of contract.

Mr. WATSON RUTHERFORD

A most important undertaking was recently formed in Wales by fourteen or fifteen persons, who subscribed money among themselves to get drainage wayleaves. By the next Definition Clause we find that "wayleave" includes drainage wayleaves Is it seriously contended that these people have to pay the tax in respect of these drainage wayleaves? It seems to me to illustrate the extreme injustice of this tax upon wayleaves.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 217; Noes, 80.

Division No. 742.]	AYES.	[10.15 p.m.
Abraham, William (Rhondda)	Allen, Charles P. (Stroud)	Barker, Sir John
Adkins, W. Ryland D.	Ashton, Thomas Gair	Barnard, E. B.
Agnew, George William	Atherley-Jones, L.	Barnes, G. N.
Allen, A. Acland (Christchurch)	Balfour, Robert (Lanark)	Barran, Sir John Nicholson
Barry, Redmond J. (Tyrone. N.)	Helme, Norval Watson	Pease, Rt. Hon. J. A. (Saff. Wald.)
Beauchamp, E.	Henderson, J. McD. (Aberdeen, W.)	Pirie, Duncan V.
Bell, Richard	Henry, Charles S.	Pointer, J.
Belloc, Hilaire Joseph Peter R.	Higham, John Sharp	Pollard, Dr. G. H.
Benn, W. (Tower Hamlets, St. Geo.)	Hobart, Sir Robert	Ponsonby, Arthur A. W. H.
Bennett, E. N.	Hobhouse, Rt. Hon. Charles E. H.	Power, Patrick Joseph
Berridge, T. H. D.	Hodge, John	Price, C. E. (Edinburgh, Central)
Birrell, Rt. Hon. Augustine	Holt, Richard Durning	Priestley, Arthur (Grantham)
Black, Arthur W.	Hope, John Deans (File, West)	Rea, Rt. Hon. Russell (Gloucester)
Boulton, A. C. F.	Hope, W. H. B. (Somerset, N.)	Rea, Walter Russell (Scarborough)
Bowerman, C. W.	Horniman, Emslie John	Reddy, M.
Brigg, John	Howard, Hon. Geoffrey	Rendall, Athelstan
Bright, J. A.	Hudson, Walter	Richards, T. F. (Wolverhampton, W.)
Brunner, J. F. L. (Lancs., Leigh)	Hyde, Clarendon G.	Ridsdale, E. A.
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Idris, T. H. W.	Roberts, Charles H. (Lincoln)
Burns, Rt. Hon. John	Illingworth, Percy H.	Roberts, G. H. (Norwich)
Burt, Rt. Hon. Thomas	Isaacs, Rufus Daniel	Robson, Sir William Snowdon
Buxton, Rt. Hon. Sydney Charles	Jenkins, J.	Roch, Walter F. (Pembroke)
Byles, William Pollard	Johnson, John (Gateshead)	Roe, Sir Thomas
Causton, Rt. Hon. Richard Knight	Jones, Leif (Appleby)	Rogers, F. E. Newman
Cawley, Sir Frederick	Jones, William (Carnarvonshire)	Rowlands, J.
Clough, William	Jowett, F. W.	Russell, Rt. Hon. T. W.
Cobbold, Felix Thornley	Keating, M.	Rutherford, V. H. (Brentford)
Collins, Stephen (Lambeth)	Kekewich, Sir George	Samuel, Rt. Hon. H. L. (Cleveland)
Collins, Sir Wm J. (St. Pancras, W.)	King, Alfred John (Knutsford)	Scarisbrick, Sir T. T. L.
Compton-Rickett, Sir J.	Laidlaw, Robert	Schwann, Sir C. E. (Manchester)
Cooper, G. J.	Lamb, Ernest H. (Rochester)	Seely, Colonel
Corbett, A. Cameron (Glasgow)	Lambert, George	Shackleton, David James
Corbett, C. H. (Sussex, E. Grinstead)	Lamont, Norman	Shaw, Sir Charles E. (Stafford)
Cotton, Sir H. J. S.	Layland-Barratt, Sir Francis	Sherwell, Arthur James
Cowan, W. H.	Lehmann, R. C.	Shipman, Dr. John G.
Cross, Alexander	Lever, A. Levy (Essex, Harwich)	Silcock, Thomas Ball
Davies, Ellis William (Eifion)	Levy, Sir Maurice	Simon, John Allsebrook
Davies, Sir W. Howell (Bristol, S.)	Lewis, John Herbert	Stanger, H. Y.
Dewar, Arthur (Edinburgh, S.)	Lloyd-George, Rt. Hon. David	Steadman, W. C.
Dewar, Sir J. A. (Inverness-sh.)	Lough, Rt. Hon. Thomas	Stewart-Smith, D. (Kendal)
Duckworth, Sir James	Lundon, T.	Summerbell, T.
Duncan, C. (Barrow-in-Furness)	Lupton, Arnold	Taylor, John W. (Durham)
Duncan, J. Hastings (York, Otley)	Macdonald, J. M. (Falkirk Burghs)	Thomas, Sir A. (Glamorgan, E.)
Dunne, Major E. Martin (Walsall)	Maclean, Donald	Thompson, J. W. H. (Somerset, E.)
Edwards, Sir Francis (Radnor)	MacVeagh, Jeremiah (Down, S.)	Tomkinson, James
Essex, R. W.	MacVeigh, Charles (Donegal, E.)	Toulmin, George
Evans, Sir S. T.	M'Callum, John M.	Trevelyan, Charles Philips
Everett, R. Lacey	M'Laren, Sir C. B. (Leicester)	Verney, F. W.
Falconer, J	M'Laren, H. D. (Stafford, W.)	Wadsworth, J.
Ferens, T. R.	M'Micking, Major G.	Walker, H. De R. (Leicester)
Ferguson, R. C. Munro	Mallet, Charles E.	Walsh, Stephen
Fiennes, Hon. Eustace	Markham, Arthur Basil	Ward, John (Stoke-upon-Trent)
Findlay, Alexander	Marnham, F. J.	Ward, W. Dudley (Southampton)
Foster, Rt. Hon. Sir Walter	Mason, A. E. W. (Coventry)	Warner, Thomas Courtenay T.
Fullerton, Hugh	Masterman, C. F. G.	Wason, Rt. Hon. E. (Clackmannan)
Furness, Sir Christopher	Menzies, Sir Walter	Wason, John Cathcart (Orkney)
Gibb, James (Harrow)	Middlebrook, William	Waterlow, D. S.
Glendinning, R. G.	Molteno, Percy Alport	Watt, Henry A.
Glover, Thomas	Montagu, Hon. E. S.	White, J. Dundas (Dumbartonshire)
Gooch, George Peabody (Bath)	Morse, L. L.	White, Sir Luke (York, E.R.)
Greenwood, G. (Peterborough)	Muldoon, John	Whitehead, Rowland
Gulland, John W.	Murray, Capt. Hon. A. C. (Kincard.)	Whittaker, Rt. Hon. Sir Thomas P.
Hall, Frederick	Myer, Horatio	Wiles, Thomas
Harcourt, Robert V. (Montrose)	Nannetti, Joseph P.	Wilkie, Alexander
Hardie, J. Keir (Merthyr Tydvil)	Nicholson, Charles N. (Doncaster)	Williamson, Sir A.
Harmsworth, Cecil B. (Worcester)	Norman, Sir Henry	Wilson, Hon. G. G. (Hull, W.)
Harmsworth, R. L. (Caithness-sh.)	Nuttall, Harry	Wilson, Henry J. (York, W.R.)
Hart-Davies, T.	O'Brien, Patrick (Kilkenny)	Wilson, W. T. (Westhoughton)
Harvey, W. E. (Derbyshire, N.E.)	O'Donnell, C. J. (Walworth)	Wood, T. M'Kinnon
Haslam, Lewis (Monmouth)	O'Grady, J.
Hazel, Dr. A. E. W.	O'Malley, William
Hazleton, Richard	Parker, James (Halifax)	TELLERS FOR THE AYES.—Captain
Healy, Timothy Michael	Partington, Oswald	Norton and Mr. Fuller.
Hedges, A. Paget	Pearce, Robert (Staffs, Leek)
NOES.
Acland-Hood, Rt. Hon. Sir Alex F.	Bowles, G. Stewart	Craik, Sir Henry
Arkwright, John Stanhope	Bull, Sir William James	Dalrymple, Viscount
Balcarres, Lord	Carlile, C. Hildred	Doughty, Sir George
Baldwin, Stanley	Carson, Rt. Hon. Sir Edward H.	Douglas, Rt. Hon. A. Akers-
Balfour, Rt. Hon. A. J. (City, Lond.)	Cecil, Lord R. (Marylebone, E.)	Faber, George Denison (York)
Banbury, Sir Frederick George	Coates, Major E. F. (Lewisham)	Faber, Capt. W. V. (Hants, W.)
Banner, John S. Harmood-	Cochrane, Hon. Thomas H. A. E.	Fell, Arthur
Baring, Captain Hon. G. (Winchester)	Courthope, G. Loyd	Forster, Henry William
Beckett, Hon. Gervase	Craig, Captain James (Down, E.)	Gardner, Ernest

