HC Deb 17 April 1913 vol 51 cc2203-27

  1. (1) Any payment or deduction made on account of a temporary tax within one month after the date of the expiration of the tax shall, if the payment or deduction would have been a legal payment or deduction if the tax had not expired, be deemed to be a legal payment or deduction, subject to the condition that if a Resolution is not passed by the Committee of Ways and Means of the House of Commons within that month for the renewal of the tax, any money so paid or deducted shall be repaid or made good, and that if the tax is ultimately renewed at a different rate, or with modifications, any amount paid or deducted which could not properly have been paid or deducted under the new conditions affecting the tax shall be repaid or made good.
  2. (2) Section ninety-five of the Finance (1909–10) Act, 1910, shall have effect with respect to any duties imposed by the Finance Act of this or any previous year, with the substitution of a reference to that Finance Act, for any reference in that Section to "this Act,"


I beg to propose to leave out Sub-section (1).

I do not think that the meaning of this Sub-section has been sufficiently appreciated. What it means is that in cases where there is a temporary tax and the power to levy such tax has to be exercised within a given time, then, although the time within which that statutory power-might be exercised had come to an end, under this Sub-section the time would be extended for one month after the date of the expiration of the existing powers to levy such a tax. It appears to me to be a very strong proposal, when this House after full discussion as to imposing a particular tax has limited the time within which the sanction for that tax is to operate, that then under the operation of a general Bill of this kind in every instance—subject to what I am going to say in a moment—the time within which that tax can be levied should be extended to the extent of a month. It may be very important, after full discussion in this House, to limit the time for the incidence of a particular tax, and when the period of time in which there is power to levy the tax has come to an end it may be of great importance for this House to consider whether that tax should be imposed again, either in its existing form or in a modified form. But what this Clause does is this: however carefully the House may have thought over and discussed the matter before deciding that the levy of the tax should be limited to a particular period of time, there is to be in all cases under this Sub-section power to extend the time limit after it has expired. It is a very strong proposal to override by a general provision of this sort a special provision introduced in a particular case after full discussion. This proposal is quite unnecessary. In fact it is not in accordance with the rest of the Bill; and so far as there is any difficulty it could without question be easily dealt with by merely making the tax run for a sufficient time when you impose it in the first instance. The only reason why the Government are asking for this extraordinary power of extending the time for which this House has imposed a tax, is that they do not introduce the new Resolutions as regards the new financial year sufficiently early.

If they introduce a Resolution sufficiently early, and if they make the tax which they impose for a sufficiently long time, Sub-section (1) of Clause 2 is wholly unnecessary. One of the worst features of the Sub-section is that it enables the Resolution as regards imposition of the new tax, to be postponed for one month after the time the old tax has expired; whereas it ought to be the essence of your practice that if the Resolution is to have statutory effect, it ought to be brought into operation before the power as regards the old tax expires. Everyone must know perfectly well that there is not the least difficulty about making a provision of that kind. This really goes beyond all the suggestions which have been made as regards the power to prevent forestalling and matters of that kind. It deliberately aims at upsetting what may be the deliberate proposal of this House after full discussion. What is the good of our saying that a particular tax is to be limited to a certain time, or that Customs Duties are not to be levied beyond a definite time, if we find that in each case the Government—and I am speaking of the Government on either side—may postpone what is the proper date for introducing the new Resolutions on which to found the Budget. By postponing the date they get fresh legislative authority for a month in reference to powers which otherwise would have expired. In my view we have given up a good deal of our control under this Bill.

We have deliberately fixed a limit of time, and then, merely because the Government do not introduce their Resolution sufficiently early, that time is extended for a month. It is all very well to put in a provision of this kind, but if the House does not renew the tax, in substance everyone knows that, when deductions of this kind have once been made, there is great difficulty, expense, and trouble in ever getting the sums repaid or made good, once they get into the hands of the Treasury or the Inland Revenue. I cannot see what reason there can be for this novel suggestion. It is not really wanted as regards the obligation which we are putting in the Bill. We have given this power under the Resolution to levy a tax just as though it had statutory effect, and, under those circumstances, you seek power to postpone your Resolution in order to raise your tax under a power which has expired. Our control is really being limited in every possible direction, and not only is it being limited, but it is being made a mockery. We first of all limit the period of the tax, and then we pass a general provision that the limitation is not to be observed. What is the good of legislating under conditions of that kind? We have discussed this matter more than once, and I can see no reason whatever for this Sub-section, the omission of which I move.


