HC Deb 06 November 1912 vol 43 cc1251-3
35. Mr. CASSEL

asked the Chancellor of the Exchequer whether his attention has been called to a recent decision of the High Court of Justice that the deduction of Income Tax without the sanction of an Act of Parliament is illegal and a contravention of the Bill of Rights; whether it is proposed to reimburse to the persons who have made such illegal deduction any sums they may be called upon to pay in respect of loss of interest consequent upon such deductions; and what course it is intended to take in the matter.

36. LORD ROBERT CECIL

also asked whether, in view of the decision in Bowles v. Bank of England, he proposes to take any steps to reimburse those taxpayers from whom Income Tax was illegally levied between the 5th of April and the 7th of August of this year?

Mr. LLOYD GEORGE

The answer to the first part of the hon. and learned Member's question is in the affirmative, and the answer to the second part and to the question standing in the name of the Noble Lord the Member for Hitchin is in the negative. With regard to the third part of the hon. Member's question, I propose to introduce legislation dealing with the matter.

Mr. CASSEL

If the right hon. Gentleman proposes to introduce legislation repealing the Bill of Rights will he undertake that it shall not be carried under the gag?

Lord ROBERT CECIL

Has the right hon. Gentleman arrived at a decision not to reimburse the losses it illegally inflicted?

Mr. LLOYD GEORGE

I explained when I suggested that a Clause should be introduced into the Budget that we were simply following a practice carried on for a number of years and which had been accepted by every Chancellor of the Exchequer, and by every Government, and had never before been challenged. We were prepared to introduce the Clause into the Bill and I did not think under these conditions, seeing that we were following a practice which had been followed so long with quite useful results it would be wise for me to reimburse.

Mr. KING

Was not that practice followed by Lord St. Aldwyn when he was Chancellor of the Exchequer?

Mr. LLOYD GEORGE

Not merely by Lord St. Aldwyn but by other Chancellors of the Exchequer.

Sir A. GRIFFITH-BOSCAWEN

If the right hon. Gentleman knew that the practice was illegal why did he pursue it?

Mr. LLOYD GEORGE

I did not say it was illegal. I said it had been followed for a long time and I thought it was right to have a case presented for a legal decision. It had been assumed not only by this Government but by other Governments for at least fifteen years that it was a perfectly legal position, and it would have been a very serious thing for us to have altered it without first obtaining a legal decision on the subject.

Sir A. GRIFFITH-BOSCAWEN

But if you knew it was illegal why continue it?

Mr. LLOYD GEORGE

I have said we are not surprised at the decision, but I still think that having regard to the number of years the practice had been followed it would have been a serious thing to alter it without first obtaining a legal decision on it.

Mr. CASSEL

But does the right hon. Gentleman consider the fact that an illegal practice has been followed for a long time is a reason for depriving a subject of his rights?

Mr. MacVEAGH

Was not this illegal practice first, adopted by a Conservative Government?

Mr. LLOYD GEORGE

I think that is so.

An HON. MEMBER

By whom?

Mr. LLOYD GEORGE

By Sir Robert Peel.

Mr. CASSEL

Does the right hon. Gentleman consider the fact that an illegal practice has been followed for a number of years is a reason for refusing a subject his rights when the practice is declared by the Courts to be illegal?