Gooch, Henry Cubitt (Peckham)	M'Arthur, Charles	Smith, Abel H. (Hertford, East)
Goulding, Edward Alfred	Meysey-Thompson, E. C.	Stanler, Seville
Gretton, John	Mildmay, Francis Bingham	Starkey, John R.
Guinness, Hon. R. (Haggerston)	Morpeth, Viscount	Staveley-Hill, Henry (Staffordshire)
Guinness, Hon. W. E. (B. S. Edmunds)	Morrison-Bell, Captain	Thomson, W. Mitchell- (Lanark)
Hamilton, Marquess of	Nicholson, Wm. G. (Petersfield)	Valentia, Viscount
Harris, Frederick Leverton	Oddy, John James	Walker, Colonel W. H. (Lancashire)
Helmsley, Viscount	Parker, Sir Gilbert (Gravesend)	Warde, Col. C. E. (Kent, Mid)
Hermon-Hodge, Sir Robert	Pease, Herbert Pike (Darlington)	Williams, Col. R. (Dorset, W.)
Hill, Sir Clement	Pretyman, E. G.	Willoughby de Eresby, Lord
Hills, J. W.	Randles, Sir John Scurrah	Wilson, A. Stanley (York, E.R.)
Hope, James Fitzalan (Sheffield)	Ratcliff, Major R. F.	Winterton, Earl
Hunt, Rowland	Rawlinson, John Frederick Peel	Wortley, Rt. Hon. C. B. Stuart-
Joynson-Hicks, William	Renton, Leslie	Younger, George
Kimber, Sir Henry	Renwick, George
Lambton, Hon. Frederick William	Roberts, S. (Sheffield, Eccleshall)
Lane-Fox, G. R.	Rutherford, John (Lancashire)	TELLERS FOR THE NOES.—Mr. Laurence Hardy and Mr. Newdegate.
Law, Andrew Bonar (Dulwich)	Rutherford, Watson (Liverpool)
Lockwood, Rt. Hon. Lt.-Col. A. R.	Salter, Arthur Clavell

Mr. WATSON RUTHERFORD moved, after the word "the" ["at the rate in each case"], to insert the word "graduated."

I shall not press this Amendment if the Government do not choose to adopt it, but I put it down after consultation with many people interested in various kinds of mines. Their suggestion was that if 1s. in the £ on royalties and wayleaves is taken as the criterion of a fair tax where the full rack rent or return is exacted, it would be only reasonable in cases—and there are many such all over the country—where the owners of the minerals have given most favourable terms in order to develop trade and confer a benefit on the localities that the 1s. should be graduated downwards. The word "graduated" which I now propose to insert is only a part of the Amendment, the remainder, which comes later, being to add after "rental value" the words "where the rent or royalty reserved and payable is not less than one-twelfth part of the merchantable value of the mineral when gotten, and ninepence where such rent or royalty is less than one-twelfth and not less than one-eighteenth part, and sixpence when less than one-eighteenth and not less than one-twenty-fourth part, and threepence when less than one-twenty-fourth part." The idea is to inflict a lighter tax in all those cases where for various reasons the owners of the minerals are allowing them to be worked on most favourable terms. If a tax of this kind is to be imposed at all it is only reasonable that all these criminals, the owners of minerals, should not be treated alike. They are not all equally exacting their pound of flesh in the way described from the benches opposite, and some consideration should be given to those who are treating their working lessees on the most favourable terms. It is with that view I move the Amendment.

Mr. LLOYD-GEORGE

In the course of these Debates I have many times heard the statement that simplicity is one of the merits of a tax. Certainly it would not be a merit of this tax if the hon. Member's Amendment were carried. I cannot imagine anything more complicated or more difficult to carry out. The Commissioners would have to find, first of all, what the value of the material was. That value fluctuated not merely from month to month, or from week to week, but from day to day, and the royalty which at one point might be one-eighth of the value might on the following day be one-fifteenth. The value sometimes fluctuates on the exchange even from hour to hour. How you are to find out what it is at a giv en moment I really think would be difficult to say. It is one of those high ideals which it is almost impossible to attain in this world. Therefore I do not see the possibility of its being carried out. Besides, I do think there is something to be said for the fact that a tax of one-eighteenth in one case and one-fifteenth in another is not a criterion of the merits of the royalty. You may have a 4d. royalty in one case which in effect is higher than a 6d. royalty in another case. When you talk of the difficulties of the case it may be that a low royalty may be excessive in one case and a high one in another. On these grounds this Amendment cannot possibly be accepted.

Mr. BALFOUR

I am glad that the right hon. Gentleman thinks that there are limits to the omniscience of the Government valuer. On that point we are agreed. But as my hon. Friend does not press his Amendment, I have nothing further to say.

Mr. WATSON RUTHERFORD

I quite appreciate the difficulties of the situation, but so many difficulties have been surmounted by the Government in so marvellous a manner in this most wonderful Budget that I did not despair of the Chancellor of the Exchequer doing some justice in carrying out this Amendment, difficult as it undoubtedly would be. I quite realise that there is scarcely time between now and the end of the financial year to grapple with this, and in that spirit I beg to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. SAMUEL ROBERTS moved to leave out the words "one shilling" ["at the rate in each case of one shilling"], and to insert instead thereof the word "sixpence."

The principal reason I ask the Committee and the Government to accept this Amendment is this: that the Chancellor of the Exchequer has made a change in this duty. The original tax was a tax on un-gotten minerals. The right hon. Gentleman found that was not practicable. You cannot value things when you do not know whether they are in the earth or not. Therefore, after a series of negotiations the Chancellor made an alteration, and changed his duty from a tax on ungotten minerals to a tax on royalties. When we had a proposed tax on ungotten minerals he estimated the revenue from that tax to be £175,000 a year. Now he has changed it he estimates the revenue to be £350,000. Therefore in making the change from a tax on ungotten minerals to a tax on royalties he is taking advantage, if I may put it in that way, to double the amount of revenue which the Government will receive. Hon. Gentlemen opposite say "Hear, hear." I do not think myself that it is a fair thing to have done. What the right hon. Gentleman did was to change the form in which he would get the money, and in changing the form he has doubled the revenue. Is that a fair and honest thing to do? [Several HON. MEMBERS: "Why not?"] When the deputation from the Mining Association waited upon the Chancellor in July there was a long discussion between him and the various members of the deputation, and towards the end of the discussion the Chancellor made some remarks which showed exactly what his intention was at that time. He said:— Well, now you say this is the very worst form for raising the money. I think I am entitled to say as a Minister, is there any other form in which it would be less objectionable to yon? Do you object altogether to mineral rights being taxed in any shape or form? If you do not, is there any form in which you think it would be preferable?

It was the form the Chancellor was on, and he had no intention of doubling the amount of the tax at that time. There is one other passage to which I should like to direct attention:— The suggestion, so far as I can gather, is this, and I think the hint is given as broadly as you can venture to give it— There was no hint given— seeing you are representatives of the colliery proprietors and not the royalty owners, is that I should take the money, not in the form of a tax upon ungotten minerals or even on the capitalised value of mineral rights, but on the amount of the royalty which the owner actually receives. Very well, I will take that. He practically stated at the time he would take the same amount of money (£150,000) in the form of a tax upon royalties, but he never gave the slightest hint he was going to take double that amount of money. It was a contract between the right hon. Gentleman and those who were engaged in this industry that the only change he was going to make was a change in the form of getting the money. That is my principal reason for moving this Amendment that the tax be reduced to 6d. instead of 1s., as the 6d. will bring in the amount that the Chancellor of the Exchequer expected to get in the first instance. The tax of 1s. in 20s. on royalties will practically double the Income Tax which the royalty owner will have to pay. He will have the Increment Value Duty to pay, and he will have to pay the extra Death Duties as well. I ask the Chancellor to carry out the pledge he gave at this meeting that he would change the form of the tax, as he certainly never said anything about changing the amount.

Mr. LLOYD-GEORGE

Does the hon. Member really suggest that the colliery proprietors who came to see me about this tax actually entered into a bargain with me at that time that mineral royalties should be taxed?

Mr. SAMUEL ROBERTS

No, certainly not. I am quite sure the right hon. Gentleman does not wish to misrepresent me. I never said anything of the sort. I said that if there was to be a tax it should be in the form which the Chancellor of the Exchequer suggested in the second instance and not in the first.