I beg to second the Amendment.

I have already stated my views on this point in previous discussions and have endeavoured to make them clear to the Government, who, I think, in this Sub-section, are infringing all constitutional rights. They are deliberately and without any necessity outraging all the principles of the Constitution. They have deliberately placed the whole of the bankers of this country in a difficulty, which has existed since the 5th April. Ever since the 4th of November I have urged that it was necessary for them to deal with this question before the 5th April; they would not do it. They insisted in going on with the Home Rule Bill, the Welsh Disestablishment Bill, and the Franchise Bill, and the dislocation since the 5th April is entirely due to that. So far as this particular Bill I is concerned, they have not even the excuse that they had with regard to Customs Duties and the possibility of forestalments, and it is an outrage upon the Constitution.


I have listened to the speeches made by my hon. and learned Friends, and one would imagine from what they have said that we were introducing some novelty. I am quite sure if anybody had come into this House knowing nothing of what had happened previously, either in Committee or on Report or on Second Reading, would have thought, from the speeches of the hon. and learned Gentlemen opposite, that both were correct in what they said. The fact is that what is here proposed is in accordance with the practice that has existed for the last sixty years, and previous to that for perhaps 150 years; but to hear the speeches made by both hon. Members they do not seem to be aware that—except in the year 1900, which was during the war, when Sir Michael Hicks-Beach came down in March and asked this House to pass Resolutions before the Income Tax and Tea Duty had expired—it has been the practice of this House, and not of this Government only but of Unionist administrations equally, to propose Resolutions for Income Tax and the Tea Duty during the month of April or during the month of May. Except in that one instance during the war, when the their Chancellor of the Exchequer came down at the beginning of March, it has been invariably the practice after the expiration of the financial year or of the Income Tax year, to bring in those Resolutions. I do think we have just cause of complaint when we listen to the speeches made by my hon. and learned Friend (Sir A. Cripps), who must know better, and it is most startling to hear him make these observations. My hon. and learned Friend, who possibly knows as much of this subject as anybody in the House, solemnly stated that this was a novel suggestion.


Hear, hear; so it is.


The right hon. Member for East Worcestershire (Mr. Austen Chamberlain) has himself told us that it was the practice in his time, and he took over that practice; and what we are doing is simply to put into statutory shape what has been rendered necessary, because of the decision which has been given in the Courts. If the hon. and learned Member for St. Pancras (Mr. Cassel) meant by his reiterated charges of outrages on the Constitution and by his strong language that this Sub-section is proposed in consequence of the decision of Lord Justice Parker, and that we have been compelled to put into statutory form what hitherto has been recognised as the usage under the Constitution, though not recognised by the Courts of Law—if that is what he meant, I agree that he is practically right; but we are not only not doing anything which is novel, but we have nothing in our constitutional usage which would prevent us from proposing the Resolutions in June or July. It was done by the Unionist Chancellor of the Exchequer in 1901 and in 1902, when Resolutions were proposed in June and July. I do not think they were Income Tax Resolutions, but they were financial Resolutions having relation to variations of the Sugar Duties; they were the ordinary Resolutions for the continuation of taxes. Anybody looking at the matter will see that you must have some provision of this kind for the collection of taxes. Let its see what we are legalising under this form. The Income Tax year expires on the 5th April, and unless you have a provision of this kind the effect would be that the banks would not be able to deduct the money for Income Tax, and the Treasury would be left to follow the persons and collect it from them. Everybody agrees that that is a very bad principle; certainly everybody who has been at the Treasury is familiar with the difficulty of following persons to get the Income Tax from them.

