§ Sir F. BANBURY
I beg to move to reduce the Vote by £500 in respect of the item (Board of Trade).
I have to call the attention of the House to the conduct of the Board of Trade in the unfortunate dispute which has arisen between the shipowners and dockers at Newport. The House will agree with me that if the intervention of Government Departments in Trade disputes is to be effectual—and I do not deny that such intervention may be of great advantage to both parties—it must be accepted by the parties concerned with confidence and in the knowledge that it will be carried out in a right and proper manner. While I do not wish to make any attack on the President of the Board of trade—I believe, indeed, he did his best— I must say this matter is so serious as to demand careful consideration without prejudice. I will endeavour to put the facts before the House in a strictly impartial manner without in any way attempting to embellish them. The facts are as follows: Messrs. Houlder Brothers have been in the habit of employing certain dock men to load their ships by piece-work. I am glad to see a considerable number of 367 Members of the Labour party present, because if I make, quite unintentionally, any error in regard to the attitude which that party have taken up, they will correct me, and I shall be most willing to accept the correction, as I have always understood that the principle of the Labour party was, generally speaking, adverse to piecework; they prefer payment by the hour or day. In this particular case Messrs. Houlder have always employed men by piece-work, because as a rule their cargoes consisted either of iron ore or coal, or some other cargo which could be loaded quickly and in a hurry without in any way endangering the cargo. But the ship that they sent to Newport to be loaded in this case was to carry a general cargo, and it was necessary that the vessel should be so loaded that when she had to discharge part of the cargo at a particular port the articles should be easily got at and should be undamaged. Under these circumstances Messrs. Houlder decided to load the "Indian Transport" by day-work instead of by piece-work. By so doing they did not gain any pecuniary advantage, but they were enabled to get their cargo loaded in a better manner and more suitable to the particular business in which at that moment they were engaged, I understand that Messrs. Houlder, on coming to this determination, gave notice to the men that, on the arrival of their next vessel, wages would be paid by the day instead of by the piece. The men, refusing to agree to the new arrangement, Messrs. Houlder applied to the Shipping Federation for substitutes, and these were sent from London, and lodged in the vessel on which the work was to be done, the local authorities being previously notified, in order that police protection might be provided in case of need. As soon, however, as the newcomers began operations, every worker in the docks was called out, and the police were attacked so vigorously that they had to abandon the positions they had taken up. Those of the substitutes who were working on shore were seriously assaulted and driven back to the ship under a fusilade of stones and pieces of iron, and, in the result, they were forced to leave the vessel, and were escorted to the railway station by a hostile crowd, under the leadership of the trade union delegates, by whom their return fares were paid. After this the Shipping Federation despatched their depot ship to Newport in order to house 368 therein a fresh lot of men; and in the meantime the Mayor of Newport convened a conference between the officials of the local trade unions and the docks manager for the purpose of drawing up terms of settlement; but as Messrs. Houlder were in no sense parties to the conference, they did not consider themselves bound by its decisions. When, however, the local authorities were asked to provide protection for the further batch of labourers, then expected, they absolutely refused, and claimed that, in taking up this attitude— and this a point to which I wish to call particular attention—they had the approval both of the Board of Trade and of the Home Office. It is even stated, on trustworthy authority, that the Government representatives not only declined to protect from violence any labourers introduced by the shipowners to engage in the perfectly lawful work they were ready to undertake, but even threatened, if they were brought into the town, to employ force to drive them out again. This attitude—probably unprecedented in the annals of government in any civilised State—was obviously inspired by a desire not to anger local trade unionists, who had already set law and order at defiance.
I venture to submit to the House that ill it is correct, as I believe it is, that the President of the Board of Trade and Sir Edward Troup told Messrs. Houlder that unless they were prepared to enter into the arbitration they would employ the armed forces of the Crown to prevent them doing what they have a right to do—to employ men by day labour to load their ships—if that is true, then I say that the Government have taken a step which they have no business to take, and one, if it is to be continuous, which will only result in the employers of labour banding themselves together in order to protect their own interests in the same way as in America, where some action of that kind has already been taken. I hope that I never make charges in this House which I am not able to substantiate, and I should not have made that charge, which I venture to say is the most serious one that any Member can make against any Government unless I could substantiate it. I hold in my hand a letter written by Messrs. Houlder to the Prime Minister, dated 9th June. It has already been published in the Press of the country, and, therefore, I will not take up the time of the House, unless it is desired, by reading the whole of the letter, beyond saying 369 that in that letter a distinct statement is made by Messrs. Houlder, of which I may as well read the words:—We then obtained the services of other men to load the vessel, and again applied to the local authorities and to the Home Office to provide the police, and, if necessary, military protection necessary to protect them from assault. In the meantime, we were requested to attend a conference at the offices of the Board of Trade, at which were present the President of the Board of Trade, the Right Hon. Sydney Buxton, M.P., Sir Edward Troup, K.C.B., representing the Secretary of State for Home Affairs, and Mr. G. It. Askwith, K.C., of the Commercial and Labour Department of the Board of Trade. With us were the General Manager of the Shipping Federation (Mr. Cuthbert Laws), of which we are members, and the senior member of the firm of solicitors to that organisation, Mr. J. D Botterell. At that interview, which lusted for some hours, we were informed that in the opinion of the Board of Trade the question was one which should be submitted to arbitration. We objected that our elementary right to employ men at daily rates of wages, and the right of the men to accept such employment, was not a fit subject for arbitration.I must say that there I agree with them. Then follows the passage to which I am desirous of calling the attention of the House. This is a letter written to the Prime Minister, and the only answer which the right hon. Gentleman gives to it is a letter from his secretary acknowledging the receipt. This was a letter dated 9th June, so that there has been plenty of time if the statement is not accurate, for it to be corrected. The letter runs:—We were told that if we placed the loading of our vessels in the hands of other men than those by whom it had hitherto been done, we shall be committing a provocative act which would lead to a breach of the peace, and we were furthermore explicitly informed, both by Mr. Sydney Buxton and Sir Edward Troup, that if we attempted to bring in the labourers whom we had engaged, not only would no steps be taken to protect them from the violence of the trade unionists, but force would be employed to prevent us from carrying out our purpose.That is the letter. An hon. Friend says "No," but here is a copy of that letter, sent to the Prime Minister to whom that statement was made, and he has not controverted it in any kind of way. I venture to say that it was never contemplated by any party in this House that the armed forces of the Crown were to be used by a Government Department for the purpose of achieving an end which suited their own purpose, but that being so, Messrs. Houlder agreed to arbitration. Personally, I think they made a great mistake in so doing. If I had been in Messrs. Houlder's position I should have said to the President of the Board of Trade: "You are threatening me in an illegal manner, and I shall refuse to enter into an arbitration brought about in such a way, and I defy you to do your worst." I am sorry that they did not take that position, but 370 they say to me: "What is an individual business firm engaged in business for a livelihood to do?" and they accordingly-submitted. They went into the arbitration suggested in that manner by the President of the Board of Trade, and having gone into the arbitration the award was given by the arbitrator in their favour—mark that, it was given in their favour. What happened? The labour leaders convened a meeting of the men. It is quite true, said the labour leaders, that the men ought to accept the award, but in saying that, according to the reports in the papers which I have here, they have also said that the award had been come to in an improper manner, that the decision was wrong, that the evidence had been burked, and practically said, "Don't nail his ears to the pump," and I may say that Mr. Benjamin Tillett, who was one of the arbitrators, actually went down to Newport, and said the arbitration had been badly conducted. What was the result of that? The men refused to accept the award. I think everybody will admit that an arbitration is no good if one of the parties to it is to refuse to abide by the decision if it happens to go against them afterwards, and therefore it is of importance in a dispute like this if this course is to be followed by a Government Department to at once come to this House and take the sense of the House upon the conduct of the right hon. Gentleman in the hope that the course he has adopted will not be pursued in future. I have just had put into my hands a letter from Messrs. Houlder, dated 22nd of June, and this is what they say:—We think it will interest you to know that our steamer 'Natal Transport,' has been boycotted at Avon-mouth by the trade unions who were parties to the submission to arbitration which resulted in the recent award as to the method of employment at Newport, which has been rejected by the unions in question.We had intended loading the 'Natal Transport' at Newport, but owing to the delay experienced by our steamship 'Indian Transport,' which was the subject of the recent dispute, we deemed it advisable to divert the other vessel to Avonmouth, where the system of payment by day rates has also prevailed. At the moment of writing, not only is the 'Natal Transport' blocked but the men have struck work on every vessel in the Avonmouth Docks. Their action is purely what is termed in trade union parlance, 'sympathetic,' probably it would be more accurately described from a legal point of view as 'malicious.'The position, therefore, which the trade unions in question wish to set up is that they will neither load our vessels at Newport under the terms of the award of the Board of Trade Umpire, nor will they allow us to remove those vessels to another port where the conditions of loading are satisfactory to us. It appears to us that if you should have an opportunity of raising the matter in the House of Commons this afternoon, this information might prove useful to you.371 I hope I have laid the case before the House in a moderate manner. I have endeavoured to make no embellishment of any sort or kind, and not to make any party capital out of the matter. I have not sought to make a contentious speech, but I have confined myself to putting before the House the exact facts as I believe them to be, and I would point out to the House that if these things are to be allowed—if you are going to say that a man in one place must not employ men unless he employs them on day labour— which is what the majority of trade unionists do—and in another place that he is not to employ men on piece work, and that he is not to employ labour as he likes, is to be forced into arbitration by threats that the forces of the Crown will be used to compel him to arbitrate—if that is to go on, then good-bye to our prosperity and commerce.
§ Mr. E. H. CARLILE
In rising to second the Motion for a reduction made by my hon. Friend, I am sure it will be realised in every part of the House there is no desire to belittle the value of the intervention of the Board of Trade in trade difficulties. Upon many occasions I am sure of this, that the country realises that when a difficulty is ripe for solution the Board of Trade may intervene with very valuable results in the case of a dispute. But I think the facts which have been stated this afternoon, and which, as my lion. Friend has said, he has placed before the House, without any attempt to embellish, or to make party capital out of them, must have impressed any unbiassed man whether he be amongst those who are Members of the Labour party or not, that it cannot be useful for the trade of our country that the Labour party or trade unions, or any special trade unions should take up a harsh or arbitrary attitude towards persons who may not be members of their own organisation. That apparently has been the case in the instance brought before us, and in order that there may be discussion upon the subject, and especially that the right hon. Gentleman the President of the Board of Trade himself may have ample opportunity of explaining the attitude of his Department in reference to these circumstances, I have great pleasure in rising to second my hon. Friend's Motion. Surely the present time when the infliction of increasing foreign competition against our industries is of so serious a character, it is not a moment for 372 those who are employing labour to be dictated to as to all the conditions under which that labour is to be employed. Certainly those who are great employers of labour, either in the shipping or any other industry, should have the right to employ those whom they prefer, and upon conditions that are satisfactory alike to employer and employed. It is under these conditions that special trade unions sometimes step in, and take up an attitude which is vastly detrimental to the welfare of their own particular class. It is shortsighted policy on their part, and it cannot fail to be injurious alike to their own interests and to the great trades in connection with which their operations take place. We look forward with much interest to hearing what the President of the Board of Trade has to say on this subject, and I think we are indebted to my hon. Friend the Member for the City of London for bringing the subject before us in order that all those who are interested in it, and in the great question of employment so very difficult to be carried on, and which ought to be encouraged and extended, may have an opportunity of hearing what in one part or another of this House may be said on this subject.
§ The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Churchill)
No one will deny that this is a very proper matter to be brought at an early and convenient opportunity to the notice of the House of Commons, and neither I nor my right hon. Friend will complain of the manner in which it has been laid before us, but I think the hon. Baronet has, in the first instance, directed his attack upon the wrong Department. The position of the Board of Trade in this matter, as one of conciliation and good offices throughout, will be defended if necessary by my right hon. Friend. The question which the hon. Baronet has raised is not a question of arbitration or conciliation, but is essentially a question falling within the scope of the Home Office, a question of the sufficiency or insufficiency of police protection, and of the use of armed forces, and the conditions under which that police protection, or that use of armed force should or should not be afforded. That is the gravamen of the hon. Baronet's charge.
§ Sir F. BANBURY
I pointed out that the President of the Board of Trade, according to my information, induced these people to go into the arbitration by using the threat which has also been used by Sir 373 Edward Troup, of employing force to prevent them carrying on their business in the way they like, therefore the arbitration was commenced in an improper manner.
§ Mr. CHURCHILL
lam anxious to show in the first instance that the responsibility for any action in that direction which may or may not have taken place rests upon the Home Office, upon myself, and on the Secretary of State for War, who, in my absence from the country during these negotiations, took a certain decision. A good many Members of the Government, including the Law Officers, have been in consultation as to the action to be taken in this most difficult and anxious matter. I will tell the House what took place, or rather such circumstances in what took place as are relevant to the great questions of policy and principle which are raised by the hon. Baronet. On Thursday, 19th May, I received a telegram from Messrs. Houlder, the shipping firm who ship from Newport to London, and from the Shipping Federation, complaining that there had been a strike of stevedores in the loading of one of their vessels owing to a change in method from piece rates to time rates, and that this strike had been prosecuted by methods of disorder and intimidation and that they were not afforded sufficient protection. They also called at the Home Office and laid their complaint in full detail before the officers of that Department. Upon that I directed the following telegram to be sent to the Mayor of Newport:—It has been represented to the Secretary of State that police have not been able to preserve order in connection with strikes of stevedores. He desires to remind yon that police and magistrates are responsible for maintenance of order and prevention of outrage or intimidation, and that if local police are insufficient, immediate steps should be taken to obtain assistance from other police forces.I got a reply shortly afterwards from the Chief Constable of Newport saying that he and the Watch Committee had made all efforts to obtain an adequate force from the surrounding police forces, but that in view of the very threatening aspect of affairs the forces at his disposal were not sufficient to cope with the situation which would arise in the event of the importation of free labourers from outside. I thereupon directed the following telegram to be sent:—In reply to head constable's telegram of yesterday, the Secretary of State desires me to say that he is confident that you, with Watch Committee and head constable, will take all necessary steps to maintain order and protect life and property. Every effort 374 should be made to obtain ample force of police from other boroughs and from counties. Only in the last resort and when all other efforts to obtain neighbouring police have proved insufficient, should application for assistance be made to the Commissioner of Metropolitan Police. He will be ready to send 200 foot and 50 mounted constables if applied to, but as this measure must be reserved for grave emergency, Secretary of State would not be prepared to authorise the despatch of any smaller body. You will, of course, understand that pay and allowances and all cost of transport must be met by Newport, and that borough is fully liable in respect of men or horses injured. Secretary of State would recommend you further to use every effort to dissuade owners from taking action which would provoke conflict. Good offices of Board of Trade should be invoked in the hope of promoting settlement.My right hon. Friend had from the very beginning tendered the good offices of his Department with a view to arriving at a settlement, or at any rate arriving at a period of discussion and peaceful debate, in order to give some time for the passions which were aroused to cool. Mr. Mitchell, of the Board of Trade, was sent down to Newport, and on the evening of Saturday, following on the telegram I have just read, a conference was held, at which the Mayor of Newport presided. Mr. Mitchell was present, Mr. Macaulay, of the Docks Board, represented the shipowners, and Messrs. Tillett and Cooney represented the strikers. Just after midnight an agreement was arrived at referring the question to the Board of Trade Arbitration, and Messrs. Houlders' representatives, who were in attendance, took steps at once to stop the landing of the imported labourers. Mr. Macaulay is the representative of the dock owners and the shippers generally in the port, and Messrs. Houlder were included in the general body of which he was the representative, and it was therefore believed by all parties that Mr. Macaulay, in coming to this arrangement to refer matters to arbitration, carried with him the full assent of Messrs. Houlder, and their representatives who were on the spot took immediate steps to stop the landing of the imported labourers, who were said to be in a ship, the "Lady Jocelyn," a short distance away from the port. On the Sunday, the day after, the Home Office received a telegram from the Mayor announcing the settlement, and the arrangements which had been made for sending the Metropolitan Police and for moving in cavalry from other parts of the country were immediately countermanded. On 23rd May work was resumed at Newport Docks, except on Messrs. Houlders' ship. The disorders had terminated, and only in the case of this particular ship was the work not proceeded with. But on Monday, the 23rd, 375 Messrs. Houlder repudiated the settlement saying that Mr. Macaulay was not authorised to act for them, and they refused to proceed with the loading of their ship on the old terms, in accordance with the settlement, the settlement being that the loading should go on on the old terms, and that arbitration should take place.