Mr. LLOYD-GEORGE

The hon. Member has not stated the whole case. I do not complain of the way he has stated his case, nor do I say that he has misrepresented what took place. What I do say is that there was no bargain so far as I am concerned. Since then I have seen some very able representatives of the mining industry, and they complain not merely of the tax on ungotten minerals but also of the Increment Charge and the Reversion Duty. They did indicate to me that as long as the Reversion Duty and the Increment Tax were dropped they would prefer a heavier charge upon mining royalties. They, of course, objected to the whole thing. I do not suggest that there was anything in the nature of a bargain which binds them. Nothing has passed between us which in the slightest degree would fetter their action in criticising the whole of the proposals of the Government. They did, however, make it perfectly clear that if there was to be a tax on mines they preferred it to be on mining royalties. The hon. Member did not state the whole case when he said that we had substituted £350,000 for £175,000, because that is not so. All we have done is that we have dropped something which they regarded as interfering with their business a good deal. They did not want to be bothered with the reckoning up of the increment of existing collieries every 15 years, and they preferred that a 5 per cent. duty should be charged on royalties. I do not think anyone will suggest that a duty of anything less than 6 per cent. would adequately meet the case. It is not a very heavy tax to get £350,000 or £400,000 on royalties. After we decided to drop the other duties I think this was a fair compromise, and I think it will commend itself to the judgment of the Committee.

Mr. BALFOUR

There are two evidently quite distinct questions raised in the speech of my hon. Friend behind me (Mr. S. Roberts). One is the very large question—and I do not propose to enter into it now—as to the amount of the burden placed upon the owners of a particular kind of property. My hon. Friend has pointed out that the owner of this particular kind of property pays the increased Income Tax, a new duty equal to the Income Tax, and the increased Death Duties. I forget whether he pointed out, but he might have pointed out, that they do all this upon a wasting capital. That is the first point. It is all part of the great controversy between some of us on this side of the House and hon. Gentlemen opposite as to whether it is safe and honest finance for this country to choose out particular interests for special taxation. I am not going to deal with that immense question upon a special Amendment. I have dealt with it before. Then we come to the second branch of my hon. Friend's speech, which dealt with the action of the Chancellor of the Exchequer in relation to the deputations which met him in connection with the coal-owners. I know absolutely nothing about those deputations except what I have heard from my hon. Friend in his speech, and what I have heard, from the Chancellor of the Exchequer in his reply. Let me say, in the first place, that I am rather interested in one concession which the Chancellor of the Exchequer has made to the coal-owners. He has given up the Reversion Duty. I understand the Reversion Duty is a duty which is to be levied by the State upon the value of a property which comes back to the owner in an enhanced form. What the enhanced value of an exhausted coalfield may happen to be, or what the expectations of the Chancellor of the Exchequer on that subject may be, or what the concession may amount to, I leave it to the coal-owner whose particular seams of coal are in process of exhaustion to determine; but that is not the kind of concession I would go down on my knees to thank a militant Chancellor of the Exchequer for having given to me in response to my appeals. Then, putting that aside, we come to the more general question between my hon. Friend and the Chancellor of the Exchequer. The Chancellor of the Exchequer has repudiated—and I am sure he is right in repudiating—the idea of a bargain. I am sure he would not tell us there is no bargain if there had been a bargain made, and I entirely and absolutely accept his statement on that subject. Nevertheless, I think an interesting light is thrown by this transaction upon the methods of the Chancellor of the Exchequer.

I remember that in the early stages of this Budget controversy, now receding into a dim and mysterious past, the Chancellor of the Exchequer explained—whether it was in this House, or in a letter, or in reply to a deputation, or in a communication to the Press, I do not know, but, at all events, it was in some public form—that anybody who wanted to get anything out of him—and he recognised even at that stage that there were a lot of people who might want to get something—ought not to go to the Opposition, but to himself. They ought not to go to my hon. Friends or to myself and put their case which we might throw across the floor of the House in a controversial form to the Chancellor of the Exchequer. In that case he gave us all to understand he would be obdurate. He would not yield to arguments in this House.

Mr. LLOYD-GEORGE

I never said that.

Mr. BALFOUR

No, that is my gloss; but, if it is not legitimate gloss, what did the Chancellor of the Exchequer mean by saying people were not to go to the Opposition, but were to go to him. He certainly implied they would get much better terms if they went to him. That may be good policy on the part of the Chancellor of the Exchequer, but was it good policy on the part of the interests concerned? Here we have an interest. They took the Chancellor of the Exchequer exactly at his words. They said: "If we go to the Opposition there is no use in doing that. They may make convincing speeches, but nothing will be got from them. We will go straight to the Chancellor of the Exchequer. We will appeal to his tender heart and his clear head, and we may reasonably hope to extract from him what we could not expect to extract from him as the result of mere debating in Committee of the House of Commons"—a process which is well known to be exhausting if it is not very productive in results. I believe that men very able in their own business, but perhaps not very well versed in the ways of the Chancellor of the Exchequer, did go to the right hon. Gentleman. They said to him, "This is our difficulty. We do not like to see the way in which you are putting on the tax; will you alter the form?" He, in his charming manner, with his

smile and his sympathetic assurances, said, "I will change the form." They wake up one morning and find that the form is changed, for the tax is doubled. I really wonder why, after this heartless example, there is this passion for interviewing Members of the Government. Why are the Suffragettes so anxious to meet them? For my part I quite agree that to go to the Opposition is a waste of labour, if it is only to lead to the delivery of speeches which produce no practical result in the form of the Bill. But, at all events, whatever may be said against that form of ploughing the lonely furrow in barren and wasteful cultivation, surely nothing can be worse than the alternative, which is going to the Government and being received with every species of favour and kindness, and finding that while what you ask is promised to the ear, the tax is in substance actually doubled, and you have to pay twice as much for the favours of the Chancellor of the Exchequer. Such is the elasticity of the position! I recommend everybody who thinks that by deputation or by representation to any party in this House something is to be got, to bear in mind that however useless we may be to serve them we are, at any rate, very much cheaper in the end.

Question put, "That 'one shilling' stand part of the Clause."

The Committee divided: Ayes, 209; Noes, 78.