The hon. and learned Member for South Bucks says that what we can do is to introduce our Resolutions before the end of the Income Tax year, but both Liberal Governments and Unionist Governments for many years have followed the usual practice, and the Chancellor of the Exchequer, following this practice, which is based on sound common sense, must at the end of the financial year make a survey in order to see how matters stand before proposing his Resolutions. If he adopted what the hon. and learned Gentleman suggests, he would be in the position of having to propose the Resolutions before the end of the Income Tax year, of having to make his financial statement before he had considered what was required, before he knew whether he should lower or raise a duty, and before he knew whether he could take anything off the Tea or Sugar Duties, or had to raise those duties. Surely that is not advisable. All we ask is that we should have this power with regard to the reimposition or renewal of taxes which have existed in the previous year, and which are not taxes for more than eighteen months. The whole object is to confine the provision to the Income Tax and Tea Duty, which come up for discussion every year. We are not seeking by this Clause to do anything novel. The only novelty is that by Sub-section (1) we are limiting the period to one month, and we are only claiming the period of one month in order that there may be time to survey all the circumstances before dealing with the Income Tax or Tea Duty. It is admitted by almost everybody in the House that a Statute must be passed to legalise the practice which has existed, but we say that by what we are proposing we make the period more limited, and we put upon the Chancellor of the Exchequer the obligation to introduce his Budget within a month, as provided by the Sub-section. I submit we are amply justified by the practice which hitherto existed.

7.0 P.M.


I think the Attorney-General's speech is an astonishing revelation of the mind of the Government that it makes no difference that you are altering custom and usage into a Statute. I think it makes an immense difference, and that my hon. and learned Friends are justified in describing it as a complete novelty. Instead of a custom which rested on general consent you are taking coercive power by Statute which makes an immense difference. It is to miss the whole point of the discussion to say that you are leaving the thing just as it is now. My hon. and learned Friends suggest that it is not necessary and that it is a very bad thing to do, inasmuch as the Constitution depends on the authority of Parliament and certainly not on the authority of a single Resolution of the House of Commons, and therefore taxation should be paid on the authority of Parliament. Is this necessary in this particular instance, and are we driven by force of circumstances to do what the Government, I think, would agree is a very undesirable thing in itself? Surely not. Supposing you made your Income Tax or Tea Duty last for fifteen months instead of twelve months, the whole difficulty is met. The Attorney-General said it would confuse the finances. It would do nothing of the kind. The Attorney-General also used the argument that the Chancellor of the Exchequer would have to make up his Budget without knowing what was the return of the tax. He would not. He would know what the return was every year, which is all he wants to know.

The fact that the tax would have legal validity for three months more would not bring about the smallest element of confusion. In some respects now that is the practice with some temporary taxes which last up to the 30th June or the 31st July. Without the Amendment what it really comes to is this, that you do alter your constitutional way of taxing by Act of Parliament, and you adopt an unconstitutional way by giving the power to tax by Resolution. The Attorney-General said that the use of the Resolutions rested on general consent. Therefore it differed from what you are doing now. You are giving the House of Commons legal authority to tax by mere decree. That is an immense novelty, and, instead of trying to cut that down and to make the innovation as small as you can, you deliberately refuse to adopt machinery which would be perfectly constitutional, and which would give you all you want without trouble or inconvenience. In the wantonness of oppression you insist on having this Clause, which is not in the least necessary, and which is an outrage on the constitutional traditions of the country. I do not think the language of my hon. Friends was at all too strong. This shows how very indifferent the Government really are as to preserving the traditions of the Constitution. The Attorney-General tells us "we accepted some of your Amendments." The Government cannot get over their moderation. Like Lord Clive, they stand astonished at their own moderation. The Supreme Cabinet has so far condescended that the suggestions of the House of Commons are not rejected altogether. Some Amendments have been accepted, and we ought to be thankful for the crumbs that fall to us from the rich man's table. We are still to try and imagine that they are our industrious servants carrying out the government in accordance with the behests of the representatives of the people. We are not yet accustomed to the servile state to which they are anxious to reduce us, and protest against their arguments.