The consequences of that position taken up by Messrs. Houlder were of the most serious character. I am not going to argue how far Mr. Macaulay was justified in coming to an agreement on behalf of Messrs. Houlder, as one of the firms included in the general body which he represented, but the fact remains that by all the men on the spot and by the whole population, which by this time had been roused to a very high pitch of excitement, it was taken for granted that the settlement was a settlement on behalf of Messrs. Houlder, and that there was an agreement to refer it to arbitration. During the 23rd and 24th—Monday and Tuesday— Messrs. Houlder said they accepted no responsibility for the settlement, and they declared that they intended to bring in a considerable body of imported labour from the steamship which was waiting in the harbour, and on the night of Tuesday, 24th May, in view of the fact that all parties in Newport had considered that the matter was to go to arbitration, it was clear that a very dangerous situation would arise if this labour were imported. It was quite clear that all the ill feeling which had been dissipated would be renewed again in a multiplied and aggravated form, and the Home Office therefore thought it proper to warn Messrs. Houlder that they would incur very grave responsibility if they imported this labour, owing to the misunderstanding about arbitration and in the state of feeling which then prevailed.
I come to the crux of the matter. The whole of the 25th was occupied in the further negotiations with the Board of Trade, endeavouring to persuade Messrs. Houlder to accept the decision which had been come to on their behalf by Mr. Macaulay and the Dock Company generally, to go to arbitration, and they definitely refused. On Thursday, 26th May, the Home Office had to decide what action should be taken if Messrs. Houlder persisted in their refusal of arbitration and insisted on landing the imported labourers. On that day my right hon. Friend the Secretary of 376 State for War, who was in charge of the duties of the Home Secretary during my absence, had before him the following letter from the Mayor of Newport:—Referring to previous communications and interviews with Sir Edward Troup on the subject of the condition of affairs at Newport consequent upon the determination of Messrs. Houlder Brothers to import free labour to load their vessel 'Indian Transport,' and understanding that the efforts of the Board of Trade to induce Messrs. Houlder to concur in the agreement which was entered on 21st inst. by Mr. John Macaulay. the docks manager, upon the assumption that he was duly authorised to do so on their behalf, and upon the faith of which the whole of the men then on strike at the docks went back to work on Monday morning last. have proved unavailing, and that Messrs. Houlder still persist in their intention and determination to import free labour into the docks, we beg to call your serious attention to what we consider will be the appalling state of things if they be allowed to do so.We confidently expect that upon the free labour men being introduced there will be a great strike throughout the town and docks, involving possibly a. stoppage of collieries in the Monmouthshire district in consequence of their being unable to ship their coal at the docks, and quite possibly an extension of the strike to other ports in the Bristol Channel.; In our town the corporation employés have already passed a resolution to cease work if free labour be imported, and we think that is very likely to be followed by the electricity undertaking employé's, which we need hardly point out would mean great confusion and terror to the inhabitants if the town be plunged in darkness.To adequately protect the free labourers, whilst at their work of loading, from the violence of the enormous crowds that would naturally assemble around them at the dock side (the dock being unenclosed), would require a police force which is estimated by the Head Constable at 500 additional men at least, and having regard to the necessity of relieving the constables so engaged it means double the number to be brought into the town.It can easily be imagined that if the crowd finds itself unable, by means of the police cordon around or protecting the free labour men, to prevent the actual loading of the ship, it, or portions of it, will endeavour to distract the attention of the police by attempting-damage to hydraulic pipes or machinery at the docks or even elsewhere in the town.In short we are most seriously apprehensive if Messrs. Houlder are permitted to carry out their intentions (and in this view we are supported by the reported speeches of the Labour leaders), that there will be serious riot and bloodshed, and that many innocent persons, as so often happens in these cases, will be the sufferers.It is only fair to state that the men honourably and faithfully carried out the terms of the agreement which was entered into by their leaders on their behalf (although many dissented from its terms), by returning to their work on Monday morning, and it is the indignation which will arise when they think that it has been departed from by one section of employers which will produce the stormy passions which we apprehend.Finally, we cannot emphasise too strongly our anxious fear for the peace and order of the town if the importation of free labour is allowed.That was the position which was before my right hon. Friend the Secretary of State for War on Thursday, 26th May, and it is obviously a position of very great difficulty, as every Member of the House will admit. We stand firmly for the principle that employers of labour or others have the right to look to the forces of the State for protection in their legal 377 and lawful acts. On the other hand, we desire most strongly to avoid a scene of bloodshed and riot, if by any means it can be avoided, and we felt that there is a point where the action which an individual may take in pursuance of his legal rights becomes so contrary to the public interest and the general commonweal that it is the duty of the State in certain circumstances of an extreme and exceptional character to resist and prevent the exercise of those rights. The hon. Gentleman knows no doubt the ancient and respectable maxim of law, sic utere tuo ut alienum non Iædas, which I will translate as meaning that you should use your own rights so as not to injure the rights of others. I am afraid that is rather a free translation, but it is the general meaning. My right hon. Friend had an opportunity during the two days which intervened between the refusal of Messrs. Houlder to agree to the arbitration entered into by Mr. Macaulay on their behalf and the date when labourers were to be imported into the docks of very carefully considering his position in the matter, and we had an opportunity of consulting other great legal authorities besides himself, and the result was, after full deliberation, that the following telegram was drafted. It was not sent because it was not necessary to send it. It was drafted, and I accept, on behalf of the Government, with the concurrence of my right hon. Friend, full responsibility for it: —It is the duty of the local authorities to provide sufficient force to suppress disorder, riot or outrage. It is also their duty to use all legal means to prevent occasion for conflict between parties. For latter purpose they should first prevent, as far as may be possible, crowds from assembling in docks; secondly, dissuade Houlders and their agents from landing imported labour and dissuade imported labourers from landing; thirdly, support dock company in any action they may be advised to take to exclude imported labour or strikers from docks; fourthly, in last extremity they may forbid and prevent landing of imported labour. The last step which would mean preventing Houlders from exercise of what, in ordinary circumstances, would be their legal rights, can only be taken if local authority can show that landing of imported labour would inevitably cause riot and bloodshed, and would lead to general and disastrous strike.That is a telegram which we should have sent if circumstances had rendered it necessary. That position was stated plainly and courteously at the interview which Messrs. Houlder had on Thursday with my right hon. Friend and Sir E. Troup, who represented the Home Office; and in view of that clear intimation, which I think amounted to this, that if Messrs. Houlder were resolved in all circumstances to continue to insist on landing 378 imported labour, no matter what the consequences to life and property might be, they, at any rate, would have to take that step only at such time and in such circumstances when the police arrangements were carried to a point which would enable them properly and adequately to safeguard them. That intimation that there must be delay in the mode in which imported labour could be suddenly thrust on that passionately excited community had the effect of inducing Messrs. Houlder, who had not made things as easy as they could throughout the matter, and who seemed to think that any moment an unlimited supply of horse, foot, and artillery would be at their disposal, to say, "We will go to arbitration," so that the second of the two crises passed peacefully away.
The arbitration was held under the Arbitration Act set up recently, and Sir David Harrel was chosen as the arbitrator, and a representative of the men and a representative of Messrs. Houlder sat with him as joint judges. The arbitration proceeded in regular course, and the arbitrator decided, and I am bound to say that I think he rightly decided in the interests of the method of loading ships at Newport Dock in favour of Messrs. Houlder. The arbitration was clearly in their favour, and it was to the effect that under certain conditions of wages, which were very good, the matter of pay was to be in future by time and not by piece work. But the arbitrator, having in his mind, I dare say, though I do not know, the same object as is in the mind of those who try to deal with a very difficult situation, the great desire of preventing violent outburst and perhaps irreparable consequences to innocent people, and he did not make the award effective until four days afterwards, that is to say, on the Monday following. That was done for the purpose of giving the men's leaders time to talk to their constituents and different bodies and persuade them to accept the award which was a bitter pill to them and very hard indeed for them to face. No doubt there was a hope that in the meanwhile Messrs. Houlder, having succeeded in carrying their main point of establishing the principle for which they were contending, having carried the point that ships should be loaded by time and not piece work, would in the interval allow the "Indian Transport" to be loaded up in the old way, and so make it easy for the strikers and the men to accept the decision which was very painful and disappointing to them. However, Messrs. Houlder, although at some 379 pecuniary loss for demurrage and so forth, said "No," and that they would stick to the strictest interpretation of their rights. They said that now that they had got the award of the arbitrator on their side they insisted upon bringing in imported labour under the new way unless the strikers would come in and accept the new terms. They complained very much of the attitude we had adopted. We immediately sent down Mr. Mitchell and other skilled negotiators of the Board of Trade, with a view of trying to aid the men's leaders in persuading the men to accept the decision, and I must say I think the men's leaders behaved in an absolutely honourable and candid fashion. They exerted themselves to the very utmost, and although they were not able to persuade their men to agree to accept the decision, they persuaded them to acquiesce in it, or at any rate not to resist by violence its enforcement. We told Messrs. Houlder that now that the arbitrator had given his award there was a perfectly clear case for them on Monday in carrying that out to the strictest letter and that any necessary force would be supplied to enable them to exercise their legal right of bringing in imported labour. I made clear that as a very exceptional step Metropolitan Police would be available if necessary, and that all means would be taken by the Government to protect either party in carrying out the award. But I am very glad to say that the method which we adopted, and which I hope the House will judge with a true understanding of the difficulties of the case, enabled passions to cool and made the workmen feel that they were, at any rate, being treated with fair consideration, that their case had been examined carefully by the court of arbitration, and that the time that had passed had rendered it possible for the loading of the "Indian Transport" to proceed and to be carried out and completed by imported labour without any disorderly scenes, or scenes of a serious character, and without the introduction of force except from the surrounding districts.
In these circumstances, I submit the action of my right hon. Friend, the Home Office, and the Board of Trade with confidence to the judgment of the House. I submit to the House that as regards three of the demands for protection which were made, two were immediately granted to the full, irrespective of any consequences 380 that might ensue, and it was only in respect of the demand made for extraordinary armed assistance to bring in labourers in a manner which would have been universally held throughout the district as a breach of the arbitration award that Messrs. Houlder had any reason to complain, and in that respect it is true to say—as the hon. Baronet says—that we did not merely content ourselves by saying, "If you bring in your men we shall not protect them," but we stated that unless it was clear that the men could be brought in with a reasonable concentration of force, without danger of bloodshed, we shall not in the ultimate issue allow them to be brought in I think that the House will understand absolutely, but for myself also I may venture to say, if I may, that the local authority with whom the responsibility rested in the first instance have steered their way through a very difficult series of events with a great deal of skill, and in the end every point contended for has been secured. The ship has been loaded, the imported labour has been brought in, the matter has been submitted to arbitration, and the arbitration, though very painful to the working-class population involved, has been acquiesced to, and all bloodshed or serious disorder or disturbance has been avoided.
§ Mr. J. H. THOMAS
The hon. Baronet, in bringing forward this Motion, very clearly indicated that he desired to state what he believed to be the facts of the case. No one will for a moment question his impartiality, but I am going to submit that the facts as stated by the hon. Baronet were not correct, inasmuch as he stated them from a brief supplied to him, whereas, on the other hand, I will be able to state them from actual knowledge and experience in connection with this unfortunate dispute. The hon. Baronet made a very serious indictment with regard to the position of the Home Office and the Board of Trade. He also took occasion to lecture the Labour party as to what their duties would be in matters of this kind. The Home Office has defended, and no doubt the Board of Trade later on will defend, their particular action, but I am going to submit to the House that when they know all the facts in connection with this unfortunate dispute, and when they know the sacrifices that the Labour party leaders in this dispute have made, con-trary absolutely to the wishes of the majority of the men, I think they will agree 381 that the hon. Baronet was not justified in bringing the Labour party within the category of his particular indictment, but that, on the contrary, the Labour leaders at Newport on this particular occasion are rather to be commended than condemned for their particular action. This dispute did not arise in consequence of any demand on behalf of the men. The men made no application either for an increase in their wages or any increase in their tonnage rates or a reduction of hours. It was not a demand by a particular trade union, but it was a demand made by Messrs. Houlder Brothers to reverse a policy that has been in operation in Newport for forty years. And the significance of the connection of the business is this, that although there are twenty-nine lines running from Newport loading similar cargoes as Houlder Brothers, Houlder Brothers are the first and only firm that had any complaint whatsoever as to the loading of their particular cargo. And it is significant to remember that although the whole of the other firms were invited to give evidence on behalf of Houlder Brothers before the arbitrators, to bear out their contentions as to the loading at Newport, the whole of those firms absolutely refused to do anything of the kind.
Those facts go to show that Houlder Brothers are not entitled to all that the hon. Baronet claims for them. After all, this House is not concerned, or, rather, should not be concerned, with the merits of this particular dispute. That is a matter entirely between Houlder Brothers and their men and the particular union. I only give those facts in order to contra-vert the statement made by the hon. Baronet. This dispute took place, as I have already indicated, purely as consequence of Houlder Brothers' action, and although for twenty years there has been an understanding in all the South Wales ports that a month's notice must be given by either side of any change in the working conditions, Houlder Brothers, instead of giving this month's notice, simply intimated that it was to be put into operation at once. That was the first violation on the part of Houlder Brothers. The men resented this particular action. They said they were not going to have the same conditions existing in Newport as are existing, and as are common, unfortunately, in other seaport towns. They said, "We are not going to have the submerged tenth that we have been happily free from in the past." These men hitherto have 382 pooled their money. They said it was unfair and demoralising that one man should earn £3 or £4 a week and another starve. The result has been that for years in Newport they have had a pooling arrangement. No matter what one particular man earns he shares with the others. The result is it gives general satisfaction to the men. This-system has been reversed and they resented the change, as I have already indicated, and struck work. Surely the Board of Trade, without attempting to be partial or without attempting to take sides in a. dispute of this description, would not have justified their position, and the President would have been wanting in his duties if, when this dispute took place, they did not avail of every opportunity that was offered to them and to those subordinate to them to bring this unfortunate dispute to a close, because at this particular moment, while it was limited to Newport or while Newport was the only port involved, there was a danger that the dispute would spread to the whole of the ports of South Wales and the Bristol Channel. I venture to say that had it not been for the intervention of the Board of Trade at that particular moment this dispute would have spread, and the whole of the South Wales and the Bristol Channel ports would have been involved.