Division No. 743.]	AYES.	[11.0 p.m.
Abraham, William (Rhondda)	Buxton, Rt. Hon. Sydney Charles	Everett, R. Lacey
Adkins, W. Ryland D.	Byles, William Pollard	Ferens, T. R.
Agnew, George William	Causton, Rt. Hon. Richard Knight	Ferguson, R. C. Munro
Allen, A. Acland (Christchurch)	Cawley, Sir Frederick	Fiennes, Hon. Eustace
Allen, Charles P. (Stroud)	Clough, William	Findlay, Alexander
Ashton, Thomas Gair	Cobbold, Felix Thornley	Foster, Rt. Hon. Sir Walter
Atherley-Jones, L.	Collins, Stephen (Lambeth)	Fullerton, Hugh
Balfour, Robert (Lanark)	Collins, Sir Wm J. (St. Pancras, W.)	Furness, Sir Christopher
Barker, Sir John	Compton-Rickett, Sir J.	Gibb, James (Harrow)
Barnard, E. B.	Cooper, G. J.	Glendinning, R. G.
Barnes, G. N.	Corbett, C. H. (Sussex, E. Grinstead)	Glover, Thomas
Barran, Sir John Nicholson	Cotton, Sir H. J. S.	Gooch, George Peabody (Bath)
Barry, Redmond J. (Tyrone, N.)	Cowan, W. H.	Greenwood, G. (Peterborough)
Beauchamp, E.	Craig, Herbert J. (Tynemouth)	Gulland, John W.
Bell, Richard	Cullinan, J.	Hall, Frederick
Belloc, Hilaire Joseph Peter R.	Davies, Ellis William (Eifion)	Harcourt, Robert V. (Montrose)
Benn, W. (Tower Hamlets, St. Geo.)	Davies, Timothy (Fulham)	Hardie, J. Keir (Merthyr Tydvil)
Bennett, E. N.	Davies, Sir W. Howell (Bristol, S.)	Harmsworth, Cecil B. (Worcester)
Berridge, T. H. D.	Dewar, Arthur (Edinburgh, S.)	Harmsworth, R. L. (Caithness-sh.)
Birrell, Rt. Hon. Augustine	Dewar, Sir J. A. (Inverness-sh.)	Harvey, W. E. (Derbyshire, N.E.)
Black, Arthur W.	Dillon, John	Haslam, Lewis (Monmouth)
Boulton, A. C. F.	Duckworth, Sir James	Hazel, Dr. A. E. W.
Bowerman, C. W.	Duncan, C. (Barrow-in-Furness)	Healy, Timothy Michael
Brigg, John	Duncan, J. Hastings (York, Otley)	Hedges, A. Paget
Bright, J. A.	Dunne, Major E. Martin (Walsall)	Helme, Norval Watson
Brunner, J. F. L. (Lancs., Leigh)	Edwards, Sir Francis (Radnor)	Henderson, J. McD. (Aberdeen, W.)
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Elibank, Master of	Henry, Charles S.
Burns, Rt. Hon. John	Essex, R. W	Higham, John Sharp
Burt, Rt. Hon. Thomas	Evans, Sir S. T.	Hobart, Sir Robert
Hobhouse, Rt. Hon. Charles E. H.	Masterman, C. F. G.	Samuel, Rt. Hon. H. L. (Cleveland)
Hodge, John	Middlebrook, William	Scarisbrick, Sir T. T. L.
Holt, Richard Durning	Molteno, Percy Alport	Schwann, Sir C. E. (Manchester)
Hope, John Deans (Fife, West)	Montagu, Hon. E. S.	Seely, Colonel
Hope, W. H. B. (Somerset, N.)	Morse, L. L.	Shackleton, David James
Horniman, Emslie John	Muldoon, John	Shaw, Sir Charles E. (Stafford)
Howard, Hon. Geoffrey	Murray, Capt. Hon. A. C. (Kincard.)	Sherwell, Arthur James
Hudson, Walter	Myer, Horatio	Silcock, Thomas Ball
Hyde, Clarendon G.	Nannetti, Joseph P.	Simon, John Allsebrook
Idris, T. H. W.	Nicholson, Charles N. (Doncaster)	Stanger, H. Y.
Illingworth, Percy H.	Norman, Sir Henry	Stewart-Smith, D. (Kendal)
Isaacs, Rufus Daniel	Nuttall, Harry	Summerbell, T.
Jenkins, J.	O'Brien, Patrick (Kilkenny)	Taylor, John W. (Durham)
Johnson, John (Gateshead)	O'Donnell, C. J. (Walworth)	Thomas, Sir A. (Glamorgan, E.)
Jones, Leif (Appleby)	O'Grady, J.	Thompson, J. W. H. (Somerset, E.)
Jones, William (Carnarvonshire)	O'Malley, William	Tomkinson, James
Keating, M.	Parker, James (Halifax)	Toulmin, George
Kekewich, Sir George	Partington, Oswald	Trevelyan, Charles Philips
King, Alfred John (Knutsford)	Pearce, Robert (Staffs, Leek)	Verney, F. W.
Laidlaw, Robert	Pearson, W. H. M. (Suffolk, Eye)	Wadsworth, J.
Lamb, Ernest H. (Rochester)	Pease, Rt. Hon. J. A. (Saff. Wald.)	Walsh, Stephen
Lambert, George	Philipps, Owen C. (Pembroke)	Ward, John (Stoke-upon-Trent)
Lamont, Norman	Pirie, Duncan V.	Ward, W. Dudley (Southampton)
Layland-Barratt, Sir Francis	Pointer, J.	Warner, Thomas Courtenay T.
Lehmann, R. C.	Pollard, Dr. G. H.	Wason, Rt. Hon. E. (Clackmannan)
Lever, A. Levy (Essex, Harwich)	Ponsonby, Arthur A. W. H.	Wason, John Cathcart (Orkney)
Levy, Sir Maurice	Price, C. E. (Edinburgh, Central)	Waterlow, D. S.
Lewis, John Herbert	Priestley, Arthur (Grantham)	Watt, Henry A.
Lloyd-George, Rt. Hon. David	Rea, Rt. Hon. Russell (Gloucester)	White, J. Dundas (Dumbartonshire)
Lough, Rt. Hon. Thomas	Rea, Walter Russell (Scarborough)	White, Sir Luke (York, E.R.)
Lundon, T.	Reddy, M.	Whitehead, Rowland
Lupton, Arnold	Rendall, Athelstan	Wiles, Thomas
Macdonald, J. M. (Falkirk Burghs)	Richards, T. F. (Wolverhampton, W.)	Wilkie, Alexander
Maclean, Donald	Roberts, Charles H. (Lincoln)	Williamson, Sir A.
MacVeigh, Charles (Donegal, E.)	Roberts, G. H. (Norwich)	Wilson, Hon. G. G. (Hull, W.)
M'Callum, John M.	Robson, Sir William Snowdon	Wilson, Henry J. (York, W.R.)
M'Laren, Sir C. B. (Leicester)	Roch, Walter F. (Pembroke)	Wilson, W. T. (Westhoughton)
M'Laren, H. D. (Stafford, W.)	Roe, Sir Thomas	Wood, T. M'Kinnon
M'Micking, Major G.	Rogers, F. E. Newman
Mallet, Charles E.	Rowlands, J.	TELLERS FOR THE AYES.—Captain
Markham, Arthur Basil	Russell, Rt. Hon. T. W.	Norton and Mr. Fuller.
Marnham, F. J.	Rutherford, V. H. (Brentford)
NOES.
Acland-Hood, Rt. Hon. Sir Alex F.	Gardner, Ernest	Oddy, John James
Arkwright, John Stanhope	Gooch, Henry Cubitt (Peckham)	Powell, Sir Francis Sharp
Balcarres, Lord	Goulding, Edward Alfred	Pretyman, E. G.
Baldwin, Stanley	Gretton, John	Ratcliff, Major R. F.
Balfour, Rt. Hon. A. J. (City, Lond.)	Guinness, Hon. R. (Haggerston)	Rawlinson, John Frederick Peel
Banbury, Sir Frederick George	Hamilton, Marquess of	Renton, Leslie
Banner, John S. Harmood-	Hardy, Laurence (Kent, Ashford)	Renwick, George
Baring, Captain Hon. G. (Winchester)	Harris, Frederick Leverton	Rutherford, John (Lancashire)
Beckett, Hon. Gervase	Harrison-Broadley, H. B.	Rutherford, Watson (Liverpool)
Bowles, G. Stewart	Hay, Hon. Claude George	Salter, Arthur Clavell
Bull, Sir William James	Helmsley, Viscount	Smith, Abel H. (Hertford, East)
Carlile, E. Hildred	Hermon-Hodge, Sir Robert	Stanier, Beville
Carson, Rt. Hon. Sir Edward H.	Hill, Sir Clement	Starkey, John R.
Cecil, Lord R. (Marylebone, E.)	Hope, James Fitzalan (Sheffield)	Staveley-Hill, Henry (Staffordshire)
Clyde, J. Avon	Hunt, Rowland	Thomson, W. Mitchell- (Lanark)
Coates, Major E. F. (Lewisham)	Joynson-Hicks, William	Valentia, Viscount
Cochrane, Hon. Thomas H. A. E.	Keswick, William	Walker, Colonel W. H. (Lancashire)
Courthope, G. Loyd	King, Sir Henry Seymour (Hull)	Warde, Col. C. E. (Kent, Mid)
Craig, Captain James (Down, E.)	Lambton, Hon. Frederick William	Williams, Col. R. (Dorset, W.)
Craik, Sir Henry	Lane-Fox, G. R.	Willoughby de Eresby, Lord
Dalrymple, Viscount	Law, Andrew Bonar (Dulwich)	Wilson, A. Stanley (York, E.R.)
Dickson, Rt. Hon. C. Scott	Lockwood, Rt. Hon. Lt.-Col. A. R.	Winterton, Earl
Douglas, Rt. Hon. A. Akers-	M'Arthur, Charles	Wortley, Rt. Hon. C. B. Stuart-
Faber, George Denison (York)	Meysey-Thompson, E. C.	Younger, George
Faber, Capt. W. V. (Hants, W.)	Morpeth, Viscount
Fell, Arthur	Morrison-Bell, Captain	TELLERS FOR THE NOES.—Mr. S. Roberts and Sir J. Randles.
Forster, Henry William	Newdegate, F. A.

Mr. LAMBTON

I beg to move in paragraph (b) after the word "been" [if the right to work the minerals had been let"] to insert the words "leased to a working lessee for a term and at a rent and on conditions customary in the district."

Mr. LLOYD-GEORGE

I accept the Amendment.

Amendment agreed to.

Mr. LAURENCE HARDY

I beg to move in paragraph (b) after the word "year ["worked by the proprietor in that year"] to insert the words, "Provided that the Commissioners shall cause a copy of their valuation of such rent to be served on the owner of the land, and the owner shall have the same right of giving notice of objection and of appeal as the owner of land under the provisions of this Part of this Act."

I move the Amendment for the purpose of obtaining, in connection with the Mineral Rights Duty, a condition similar to that which was accepted by the Government in reference to the land duties. Paragraph (b) says: "Where minerals are being worked by the proprietor thereof, the amount which is determined by the Commissioners to be the sum which would have been received as rent by the proprietor in the last working year if the right to work the minerals had been leased…" That leaves to the Commissioners absolute power to determine the amount, and I think the owner of the land should have the right of giving notice of appeal.

Mr. LLOYD-GEORGE

I am quite willing that the owner of the land should have a statutory right to be served with a copy of the valuation of the rent determined by the Commissioners, but I would suggest that the latter part of the Amendment should be omitted. My reason for suggesting the leaving out of that part is that the owner of the land would have the right of appeal under Clause 22. If the hon. Member would move the Amendment in the form I suggest, I would be very happy to accept it.

Mr. LAURENCE HARDY

If the right hon. Gentleman assures me that the latter part of the Amendment is met by Clause 22, I shall withdraw the Amendment and move it in the shorter form.

Amendment, by leave, withdrawn.

Amendment made: In paragraph (b), after the word "year," to insert the words, "Provided that the Commissioners shall cause a copy of their valuation of such rent to be served on the owner of the land."—[Mr. Laurence Hardy.]

Mr. WATSON RUTHERFORD moved in Sub-section (3) after the word "in" ["and in default"] to insert the word "wilful."

There is a provided penalty of £50 for default in making the return, and the suggested Amendment is that the penalty should not apply save in cases of wilful default. The proprietor must make the return. He can be assessed if he does not, and he will be sure to make it. There is no occasion to put on this heavy penalty, but if it is to be insisted on, it is reasonable to say that it should be inflicted only in cases of wilful default.