I do really regret the language which has been used by the Attorney-General in reference to my hon. and learned Friends. It is all very well to talk of usage, but the usage was abused by the Government, and the Attorney-General must not be surprised if a certain number resent, and very strongly resent, the necessity of passing a Clause like this, because of the abuse by the Government of a power hitherto given to them by ordinary practice. May I also remind the House that this Clause does not merely refer to the Government deducting the tax, but it gives power to everybody to make the deduction from Income Tax—power hitherto used sparingly. That is a vital difference, and it is to me a matter of great surprise that the Attorney-General did not appreciate the observations made by my hon and learned Friend. This Clause, for good or ill, legalises any

Division No. 55.] AYES. [7.9 p.m.
Abraham, William (Dublin, Harbour) Duffy, William J. Hughes, Spencer Leigh
Acland, Francis Dyke Duncan, C. (Barrow-in-Furness) Illingworth, Percy H.
Agnew, Sir George William Duncan, J. Hastings (Yorks, Otley) Isaacs, Rt. Hon. Sir Rufus
Arnold, Sydney Edwards, John Hugh (Glamorgan, Mid) John, Edward Thomas
Atherley-Jones, Llewellyn A. Esmonde, Dr. John (Tipperary, N.) Jones, Edgar (Merthyr Tydvil)
Baker, Joseph Allen (Finsbury, E.) Essex, Sir Richard Walter Jones, H. Haydn (Merioneth)
Balfour, Sir Robert (Lanark) Falconer, J. Jones, J. Towyn (Carmarthen, East)
Baring, Sir Godfrey (Barnstaple) Farrell, James Patrick Jones, Leif Stratten (Notts, Rushcliffe)
Barlow, Sir John Emmott (Somerset) Fenwick, Rt. Hon. Charles Jones, William S. Glyn- (Stepney)
Barnes, G. N. Ferens, Rt. Hon. Thomas Robinson Jowett, Frederick William
Barran, Sir J. (Hawick Burghs) Ffrench, Peter Joyce, Michael
Barton, William Field, William Keating, Matthew
Beale, Sir William Phipson Fitzgibbon, John Kellaway, Frederick George
Bentham, George Jackson Flavin, Michael Kelly, Edward
Bethell, Sir J. H. France, G. A. Kennedy, Vincent Paul
Black, Arthur W. Furness, Stephen Kilbride, Denis
Boland, John Pius Gill, A. H. King, J.
Booth, Frederick Handel Ginnell, L. Lambert, Rt. Hon. G. (Devon, S. Molton)
Bowerman, C. W. Gladstone, W. G. C. Lambert, Richard (Wilts, Cricklade)
Boyle, Daniel (Mayo, North) Glanville, H. J. Lardner, James C. R.
Brace, William Goddard, Sir Daniel Ford Lawson, Sir W. (Cumb'rld, Cockerm'th)
Brady, P. J. Goldstone, Frank Leach, Charles
Brocklehurst, William B. Greenwood, Granville G. (Peterborough) Low, Sir Frederick (Norwich)
Bryce, J. Annan Greenwood, Hamar (Sunderland) Lundon, Thomas
Buckmaster, Stanley O. Greig, Colonel James William Lyell, Charles Henry
Burke, E. Haviland- Griffith, Ellis J. Lynch, A. A.
Burt, Rt. Hon. Thomas Guest, Major Hon. C. H. C. (Pembroke) Macdonald, J. M. (Falkirk Burghs)
Buxton, Rt. Hon. Sydney C. (Poplar) Guest, Hon. Frederick E. (Dorset, E.) McGhee, Richard
Byles, Sir William Pollard Gulland, John William Maclean, Donald
Carr-Gomm, H. W. Gwynn, Stephen Lucius (Galway) MacNeill, J. G. Swift (Donegal, South)
Cawley, Sir Frederick (Prestwich) Hackett, J. Macpherson, James Ian
Cawley, H. T. (Heywood) Hall, Frederick (Normanton) MacVeagh, Jeremiah
Chancellor, H. G. Hancock, John George M'Callum, Sir John M.
Chapple, Dr. William Allen Harcourt, Robert V. (Montrose) M'Curdy, Charles Albert
Clancy, John Joseph Hardie, J. Keir M'Kean, John
Clough, William Harvey, T. S. (Leeds, West) McKenna, Rt. Hon. Reginald
Clynes, John R. Haslam, Lewis (Monmouth) M'Laren, Hon. H. D. (Leics.)
Compton-Rickett, Rt. Hon. Sir J. Havelock-Allan, Sir Henry M'Micking, Major Gilbert
Condon, Thomas Joseph Hayden, John Patrick Markham, Sir Arthur Basil
Cornwall, Sir Edwin A. Hayward, Evan Marks, Sir George Croydon
Cory, Sir Clifford John Hazleton, Richard Marshall, Arthur Harold
Cotton, William Francis Helme, Sir Norval Watson Meagher, Michael
Cowan, W. H. Hemmerde, Edward George Meehan, Francis B. (Leitrim, N.)
Craig, Herbert J. (Tynemouth) Henderson, Arthur (Durham) Millar, James Duncan
Crooks, William Henderson, J. M. (Aberdeen, W.) Molloy, Michael
Crumley, Patrick Henry, Sir Charles Molteno, Percy Alport
Davies, Ellis William (Elfion) Herbert, General Sir Ivor (Mon., S.) Mond, Sir Alfred Moritz
Davies, Timothy (Lincs., Louth) Higham, John Sharp Montagu, Hon. E. S.
Davies, Sir W. Howell (Bristol, S.) Hinds, John Mooney, John J.
Davies, M. Vaughan- (Cardigan) Hobhouse, Rt. Hon. Charles E. H. Morgan, George Hay
Delany, William Hodge, John Morrell, Philip
Denman, Hon. R. D. Hogge, James Myles Morison, Hector
Dickinson, W. H. Holmes, Daniel Turner Morton, Alpheus Cleophas
Dillon, John Holt, Richard Durning Muldoon, John
Donelan, Captain A. Horne, C. Silvester (Ipswich) Munro, Robert
Doris, William Howard, Hon. Geoffrey Murphy, Martin J.