The Board of Trade succeeded in bringing the parties together. When I say the parties, I desire the House to remember this: Mr. Macaulay, the general manager of the Newport Docks, is a gentleman who-undoubtedly has the support and confidence of the whole of the employing classes. No one could question for a moment that when Mr. Macaulay, holding the position that he does, respected as he is by the employers in that particular district, signed on behalf of the employing interests that agreement, which referred the matter to arbitration, he was acting not only with the consent of Messrs. Houlder Brothers, but that they would be bound by this particular agreement; and it is remarkable that, although the trade-union leaders who signed that agreement agreed when the Board of Trade intervened to refer the matter to arbitration, they did so without consulting the men. As a matter of fact, they were condemned by the men, and let the hon. Baronet remember that they took the responsibility in the interests of peace in the whole of the, Bristol Channel ports, and when this agreement was drawn up they took the responsibility of going to the men and 383 saying, "We have agreed that this matter shall be referred to arbitration. We have agreed with the Board of Trade and with Mr. Macaulay that you shall return to work, and we insist that you shall go back to work." The men accepted that position. Yet, although they had succeeded in bringing the parties together, although they had succeeded in signing an agreement, and although the trade union officials had signed that agreement in defiance of the men, you can imagine the feeling that was engendered throughout the whole of that town when it was discovered that Messrs. Houlder Brothers repudiated entirely Mr. Macaulay's right to sign on their behalf. I submit that that was the first cause of the serious trouble. The men felt when the Mayor of Newport, the Board of Trade, Mr. Macaulay, and the trade union leaders had signed an agreement referring the matter to arbitration, and that one party, namely. Houlder Brothers, desired to repudiate it, that they could not trust the matter so far as Houlder Brothers were concerned. That, again, I repeat, was the real cause of the serious trouble so far as the temper of the men was concerned.
Eventually the matter was referred to arbitration. It is perfectly true, as the Home Secretary has pointed out, that the arbitration award is not only a bitter pill to the men, but the men themselves think it is contrary to the weight of evidence submitted by their leaders. I do not complain of that, but I do complain that the hon. Baronet is not justified in saying for a moment that the men's leaders, having agreed to go to arbitration, are repudiating the agreement. On the contrary, keenly as they resent the award, much as they feel that the award is contrary to the weight of the evidence, so far from repudiating it, they have at great personal risk gone to the docks and persuaded the men to accept the award; and because the men did not accept the award, they have absolutely refused strike pay to all of "them out to-day. That is the actual position at Newport. These trade unions involved, through the trade union leaders, not only persuaded the men to accept the award, but to show that they will have authority, and that they will have discipline, and to show that they are prepared to act fairly and honestly in this matter, they have actually refused the strike pay to the particular men involved. So far as "this indictment against the Home Office 384 is concerned, I can only say that had it not been for the tact of the Mayor of Newport and the Home Office in dealing with this matter, serious trouble would have arisen. With regard to the intervention of the Board of Trade, I am perfectly certain that they have not been partial in the matter, and they have never attempted to take sides with either the men or the masters, but they did recognise that there was a very grave responsibility resting upon them, and that if by their intervention they could prevent the strike spreading it was their duty to do so. I believe that by that intervention the strike was stopped from going to the other ports. In any case, I have only to express regret in conclusion that Houlder Brothers have not shown the disposition that the circumstances warrant. In the first place, they took up this position without recognising the month's notice, they repudiated what, after all, was looked on as a binding agreement; and, seeing the temper of the men at that particular time, no one can wonder that they resented that particular action. In conclusion I have only to say, speaking as a trade union leader, as one who does appreciate the means of conciliation and arbitration, and as one anxious to develop that method of settling trade disputes, that I think it will be regrettable if any action of this House should cripple the Board of Trade in intervening on behalf of peace, and if trade union leaders are lead to resent that method of settling disputes. In short, I would respectfully point out that serious as the House may feel this question to be, yet it should be remembered that trade union officials have, at considerable sacrifice and considerable personal risk, come to a personal agreement, and endeavoured as far as humanly possible to advise the men to give effect to that particular agreement.
§ Mr. LEWIS HASLAM
As a Member for Monmouth, in which Newport is situated, I feel that I ought not to allow this occasion to pass without saying a few words on this important question now before us. Enough has been said, I think, to convince hon. Members that the action of the Board of Trade and the Home Office has been justified. The conditions at Newport were of a very serious nature, and no one could foresee what might happen if the temper of the people overcame their common-sense. No one could know 385 what would happen, or whether there would be scenes of bloodshed and a great destruction of property. From the legal point of view, of course, the shipowners were perfectly correct in saying that they had the right to engage men on their own terms. But there were other considerations. The point was whether by the importation of free labour the temper of the people might be so roused that consequences of a very deplorable character might ensue. The Home Office and the Board of Trade were well advised, therefore, in preventing the importation of free labour at that particular time. I am very glad that the Government have had the support of the Labour Members. I am sure those Members will agree with me when I say that we all look forward to the time when disputes of this sort will be settled by arbitration. The leaders of the men decided to accept arbitration, and it is very much to be regretted that the men should not accept the decree. I am sure that those who have taken that ill-advised attitude will, in consequence, suffer very much personally. When a labour dispute goes to arbitration I think all the workmen concerned should be determined to accept the arbitrament. I should like to see the time when all members of trade unions are ready to sign a document on behalf of their unions that they will accept decrees of arbitration when their leaders have thought fit to enter into negotiations of that kind. Unless that is done, arbitration generally will be a failure. I have risen chiefly to state that, after following this dispute very closely from day to day, and having read the account in the papers about the action of the Board of Trade and of the Home Office in connection with the dispute, I think the Government have acted in the only way which common-sense dictated and that they have been instrumental, in all probability, in preventing what might have been serious loss of life and property.
§ Lord HUGH CECIL
I think the speeches to which we have listened from below the Gangway opposite are worthy of very much sympathy, but it is not the circumstance that this dispute has arisen out of a labour trouble that seems to me to make it sufficiently controversial to deserve the attention of this House. It is a desirable and useful thing that trade unions should maintain the rights of the men belonging to them, and most desirable from time to time that those rights should 386 be enforced, if necessary, by strikes. It is not desirable, but almost unavoidable— at any rate very probable— that heat and anger should arise in the course of these disputes. On all these points I have not a word to say. That a dispute should have arisen and that one side should be unreasonable in one respect and the other side unreasonable in another respect— all that is regrettable, but common enough. The single point to which I wish to direct the attention of the House is the action of the Government in respect of maintaining order. It was very lucidly expressed in the telegram which the right hon. Gentleman the Home Secretary read to the House. That telegram showed very plainly indeed the position which the Government took in respect to the maintenance of order. The duty of the Government to maintain order is of the greatest public concern, and it is a matter to which the attention of the House can be properly directed. As to the three earlier points in that telegram, I think there can be no dispute that reasonable precautions should be taken to prevent disorder from arising, and all efforts should be made to dissuade Messrs. Houlder from doing what they thought was likely to lead to disorder, and I do not think any Member of the House would disapprove of it. But in respect of the fourth point, I think the Government have taken the wrong course, though I can easily understand the temptation to take it. But in taking the wrong course they have erected an exceedingly dangerous precedent, against which a protest ought emphatically to be made. In this particular case there were many circumstances which led the Government to take that course. These evil precedents always begin in this way unless a protest is made at once against them. Though not very much harm may be done, yet the evil begins, unless a protest is made, and worse precedents follow, until it becomes more difficult to stop the evil at a later stage than at the earlier stage. What did the Government do? They prohibited a body of citizens from exercising their legal rights because it was feared a riot would result. I think that is teaching the public a most dangerous lesson. It would have been bad enough if the Government had refused to allow the men to be landed, but they said, "No; you must not land them, and we will prevent you." I know nothing about the dispute, but I presume the prohibition would be enforced in the ordinary 387 way. All I can say is, if I had been one of Houlder Brothers I would have prosecuted every policeman who prevented me from doing what I had a right to do. Such a proposition was quite outrageous.
§ Mr. CHURCHILL
We knew that the men were to be landed, and that at that particular time Messrs. Houlder's arrangements had been made. At that time the police arrangements were not quite adequate.
§ Lord HUGH CECIL
A delay of a few hours I could easily understand, but perhaps I misunderstood the right hon. Gentleman. I understood that there was a general prohibition of the employment of these men. It was not a question of the Monday night, or of putting it off forty-eight hours—it was a general prohibition.
§ Mr. CHURCHILL
In effect it was a prohibition only relating to the specific circumstances of the situation at the time it was made.
§ Lord HUGH CECIL
I understand that the effect of it was that Houlder Brothers thought they had no option under the quasi-compulsion, and therefore acquiesced in the arbitration.
§ Sir F. BANBURY
This is rather an important matter. Is it not a fact that the right hon. Gentleman told Messrs. Houlder that they were not to land their men from the "Jocelyne," and that if they did the Home Office and the Board of Trade would use force to prevent those men from being landed?
§ Mr. CHURCHILL
The telegram very clearly stated the position, and I prefer that the matter should be judged by the actual words of the telegram.
§ Lord HUGH CECIL
At any rate, I understand the effect produced was that the forces of the State or the police were to be used in preventing the landing of imported labour because it might lead to a riot. It was not merely a temporary measure until proper police could be brought up, but because gross disorder was apprehended if the landing took place. That is, you say to all the world that if you create the probability of disorder you will intervene and prevent citizens from doing what otherwise they have a legal right to do. The workmen of Newport would have been in a worse position for the purpose of their dispute if they had obeyed the law and been peaceful citizens than they were in if they threatened to 388 break the law and become rioters. That is to say that you teach everyone that it pays better to be riotous than to be law-abiding. Suppose such a thing were to arise in London. How calamitously dangerous it would be, what a frightful menace to the public security, if once the people of the Metropolis were taught that they can influence the Government to restrain citizens from doing what under the circumstances they have a legal right to do, and to restrain them by force. It would be, I imagine, quite an illegal threat. I suggest it because it seems tome to resemble the well-known case at Eastbourne in connection with the disturbances between the Salvation Army and the Skeleton Army. Disorder took place whenever the Salvation Army held their meetings, and the local authorities seemed to take the view that the Salvation Army might be properly restrained from holding their meetings because they led to disorder. But the ultimates decision was that the citizens have the right to do what is in itself legal, and it is the business of the authorities and the police to keep order, whatever riotous persons may do.
§ Mr. CHURCHILL
I do not traverse that general statement at all. In what I did I was having regard to the time, place, and circumstances. It is quite clear that you ought not to have allowed these particular men to be brought into this particular place if the immediate consequences are to be riot and disorder. If you are prepared to support the landing of these men, clearly it is for the authority to be the judge of the time, manner, and circumstances of their introduction.
§ Lord HUGH CECIL
If it is only a; matter of a few hours one way or the other, that may be so, but in this instance the prohibition was altogether against their being landed. I am not criticising Messrs. Houlder or their opponents; but Messrs. Houlder, up to that point, took up the position that they would not go to arbitration, and yielding, as it seems to me, to the threat, they went to arbitration.
§ Mr. J. H. THOMAS
Messrs. Houlder Brothers repudiated the right to go to arbitration, and the question of police had nothing whatever to do with the question of arbitration. It is to be further remembered that the people, or the "blacklegs," if I may so call them, were stopped 389 from landing not because of this agreement, but because of the personal intervention of Lord Tredegar, who himself went to the docks.
§ Lord HUGH CECIL
I do not know the details very well, but as I understand the matter an interview took place at the Board of Trade office, at any rate with the right hon. Gentleman the President of the Board of Trade and a high official of the Home Office, and after that interview it was said to Messrs. Houlder, "If you persist in landing your imported labourers," not to-night or to-morrow night, "but if you persist at all, we will resist you because of the possibility of a riot."
§ Mr. CHURCHILL
Obviously time, place, and circumstances ought to be considered, and among the circumstances the state of feeling was one to be taken into account.
§ Lord HUGH CECIL
Continuing time, not momentary time. It was not said, "If you put it off until we gather police men or send down the Metropolitan Police." The proposition was, "You must not do it, and we will stop you doing it as long as the danger of disorder continues." That is to say, you teach the public to believe that it paid to be disorderly. It is unquestionably the case that Messrs. Houlder were driven to accept arbitration because the Newport workmen were disorderly. Other work men are not disorderly, and suffer relatively because of their good conduct and because they obey the law. That is the lesson the Government taught the people of this country, and I say advisedly that, terrible as it is to use force in the suppression of a riot, it is measurably less terrible than to inculcate the belief that disorder moves the State out of its line. My point is that the Government anticipated that there would be grave disorder, and because they anticipated that there would be
§ Lord HUGH CECIL
They restrained Messrs. Houlder from doing that which, whether it would have been judicious or injudicious, was unquestionably legal. That is to say, disorder moves the State out of its path, and that it answers to be disorderly. I am quite sure that there is no probable loss of life, or mischief, that would have resulted from a riot in Newport which would not have been a less evil 390 than teaching the people that disorder is the best thing that answers workmen if they want to get their own way. I do make an emphatic protest against that last clause of the telegram. I am quite sure it is a dangerous and pernicious principle. I am quite sure that those who really follow the progress of labour, and who wish labour disputes, or the adjustment of the relations between capital and labour, to proceed on equitable lines, and consistently with the general progress and prosperity of the community, will view with the same suspicion as I do anything that inculcates that disorder is a helpful weapon. Beyond all doubt the great thing we have both to learn and to teach is that the laws must be absolutely supreme under circumstances of whatever provocation, and that the whole forces of the State will be used quite impartially, and that whatever the law may happen to be there should be no intervention by a bureaucracy to supersede the law, but that the whole forces of the State should be used to maintain order.
§ Sir IVOR HERBERT
I think the Noble Lord has made his statement under the disadvantage of not being altogether conversant with the circumstances of the very difficult case that arose at Newport. I think every Member of this House will accept the general principle he laid down in the peroration of his speech. The maintenance of law is no doubt a first necessity, but there must be taken into consideration certain considerations of time and place and surrounding circumstances, and the time at which force is to be employed by the Executive. As the Member for the Division in which Newport lies, and having a considerable interest and connection with that town and the docks, I was present at an early period of this difficulty and know what has taken place. I was actually present at Newport at the time of the conference which led to the agreement, as it was believed to be the general agreement to go to arbitration. In fact, I had been approached with regard to acting between the disputers in the matter. Happily a decision was arrived at at that conference to go to arbitration. I think it is difficult to describe the feeling that there was at that time in Newport. The practice of that port as to the loading of ships is the system as has been described by the hon. Member for Derby (Mr. J. H. Thomas). It has existed for a very considerable time, and the men felt that there was thrust upon them an attempt by one particular 391 firm to alter that long established usage. That alone in itself constituted a very grave subject of annoyance and aroused very strong feeling amongst the men. Does anyone imagine the feeling of those men, after having been told that there had been a general agreement to go to arbitration, to which their representatives had been a party, and after that had been arrived at, although the men themselves were condemning their own leaders for having gone into this arbitration, when suddenly at the last moment they learned that one firm, the firm concerned, has refused to go on a wholly technical and formal question as to whether they were represented by Mr. Macaulay or not.