Sir W. ROBSON

I think it would make the Clause somewhat difficult of application if you insert the word "wilful." It is difficult to prove actual wilfulness. The case in which the default is not very serious is met by the next Amendment, which we will accept.

Amendment, by leave, withdrawn.

Amendment made: In Sub-section (3) to leave out the word "of" ["of fifty pounds"] and to insert instead thereof the words "not exceeding" ["not exceeding fifty pounds"].—[Mr. Watson Rutherford.]

Mr. LAMBTON moved, in Sub-section(4) to leave out from the word "lessee" ["the working lessee"] to the end, and to insert instead thereof the words, "Provided that where under a contract or covenant made before the thirtieth day of April, nineteen hundred and nine, a lessee has agreed to pay all future taxes, rates, or assessments which may for the time being be levied, charged, or payable in respect of the mines or minerals demised by the lease or in respect of the rents or royalties payable thereunder, nothing herein contained shall alter the effect of such contract or covenant."

The Attorney-General two or three times to-day talked about contracts in a way which gave me some hope that he would accept this Amendment. If he prefers to have contracts preserved in some places and broken in others, perhaps he will explain why I am speaking now of the county Durham. I do not understand the question in other districts. In the county Durham the lessee generally agrees to pay all rates and taxes, except Income Tax and Landlord's Property Tax. The Ecclesiastical Commissioners have large tracts of coal in that county, and they lease all the coal on these conditions. A case, of which I speak from personal knowledge, is that in which a firm of colliery owners leased a large tract of land from the Commissioners. They have always paid the royalty rent, I think, of 4½d. a ton to the Ecclesiastical Commissioners. The lease was from the Ecclesiastical Commissioners on the understanding that they were to pay all rates and taxes imposed by Parliament. A few years ago one of these lessees of the Ecclesiastical Commissioners ceased working his own coal, and let the whole of it to another person, and let the coal of the Ecclesiastical Commissioners on the basis fixed with the Commissioners, that the lessee was to pay the rates and taxes. I maintain that to break a contract like that is practically breaking a contract for sale. The sale price was agreed upon on the understanding that the conditions were to be the same as those imposed by the Ecclesiastical Commissioners. The Chancellor of the Exchequer comes down and breaks that contract, which to a man who has sold his coal in this way is a very great hardship. I beg to move the Amendment, for the purpose of enabling the Government to explain why a contract between the owner and lessee is to be broken.

Mr. LLOYD-GEORGE

The hon. Gentleman has asked us to assign a reason why we insert the provision in the Clause that this tax, notwithstanding any contract to the contrary, shall fall upon the royalty owner. I can give him a precedent for it. The reason is that we want to make it perfectly clear that this tax will fall upon the royalty and not upon the industry; otherwise the royalty owner, simply by the use of general words in the contract—and I daresay a good many of these contracts do contain general words—could contract that all charges, local or imperial, whether imposed now or to be imposed, shall be paid by the lessee. We want to make it perfectly clear that the tax will fall upon the royalty owner and not upon the industry. I can give the hon. Gentleman a precedent under a Conservative Government in 1842. I can assure the hon. Gentleman they did not respect contracts less then than they do now; and they were not less pro-landlords then than now—I do not say that they could be more. I only wish to point out that this precedent was set by Sir Robert Peel, a sufficiently high authority. The precedent applies to the landlord's property tax—"that all charges except the landlord's property tax, are to fall upon the lessee." Why did they except the landlord's property tax? For the simple reason that it was to be paid by the landlord. These are the words which are used in Sir Robert Peel's great Statute of 1842, and I invite the attention of hon. Gentlemen who think we are doing something very mischievous, pernicious, and wicked in proposing this. The Section is:—"Provided always, and be it enacted, That no Contract, Covenant, or Agreement between Landlord and Tenant, or any other Persons, touching the payment of Taxes and Assessments to be charged on their respective premises, shall be deemed or construed to extend to the Duties Charged thereon under this Act, nor to be binding contrary to the Intent and Meaning of this Act; but that all such Duties shall be charged upon and paid by the respective Occupiers, subject to such Deductions and Repayments, as are by this Act authorised and allowed; and all such Deductions and Repayments shall be made and allowed accordingly, notwithstanding such Contracts, Covenants and Agreements." (C. 35, S. lxxiii.)

Mr. LAMBTON

Is that retrospective?

Mr. LLOYD-GEORGE

Certainly it is; so that if there were any general contract at that time that the tenant was to pay all those charges there is a distinct statement that no contract shall be permissible which would provide for that payment. I think it is a perfectly fair thing to do. We wish this charge to be a charge on the royalty owner and not on those who are engaged in the operation of winning the coal. I think the State has a perfect right to do so, and to say that is what we want to tax, we want to tax the royalty, we do not want to tax profit on the mines, we do not want to tax the miner or the colliery proprietor, but the man who is receiving royalty. I think we are perfectly justified in the words.

Mr. PRETYMAN

I do not think the precedent is complete, because the right hon. Gentleman would have to show that there were existing contracts in 1842 which were affected by the Statute. There are plenty of precedents from an Act which makes it illegal or void in the future contracts regarding the tax imposed by the Act. That is a common thing. Quite recently we have had the case of the Agricultural Holdings Act. It is a comparatively common case. Many precedents could be found for imposing a liability or duty, and for Parliament enacting that any contract which tends to escape or avoid that duty shall be null and void. That is a totally different thing to this. I do not say there were no existing contracts, but I say that the right hon. Gentleman has not told us so. So far as he has quoted the case it does not prove that there were existing contracts. I should think it was very improbable that there were existing contracts. As to the second part of the right hon. Gentleman's speech, as to his great anxiety to avoid placing any burden whatever upon persons who are working the coal, he has only got to look at paragraph B of this particular Clause to show that he is actually imposing a burden on them; so that I really cannot see that he can stand upon that ground. The fact is that this is distinctly a breach of contract, and we have only recently the solemn statement of the Prime Minister that whatever this Government would do, they would not sanction any breach of contract. We had that distinct statement from the Prime Minister.

In calculating the Reversion Duty the Government have avoided breach of contract by the form in which they have imposed the duty. They desired to do the same in this case by the form in which the duty was originally proposed, but they found it impossible to carry the duty in its original form, their scruples have gradually vanished, they cannot follow the path of virtue, the descent is easy, and they have gradually got lower and lower in the scale of honesty, until now they have arrived at a point when it is comparatively easy to break contracts. The right hon. Gentleman has not made good his case that there are precedents for it. It is a distinct breach of contract, and, as far as I am aware, it is the first time Parliament has distinctly enacted a law which, to the detriment of one of the two parties, breaks an existing contract.

Mr. LLOYD-GEORGE

The hon. and gallant Gentleman has suggested that the Act of 1842 has purely a prospective effect, and that any contracts which were in existence before that date, by which tenants had to pay all rates and taxes, would be outside the operation of the Act.

Mr. PRETYMAN

I did not say anything of the kind. My point was that to make this precedent complete the Chancellor of the Exchequer had to show that such contracts were in existence. I entirely admit that if there were such contracts in existence it would be a precedent; but if there were not, and it was generally known that there were not, the question would never have arisen. To make his precedent complete the right hon. Gentleman must show that there were in existence contracts which that Act did abrogate.

Mr. LLOYD-GEORGE

I can show the hon. and gallant Gentleman even that. But let us see first of all what the statement is. He says that for us to introduce a Clause into a Bill overriding existing contracts to the extent of saying that owners must pay a specific tax, whether the contract is the other way or not, is to descend in the scale of common honesty to, I think he said, the lowest depths. I say again that we are following the precedent of a real Conservative statesman, Sir Robert Peel. He had Conservative colleagues, who agreed with him, and it was the Conservative Party who supported him in carrying the Bill through. If hon. Members opposite repudiate Sir Robert Peel, they will hardly repudiate Disraeli. But says the hon. and gallant Gentleman, "Ah, Sir Robert Peel must have known that there were no such contracts at that date." This is the footnote on the Act by an admitted authority:— (The right hon. Gentleman read a passage stating that many leases and agreements for leases had been made and entered into, and that the said enactment was in effect a cautionary notice to the persons concerned that the words "except Income Tax" must be read into such agreements where it was provided that the rent should be paid free of taxes.) Anybody who knows anything about agreements is aware that in probably every agreement between landlord and tenant at that time there was a Clause that all the taxes should be borne by the tenant. There is a statement of facts. The hon. and gallant Gentleman admitted that if I had any evidence that there were agreements of that kind then my precedent was complete. I have given him my reasons; I have given him my precedents, that of Sir Robert Peel—a man held in great contempt by hon. Gentlemen opposite—[HON. MEMBERS: "No, no."]—here I am giving them the precedent of this distinguished statesman. The Act has been on the Statute Book for 60 or 70 years. It is only to-night, when we propose to extend the principle to royalties, that the dishonesty of the transaction is discovered!