deduction, whether by mere habit or under the authority of a Treasury Minute or how it comes to be made. Once you deduct a certain sum and call that Income Tax, that deduction is made legal. It is only fair that the House should understand what is being done, and that legality can be claimed not only for a Government Department, but by a bank or agent or any person on those grounds. I think the observations of the Attorney-General are not called for.

Question put, "That the words, 'any payment or deduction made on account of a,' stand part of the Bill."

The House divided: Ayes, 266; Noes, 109.

Needham, Christopher T. Richardson, Thomas (Whitehaven) Tennant, Harold John
Neilson, Francis Roberts, Charles H. (Lincoln) Thomas, James Henry
Nicholson, Sir Charles N. (Doncaster) Roberts, G. H. (Norwich) Thorne, G. R. (Wolverhampton)
Norton, Captain C. W. Roberts, Sir J. H. (Denbighs) Thorne, William (West Ham)
Nugent, Sir Walter Richard Robertson, Sir G. Scott (Bradford) Toulmin, Sir George
Nuttall, Harry Robinson, Sidney Trevelyan, Charles Philips
O'Brien, Patrick (Kilkenny) Roch, Walter F. (Pembroke) Wadsworth, J.
O'Connor, John (Kildare, N.) Roche, Augustine (Louth) Walsh, Stephen (Lancs., Ince)
O'Connor, T. P. (Liverpool) Roe, Sir Thomas Walters, Sir John Tudor
O'Donnell, Thomas Rowlands, James Ward, John (Stoke-upon-Trent)
O'Dowd, John Rowntree, Arnold Wardle, George J.
O'Kelly, Edward P. (Wicklow, W.) Runciman, Rt. Hon. Walter Waring, Walter
O'Kelly, James (Roscommon, N.) Russell, Rt. Hon. Thomas W. Warner, Sir Thomas Courtenay
O'Malley, William Samuel J. (Stockton-on-Tees) Wason, Rt. Hon. E. (Clackmannan)
O'Shaughnessy, P. J. Schwann, Rt. Hon. Sir Charles E. Wason, John Cathcart (Orkney)
O'Shee, James John Scott, A. MacCallum (Glas., Bridgeton) Watt, Henry A.
O'Sullivan, Timothy Seely, Rt. Hon. Colonel J. E. B. Webb, H.
Outhwaite, R. L. Sheehy, David Wedgwood, Josiah C.
Palmer, Godfrey Mark Sherwell, Arthur James White, J. Dundas (Glasgow, Tradeston)
Parker, James (Halifax) Shortt, Edward White, Patrick (Meath, North)
Parry, Thomas H. Simon, Rt. Hon. Sir John Allsebrook Whyte, A. F.
Pearce, Robert (Staffs, Leek) Smith, Albert (Lancs., Clitheroe) Wiles, Thomas
Phillips, John (Longford, S.) Smith, H. B. Lees (Northampton) Williams, John (Glamorgan)
Pirie, Duncan V. Smyth, Thomas F. (Leitrim) Wilson, John (Durham, Mid)
Pointer, Joseph Snowden, P. Wilson, W. T. (Westhoughton)
Ponsonby, Arthur A. W. H. Soames, Arthur Wellesley Winfrey, Richard
Price, C. E. (Edinburgh, Central) Spicer, Rt. Hon. Sir Albert Wing, Thomas
Pringle, William M. R. Stanley, Albert (Staffs, N.W.) Wood, Rt. Hon. T. McKinnon (Glasgow)
Radford, G. H. Strauss, Edward A. (Southwark, West) Young, W. (Perthshire, East)
Raffan, Peter Wilson Sutherland, J. E. Yoxall, Sir James Henry
Reddy, M. Sutton, John E.
Redmond, John E. (Waterford) Taylor, John W. (Durham) TELLERS FOR THE AYES.—Mr. Wedgwood Benn and Mr. W. Jones.