I have no doubt that at that time the condition was extremely critical, and anybody who would have allowed any provocative action to take place at that time would have been incurring a very-grave responsibility. Those are the conditions under which the Government had to act. I can only re-echo what fell from my right hon. Friend just now when he said that the local authorities showed the greatest tact and discretion in the matter. I believe also that the Government showed the greatest judgment and wisdom in the action that they took. There was a report that the same firm was going to import free labour into the port, which had never known anything of the sort before, in order to force on this system of loading which was unknown in the port, and opposed by the whole community, shippers as well as men. It would have been an outrageous piece of provocation to do such a thing, but eventually wisdom prevailed, and Messrs. Houlder consented to go into arbitration. By the action which was taken time was gained for heated feelings to subside, and the best proof of the wisdom of the Government is shown by the fact that Messrs. Houlder actually loaded that ship, and imported free labour afterwards; and that there was no disturbance. I do not say that there was not very strong feeling on the subject. There was, and there is, very strong feeling, and I quite agree with my hon. Friend that there ought to be, because that was certainly at any time a great act of provocation; but the facts show this, that the disposition of the men was not to make a breach of the peace if it could possibly be avoided.
There was no provocation on the side of the dock labourers throughout the whole of this time. There was a good deal of feeling, and there were, undoubtedly, some 392 very heated speeches delivered, but throughout they maintained a discipline which did them the greatest credit; and I think, through the action of the Government and through the restraining influence of the labour leaders, very serious consequences were avoided. It is all very well for the Noble Lord to lay down as a general maxim that it is better that there should be some way shown to the people that the rights of individuals must be maintained at any price. Blood has been shed in the streets of Newport before now on one occasion, and I am quite certain nobody who has the interest of that port and of the trade of South Wales at heart, ever wishes to see that done again. It could only have led to the extension of a very serious and critical state of affairs. I thank the right hon. Gentlemen for the action they have taken, and I commend their action to any successors they may have.
§ Mr. BONAR LAW
I quite recognise the difficulty of the position in which the Home Office was placed in regard to this matter. I am bound to say that, listening to the speech of the Home Secretary, I had the feeling that it was very doubtful whether anyone, to whatever party he belonged, would not have acted, in the main, in precisely the same way in which the Government acted in regard to that matter. I do not therefore find fault, in the main, with what the Government have done. The reason that I rise now— and I did not intend to, but for some speeches that took place in the last few minutes— is that, in my belief, the speech of the right hon. Gentleman, in justifying the action which the Government took, has gone to lengths which I do not think it is any exaggeration to say introduce a new principle, and a very dangerous principle, into the administration of the law in this country. Let me point out exactly what the position is. The Home Secretary was placed in this position. There was a very keen feeling in Newport on the subject, the free labourers were there ready to be landed, and he was informed, on authority which he had every reason to accept, that if the men were landed there would be a riot. Under these circumstances he or any other administrative Member of the Government was bound to do everything he could to prevent any action which would cause a disturbance. If the Home Secretary, in his defence of the action of the Government, had confined himself to saying, "The police protection is not sufficient, 393 and if these men are landed now there will be trouble and disturbance, with which it wilt be impossible to cope; therefore to allow these men to land would be so great an evil that, as an administrative Member of the Government, it is my business to prevent it," I should have said that he was quite right. But the whole question is whether he took up the position, "I will not defend Messrs. Houlder in a legal act at this moment, because I have not the power"; or whether, as his speech led us to suppose, and as the speech of an hon. Member opposite clearly stated, he took up the position that, wherever there was danger arising, he, as representing the Government, would say, "We will not allow a man to do what he is legally entitled to do, because we believe the danger of a riot is so great that we are justified in preventing him from carrying out a legal transaction."
§ Sir IVOR HERBERT
I think the hon. Gentleman omitted to notice that I specially stated that the circumstances of the case must be considered. I did not lay down a general rule.
§ Mr. BONAR LAW
If the Home Secretary will say now what the hon. Gentleman has just stated, and in defence of the action of the Government will say, "All that I did was to say that at the time the danger of riot was so great that it was impossible to deal with it, and I was bound to say to these people, 'I will take steps to prevent the men being landed in consequence of the dangers which will follow,'" I would agree with him.
§ Mr. BONAR LAW
The right hon. Gentleman apparently accepts it now, but he did not accept it in the interruption of my Noble Friend. If he agrees, there is no difference of opinion. If all that the Home Secretary meant was that he was prepared to say to Messrs. Houlder, "At this moment we have not the force necessary to prevent a riot, and therefore I will do my best to prevent these men being landed; but if you insist on your legal rights I shall take steps to give you legal protection," I have not the least fault to find with the right hon. Gentleman. But it is quite evident that he does not accept that position. I fully recognise the difficult position in which the Government were placed, and that they were justified in using every element of persuasion to prevent these men being landed; but I say 394 that if they told Messrs. Houlder Brothers, or led them to suppose that not only at that moment but permanently they would not give them protection in carrying out a legal transaction, they were laying down a precedent which was a very bad one indeed.
§ The PRESIDENT of the BOARD of TRADE (Mr. Buxton)
Though the Debate has turned on questions affecting the Home Office, as the Board of Trade has been brought into the matter it may be well that I should say a few words. I entirely agree with the remarks of the Mover of the reduction as to the general attitude which the Board of Trade ought to take up with reference to labour disputes. I entirely agree that their attitude should be one of strict impartiality. Indeed, it is only if they maintain the traditions of strict impartiality which the Department at present enjoy that they will be able to do any good in these matters from the public point of view. I hope the House will believe me when I say that in intervening at a certain period in this affair I was actuated solely by the desire to bring about a satisfactory settlement. I repudiate altogether any idea that I was not holding the scales perfectly fairly between the two parties. My view was that such action as I took would be to the advantage of both capital and labour. The Home Secretary has given so exhaustively the history of this matter as far as the action of the Home Office is concerned that I need not go into it in detail. I must, however, refer to it briefly in order to show what the attitude of myself and of my officials was in regard to the matter. Previous speakers have dealt at length with the merits of the proposal of Messrs. Houlder in regard to tonnage rates and day rates, and with that I have nothing whatever to do. I have nothing to do with the merits of the original quarrel or with the merits of the decision come to by the arbitrator. It was only after the first strike and riot had occurred that either the Home Office or the Board of Trade came into the matter. It was not till then that the Home Office was asked to give protection to the imported labour. The first action taken by the Board of Trade was to send down Mr. Mitchell to see how far he could assist in bringing about a satisfactory settlement. I am glad to think that his good offices and those of the Mayor of Newport were successful after prolonged discussion in persuading the men on the one side and the dock company, representing the shippers on the other, to come to what they believed was an agreement 395 satisfactory to all parties, namely, to refer the matter to arbitration, to refer other matters in dispute to the good offices of the Board of Trade if they occurred, and t that the men should return to work on the following Monday. I received telegrams expressing the greatest possible gratification at what was believed to be a final settlement of the business. I will not go into the question of how the misunderstanding between Mr. Macaulay and the shipping company arose; I will only say that he thought he was authorised in specifying particularly in the agreement the case of Messrs. Houlder. On the Monday Messrs. Houlder repudiated the agreement, saying — and I do not cast any doubt on their word— that it was made without their concurrence. However the misunderstanding may have arisen, the mere fact that after an agreement had been arrived at in circumstances of great difficulty it should have been suddenly repudiated by, as the men believed, one of the parties to it, naturally exacerbated a position already very grave. So grave was the position on the Saturday that the Home Secretary had pointed out to the local authority that their obligation was to maintain order, and that he would assist them, by sending down no less than 300 Metropolitan police in augmentation of the local force. It was clear that after Saturday a very much greater force would be necessary if matters came to an issue. On the Monday Mr. Macaulay and the Mayor of Newport came up to see if they could persuade Messrs. Houlder to become a party to the agreement. On the Wednesday Mr. Askwith of the Board of Trade invited Messrs. Houlder and the other parties concerned to meet him to see if they could arrive at an agreement. After considerable discussion Messrs. Houlder agreed to refer the matter to arbitration— practically coming to the agreement which had been made on the Saturday. In a letter sent to the papers on the 27th by the Shipping Federation, who for this purpose are Messrs. Houlder, they said —they [Messrs. Houlder] recognise, however, that the result of the unauthorised negotiations for the settlement of the dispute upon the 'Indian Transport' which took place on the 21st inst, has been to place not only themselves, but their old employé's, in a false position. They accordingly, after consultation with the Shipping Federation, and with an earnest desire to promote a settlement, made an offer through the Board of Trade, on 25th inst., to submit to the judgment of three arbitrators, one to be appointed by their former employé's, one by themselves, with an umpire to be agreed jointly upon, on the question as to whether or not the piecework or day wage system should prevail.396 The important point is that on the Wednesday they had themselves voluntarily agreed to refer the matter to arbitration. But they attached what was considered at the time an impossible condition, namely, that, pending the arbitration, their ships should be loaded under the new system. It is invariably the custom when a matter is referred to arbitration that the work or whatever it may be which goes on during the course of the arbitration should be under the old system. If it were otherwise it would obviously prejudice the decision of the arbitrator, and I do not think it was at all unreasonable on the part of the men to decline to accept that as a condition of the reference to arbitration. They were, however, anxious to meet their opponents, and they agreed with Messrs. Houlder that if Messrs. Houlder had any complaint to make, or would suggest any way by which their ships could be loaded in a better way, they were perfectly prepared to accept the instructions of any foreman appointed by Messrs. Houlder and to load the ships to the satisfaction of Messrs. Houlder. But Messrs. Houlder declined to agree to the principle of arbitration without attaching the particular condition to it. Then came the Thursday. I was informed that the matter had come to a deadlock, and I therefore thought it right to intervene and see if I could bring about an agreement. There were four parties interested in the matter— the local authority, the dock company— representing the shipowners— the men, and Messrs. Houlder. I first saw the mayor, the deputy-mayor and the town clerk, as representing the local authority responsible for law and order. They informed me of the circumstances exactly as the Home Secretary has already described. This information I need not repeat. They described to me the position of affairs, the very great gravity of the situation, and the certainty that if these men were brought in that bloodshed would ensue. I was also informed by the Home Office to the same effect— as the Home Secretary has already stated. Meanwhile I had communicated with Messrs. Houlder, and invited them to come and see me. They at first declined, but apparently they thought better of it, and they came and saw me in the course of the afternoon. I want hon. Mem-Members to understand that the matter at that moment was very acute and very urgent. I saw Messrs. Houlder some time early on the afternoon of Thursday. They 397 had stated that morning that these men were to be brought in at seven o'clock that evening. Therefore the matter was a question of hours and not of days. My object was to persuade Messrs. Houlder— which I confess I hoped to have been able to do— to go back to the position of the previous Saturday. They themselves had almost come back to it voluntarily. They opened the discussion by saying that they had now gone back from that position. They told me that they did not propose to agree to arbitration; nothing would induce them to agree to arbitration; nothing would induce them to agree to their ships being loaded pending arbitration, except under the new system. We discussed the matter, and after a very long discussion— I hope on my part temperately, and I am sure courteously— I was able to persuade them to recede from the position they had taken up, and to discuss the matter on the basis that they might possibly agree to arbitration. No principle seemed to be involved in such agreement, for they had already substantially agreed to arbitration. But I was unable to get any further. In the course of a very prolonged discussion—and this meets the point of which I am accused—I was asked by one of them as to what would happen; what it was proposed I should do when their men came in at seven o'clock that evening, it being now about four o'clock in the afternoon.
I replied that, as President of the Board of Trade, it was not my business or duty to intervene in any question of law and order: that I had seen those representing the local authority, and that they had put the case before me to the effect that if these men were brought in there would be very serious rioting, and almost certain bloodshed, and that, so far as they were concerned, they considered the proposals of Messrs. Houlder very unreasonable. I asked Sir Edward Troup, the Permanent Secretary of the Home Office, who was with me, to state what the view of the Home Office was. He stated it substantially in the terms of the Memorandum which the Home Secretary read. In saying I was not responsible I do not wish this House to understand that I desire in any sense to disclaim any responsibility which properly attaches to me. Quite obviously the offices performed by the Board of Trade are different to those of the Home Office. Still, I am bound to say here that the knowledge which came to me during the course of these various days, showed me that the action 398 of the Home Office was absolutely justified, and I associate myself entirely with the action of my two right hon. Friends. At the same time it was not my business then, and it is not my business now, to discuss on its merits the action of the Home Office. I think the House will agree with me in that. I asked Sir Edward Troup to express the view of the Home Office, and he expressed it in terms that were substantially the terms of the Memorandum. That was that the local authority had also informed him that they should not, under the circumstances, be able, or indeed be willing— if you like to put it that way— that evening to give substantial protection to these men or to secure their landing without riot and possibly without some maltreatment of the men themselves. This attitude was quite as much, I venture to say, in the interests of these free labourers as in the interests of the locality as well as of those of Messrs. Houlder. I said, in effect, to Messrs. Houlder, you have already agreed to the principle of arbitration: this is the local position; this is the view of the local authority; this is the view of the Home Office; surely under these circumstances it is not a very unreasonable proposition to ask you to accept arbitration! However, I was unable to persuade them, although, let me assure the House, I gave them this information more by way of information than by way of threat. To my very great regret our conference had practically broken up, and I was afraid that the affair would have to take its consequences. Just at the last moment, however, one of those present, representing Messrs. Houlder, or Mr. Houlder himself, suggested that as a way out they would agree, reluctantly, to the principle of arbitration if I could persuade. the local authority to undertake to indeminfy them for any loss, physical or material, that they might have been put to in the previous days before the Home Office and the Board of Trade intervened, during the rioting which occurred before, and also if the local authority, pending arbitration, would pay them a demurrage fee of £100 per day. It seems to me that the position of Messrs. Houlder at that moment was this: they were perfectly prepared to run the risk of certain rioting and probable bloodshed, and maltreatment of these men, unless they were paid for not doing so. I then represented this position of theirs to the local authority. I did my best to persuade them in the circumstances to agree to this demand in order to bring 399 about a peaceful solution. The local authority thought, and I must say I agree with them, that this was an unreasonable proposition on the part of a shipping firm. I do not believe any other shipping firm in the Kingdom would have made such a proposal; and, agreeing to the principle of arbitration, would not have allowed the ship—the source of friction— to be loaded and leave. However, I was able to persuade the local authority to agree to the terms. I then saw the representatives of the men, and after some difficulty I was able to persuade them also to agree to these terms. I venture to say to the House that the account I have given of my interview with Messrs. Houlder shows that my object was to bring about a peaceful solution of this question, that I endeavoured, under very difficult circumstances, to persuade them to agree to the course which I ventured to suggest to them; but whatever the cause which brought it about, at all events they did agree finally upon arbitration.