Mr. STUART-WORTLEY

I have an Amendment on the Paper which raises much the same point. I may, perhaps, be permitted to say that I was perfectly well aware of the precedent of 1842 when I put down this Amendment. But I am here to contend that it is outside and distinguishable from the present case. That provision of the Income Tax Act applied universally to an immense body of taxpayers, of whom many—and many more at that date—were small tenants of houses or land whom it was desired to protect and place in a position of sufficient freedom to make good bargains. How different is the present case? Here we are dealing with men like the hon. Member for the Mansfield Division (Mr. A. B. Markham). He must be able to take care of himself? Men like Lord Joicey and Sir Hugh Bell are quite capable of making bargains and taking care of themselves, and do not need to be protected by Parliament as if they were no better than inhabitants of a congested district in the West of Ireland.

Mr. F. W. LAMBTON

I do not think the answer of the Chancellor of the Exchequer very convincing. He goes back to the year 1842. It is not necessary, because Sir Robert Peel was a Conservative statesman to accept everything he did. Personally, I think he was a much better man in 1848 than in 1842. This is a different matter from the ordinary cases spoken of in the Act of 1842.

Mr. PRETYMAN

I regret the word I used a while ago, and should like to be allowed to withdraw it.

Mr. JOHN WARD

I am bound to draw attention to what has happened during the Debates on these two Motions. I have sat for some hours listening to hon. Gentlemen above the Gangway declaring that this was an absolute tax upon industry; that the royalty owner would be sure to shift it back on the colliery proprietor, the mineowner, or the men working the mines, as the case might be. Now there is a Motion to prevent that being done they oppose it, so that evidently what they want is really that the Chancellor of the Exchequer should leave it so that it might be a tax upon production. I am delighted to think that the Chancellor of the Exchequer has resisted their attempts.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 202; Noes, 65.

Division No. 744.]	AYES.	[11.35 p.m.
Abraham, William (Rhondda)	Davies, Sir W. Howell (Bristol, S.)	Howard, Hon. Geoffrey
Adkins, W. Ryland D.	Dewar, Arthur (Edinburgh, S.)	Hudson, Walter
Agnew, George William	Dillon, John	Hyde, Clarendon
Allen, A. Acland (Christchurch)	Duckworth, Sir James	Idris, T. H. W.
Allen, Charles P. (Stroud)	Duncan, C. (Barrow-in-Furness)	Illingworth, Percy H.
Ashton, Thomas Gair	Duncan, J. H. (York, Otley)	Isaacs, Rufus Daniel
Balfour, Robert (Lanark)	Dunne, Major E. Martin (Walsall)	Jenkins, J.
Barker, Sir John	Edwards, Sir Francis (Radnor)	Johnson, John (Gateshead)
Barnard, E. B.	Elibank, Master of	Jones, Leif (Appleby)
Barnes, G. N.	Essex, R. W.	Jones, William (Carnarvonshire)
Barran, Sir John N. (Hawick B.)	Evans, Sir Samuel T.	Kekewich, Sir George
Barry, Redmond J. (Tyrone, N.)	Everett, R. Lacey	King, Alfred John (Knutsford)
Beauchamp, E.	Falconer, James	Laidlaw, Robert
Beck, A. Cecil	Ferens, T. R.	Lambert, George
Belloc, Hilaire Joseph Peter R.	Ferguson, R. C. Munro	Lamont, Norman
Benn, W. (Tower Hamlets, St. Geo.)	Fiennes, Hon. Eustace	Layland-Barratt, Sir Francis
Bennett, E. N.	Findlay, Alexander	Lehmann, R. C.
Berridge, T. H. D.	Fullerton, Hugh	Lever, A. Levy (Essex, Harwich)
Birrell, Rt. Hon. Augustine	Furness, Sir Christopher	Levy, Sir Maurice
Black, Arthur W.	Gibb, James (Harrow)	Lloyd-George, Rt. Hon. David
Boulton, A. C. F.	Glendinning, R. G.	Lough, Rt. Hon. Thomas
Bowerman, C. W.	Glover, Thomas	Lundon, Thomas
Brigg, John	Gooch, George Peabody (Bath)	Lupton, Arnold
Bright, J. A.	Greenwood, G. (Peterborough)	Macdonald, J. M. (Falkirk Burghs)
Brodie, H. C.	Gulland, John W.	Maclean, Donald
Brunner, J. F. L. (Lancs., Leigh)	Hall, Frederick	MacVeagh, Jeremiah (Down, S.)
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Harcourt, Robert V. (Montrose)	M'Callum, John M.
Burns, Rt. Hon. John	Hardle, J. Keir (Merthyr Tydvil)	M'Laren, Rt. Hon. Sir C. B. (Leices.)
Buxton, Rt. Hon. Sydney Charles	Harmsworth, Cecil B. (Worcester)	M'Laren, H. D. (Stafford, W.)
Byles, William Pollard	Harmsworth, R. L. (Caithness-shire)	M'Micking, Major G.
Causton, Rt. Hon. Richard Knight	Harvey, W. E. (Derbyshire, N. E.)	Markham, Arthur Basil
Cawley, Sir Frederick	Haslam, Lewis (Monmouth)	Marnham, F. J.
Churchill, Rt. Hon. Winston S.	Hazel, Dr. A. E.	Masterman, C. F. G.
Clancy, John Joseph	Hazleton, Richard	Middlebrook, William
Clough, William	Healy, T. M. (Louth, North)	Montagu, Hon. E. S.
Collins, Stephen (Lambeth)	Hedges, A. Paget	Morse, L. L.
Collins, Sir Wm. J. (St. Pancras, W.)	Helme, Norval Watson	Muldoon, John
Cooper, G. J.	Henry, Charles S.	Murray, Capt. Hon. A. C. (Kincard.)
Corbett, A. Cameron (Glasgow)	Higham, John Sharp	Myer, Horatio
Corbett, C. H. (Sussex, E. Grinstead)	Hobart, Sir Robert	Nannetti, Joseph P.
Cotton, Sir H. J. S.	Hobhouse, Rt. Hon. Charles E. H.	Nicholson, Charles N. (Doncaster)
Cowan, W. H.	Hodge, John	Norman, Sir Henry
Craig, Herbert J. (Tynemouth)	Holt, Richard Durning	Nuttall, Harry
Cullinan, J.	Hope, John Deans (Fife, West)	O'Brien, Patrick (Kilkenny)
Davies, Ellis William (Eifion)	Hope, W. Bateman (Somerset, N.)	O'Donnell, C. J. (Walworth)
Davies, Timothy (Fulham)	Horniman, Emslie John	O'Grady, J.
O'Malley, William	Rowlands, J.	Ward, John (Stoke-upon-Trent)
Parker, James (Halifax)	Russell, Rt. Hon. T. W.	Ward, W. Dudley (Southampton)
Partington, Oswald	Rutherford, V. H. (Brentford)	Warner, Thomas Courtenay T.
Pearce, Robert (Staffs, Leek)	Samuel, Rt. Hon. H. L. (Cleveland)	Wason, Rt. Hon. E. (Clackmannan)
Pearson, W. H. M. (Suffolk, Eye)	Scarisbrick, Sir T. T. L.	Wason, John Cathcart (Orkney)
Pease, Rt. Hon. J. A. (Saffron Walden)	Seely, Colonel	Waterlow, D. S.
Philipps, Owen C. (Pembroke)	Shackleton, David James	Watt, Henry A.
Pirie, Duncan V.	Shaw, Sir Charles Edward	White, J. Dundas (Dumbartonshire)
Pointer, Joseph	Sherwell, Arthur James	White, Sir Luke (York, E.R.)
Pollard, Dr.	Silcock, Thomas Ball	Whitehead, Rowland
Ponsonby, Arthur A. W. H.	Simon, John Allsebrook	Wiles, Thomas
Price, C. E. (Edinburgh, Central)	Stewart-Smith, D. (Kendal)	Wilkie, Alexander
Priestley, Arthur (Grantham)	Summerbell, T.	Williamson, Sir Archibald
Rea, Rt. Hon. Russell (Gloucester)	Taylor, John W. (Durham)	Wilson, Hon. G. G. (Hull, W.)
Rea, Walter Russell (Scarborough)	Thomas, Sir A. (Glamorgan, E.)	Wilson, Henry J. (York, W.R.)
Rendall, Athelstan	Thompson, J. W. H. (Somerset, E.)	Wilson, W. T. (Westhoughton)
Richards, T. F. (Wolverhampton)	Thorne, G. R. (Wolverhampton)	Winfrey, R.
Roberts, Charles H. (Lincoln)	Tomkinson, James	Wood, T. M'Kinnon
Roberts, G. H. (Norwich)	Toulmin, George
Robson, Sir William Snowdon	Trevelyan, Charles Philips
Roe, Sir Thomas	Verney, F. W.	TELLERS FOR THE AYES.—Captain
Rogers, F. E. Newman	Wadsworth, J.	Norton and Mr. Fuller
Rose, Sir Charles Day	Walsh, Stephen
NOES.
Acland-Hood, Rt. Hon. Sir Alex. F.	Gretton, John	Renton, Leslie
Balcarres, Lord	Guinness, Hon. R. (Haggerston)	Renwick, George
Baldwin, Stanley	Guinness, Hon. W. E. (Bury St. Edm.)	Rutherford, John (Lancashire)
Banbury, Sir Frederick George	Hamilton, Marquess of	Rutherford, Watson (Liverpool)
Banner, John S. Harmood-	Harris, Frederick Leverton	Salter, Arthur Clavell
Baring, Capt. Hon. G. (Winchester)	Harrison-Broadley, H. B.	Smith, Abel H. (Hertford, East)
Beckett, Hon. Gervase	Hay, Hon. Claude George	Stanier, Beville
Carlile, E. Hildred	Helmsley, Viscount	Starkey, John R.
Carson, Rt. Hon. Sir Edward H.	Hermon-Hodge, Sir Robert T.	Staveley-Hill, Henry (Staffordshire)
Clyde, J. Avon	Hill, Sir Clement	Thomson, W. Mitchell- (Lanark)
Cochrane, Hon. Thomas H. A. E.	Hope, James Fitzalan (Sheffield)	Valentia, Viscount
Courthope, G. Loyd	Hunt, Rowland	Walker, Col. W. H. (Lancashire)
Craig, Captain James (Down, E.)	Keswick, William	Warde, Col. C. E. (Kent, Mid)
Dalrymple, Viscount	King, Sir Henry Seymour (Hull)	Williams, Col. R. (Dorset, W.)
Dickson, Rt. Hon. Charles Scott	Lane-Fox, G. R.	Willoughby de Eresby, Lord
Douglas, Rt. Hon. A. Akers-	Lockwood, Rt. Hon. Lt.-Col. A. R.	Wilson, A. Stanley (York, E.R.)
Faber, George Denison (York)	Meysey-Thompson, E. C.	Wortley, Rt. Hon. C. B. Stuart-
Faber, Capt. W. V. (Hants, W.)	Morpeth, Viscount	Wyndham, Rt. Hon. George
Fell, Arthur	Morrison-Bell, Captain	Younger, George
Fletcher, J. S.	Newdegate, F. A. N.
Forster, Henry William	Pease, Herbert Pike (Darlington)	TELLERS FOR THE NOES.—Mr. Lambton and Mr. Samuel Roberts.
Gardner, Ernest	Pretyman, Ernest George
Goulding, Edward Alfred	Ratcliffe, Major R. F.