Redmond, William Archer (Tyrone, E.) Taylor, Theodore C. (Radcliffe)
Rendall, Athelstan Taylor, Thomas (Bolton)
Agg-Gardner, James Tynte Fitzroy, Hon. E. A. Pollock, Ernest Murray
Ashley, W. W. Gastrell, Major W. Houghton Randles, Sir John S.
Baird, J. L. Gibbs, G. A. Rolleston, Sir John
Baldwin, Stanley Gilmour, Captain John Royds, Edmund
Banbury, Sir Frederick George Glazebrook, Captain Philip K. Rutherford, John (Lancs., Darwen)
Baring, Maj. Hon. Guy V. (Winchester) Gordon, Hon. John Edward (Brighton) Rutherford, Watson (L'pool, W. Derby)
Barnston, Harry Guinness, Hon. W. E. (Bury S. Edmunds) Sanders, Robert Arthur
Bathurst, Charles (Wilts, Wilton) Haddock, George Bahr Sanderson, Lancelot
Beach, Hon. Michael Hugh Hicks Hall, Frederick (Dulwich) Sassoon, Sir Philip
Bentinck, Lord H. Cavendish- Hambro, Angus Valdemar Spear, Sir John Ward
Rigland, Alfred Harris, Henry Percy Stanley, Hon. G. F. (Preston)
Bird, A. Harrison-Braodley, H. B. Staveley-Hill, Henry
Boscawen, Sir Arthur S. T. Griffith- Henderson, Major H. (Berks, Abingdon) Steel-Maitland, A. D.
Bridgeman, W. Clive Hewing, William Albert Samuel Stewart, Gershom
Burn, Colonel C. R. Hill-Wood, Samuel Strauss, Arthur (Paddington, North)
Butcher, John George Hoare, S. J. G. Sykes, Alan John (Ches., Knutsford)
Carlile, Sir Edward Hildred Hohler, Gerald Fitzroy Sykes, Mark (Hull, Central)
Cassel, Felix Hope, Major J. A. (Midlothian) Talbot, Lord E.
Castlereagh, Viscount Horne, E. (Surrey Guildford) Terrell, George (Wilts, N.W.)
Cecil, Lord Hugh (Oxford University) Jardine, Ernest (Somerset, East) Thompson, Robert (Belfast, North)
Chaloner, Colonel R. G. W. Jessel, Captain Herbert M. Thomson, W. Mitchell- (Down, North)
Clay, Captain H. H. Spender Kerr-Smiley, Peter Kerr Touche, George Alexander
Clive, Captain Percy Archer Kerry, Earl of Tryon, George Clement
Cooper, Richard Ashmole Law, Rt. Hon. A. Bonar (Bootle) Valentia, Viscount
Craig, Ernest (Cheshire, Crewe) Lewisham, Viscount Warde, Colonel C. E. (Kent, Mid)
Craig, Captain James (Down, E.) Lonsdale, Sir John Brownlee Weigall, Captain A. G.
Croft, H. P. Lowe, Sir F. W. (Birm., Edgbaston) Weston, Colonel J. W.
Dalrymple, Viscount Lyttelton, Hon, J. C. (Droitwich) Willoughby, Major Hon. Claud
Dalziel, Davison (Brixton) MacCaw, Wm. J. MacGeagh Wills, Sir Gilbert
Denniss, E. R. B. M'Neill, Ronald (Kent, St. Augustine's) Winterton, Earl
Dickson, Rt. Hon. C. Scott Malcolm, Ian Wood, John (Stalybridge)
Du Cros, Arthur Philip Mildmay, Francis Bingham Worthington-Evans, L.
Duke, Henry Edward Mills, Hon. Charles Thomas Wright, Henry Fitzherbert
Eyres-Monsell, Bolton M. Morrison-Bell, Capt. E. F. (Ashburton) Yale, Colonel C. E.
Falle, Bertram Godfray Mount, William Arthur
Fell, Arthur Newman, John R. P. TELLERS FOR THE NOES.—Sir A. Cripps and Major M'Calmont.
Finlay, Rt. Hon. Sir Robert Peel, Lieut.-Colonel R. F.
Fisher, Rt. Hon. W. Hayes