Let me point out this— I think it is material. It is quite obvious from what has subsequently occurred that mine was not an unreasonable proposition, and to their disadvantage, because the arbitration has gone absolutely and entirely in their favour. I cannot be charged with trying to jockey them into arbitration, knowing their case was a bad one, and that they would suffer by arbitration. The arbitration took place. The Home Secretary has referred to it. Some of the men, I deeply regret— the number was very limited— declined to accept the arbitration. I regret that these men should have declined to accept the arbitration. It is quite obvious if we have arbitration under the Board of Trade that unless both sides absolutely and loyally accept the result of that arbitration it is really hopeless for us to undertake it. The leaders accepted the arbitration. They have repudiated the action of those few men who did not. They have not given them strike pay, and have stated that these ships, even by imported labour, were to be peacefully loaded. They have been so loaded. I think the best justification for the action of the Home Office and of the Board of Trade is this: that if I had not ventured to intervene and been able to persuade Messrs. Houlder, and if the Home Office had not taken the action they did, unquestionably we should have had in Newport rioting 400 and bloodshed to a very great extent, whereas I am glad to think that the whole matter passed off without loss of life or property. I do not know what the House would have thought if we had not done our very level best to bring about a peaceful result. We are now taxed for having tried to do our best, but I should like to know what would have been the indignation, and the rightful indignation, of hon. Members opposite, and in all quarters of the House, if we had had to produce here a Newport casualty list and try to defend our inaction. Having been through this whole affair, I am bound to say that I should have had more sympathy with Messrs. Houlder if from the beginning to the end they had at any moment shown the slightest glimmering of a desire to assist those who were honestly endeavouring to bring about a peaceful result, and if they had not from the beginning to the end thrown every difficulty and obstacle in the way of those who were trying to reduce and not to inflame irritation, and trying to bring about a peaceful settlement. I did not mean to detain the House so long, but I have been trying to give the justification for what we have done. The Home Secretary has shown where the Home Office were responsible for what they have done. I can only say for myself that I have endeavoured throughout to do what was right and just. I have carefully reviewed more than once my action in the light of subsequent events both what I said and what I did during those few days. I can assure hon. Members that it was a very difficult and delicate task I had to undertake, and I venture to say now in all modesty that, reviewing what I said and did then, I have nothing to retract, nothing to apologise for, and I should have done exactly the same thing if the same circumstances had occurred.
§ Sir ALFRED CRIPPS
I do not rise to controvert anything that has been said by the right hon. Gentleman who has just sat down. I am one of those who rejoice that conciliation and arbitration brought about a settlement on that occasion, and I hope the principle of arbitration and conciliation will spread as far as possible in regard to labour disputes. I think it is a very important thing in cases of this kind that there should not be any doubt as between legal Members of the House as to what the law is in reference to the circumstances which arose in Newport. I see the right hon. Gentleman the Secretary of State for War opposite, who, 401 before he took to his warlike pursuits, was very well known as an authority on matters in connection with riots. I refer particularly to the part he played in the Commission in reference to the Feather-stone riots. I should like to ask the Secretary of State for War whether he agrees with me in what I consider to be the law upon this point. I do not think anyone will doubt that as a matter of principle what was said by the Noble Lord the Member for Oxford (Lord Hugh Cecil) was perfectly accurate, namely, that it is the duty of the police authorities to protect all citizens so as to enable them to carry out their legal rights in a peaceful manner. While one may state a proposition of that kind one also has to state that certain conditions of time, place, and circumstances must govern the action of the police authorities and the Home Office, and that they are bound to have regard to the particular time, place, and circumstances, such as arose in this case at Newport.
I understand the position to be this: The Home Office and the local authorities and those responsible for the police came to the conclusion that if these free labour men were allowed to land the result would be riot and bloodshed. I say, without fear of contradiction, that those responsible are not only bound, but it is their right and duty to prevent an act which in these circumstances was likely to lead to riot and bloodshed, and having regard to what the Home Secretary has said— I am only expressing my own opinion— the view of the Home Office is not only entirely justified, but in my opinion the Home Office would have been guilty of dereliction of duty if they did not step in and intervene in order to prevent what would have resulted in riot and bloodshed. While saying that, I want to make it quite clear that no one can doubt what was said by the Noble Lord. Of course, it is the duty of the police authorities to protect citizens in the exercise of their rights, but you cannot press a general principle of that kind to an extent that would prevent the police authorities or the Home Office from interfering with the exercise of particular rights which if exercised were likely to lead to riot or bloodshed.
If we bring these two views together— what I may call the general principle on the one hand, and its modification by special circumstances on the other— I think we will get an accurate definition a6 to what the true legal position is as regards such conditions as those which arose 402 in the Newport case. I want to know whether the right hon. Gentleman the Secretary of State for War agrees with what I say as regards the position, because I think it would be a lamentable matter in regard to what took place at Newport that any difference of opinion should exist among the legal Members of the House as to what the law is. I think the Home Office took the right course, and were fully justified in what they did.
§ The SECRETARY of STATE for WAR (Mr. Haldane)
The hon. and learned Gentleman who has just sat down has. appealed to me as to whether I confirm his view of the law. I entirely agree with him, and, if I may say so, I think he has stated it admirably, but that is not the only reason for which I rise. On the 21st May my right hon. Friend the Home Secretary had to leave the country, and as there must be a Home Secretary in the country it was arranged that I should take over the duty. I did take it over, and it was at that period that these things happened, and the view of the law acted upon was the view of the law as expressed in a certain direction, which I give. These directions were based entirely upon the principle which I think the hon. Member quoted. I agree that the first duty of the Executive should be to preserve law and order. I agree persons must be protected in the exercise of their legal rights. But there is a class of case, which is very difficult to define when you come across it, in which what would otherwise be the legal rights becomes illegal. The courts are full of such cases, and scores of such cases have come before them. I will not weary the House with the relation of cases in which it is shown that an act which is perfectly legal in itself becomes, under certain circumstances, illegal. 3 agree entirely with the view of the hon. and learned Gentleman (Sir A. Cripps) that you cannot always define these cases by abstract principle, but you know them when you see them. I may not be able to define an elephant, but I know one when I see it. I had to consider, and to consider without the aid of books— for I was in the country at the time— into what category the case at Newport had to fall. It was not that Messrs. Houlder were prevented from bringing in their free labourers. Whatever may have been the merits of that is another matter— we had nothing to do with it. The law had simply to protect Messrs. Houlder in the exercise of their legal rights, but where Messrs Houlder, or any- 403 body else, are exercising legal rights, and doing something which is as bad as the striking of a match in the immediate neighbourhood of a gunpowder magazine, these are circumstances in which their action might become illegal actions— circumstances in which the state of public feeling is such that no power can prevent riot and bloodshed and disorder, when doing something which in other circumstances would be a perfectly innocent act on the part of the individual. In our view at the time that was the special circumstance. I quite agree with the hon. Member opposite who pointed out that it would be a very questionable proposition if on the ground of something that might happen on the moment, that the intention was expressed to interfere. We interfered, and I take the responsibility for giving the decision simply and solely on the ground of the circumstances at Newport at the time, and I came to the conclusion that what would otherwise be legal action on the part of Messrs. Houlder would be illegal if persisted in in the then circumstance. I cannot, as I say, pretend to give an abstract definition of the exact circumstances, but the House will accept what I have said. In a book by Professor Dicey, a very Conservative writer, there is a passage which puts it very well. He says: "It may well be that if the public peace cannot otherwise be preserved, it is lawful to interfere with the legal rights of an individual and prevent him pursuing a course which in itself may be perfectly legal." That is the answer to the criticism of the Noble Lord, and I can only say that in taking the course the Home Office did take, they believed they were acting in strict accordance with the common law.
§ Lord HUGH CECIL
May I ask the right hon. Gentleman whether in his opinion, supposing Messrs. Houlder had persisted, they would have laid themselves open to legal proceedings, and whether the people who resisted the law would lay themselves open to similar legal prosecution?
§ Mr. HALDANE
That is a speculative question, which would have to be decided. But if the Noble Lord asks my view, it is this: that anybody who exercises his legal right in such circumstances as to lead to riot and bloodshed is doing something which is in character illegal.
§ Mr. GEORGE ROBERTS
I am loth to intervene in a Debate which has been, con- 404 trolled so far by Gentlemen of the legal profession. My only object in intervening is for the purpose of saying that in my opinion the Noble Lord (Lord Hugh Cecil) and the hon. Member for Dulwich (Mr. Bonar Law) were pushing their theory a good deal too far. They seem to claim that all the resources of the State should have been placed at the disposal of this firm in order that they might carry out their legal right of importing labourers into Newport. I venture to submit that the speeches which have been delivered by the last two speakers indicate the real facts of the case, and that the Mayor of Newport and his associates certainly have the right to see whether all these expenses should be incurred and all these police imported from different parts of the country at the cost of the ratepayers of Newport. If the theory of the Noble Lord is really the law, it would be rather difficult to preserve that impartiality which he desired in the course of his speech. If it is possible for a firm like Messrs. Houlder Brothers to claim the whole resources of the State, all they have to do is to break off negotiations, and they will have the assurance that it is incumbent upon the authorities to call up the police reserves and to call out even the armed forces to quell any disturbance that they have promoted. That carries matters to this extent that any firm in the position of Messrs. Houlder need only carry their claims to the extreme limit in order that they may crush those with whom they are in conflict, and achieve victory not upon the merits of their case, but with the aid of the extraordinary forces that they bring to their assistance. I have no apprehension in that direction, because the working classes of this country do not move along the line of riot and disorder to-day. In this particular case they were an organised and disciplined force, and there was not the danger which some people apprehended. There are no bodies of trade unionists, and certainly no trade union officials, who would ever give sanction to riot and disorder in order to achieve the particular aim they have in view. On the other hand, I submit there is just as great and perhaps formidable a danger in the theory enunciated by the Noble Lord and the hon. Member for Dulwich. If firms are to be told across the floor of the House of Commons that they have the right to call upon all the resources of the State to subdue their men in time of trade disputes, I think we shall be violating the principle of impartiality 405 and equity. I agree with the Secretary for War that the circumstances in each case must be taken into consideration, and I feel that the fact that this trouble has been allayed without any riot or disorder, and without any destruction of property, redounds to the credit of the leaders of the men and also to the credit of the Mayor and the members of the Municipal Council of Newport. I happen to know the leaders of the men in this dispute. Mr. Tillett is himself known throughout the country as a most powerful advocate of the principles of conciliation and arbitration, and I was quite confident when the strike was entered upon that he would use his influence to have the whole matter submitted to arbitration with a view to arriving at a peaceful settlement. Therefore I do not think it is right, across the floor of the House of Commons, to cast any aspersions upon the leaders of the men for their conduct in this unfortunate dispute. I hope that the interpretation given by the Secretary for War will secure as much attention and publicity as will undoubtedly be accorded to the theory enunciated by the Noble Lord opposite. I do not think it is desirable to enter into the details of this dispute. They have been laid before the House with great fairness, and I feel that whatever apprehensions may have existed in the minds of hon. Members they will be bound to admit that both the Home Office and the Board of Trade did what was expected of them under an unfortunate and regrettable set of circumstances. They have emerged with credit, and we are able to rejoice that they have, assisted by the influence of the Mayor of Newport and his colleagues, been able to avoid what might have been a very serious outbreak, and peace has been established to the satisfaction of all parties. I know the men's leaders have had great difficulty in inducing the men to acquiesce in the arbitrator's award, but, like honourable men, despite the unpopularity of their action, they have insisted that the men should abide by a principle which was somewhat distasteful to them.
§ Mr. ALFRED LYTTELTON
I agree that the speech made by the Secretary for War was on the whole highly satisfactory, although I think the Home Secretary put the case somewhat too high. I think the action of the Home Office in this case was entirely justified. It is probable that the occasion on which it was proposed these men should land would have led to a serious riot, and therefore I think the 406 Home Office were right in deciding not to permit the men to land. I think the Secretary for War has admitted this principle, although I do not think the Government would have been justified in taking such action permanently or even over a considerable period. Having said that, may I also say, with great deference to the right hon. Gentleman's legal authority and abilities, that I should hesitate to assert that Messrs. Houlder, in proposing to land those men or in actually landing them contrary to the advice of the Home Office, would have been guilty of any illegal act. There are times when the Chancellor of the Exchequer considered it his duty to oppose the policy of the late Government in a manner which brought upon him unpopularity. The right hon. Gentleman addressed meetings which anybody could have told him would be likely to produce a riot. But, notwithstanding such an intimation, if the right hon. Gentleman went down to Birmingham and persisted in delivering a speech which produced that result, would he be guilty of a crime or an illegality? According to the statement made by the Secretary for War the law would have enabled the Town Clerk of Birmingham to have entered an action against the Chancellor of the Exchequer for trespass or for acts calculated to cause a riot. Had anybody attempted to prosecute the Chancellor of the Exchequer for delivering such a speech, I think they would have failed to convict him. With that protest against the latter part of the Secretary for War's speech, I. desire to say that the action of the Home Office is not impeached upon the present occasion, but I wish to guard myself from any idea that a temporary risk of riot constitutes an excuse for making a permanent change in the law.
§ Amendment put, and negatived.
§ Motion made, and Question proposed, "That the House doth agree with the Committee in the said Resolution."
§ Sir WILLIAM BULL
I put down the Motion which stands in my name to-night for the purpose of ventilating and obtaining some information as to the way the Super-tax is to be collected, and I desire to make some remarks as to the regulations. I wish to question the legality of issuing the Super-tax forms at the present time. In the first place, I would point out that the return for assessment was issued to the public long before the regulations were laid upon the Table. This may not appear 407 to be a very important matter now that the tax will be collected, but I would point out that it is a very arbitrary and unconstitutional proceeding for officials to pretend that they have the legal authority to collect moneys when they have nothing of the kind. This is not the first time that this has been done recently, and I desire to protest against it. It is a part of the spirit of bureaucracy which the present Government has been the means of bringing into being. Then, again, I should like to know how the twenty-eight days from the date when the notice was served squares with the fact that the regulations have to lie forty days on the Table before they become law. The form is extremely inquisitorial—more inquisitorial than we have ever had in taxation before, and a great deal of information required by it is already in the hands of the Income Tax authorities, and why people should be compelled to fill up fresh forms when the information is in the hands of the authorities I cannot think, except for the purpose of annoying them. English people have no genius for filling up forms; they always do it very badly, and they always make mistakes. Thousands and thousands of pounds are claimed annually by the Government which ought to be returned to the people with small incomes, if only right were done, but the people are so appalled at the red tape they have to go through in the forms they have to fill up, that they would rather submit to the loss of the money than the time and trouble it takes to get back the amounts claimed; and on this subject I can speak with some authority.
A great many cases are occurring under which it will be very difficult indeed for a person to know how to act. When a man lives in his own house and also occupies land which is separately rated, is the rent or the annual value of the house to be the amount upon which it is rated and on which tax is paid under Schedule A; and is the annual value of the land in the owner's occupation to be the amount at which it is assessed and on which tax is paid under Schedule B? This is a point which concerns a great many people who will have to fill up these forms. I would like to know if this is all required to be paid in respect of the land. I am aware the directions say land profits on land are to be taken at the amount on which Income Tax has been paid under Schedule B or D, but is this all that is required to 408 be paid in regard to the land? An owner pays under Schedule A and B. I see that in the case of Income Tax for which anyone is personally liable to be assessed the amount is to be the sum for the year ending 5th April, 1909. This may prove to be very hard, because as the House is well aware in the past the three years' average has always been taken for Income Tax purposes. This in the present case may bring the income up to £5,000, whereas, if the income was taken for the year to 5th April as in the Act, it might very well be below £5,000. I should like to suggest that the explanatory note should be made more clear than it is at the present time, for few will understand the meaning of making a return of total income from all sources estimated for the purposes of exemption or abatement under the Income Tax Acts. It really will require a great deal of skilled labour for anyone to fill up these forms properly. With regard to abatement, the word "annuities" is used. Will this include a payment under a deed of covenant? I should like to give this as an example. A, on the marriage of a daughter, covenants by deed to pay his daughter £300 a year during his life. Can that be deducted as a charge on his income? Until the Super-tax was imposed the question never arose, but now, if this be not deducted as a charge on his income, he may have to pay the Super-tax, his income being so near £5,000. Supposing he has settled property on a son or daughter, will he have to pay Income Tax on that amount?