Question, "That those words be there added," put, and agreed to.

Mr. MARKHAM moved to add at the end of the Clause the words "whether made before or after the passing of this Act." So far as future agreements are concerned I am not certain whether the Clause invalidates agreements before the passing of the Act under which the lessee has covenanted to pay all future taxes, rates or assessments. To make the point clear it is necessary to make the Clause read "notwithstanding any contract to the contrary, whether made before or after the passing of this Act." If there is any doubt—and that is the opinion of one of the first mining authorities in this country—surely it is desirable that these words should be inserted to make the meaning quite clear. I hope the Attorney-General will accept this Amendment.

Mr. LLOYD-GEORGE

I do not think these words will do any harm. It is really the intention of the Government, and therefore I accept the Amendment.

Sir W. ROBSON moved to insert the following new Sub-section after the words last added, "(5) Mineral Eights Duty shall not be charged in respect of common brick clay, common brick earth or sand, chalk, limestone, or gravel."

The Committee will remember this is the list of exemptions to which the Government agreed at an earlier period of the evening. It takes common brick clay, earth, or stone, chalk, limestone or gravel outside the scope of the Mineral Rights Duty, and it takes them outside the scope of the duty, not merely in respect of the articles themselves, but also in respect of wayleaves.

Mr. PRETYMAN moved, at the end of the proposed Amendment, to add the words, "granite, building stone, or road stone." These exemptions are certainly agreeable to us as far as they go, but they do not appear to me to go quite far enough. The intention of the Amendment is to exempt all minerals below a certain value, but it is hurriedly drawn. The point is one of great difficulty, and the Chancellor of the Exchequer, with regard to one of the greatest difficulties, referred us to the law officers. We have, however, no clear light on what is a mineral. We have here a specified list of articles to be exempted, but we do not know whether they are or are not minerals. Why limestone and why not other stone used for building? Why limestone and not sandstone and road stone? If limestone is to be included it is obvious that all other material of that character, used either as building stone or as road stone, should come under the same category. You have limestone and sandstone being worked side by side almost within a few yards of each other. Only a few days ago I saw whinstone and sandstone being worked side by side in Scotland. The thing is obviously impracticable, and I would suggest that, instead of the word "limestone," the words "building stone or road stone" should be included. Granite should certainly be included. Road stone is a very well known term. I do not, of course, know what the intention of the Government is, but I take it their intention is to exclude from the operation of the tax all common stone, gravel, chalk, and material of that description, which may or may not technically be a mineral, but which is of a low value and very common. It would suffer very much more heavily than other minerals of a much higher value. It is worked close to the surface, and the cost of getting it is very small. That being so it is perfectly clear it would suffer more heavily from the tax than a much more costly mineral. On that ground I cannot see why these ordinary stones should be exempted. I therefore move to add the words "granite, building stone or road stone."

Mr. LLOYD-GEORGE

I trust that the hon. and gallant Gentleman will not press this Amendment. We have had very lengthy discussions on this subject; the claim of all these various materials have been discussed. The difficulty arises when you begin to distinguish one material from another. But we must draw a rough line somewhere in cases of this kind. There must, of course, be some measure of give and take. The hon. and gallant Member, when moving his Amendment, was gradually drawn on from one point to another, and so it might go on until you cover the whole category of minerals. Granite is a very valuable mineral. It does not interfere with industry. The people who receive the royalty have nothing to do with industry, except to share the profits. They do not give any money at all. I agree that we should have a distinction with regard to chalk. It is the people who put their money into the development who do own the royalties as a rule, but in this case it is a totally different thing, and I do not think it is possible for a distinction to be drawn between roadstone and granite and these other stones. It is really very difficult once you begin in this way. We have gone very far to meet the case of road stone, and I do not think it is possible to go any further, but I will consider it.

Mr. WALTER GUINNESS

The objection taken by the right hon. Gentleman to the definition of the hon. Gentleman was that it was too wide, but if he accepts the words "road metal" or "macadam road metal" there will be no difficulty about the concession. I do think at the present time, when it is one of the chief objects of local authorities to improve their roads, it is most undesirable to put a tax on macadam. [HON. MEMBERS: "On the royalty."] It will be eventually a tax upon the local authorities who have to buy this metal from the owners of quarries, and if the only form of metal which is to be exempt is broken up limestone and broken up macadam is to be included, undoubtedly there will be discouragement on the part of local authorities to put down granite. It would be most undesirable to compel them to go back to making roads of flint or other stones, and I think the right hon. Gentleman ought to meet the case of the local authorities who have to make these roads.

Mr. LLOYD-GEORGE

The hon. Gentleman is under a complete misapprehension. It is not the local authorities who will pay. They will probably buy the stone from one of the quarries, and it is only on the royalty which they have to pay somebody else that a tax will be charged. Supposing you buy the materials for road making from one of these great granite quarries, if they pay a royalty in respect of that quarry to the great landowner, why should that part of his royalty be exempt from this tax when the rest is charged? That illustrates the difficulty we get into when once you begin to make exemptions.

Mr. WALTER GUINNESS

It is very unusual for the majority of local authorities to pay royalties direct to landowners. In all the cases I have had experience of the local authorities buy the stone in truck loads from the quarries. The quarries are not by any means necessarily used for building stone. It is generally Derbyshire granite, and our point is that it will undoubtedly tend to raise the price if they have to pay.

Mr. ABEL SMITH

I am grateful to the Chancellor of the Exchequer for the concession he has made, but I am rather suspicious of the exclusive definition. I think it would have been better, fairer and wiser to proceed on the lines of the Amendment moved earlier in the evening. I do not see why limestone should be taxed when other stones of equally low value are not mentioned.

Mr. PRETYMAN

In the case of common minerals there will never be an annual increment on which to base the tax, because they are not considered to have any value until someone comes along who wants to work them. When they are worked the Increment Value Duty will become payable at 4s. in the £ on the whole value every year. If the owner works the

quarry he will have to pay on what would be the rental value. I will not press the Amendment, as it is on a concession.

Amendment, to proposed Amendment, by leave, withdrawn.

Mr. LAURENCE HARDY

Would it not be more convenient to bring the Amendment up on the Definition Clause of minerals? That would enable the right hon. Gentleman to consider the wording of it and to consider whether this exemption is also going to apply to the next Increment Value Duty Clause. Surely it would not be desirable to exclude these from the Mineral Rights Duty and at the same time bring them under the Increment Value Duty. If we put it into the Definition Clause, both questions will be covered by one Amendment, and it would be more appropriate to the Definition Clause than to this Clause. If he reconsiders it I hope the right hon. Gentleman will consider the question of marl, which is used for the same purpose as chalk—to make cement.

Original Amendment agreed to.

Question put, "That the Clause, as amended, be added to the Bill."

The Committee divided: Ayes, 192; Noes, 58.