Amendment made: After the word "the" ["passed by the Committee of Ways and Means"], insert the words "House of Commons or by the."—[Mr. McKenna.]


I beg to move, after the word "Commons" ["Committee of Ways and Means of the House of Commons"], to insert the words "(if that Committee is a Committee of the Whole House)."


As I was absent from the House just now, I think it is only right that I should take this opportunity of thanking the Government for the way in which they have met me. There was considerable feeling on both sides of the House as to the possibility of a very unfortunate precedent being set up, and I thank the Government for the action they have taken.

Question, "That those words be there inserted in the Bill," put, and agreed to.

Further Amendments made: After the word "tax" ["renewal of the tax"], insert the words or if such a Resolution is passed within that month but ceases to have statutory effect under this Act."—[Mr. Cassel.]

At the end of Sub-section (1), insert the words: For the purposes of this provision, the expression 'temporary tax' means a tax which has been imposed or renewed for a limited period not exceeding eighteen months, and was in force or imposed during the previous financial year."—[Mr. McKenna.]


I beg to move, to leave out Sub-section (2).

This is really a remarkable Sub-section. I think that what the Government meant to say was: "This Section shall apply to payments and deductions made before the passing of this Act." But instead of putting it in that way, they have adopted the involved wording of this provision. The Sub-section deals with two separate matters. The first is the Finance Act of this year. We have been accustomed to having to amend the legislation of this Government very soon after it has passed. We have had cases where their legislation has had to be amended in the same Session, and other cases where it has had to be amended in the next Session, but this Sub-section proposes to amend an Act before it comes into existence at all. It is not merely counting one's chickens before they are hatched; it is cutting their legs off before they are hatched. What is the effect of this Sub-section? It says that duties imposed by the Finance Act of this year shall have a certain effect. But they cannot have any effect until the Finance Act of this year is passed. What do the Government really intend so far as the Finance Act of this year is concerned? I submit that the proper procedure would be to put the Section into that Act when we know what the contents of that Act are. The Government might as well insert the words "any future Act." They have not accomplished the purpose they intended, and the bankers of the country are anxious to know what is really meant. I submit that this Sub-section does not legalise any deductions made between 5th April and 22nd April, assuming that the Income Tax Resolution is passed on that day until the Finance Act of this year is passed.

With regard to previous years, what is the object of the Government? Some of the old Finance Acts contain provisions making them retrospective, but in a great many cases those provisions were omitted. I suppose that the reference to previous years in this Sub-section is inserted because of the apprehension that somebody might bring an action to recover sums which have been deducted in the past under those Finance Acts from which the retrospective Clauses were omitted. If that is so, I should have thought that this was really a charging section. I wonder why the Government attach such special importance to the words "Finance Act." The term has only been in use since 1894. If the proposal was necessary for those years when the Finance Act was called by that name, it would be equally necessary for the years in which it was called the Customs and Inland Revenue Act. The House is entitled to know what the Government really mean by this Sub-section.


I beg to second the Amendment.