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)
It is a legal obligation.
§ Sir W. BULL
It becomes a legal obligation. Then he might settle the larger part of his income on his children, and thus avoid payment.
§ Mr. GIBSON BOWLES
Let me at the outset say that the extreme and vicious principle of the law of averages always works unjustly in the case of the Income Tax. When a man's income is rising and prosperous he is charged too little, and when it is falling, and he is the reverse of prosperous, he is charged too much. The regulations and indeed the law with regard to the issue of these regulations raises a really serious question which will have to be dealt with some day, and that is the extent to which the people and the law of this country are now put in the 409 hands of permanent officials. There was a time when Parliament made laws, but at present practically the permanent officials make the laws. They make them by Provisional Order, and they make them by virtue of Orders in Council, as to which there is great glamour. It is presumed that the Sovereign sits surrounded by his great advisers and by eminent men, and that he affixes the Sign Manual to the law; but the real truth is that the Order in Council is prepared by a third-class clerk in a back parlour in Whitehall, and in nine cases out of ten it is passed by the Council without anybody at the Council Board understanding what it means. I trust there will be an alteration in the proceeding with regard to it.
I think that of all the sinners among the permanent officials who make these back-parlour Provisional Orders the Commissioners of Inland Revenue are about the worst. Our experience here shows they have conceived the notion it is their business to issue ukases as well as to override not only the law, but the judges of the courts of the land. It seems to me they have a notion it is their business to make the law, to construe the law, and to break the law when they choose; and, as for the courts, they appear to treat them with the utmost contempt. The late lamented Mr. Falstaff, when a certain Henry came to the Throne, said:—… the laws of England are at my commandment. Happy are they which have been my friends; and woe unto my Lord Chief Justice!That is what the Inland Revenue say now.
Let me say, with regard to the Income Tax, not the Super-tax, that the Inland Revenue constantly levy and retain enormous quantities of Income Tax to which they are not entitled. Take a case in which there are a large number of small shareholders, like Lipton's or the "Daily Mail." Before those shareholders get their dividends, every farthing of Income Tax is deducted. All those rather poor people in possession of incomes of no more than £700 a year have a right to a return in respect of that income. They never get it. I know, of course, what the Inland Revenue would reply. They would say it is their own fault. Why do not they claim I should think myself more likely to succeed in getting butter out of a dog's mouth than in any enterprise to get anything out of the Inland Revenue after once they have got hold of it. The poor applicant for a 410 small sum would find it practically impossible to stand the conditions which the Inland Revenue would put upon him. These applications, as a matter of fact, are not made, and the Inland Revenue is constantly retaining enormous sums of Income Tax to which they are not entitled.
I believe the Inland Revenue regard themselves as the special Department of extortion. I hope it may be denied in the course of the Debate, but I am informed that the promotion of officials at the Inland Revenue depends upon their success in extorting taxation from taxpayers, rightly or wrongly, and usually wrongly. These Commissioners are very unfair. They tell you all the conditions under which you must pay, but they abstain from telling you the conditions under which you can obtain alleviations or exemptions from payment. They are un-candid; they are vexatious; they worry the taxpayer in the most terrible manner; they are inquisitorial, and they constantly make inquiries which, I say, they have no warrant at all for making. I will give the House an instance. I am told they issue inquiries as to the underwriting of loans. You find men in the City who will themselves undertake the whole of an issue at a price, or take any part of an issue the public does not take. That is a risky business, and there are losses made in it as well as gains. I am credibly told that the Inland Revenue are now issuing requests to financiers to give them the names of all the persons who have underwritten. They have no more right to do it than they have to do the most unlawful thing possible. Hitherto those who have understood their rights have refused their demand, and they have not got the information; but I have no doubt in the case of some financiers who have not understood their rights they have obtained the information, and they are possibly now using it for extorting taxation. They constantly figure as oppressors. They use the powers the law gives them, and the greater powers which are supposed to belong to them, to terrify the taxpayer into paying taxes which he believes not to be due, and which sometimes are not, in fact, due. They are also, I cannot help saying, suborners of perjury. The Income Tax Act of 1842 enacts that before anybody undertakes the duties of a commissioner, collector, assessor, or even of a clerk, he shall take an oath that he will not divulge any particulars that come to his knowledge with regard to Schedule D. I venture to affirm that these particulars are 411 constantly divulged by Income Tax officials, at any rate to Estate Duty Officials, who use them in order to increase the Estate Duty charges in a manner which would not be otherwise possible.
I come now to this immediate question of the Super-tax. My hon. Friend opposite has mentioned it, but I will read the Clause to the House that we may understand where we are. I will do so in the presence of the Solicitor-General (Sir Rufus Isaacs), who, I think, is good lawyer enough to agree with the interpretation I put upon the Clause. The Clause is this:The Super-tax shall be assessed and charged by the Commissioners for the special purposes of the Acts relating to Income Tax (in this Act referred to as the Special Commissioners).Let the House mark this:Every person upon whom notice is served in manner prescribed by regulations under this section by the Special Commissioners requiring him to make a return of his total income from all sources.…shall, whether he is or is not chargeable with the Super-tax, make such a return in the form and within the time required by the notice.A person upon whom notice is served in a manner not prescribed by regulation is not bound to make the return, nor is he bound to make a return if regulations do not exist. That is the case here. The Commissioners may make regulations, and if hon. Members will refer to the Interpretation Clause they will see that in this particular instance they must be made by the Inland Revenue Commissioners, and the regulations, when made, are to lie upon the Table of both Houses of Parliament for forty full sitting days, and if in the course of those forty days an Address is moved by either House to His Majesty the King to annul one or any of those regulations, then the King may by Order in Council annul them. Mark the result of this. Those regulations were put on the Table of this House in dummy on 8th June, and only one copy, instead of the two -which ought to have been sent to this House, and which the Commissioners of Inland Revenue knew should have been sent, was forwarded. In fact, instead of sending two copies so that one might be passed on to the printers and the other be accessible to Members of the House, the Commissioners, in their grand 412 manner, only sent one. They paid no more attention to the order of Mr. Speaker than they are in the habit of paying to the law. The result of sending only one copy was that no Member of this House was able to see the regulations until, in consequence of a remonstrance made by myself, a second copy was laid on the Table, and that was on 16th June. You, Mr. Speaker, ruled that the forty days did not begin to run until the House had effectively seen the regulations—that is to say, until 16th June. The consequence of that is that the period of forty sitting days cannot lapse until 11th August, and if before then the sittings of this House are intermitted the days may go on till next Session. The forty days must be completed, and until the expiration of that time the regulations are not final or valid. They may in part or whole be annulled, and they cannot be held to be final, at any rate, until early in August. I submit again that there is no power in the Special Commissioners even to issue the notice until the regulations are final and valid, and still less is there any power to act upon it. I say the Special Commissioners had no power under this Act—but it is not they who are in fault. It is the Inland Revenue Commissioners who have done this, and I emphasise that because, personally, I am later on going to pay my testimony to the Special Commissioners, and to make an appeal to them. These notices have been issued, and they have demanded a return. They issued the notices long before the regulations were even laid in dummy on this Table. They were not laid until 8th June, and, to my painful personal knowledge, the Commissioners issued the notice on 4th May, and they claimed a return by 1st June, even before this House had heard of or seen the regulations. I claim that that is a gross abuse of their powers, arid my advice to everybody under the irregular circumstances who has received this notice is not to pay the slightest regard to it or to make any return until at least 12th August. In that I believe I am stating an absolutely correct principle of law which cannot be controverted.
I come to the notice itself. It is in the hands of Members, and no doubt many of them have perused it with probably some anxiety. It requires a return of the whole income. It is extremely hard for many persons whose income is derived from many sources to say what their whole income is. It is not usual to keep an account of the whole income. One may 413 perhaps keep an account of household expenditure and of any business with which ha may be connected. He may keep a list of his investments in Consols—if he has been so imprudent as to invest in them— or in any other securities of a different kind, but the practice of keeping an account of the whole income is, I venture to say, most unusual, and possibly is not followed by one out of fifty Members of this House. The result is that when one is suddenly called upon to make a return of total income it proves an extremely difficult task, for the taxpayer has to rely considerably upon memory and somewhat upon his banker's book, which, in my case, is an enigma to me, and upon any information he may be able to pick up in another way. Then apparently, to add insult to injury, this notice requires him to return his wife's income with every particular thereof! How is a man to ascertain his wife's income? I say with all submission to the learned Solicitor-General, I very much doubt whether he can do it by means of any action at common law. I doubt even if the Lord Chancellor could do it himself. If a man is to be compelled to make a return of his wife's income he surely ougnt to have power given him to force the information from the wife of his bosom. But there is no such power, and my firm conviction is that a man cannot force his wife to tell him her income. It appears to be a fair assumption that you cannot force him to force her. There is., of course, a way of escape. I hold that at any rate if the Special Commissioners suspect a wife of, having more than £5,000 a year they may issue notice to her, but then it ought to be clearly understood that if she fails to make the return it is not the husband but the wife who will be cast into the dungeons of Somerset House.
What is income? Here I would refer to the extremely lucid instruction given in general by the Commissioners of Income Tax, and the House will see how far it advances them. The income, they say, is neither the actual income of the year nor the income which a person expects to make in that year, but it is a statutory income. That is to say, it is a hypothetical, imaginary, notional sum arrived at in an artificial manner which you have to understand. What I complain of is that no information is given as to what that artificial manner is. It is a very remarkable fact that no fewer than three times in the Super-tax Return we are told that the income for Super-tax is to be assessed in 414 the same manner as the total income from all sources is estimated for the purposes of exemption or abatement under the Income Tax Act. The whole question is what is the manner, yet although they tell us three times that it is to be done in a special manner, they do not once inform us what that manner is, and it is extremely difficult to ascertain. Ever since that fatal 4th May when I received the notice I have been endeavouring to ascertain what that mysterious manner is. I believe the Special Commissioners are in as much doubt about it as I am myself. In the end I shall make an honest return to the best of my ability, but I shall have to do so-probably without discovering what that mysterious manner is.
Next I come to the regulations. On them there is neither name nor date. For all that appears on the face of them they might be documents from ancient Babylon—a statement by the great progenitor of all tax collectors, Abraham, when he dwelt on the plains of Shinar, collecting other people's flocks, and herds. But really if ever there was an occasion upon which the regulations should explicitly inform the taxpayer of what he is to do, this is the time. Here is a tax being levied under new conditions, and it is to be demanded in a very short space of time. Let the House look at the statements herein contained —statements which are entirely unintelligible. It looks really as though the policy of the Inland Revenue Commissioners was not to give information, but to deliberately withhold it—not to diminish the difficulties of the taxpayer who earnestly desires to pay his tax, but rather to add to them. There is no information at all. The hon. Member for Hammersmith (Sir W. Bull), I see, proposes to move an Address to the Crown to annul the first paragraph of the regulations. But that is the least objectionable part of the regulations. It is in consonance with the traditions of the party to which the hon. Member belongs always to attack the strongest part of the position. Still, even in the first paragraph there is great vice, for it says that the notice shall be served "in the form attached hereto." That is the wicked form that three times tells us to do things in a certain manner while it does not inform us what that manner is. But there is another vice in the form, which requires the most complete and minute particulars to be returned under every one of the five heads set forth. I believe there is no right 415 in the Inland Revenue Commissioners to demand that, and that if the taxpayer fills up this return with a lump sum under each one of the five heads, it is all that the law requires or that the Special Commissioners can demand. Of course, it must be filled up honestly.
Take the other paragraphs of these regulations. They are almost incredible. Take No. 3. It says the liability to the Super-tax shall be assessable at the offices of the Special Commissioners. That is a piece of most outrageous presumption. The liability to a tax can be imposed only by Parliament, and by nobody else. What is assessable is not the liability but the amount of the income and the amount of taxation upon it. There is no assess-ability of liability, and what the Commissioners really meant to have said was, no doubt, that the income and not the liability was assessable. They put in the word "liability" where they meant "income." It reminds me of the story of the man in the play who, when another character was talking of the telephone, after a long explanation, said, "What you mean is a gramaphone, and then you are wrong." That is the case of the Inland Revenue Commissioners here. Then take paragraph 4, and bear in mind that the assessments are made by the Special Commissioners, and note that it says that "a person aggrieved by an assessment made upon him shall, at any time within twenty-eight days, be entitled to give notice to the Special Commissioners of his intention to appeal." To appeal to whom? Why, to appeal to the Special Commissioners against their own decision. Is it not a mockery to call that an appeal?
I have the very highest respect for and confidence in the Special Commissioners—much more than I have in the Inland Revenue. In my opinion the Special Commissioners were intended to be, and ought by law to be, a body with quasi-judicial functions. It is their business not to accord and concert their actions with the Inland Revenue Commissioners, but to accord their decisions with the law and to resist the Inland Revenue Commissioners, if need be. It is impossible to read the Income Tax Act without seeing that the intention was to set up in the Special Commissioners, not another set of tax collectors or extortioners, but an independent or judicial body, who should stand between the tax 416 collector and the public, and see justice done to them both. That is confirmed by a section of this very Act, for it is provided by Section 72 (7) "that any person nominated in that behalf by Commissioners of Inland Revenue shall have the same power to act in and upon the determination of the appeal before the Special Commissioners as the Surveyor of Taxes has." That shows at once that the Inland Revenue Commissioners are intended to be a separate body, and may become a contending body before the Special Commissioners, and they are entitled to be represented, not by counsel, but by a person who may be a surveyor of taxes. I think that indicates the true principle and the true intention with regard to the appointment of Special Commissioners, and I do earnestly hope that those Commissioners themselves will maintain their independent position and may be supported in so maintaining independence so that they may take the part of justiciars between the extortioners at Somerset House and the general public at large.
Then I come to the fifth paragraph which says that "Super-tax payable should be remitted by the person assessed to the Accountant-General of Inland Revenue at Somerset House." I have been trying to remit my taxes to that individual for years but I have been told that they could not receive them at Somerset House. Only the other day the Chancellor of the Exchequer, in words put into his mouth by the Inland Revenue, said there was no machinery to enable the Inland Revenue to accept taxes collected, and yet here is the whole of this sum in regard to Super-tax to be paid to the Commissioners with the Accountant-General as machinery in spite of all that Somerset House has been telling me for years, in spite of their constant refusal to accept my Income Tax and other people's Income Tax, and in spite of their assertion that they have no machinery to do so. The fact is that they have all the machinery and in regard to the Super-tax they mean to proceed by that machinery. Then I come to the last and most presumptuous regulation of all, which is in paragraph six. If Members will read it they will see it says "Any notice required to be served on any person under these regulations may be either delivered to such person or left at his usual and last named place of abode or sent by post by prepaid registered letter, addressed to such person, at his last named place of abode, and such service shall be deemed to be sufficient service." 417 That is not the law. It is what is to be "deemed." Who are these Commissioners who are to settle what is to be "deemed?" That is for this House to say? When you say that a thing shall be deemed what you mean is that what would ordinarily mean one thing shall be taken and deemed to mean another—that what is usually taken and deemed to have such an effect shall be taken and deemed to have such other effect. That is the prerogative of this House, and not of the Inland Revenue Commissioners. What that amounts to is a presumption by the Inland Revenue Commissioners that they are entitled to put their own construction upon the law. No, that is not for the Commissioners of Inland Revenue, but it is for this House and the Courts of Law, and for this House and the Courts of Law alone.