Division No. 745.]	AYES.	[12.8 a.m.
Abraham, William (Rhondda)	Cowan, W. H.	Hazleton, Richard
Adkins, W. Ryland D.	Craig, Herbert J. (Tynemouth)	Healy, Timothy Michael
Agnew, George William	Cullinan, J.	Hedges, A. Paget
Allen, A. Acland (Christchurch)	Davies, Ellis William (Eifion)	Helme, Norval Watson
Allen, Charles P. (Stroud)	Davies, Timothy (Fulham)	Henry, Charles S.
Ashton, Thomas Gair	Davies, Sir W. Howell (Bristol, S.)	Higham, John Sharp
Balfour, Robert (Lanark)	Dewar, Arthur (Edinburgh, S.)	Hobart, Sir Robert
Barker, Sir John	Dillon, John	Hobhouse, Rt. Hon. Charles E. H.
Barnard, E. B.	Duckworth, Sir James	Hodge, John
Barnes, G. N.	Duncan, C. (Barrow-in-Furness)	Holt, Richard Durning
Barry, Redmond J. (Tyrone, N.)	Duncan, J. Hastings (York, Otley)	Hope, John Deans (Fife, West)
Beauchamp, E.	Dunne, Major E. Martin (Walsall)	Hope, W. H. B. (Somerset, N.)
Beck, A. Cecil	Edwards, Sir Francis (Radnor)	Horniman, Emslie John
Benn, W. (Tower Hamlets, St. Geo.)	Elibank, Master of	Howard, Hon. Geoffrey
Bennett, E. N.	Essex, R. W.	Hudson, Walter
Berridge, T. H. D.	Evans, Sir S. T.	Hyde, Clarendon G.
Birrell, Rt. Hon. Augustine	Everett, R. Lacey	Illingworth, Percy H.
Black, Arthur W.	Falconer, James	Jenkins, J.
Boulton, A. C. F.	Ferens, T. R.	Johnson, John (Gateshead)
Bowerman, C. W.	Ferguson, R. C. Munro	Jones, Leif (Appleby)
Bright, J. A.	Fiennes, Hon. Eustace	Jones, William (Carnarvonshire)
Brodie, H. C.	Findlay, Alexander	Jowett, F. W.
Brunner, J. F. L. (Lancs., Leigh)	Fullerton, Hugh	King, Alfred John (Knutsford)
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Glendinning, R. G.	Laidlaw, Robert
Burns, Rt. Hon. John	Glover, Thomas	Lambert, George
Byles, William Pollard	Gooch, George Peabody (Bath)	Lamont, Norman
Causton, Rt. Hon. Richard Knight	Greenwood, G. (Peterborough)	Layland-Barratt, Sir Francis
Cawley, Sir Frederick	Gulland, John W.	Lehmann, R. C.
Churchill, Rt. Hon. Winston S.	Hall, Frederick	Lever, A. Levy (Essex, Harwich)
Clough, William	Harcourt, Robert V. (Montrose)	Levy, Sir Maurice
Collins, Stephen (Lambeth)	Hardie, J. Keir (Merthyr Tydvil)	Lloyd-George, Rt. Hon. David
Collins, Sir Wm. J. (St. Pancras, W.)	Harmsworth, Cecil B. (Worcester)	Lough, Rt. Hon. Thomas
Cooper, G. J.	Harmsworth, R. L. (Caithness-shire)	Lundon, T.
Corbett, A. Cameron (Glasgow)	Harvey, W. E. (Derbyshire)	Lupton, Arnold
Corbett, C. H. (Sussex, E. Grinstead)	Haslam, Lewis (Monmouth)	Macdonald, J. M. (Falkirk, Burghs)
Cotton, Sir H. J. S.	Hazel, Dr. A. E. W.	Maclean, Donald
MacVeagh, Jeremiah (Down, S.)	Pollard, Dr. G. H.	Thomas, Sir A. (Glamorgan, E.)
M'Callum, John M.	Ponsonby, Arthur A. W. H.	Thompson, J. W. H. (Somerset, E.)
M'Laren, Sir C. B. (Leicester)	Price, C. E. (Edinburgh, Central)	Thorne, G. R. (Wolverhampton)
M'Laren, H. D. (Stafford, W.)	Priestley, Arthur (Grantham)	Tomkinson, James
M'Micking, Major G.	Rea, Rt. Hon. Russell (Gloucester)	Toulmin, George
Markham, Arthur Basil	Rea, Walter Russell (Scarborough)	Trevelyan, Charles Philips
Marnham, F. J.	Rendall, Athelstan	Verney, F. W.
Mason, A. E. W. (Coventry)	Richards, T. F. (Wolverhampton, W.)	Walsh, Stephen
Masterman, C. F. G.	Roberts, Charles H. (Lincoln)	Ward, John (Stoke-upon-Trent)
Middlebrook, William	Roberts, G. H. (Norwich)	Ward, W. Dudley (Southampton)
Montagu, Hon. E. S.	Robson, Sir William Snowdon	Warner, Thomas Courtenay T.
Morse, L. L.	Roe, Sir Thomas	Wason, Rt. Hon. E. (Clackmannan)
Muldoon, John	Rogers, F. E. Newman	Wason, John Cathcart (Orkney)
Murray, Captain Hon. A. C. (Kincard.)	Rose, Sir Charles Day	Waterlow, D. S.
Nannetti, Joseph P.	Rowlands, J.	Watt, Henry A.
Nicholson, Charles N. (Doncaster)	Russell, Rt. Hon. T. W.	White, J. Dundas (Dumbartonshire)
Norman, Sir Henry	Rutherford, V. H. (Brentford)	White, Sir Luke (York, E.R.)
Nuttall, Harry	Samuel, Rt. Hon. H. L. (Cleveland)	Whitehead, Rowland
O'Brien, Patrick (Kilkenny)	Scanlan, Thomas	Wiles, Thomas
O'Donnell, C. J. (Walworth)	Scarisbrick, Sir T. T. L.	Wilkie, Alexander
O'Grady, J.	Seely, Colonel	Williamson, Sir A.
Parker, James (Halifax)	Shackleton, David James	Wilson, Hon. G. G. (Hull, W.)
Partington, Oswald	Shaw, Sir Charles E. (Stafford)	Wilson, Henry J. (York, W.R.)
Pearce, Robert (Staffs, Leek)	Sherwell, Arthur James	Wilson, W. T. (Westhoughton)
Pearson, W. H. M. (Suffolk, Eye)	Silcock, Thomas Ball	Winfrey, R.
Pease, Rt. Hon. J. A. (Saff. Wald.)	Simon, John Allsebrook	Wood, T. M'Kinnon
Philipps, Owen C. (Pembroke)	Stewart-Smith, D. (Kendal)
Pirie, Duncan V.	Summerbell, T.	TELLERS FOR THE AYES.—Captain Norton and Mr. Fuller.
Pointer, J.	Taylor, John W. (Durham)
NOES.
Arkright, John Stanhope	Guinness, Hon. W. E. (B. S. Edmunds)	Renton, Leslie
Balcarres, Lord	Hamilton, Marquess of	Renwick, George
Baldwin, Stanley	Hardy, Laurence (Kent, Ashford)	Rutherford, Watson (Liverpool)
Banbury, Sir Frederick George	Harrison-Broadley, H. B.	Salter, Arthur Clavell
Banner, John S. Harmood-	Hay, Hon. Claude George	Smith, Abel H. (Hertford, E.)
Baring, Capt. Hon. G. (Winchester)	Helmsley, Viscount	Stanier, Beville
Beckett, Hon. Gervase	Hill, Sir Clement	Starkey, John R.
Bull, Sir William James	Hope, James Fitzalan (Sheffield)	Staveley-Hill, Henry (Staffordshire)
Carlile, E. Hildred	Hunt, Rowland	Thomson, W. Mitchell- (Lanark)
Clyde, J. Avon	Keswick, William	Walker, Col. W. H. (Lancashire)
Courthope, G. Loyd	King, Sir Henry Seymour (Hull)	Warde, Col. C. E. (Kent, Mid)
Craig, Captain James (Down, E.)	Lambton, Hon. Frederick William	Willoughby de Eresby, Lord
Dalrymple, Viscount	Lane-Fox, G. R.	Wilson, A. Stanley (York, E.R.)
Dickson, Rt. Hon. C. Scott	Lockwood, Rt. Hon. Lt.-Col. A. R.	Wortley, Rt. Hon. C. B. Stuart-
Douglas, Rt. Hon. A. Akers-	Meysey-Thompson, E. C.	Younger, George
Faber, George Denison (York)	Morpeth, Viscount
Fell, Arthur	Morrison-Bell, Captain
Forster, Henry William	Newdegate, F. A.	TELLERS FOR THE NOES.—Sir
Gardner, Ernest	Pretyman, E. G.	A. Acland-Hood and Viscount Valentia.
Goulding, Edward Alfred	Randles, Sir John Scurrah
Guinness, Hon. R. (Haggerston)	Ratcliffe, Major R. F.

Bill read a second time.

Mr. LLOYD-GEORGE moved, after Clause 13, to insert the following:—