It seems to me to be great presumption on their part to assume to do what can only be done by Parliament, or, in the last resort, by the Courts of Law, and if the Inland Revenue Commissioners think that for ever they will escape the Courts of Law they are mistaken. Constantly they have been in the wrong. They were in the wrong—proved to be in the wrong —in their attempt to tax as income investments abroad of which the income never reached this country. That was the Gresham case. They were again in the wrong in that most notorious case of the Duke of Richmond, where they wanted to tax an estate upon a valuation of a million, and had to give up £700,000 of it. These are cases decided by the House, of Lords, and I can cite dozens and scores of cases in which they have attempted to levy taxes which they were not entitled to levy, and in which their claims have been upset in the Courts of Law. On all these points they must at last go into the courts of the King, which, thank God, are still open. This system of taxation is experimental; in some respects is, I think, dangerous and is very new. In the days of man's innocency there were no taxes because there was no Government. As soon as a Government was invented taxes arose. And, let me remark parenthetically, that every tax, in every country, was always at first upon the land alone. Then came the notion of what were called direct taxes. There was the instance of King John. King John, who could not get enough from his English subjects, did not think he would get much from the Celtic fringe, so he had resource to the Semitic 418 frill. He drew the teeth of the Jews. We do not draw their teeth now, we draw their patents of nobility, which is very much more civil, if not more civilised, and considerably more profitable.
But the extent to which direct taxation has been pushed now makes it necessary that it should be collected with discretion, and let the House permit me to observe that I believe in direct taxation as the best of all taxation. It is because I believe in direct taxation that I am anxious that the Estate Duty and the Income Tax should be preserved and continued, and it is because of this I so much deplore the imperfections which I see in some of the present operations of the system, and one of the most important things is that these very severe and sometimes most odious taxes should be levied, not in a spirit of extortion, but with patience and with some consideration for the taxpayer. Let me assure the House that the taxpayer has not always a desire to cheat the Revenue, but usually is animated by a desire honestly to pay his taxes. Let me impress upon the right hon. Gentleman the Chancellor of the Exchequer therefore that he should bring these lessons home to the Commissioners of Inland Revenue; that he should teach them that a little modesty would not be unbecoming and should be accompanied with a little consideration for the taxpayer. If this severe new system is to be accompanied by tricks played upon the taxpayer and traps laid for him by those who levy the taxes, by habitual concealment of alleviations which the law extends to the taxpayer and to which he is entitled —if when he makes a just claim he is met by delay, quibbles and quirks, and something like threats of further taxation—if vexatious and tortuous methods are adopted in the system of levying taxes, then I think serious times are in front of any Government that has to continue the taxation. Up to this time the taxes of my right hon. Friend's excellent Budget have only barked; they are now beginning to bite, and if that bite is too sharp or with too-poisoned a tooth I do not envy the reputation that will arise from them to the great masters of the thumbscrew of taxation who are now Inland Revenue Commissioners or to His Majesty's Government.
There is no system of taxation, however good, which will not suffer by being pushed to an extreme. The Eastern method of taxation is this, you do not tax the poor man, because he is not worth robbing, but 419 you follow up the rich man, and you extort and squeeze out of him by every method, moral and physical, the last farthing that he is capable of giving. That is the method of the Pasha—of every Pasha in the East. The remedy that the rich man finds is that he buries his gold in a hole or in a cave, and pretends to be a poor man. And if Eastern methods of taxation are introduced into this country they will be met by the Eastern methods of avoidance. The rich man need not fly or dig a hole, for here his riches can be concealed with the greatest ease. It is merely a question of writing out and putting your signature on a piece of paper, and although it may be an excellent thing for English capital to go abroad, and for English taxpayers to have, current accounts in foreign banks, on which they can draw for the payment of their bills here, I conceive it will be a bad thing, both for English banks and the Revenue, if large sums of that sort go abroad with that object of avoidance. We have j lent Canada in recent years £100,000,000, much of it has fled from the tax collector, and sums are now going abroad that we also flying from the tax gatherer. I end as I began—I do not disapprove of the direct system of taxation, I think it is infinitely preferable to all those lunatic schemes which are propounded from the other side of the House, but I do submit that the too great zeal of the Commisioners of Inland Revenue and their presumptious methods should be curbed. They should remember that their very purpose to collect a large amount of taxation will be defeated when the people are persuaded that they are extortioners as well as tax collectors, and they should be taught to remember that courtesy and consideration are no small part of the duty they owe to the taxpayer.
§ The SOLICITOR-GENERAL (Sir Rufus Isaacs)
The hon. Gentleman who has just spoken has dwelt upon the duties of the Inland Revenue Commissioners and the modesty which should characterise them. I recognise in the hon. Member an expert on these subjects, and he is quite entitled to correct the Commissioners. I only intend to deal with the legal points which have been raised. The most important point, it appears to me, which the last speaker made was with reference to the notice which had been sent out under Section 72 of the Finance Act. Let me point out how this matter stands. I cannot but 420 think there is a fallacy underlying the legal aspect of the matter presented by my hon. Friend. He has dealt very faithfully with the. Section and the Sub-section, but I cannot help thinking that he omitted to take note of the last part of one of the Sections. The point which is made on Section 72, I understand, is this. It is said a notice is served in manner prescribed by regulations under Section 72 of the Act. Those regulations may be made by the Commissioners, but they must lie upon the Table of the House for forty days before they acquire validity, and, therefore, it is said that, as they have not lain on the Table for forty days, time does not really begin to run, and anyone is at liberty to set at defiance the notice which has been served upon him, in pursuance of Section 72, may treat the notice with contempt, and may shield himself under this, that forty days have not really expired at the present moment. There is the subsidiary point in connection with the same Section, that inasmuch as the regulations were first laid on the Table not in proper compliance with what is required by this House, the time, according to the ruling of Mr. Speaker, would not begin to run for the forty days until the second copy had been laid on the Table; that therefore equally the time would not begin to run from that forty days, and that therefore no one need pay his Super-tax until forty days from the date when the second copy was before the House, which was stated to be 16th June. My submission on both of those points is that my hon. Friend is in complete error as to the construction of the Statute. There is no doubt that there is power to make the regulations. All that is undisputed, and it appears from Section 72 that the regulations have force from the moment that they are made.
If you look at Section 93 you will find this is what must happen. As soon as possible after the regulations are made they must be laid upon the Table of the House. Then, within forty days of the date of their being laid upon the Table of the House, which I take to be, within the ruling of Mr. Speaker on a recent occasion, forty days from the time that they are properly laid on the Table, that is with two copies, and forty sitting days, there is power given to move an Address to His Majesty by either House of Parliament that this regulation may be annulled by His Majesty in Council; and, of course, if in pursuance of that an Address is presented, it is open to His Majesty in Council to annul the rule or regulation, and if so, 421 under Section 93, "it shall thenceforth be void, but without prejudice to the validity of anything previously done thereunder." It seems to me that it is quite clear that the regulations are valid from the time they are made and that the limitation of forty days applies merely to the time during which the Address may be presented by either House of Parliament, and then, if His Majesty in Council annuls the rule, the result is not that everything that has been done thereunder is null and void, but quite the contrary. The Statute says that the rule shall from that moment be annulled, and everything that is done thereunder shall remain good and valid notwithstanding that it is annulled from this particular period. Therefore I do not think my hon. Friend, with his very great ability, and his great knowledge on this subject would be quite safe in giving the advice which he has been giving to the country, and I am also quite certain that if he were appealed to for his advice he would agree that he must make it subject to the qualification that if it is annulled the rule is only to be void from the moment that it is annulled, and that the operation of the last line of Section 93 would protect everything that has been done thereunder.
There remains the other point which is not disposed of by what I have said. That is in reference to Sub-section 2 of Section 72. All that that says is that the notice must be served in the manner prescribed by the regulations, and anyone upon whom notice is served which is not in accordance with those regulations would be quite entitled to say that it did not bind him, but it does not make a good notice invalid from the notice it is given. That must be so because you may issue1 your notice, and the moment you have the regulations they need not be on the Table of the House. They must be laid on the Table as soon as may be after they are made but they are effective from the moment they are made.
§ Mr. GIBSON BOWLES
Does the hon. and learned Gentleman really suggest that the notice might have been issued, and would be valid although the regulations had never been made?
§ Sir RUFUS ISAACS
I do not think that is quite in accord with what I am stating. "There have to be regulations prescribed— that is clear. A notice, in order to have validity, must be in the manner prescribed by the regulations, arid so long as the 422 notice which is served is in accordance with the regulations which are prescribed, it is not necessary that those regulations should have been prescribed at the time the notice is served. That is the only point that I am upon. It seems simple enough. All that it means is that the regulations have to be prescribed by the Commissioners. Although the regulations have not been prescribed, the notice may be perfectly good, and the regulations may be issued afterwards. I agree entirely that the notice nevertheless, in order to be a valid notice to be made operative against the person upon whom it is served, must be in the manner prescribed by the regulations. It takes no validity and cannot be enforced until there have been regulations prescribed for that purpose. But it does not make the notices, which have been issued before the regulations were prescribed, invalid. The only matter upon which there can be any question is as to whether a notice which is served before the regulation is issued may be disregarded for all time, notwithstanding that the regulations are subsequently prescribed, and that the notice which is given is in accordance with the regulations, or whether the notice has again to be served. There is no difficulty in that, as it appears to me, so long as the notice is served in the manner prescribed by the regulations under this Section.
§ Mr. H. E. DUKE
Does the hon. and learned Gentleman suggest that a bad notice can be validated by a subsequent regulation?
§ Sir RUFUS ISAACS
I do not quite understand what my hon. and learned Friend means by a "bad notice." That begs the question according to the view I am taking. If the notice is in accordance with the regulations it is not bad because it was served before the regulations were prescribed. It still remains a notice served in the manner prescribed by the regulations.
§ Mr. DUKE
This is a matter of substance. A notice may be good at law without any regulations. That is a good notice. If the notice is not good at law without the regulations, then it requires something to validate it. I want to know whether a notice which is not good at law can be validated by a subsequent regulation of the Taxation Commissioners. Ordinarily, except for some provision in an Act of Parliament, it could only be validated by Parliament.
§ Sir RUFUS ISAACS
I have been trying to follow the hon. and learned Gentleman's point. It does not seem to me to follow from what I am putting. The notice must be in the manner prescribed by the regulations. That means that there must be regulations, and that the notice must accord with those regulations. If a notice is served before the regulations are prescribed, and it does not agree with the regulations, that notice, as I have already said, could not, in my opinion, be enforced. It would be invalid, because it was not in accordance with the form prescribed by the regulations. May I point out that we are really discussing what is a purely academic matter? In point of fact, no notice was served until the regulations had been made. I say that on the information which has been given to me from the. very best source.
§ Mr. GIBSON BOWLES
May I point out that the regulations before us bear no date, and therefore there is no indication whatever when they were made. They did not reach this House until 8th June, or a month after the notices were issued.
§ Sir RUFUS ISAACS
That only takes us back to the same point. What my hon. Friend has said does not meet the point I am making. It only complicates the matter. It does not help the case to talk about the date when the regulations were laid on the Table of the House. Whether the regulations were laid on the Table of the House on 1st, or 8th, or 16th June does not matter. What does matter is whether any notices were sent out before the regulations were made.
§ Mr. BOYTON
Will the hon. and learned Gentleman give us the date when the Special Commissioners did prescribe the regulations?
§ Sir RUFUS ISAACS
I cannot give it at the moment. I pass now to the point raised by the hon. Member for Hammersmith (Sir W. Bull). He quoted Section 72 of the Act, and complained of what he described as an inconsistency, because there are twenty-eight days fixed for sending in the returns for Super-tax, while at the same time there is a statement in Sub-section (3) of the Clause that the tax of 1910 shall be paid in this year. These are two quite separate things, and I am sure the hon. Member for King's Lynn (Mr. Gibson Bowles) will agree with what I am saying on this point. There are 424 two matters which have to be dealt with in regard to the Super-tax. One is the return which has to be made in accordance with the notice served on a person, and the other is the return which a person liable for the Super-tax has to make, though no notice is served upon him. In order to comply with the Statute a person who is liable for the tax and who receives no notice must give notice to the authorities before 31st July, otherwise he renders himself amenable to the law. I think that disposes of all the matters raised in regard to matters of law. I listened with the greatest interest to what my hon. Friend said in reference to a husband ascertaining from his wife what her income was. The question I was asked was what I would prescribe as the right thing to do in the circumstances. I am fortified by the suggestion of my hon. Friend that if the husband makes a return it is therefore open for the Commissioners to serve their notice on the wife. Whether the Commissioners, after they get the information, may communicate it to the husband is a matter I do not express an opinion upon. I would only like to make one observation with reference to the general comment made on the Commissioners of Inland Revenue as to their action in matters of litigation. The hon. Member blames them for the variance in the decisions given in the House of Lords and in the lower courts. The Commissioners of Inland Revenue or any other Department can hardly be held to be blamable because the view which they have taken, probably on advices has not been found in the end to be that which commends itself to the highest tribunal. There are points of law which are not quite settled even now, and as to which there is some doubt what the House of Lords would do if a case came before them. It would be a dangerous thing to say that every Government Department must be held to have acted wrongly and blamably if in cases where they are parties to litigation the courts did not sustain the view which, in the interest of the Exchequer, they presented for adjudication.
§ Mr. PRETYMAN
I wish to put one or two specific points before the Chancellor of the Exchequer, but before doing so let me say that I think the House would have been glad if the Solicitor-General had added a little more information on the question of the income of husband and wife. The hon. and learned Gentleman told us how the Inland Commissioners 425 were going to get at the lady's income, but he did not tell us who would have to pay the tax. If paid by the husband, would he have any legal right of recovery from the lady? That is a somewhat important point, because the lady might have all the income. That matter has not been thoroughly cleared up by the hon. and learned Gentleman's explanation. I wish to make this one general observation. I am sure the House will agree that it is most objectionable that guerilla warfare should be waged between the taxpayer and the Board of Inland Revenue. I do not wish to make any adverse comment on the principle that underlies the taxation, but I may be permitted to say that it is regarded by many people as difficult to understand. Therefore it should be the object of the Board of Inland Revenue having that potential resentment to deal with, to do the least possible to increase it, and to levy the taxes under such regulations as will make the burden as easy to be borne as possible. I do not see any evidence of that kind in the regulations we are now discussing. I wish particularly to draw attention to two points which appear to me to require explanation. I associate myself with the remarks made by the hon. Member for King's Lynn, except where he expressed the opinion that it is impossible to get back taxes from the Inland Revenue. That is not my experience.
§ Mr. GIBSON BOWLES
May I say it has not been my experience either. I have got taxes back from them which were overpaid. I was referring to the difficulty which is felt by poor people in getting back taxes.
§ Mr. PRETYMAN
I agree with the hon. Gentleman in that. The forms which have to be filled up in order to get back money from the Inland Revenue are very irksome to small, poor people. I wish to draw the particular attention of the Chancellor of the Exchequer to Sub-section (b) on page 2 of these regulations, which deals with the income from property. According to the terms of that regulation every occupation has to be separately stated. If that were necessary for this, I would say that it was a serious condemnation of the tax, but it is not necessary, because the figures are already available for the Commissioners of Inland Revenue through the machinery in operation for collecting the ordinary Income Tax. I hope the House will bear 426 with me when I state how the present Income Tax is collected. The present Income Tax on landed property is now settled by the local Commissioners. The figures are presented to them by the local assessor, and if any question arises upon them it is referred to the surveyor of taxes for the district, who has the whole of that information, which is extracted from the rate-book. I have here an actual claim which was furnished on landed property. It was prepared by an assessor and sent in by him to the estate officer as a claim for Income Tax. On this paper every separate occupation of any size is entered, but in dealing with allotments and small cottages
§ Mr. PRETYMAN
I was coming to that. There are two ways of doing it. In this ease the landowner pays the whole of this tax himself. That is not a universal practice but I think it is a wise practice. It enables the figures to be more accurately ascertained. The unit of collection is parishes and each parish has an assessor and that assessor makes his claim on the owner, and I have here the actual claim. In this claim every occupation in the parish belonging to the owner is separately stated, except in regard to allotments and cottages which would involve the entering of an immense number of particulars, and in those cases the claim is made under one single item, so many cottages so much, and an allotment field so much. Even the number of allotments is not specified. The separate occupants are not stated, but the whole of the figures are there and they are all available to the Chancellor of the Exchequer and the Board of Inland Revenue. Another system which is practised on a great many properties is that the Income Tax is paid by the occupier, the tenants, and he has the right to deduct it when he pays the rent. But even in that case the whole of the figures are accessible to the Surveyor of Taxes, and any information which the Board of Inland Revenue desire to obtain is available to them and is in their own possession. To prepare a statement of this kind would involve immense labour and immense trouble, and although particulars are available to the owner yet he has already furnished these particulars, not in a statement in regard to allotments and cottages, but in regard to larger occupations it would be a matter of great 427 and unnecessary expense and extremely irksome and absolutely without any useful results to the Revenue or anybody concerned to ask him to do more than do what is embodied in a suggestion which I have here, and which was sent to me from in estate in Yorkshire. The gentleman who writes says: "It would be much simpler, and an improvement in the Super-tax forms, if the return under No. 1 B stated the name of the property or estate, and the Income Tax district in which it was situated." For instance, he names one property and gives the Income Tax district of Ripon, and then he names another estate in the Income Tax district of Skipton. In these cases any figures or any information for comparison which the Commissioners of Inland Revenue desire can be obtained by them on reference to the surveyors of Ripon or Skipton. They have the whole information available, and can supply it on demand, and I do urge upon the Chancellor of the Exchequer to assent to an Amendment of this form in that particular, in order that this increasing burden may not be thrown upon owners of landed property.
Owners of landed property are specially hit, as usual, and, naturally, land has to bear a much heavier tax than other kinds of property. Even Mr. Bernard Shaw has discovered that, because he says, in a letter to "The Times," that you have only to conceive the taxation getting to a certain figure, to conceive a situation in which you will be taxing a poor man on the scale of a rich man, and on the assumption that he is enjoying an income of £20,000. That is absolutely what happens—I do not say quite on those figures. A man who has landed property is not taxed, as most of the public believe, on the money which goes into his pocket, A man who is enjoying dividends from investment gets 1,000 sovereigns—they go into his pocket; a tax of 1s. 8d. in the £ is imposed upon them. He has got the money, he pays the 1s. 8d., and he has the balance to spend as he likes. A man who has got a gross rental from landed property does not pay, like the owner of investments, on the money which goes into his pocket—he pays upon gross rental, with certain statutory deductions.
§ Mr. PRETYMAN
I acknowledge that those deductions were increased by the Chancellor of the Exchequer last Session, 428 and I acknowledge that those deductions are big ones, but they are nothing like adequate in many cases. I am speaking about what I know. Hon. Members on both sides of the House who know anything about land will agree with me that there are many cases of poor men entirely dependent upon land, and who have to live upon it, and the money which they are actually able to put into their pockets is extremely small in proportion to the gross income with the statutory reductions upon which the tax is paid; and there are cases under the present taxation taking the Death Duties at their new level and taking the Income Tax and the Super-tax, in which the taxation may easily amount to 20s. in the £. The case taken by Mr. Shaw-is, I assure the Chancellor of the Exchequer, a conceivable case. I am not making that point now on its merits, but to point out that you should ease as much as you possibly can the burden upon people who are in that position. That brings me to my next point, which is the note at the end of this notice in regard to the present collection of Super-tax—that the additional allowance for actual expenditure upon maintenance and repairs upon any landed property is not available under the present Super-tax for the present year. It has got to be paid even where there has been no income to pay it out of. I am sure the right hon. Gentleman will agree with me that a man may have no income available, no money in his pocket out of the estate, and yet he has got to pay this. The House will agree with me that at one and the same time in the Budget of last year two financial actions were taken—the Super-tax was imposed, and this particular relief was given to agricultural land. Surely they should act together.
§ Mr. PRETYMAN
The note at the end of this notice says that the additional allowance—that is, the concession I have been referring to for the cost of maintenance, repairs, etc.—does not apply to the year ending 5th April, 1909, which is the year for which this tax is leviable. Therefore it has got Lo be paid, but it is on the income on which the Super-tax of the year 1909–10 is chargeable. If, however, you should obtain repayment of ordinary Income Tax or any such allowance for the year ending 5th April, 1910, the Board of Inland Revenue will be prepared at the same time to entertain a claim for relief 429 from the Super-tax paid for that year. Perhaps the right hon. Gentleman will tell us that that amounts to a direct undertaking to repay the money, but at the same time it is very hard on people to have to pay this money and wait for such a long time in order to get it back again. The matter can be simply dealt with. It is a mere oversight in the Act. The words were not made sufficiently retrospective. All that the Chancellor of the Exchequer has got to do is, when he brings in his Budget in a few days, to introduce a short clause putting in words which will carry out the actual intentions of the House of Commons, namely, that these concessions should be operative as to time equally with the additional burden which has been placed on the taxpayer. That can be perfectly easily done in the Budget which is about to be introduced. I believe that the difficulty is purely one of wording. I am afraid that it arises from the wording that the concession is given only in regard to the duty which has been paid, and it was an oversight that the duty should be claimed for a year in which that concession has not been made. I would suggest to the right hon. Gentleman that he should adopt my two suggestions: In the first place, that instead of the terrier on the estate he should only require the name of the estate and the Income Tax district in which the property is situated; and, in the second place, that he should make this concession which he gave in regard to landed property for maintenance and repairs operative in regard to the Super-tax now claimed as well as in regard to the Super-tax for next year.
§ 8.0 P.M.
§ Mr. LLOYD GEORGE
I will reply to the remark of the hon. and gallant Gentleman before I come to answer other questions that have been put to me. I think that my hon. Friend the Member for King's Lynn (Mr. Gibson Bowles) has been very adequately disposed of by my j hon. and gallant Friend. I agree, if I may say so, with the general proposition laid down by the hon. Gentleman that when you put a tax like this into operation it should be done with as little friction and as little irritation as possible, and it should be made as easy as possible for the taxpayer to comply with the regulations of the Inland Revenue, and I think that the officials of Inland Revenue and the Commissioners have really striven to carry out that general idea. I think I shall be able to satisfy the hon. and gallant Gentleman that that is being done. With regard to his first proposal, on the face 430 of it it appears to be rather exacting that we should demand full particulars of all these hereditaments, but I have gone into that matter very carefully, and I do not think they could do anything else, and for this reason: It is perfectly true that the surveyors of taxes have a vast mass of information at their disposal, though not altogether at their command, but that does not cover the whole ground of the Super-tax. For instance, ground rents, mineral royalties, feu rents, and several items of that kind, which no surveyor of taxes could possibly command. That covers a very considerable part of the money which had to be accounted for by those who are super-taxed. But I come now to property, of which undoubtedly you may have a record in your various offices, but in such a case it is very difficult to get it together. After all, the owner of property who is liable to Super-tax may have a very considerable estate. It is very rarely confined to the same district, and very seldom to the same parish, and not often to the same Income Tax district. Therefore it means that all the property is scattered over a wide area, over a considerable number of districts, and there is no surveyor who could possibly make what the hon. Gentleman has called a terrier of all the property of this Super-tax subject. Even if he could do it he could only do it as from the year 1903, which was the year of the last quinquennial valuation before 1908, and there may have been a great many changes in the property in the meantime. The taxpayer may have sold certain farms and have bought others, and the only person who could give a complete account of all this property, with full particulars, is the subject himself. Is it really such a hardship? The hon. Gentleman knows perfectly well what happens in these cases. Most of these owners have agents. Very few of them undertake the management of their properties themselves. I do not know one. There may be a few, but when you come to properties with large rent rolls, it means a property with a rental of at least over £6,000 a year, and where you have a property of that description you generally find that the owner employs an agent. All he has to do is to get a copy made of the hereditaments in his book.
§ Mr. AUSTEN CHAMBERLAIN
I quite follow the right hon. Gentleman. But to what purpose is it material to the Inland Revenue to know in the case of every field 431 and every allotment the name of every holder of an allotment, or of every cottage on the estate? Is there any advantage for the inconvenience created, or is there any compensation to the State for the amount of labour which would be entailed?
§ Mr. LLOYD GEORGE
The information is required in order to enable the Inland Revenue to check the returns. They require full particulars for this purpose. It is complained against the Inland Revenue officials that this is a step directed against the owners of real property. In the case of personal property it must be obvious to the right hon. Gentleman that a man j making a return of his income could not merely say, "I derive from dividends £3,500." How would the Inland Revenue be able to check that lump return unless they got full particulars. He may get £175 j from this particular company, £200 from another, and so on, and full particulars are a means to the Inland Revenue of checking his returns. How could they check it unless they got full particulars'? I have never heard of any complaint so far as the owners of personal property are concerned. I do not think they object to paying taxes; I do not think they look at it as causing them a great deal of trouble; and I have never heard of any real challenge of the equity and fairness of the demand of the Inland Revenue, so far as personalty is concerned and dividends are concerned. But when you come to realty there has been a good deal of complaint. The owner of realty may say that his rents amount to £2,000, and that there are deductions to be estimated for agricultural land, and for other property.
§ Mr. PRETYMAN
That is not so now, because the two are assimilated. The original deduction was one-sixth and one-eighth, and there was added one-twelfth and one-eighth, so as to make them both a quarter.
§ Mr. LLOYD GEORGE
The Inland Revenue have a right to check the deductions, and I do not see how they are to do it unless they have got full particulars. The owner of property might say my deductions are £l,500, but the Inland Revenue Commissioners have a perfect right to demand particulars of the whole of those deductions in order that they may be checked.
§ Mr. LLOYD GEORGE
The hon. Gentleman is really mixing up the two things. That is exactly the difficulty. We are dealing with the Super-tax and not the ordinary Income Tax. You have first of all to ascertain whether a man belongs to the Super-tax class. In order to do that you have to take the whole of his property wherever it is—whatever district, whatever area, or whatever parish. First of all he makes his aggregate returns of income derived from property, and you cannot check his deductions unless he gives you full particulars of each case. I have no doubt at all that there is not the slightest difficulty in this, and what I am concerned to point out to the hon. Gentleman is that the Inland Revenue Commissioners are really anxious to make it clear to the public that they are not making these demands unless they are necessary to check the returns. They want full particulars as to the gross revenue, and also full particulars of the deductions, in order to arrive at the net income. After all this is the first time this tax is imposed, and all that we ask the agents is that they should turn a clerk on to copy out of a book what is already there. It would not take a clerk two days on the largest estate in England to comply with this demand. Yet this is treated as if it were a grossly unfair proposal. But every owner of property has his book, in which everything is put down, and the clerk in his office has only to make a copy of the list of hereditaments and send it on to the Inland Revenue. There is really no hardship; it does not cause any trouble to the taxpayer; it saves a good deal of trouble to the Inland Revenue; and in the long run it is in the interests of the taxpayer himself. It enables the Inland Revenue to check the returns and to see that there is no excessive charge; it also enables them to check the deductions and give full credit to the taxpayers for those deductions they have a right to make.
The hon. Gentleman made two suggestions to me in the interests of the taxpayer. He made a suggestion as to cases where the owners of property undertake payment under Schedule A, and I think they cover something like 50 per cent, of the owners of property. In cases of that kind the hon. Member suggested, if they would only refer to the demand note accompanying the document, it would show that they are only asked to give -a list of their properties, without reference to minerals, ground rents, and other things 433 outside. Particulars in that return, I can assure him, will be regarded as a complete satisfaction of the demand. The Inland Revenue Commissioners are very anxious to meet the wishes of the taxpayers in this particular, and they do not want to impose any unnecessary burdens. I think I have satisfied the hon. Gentleman in regard to that. I am not quite clear about his second suggestion, and I would not like to answer it straight off. If he will give me some further particulars with regard to the second suggestion I will look into the matter, but I should not care to give an immediate answer. It seems to me possibly a case where I might agree with him. With regard to his first suggestion I think it can be done. In regard to the third point he raised, he said certain deductions were promised this year for the purpose of Schedule A. These deductions are only operating this year. The hon. Gentleman stated that under the fourth Schedule the deductions on the Super-tax that were promised, so far as the form is concerned, are purely on the old scale. I fully recognise that, and I would assure him that we intend to give full credit in favour of all the deductions, but I am afraid it has to be done by way of repayment.
§ Mr. LLOYD GEORGE
I will undertake to consider the matter, but I should not like to make a statement without first of all consulting the officials concerned. At any rate I agree that full deduction ought to be made for the Super-tax in last year and in the present year to the utmost limit of the concession promised by the Government. The only question is whether it should be done in respect of the Super-tax last year, or whether we should adjust it on repayment this year. I think that meets all the points raised by the hon. Gentleman. The hon. Member for Hammersmith first of all wanted to know whether annuities paid under a legal obligation were subject to payment of the duty, and whether that would be deducted. That clearly would be deducted as long as it is not a voluntary payment, but there is a legal obligation. The other point he made was with regard to a man owning a house and land. He wanted to know what he had to pay in respect of the land. He would pay first of all under Schedule A as owner, and he pays under Schedule D as occupier; or if he prefers Schedule B instead of D, he 434 can do so. I think that answers the two questions of the hon. Gentleman. I do not think I have anything more to add. If there had been time I should have said something about the Increment Duty, but I understand that will come up later on.
Will the right hon. Gentleman answer the question about the average income of previous years in connection with the limit of £5,000?
§ Mr. DUKE
There is another point to which the right hon. Gentleman has not referred, and which was raised by the hon. Member for King's Lynn. It is purely a matter of administration, namely, the constitutional procedure which is involved in the making of regulations under the Finance Act this year by the Commissioners of Customs and Excise, some time at the beginning of May—I think the 2nd of May—and the fact that although the existence of those regulations is said by the Solicitor-General to have had most unheard-of and unprecedented consequences on the liability of individuals under the Clause of the Act, up to the present time those regulations have not been submitted to the judgment of this House.
And, it being a Quarter past Eight of the clock, and there being Private. Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.