This Sub-section by no means imposes a charge, nor is there anything in the words of the Section incorporated which imposes any charge. What the proposal does is that it legalises deductions which have been made, and it makes the operation of this Sub-section conditional upon the duties being imposed by the Finance Act of this year or of previous years. In so far as it relates to this year, all that it does is to say that if the duties are imposed by the Finance Act certain results will follow. As regards previous years it makes really the same provision, not that Income Tax shall be charged, but that if deduction has been made in respect of it, that it shall not be deemed to be illegal. I explained when we discussed the matter in Committee, what the main objects of this provision are, but I will explain it again as the hon. and learned Member asks me to do so. If you do not pass a Clause either in these words or to this effect, the result would be that for past years, now that the Courts have declared that the bank cannot deduct until the Act has been passed, those who are properly liable to the Income Tax would be able to claim against the banks, or the brokers, or the agents who deducted the tax as in previous years before the Act had been passed, on the ground that they had no right to make that deduction at that time. It does not affect the liability to pay Income Tax. That is imposed by previous Acts. What it does is to say that no one shall be able to claim against the bank for the past sixty years—subject to the Statute of Limitations—for acting upon what was the recognised practice during all this period, and which had continued up to the last two or three years, when it was said that the Government had begun to introduce its Budget very late.

Take, if you do not make a provision of this kind, the case of some person who is abroad, and who at the time had securities in the hands of the bank. The bank, assuming that the Income Tax was properly chargeable, might deduct according to the practice which has prevailed, but that the Courts have now said had no validity. Consequently, if the bank were sued, the bank would be held to have made a deduction that it had no right to make. How, then, do you propose to get the Income Tax from such people? It is clear that they are liable to pay, and have paid, and it is quite clear that the new Statute which we are now passing imposes no liability which did not exist before. How do you propose to reach those persons who have gone out of the country in respect of the Income Tax for which they are properly liable? Hitherto you have rested upon the practice. Now that you cannot you must do something in order to give validity to what was the practice, and to amend an Act which was defective, though the usage was that recognised! I cannot see that anybody can suggest that all persons in these circumstances should be entitled to get back their Income Tax! That would be the effect of it if they sued the bank, and the bank would naturally say to the authorities, as every lawyer knows, "You must pay us back the money for which we have been sued." The Treasury would be left in the position of having nobody to recover Income Tax from, and people who were liable for it would go scoot free instead of paying their proper contribution in respect of the tax which was imposed upon them, properly validated by Act of Parliament. It is clear that it is necessary that some such Clause as this should be put in. Whether there might possibly be some other Clause devised is really hardly worth discussing.


I think the right hon. Gentleman the Attorney-General has not appreciated the points of the hon. and learned Gentleman the Member for St. Pancras, or he is unable to answer them. What the hon. and learned Gentleman said was that this Section should not have any effect as regards the duties imposed by the Finance Act of this year, and until that Act had been passed. Therefore the Section is quite useless to meet the time between 5th April last year and the time the first Resolution passed on the 22nd April; it does not operate to legalise what is done during that period in any sort of way at all. What I am putting to the Attorney-General is this: The desire is to legalise, I take it, first of all in this year, duties which may be collected or Income Tax which may be deducted between 5th April and 22nd April—which we suppose is the time that the real Resolution will come into operation. This particular Sub-section then cannot have that operation at all. It does not operate or attach until certain duties have been imposed by the Finance Act of this year. The proper time to introduce any proposal of this kind would be in the same Act in which were imposed the duties. As regards the main difficulties, this does not meet them in any sort of way. In face of the explanations that the Attorney-General has given, I want to say that this proposal is not only objectionable, but very strongly objectionable.

I wonder how many hon. Members have looked into Section 95 of the Finance Act of 1910? That was passed in a Bill which in itself was passed under very exceptional circumstances and conditions in an extraordinary week to deal with irregularities—because, as we all know, very special irregularities attached to the Finance Act of 1910. The Dissolution took place between the introduction of the Budget and the passing of the Act. Section 95 goes quite outside what is necessary in any normal case and is directed to extraordinary conditions which are not likely to recur. The only way in which this Section would operate would be in regard to duties imposed by any Finance Act of this year. There are no irregularities which we have got to make right. There is not the slightest question in regard to matters of this kind, nor has this point been raised. But you have here a most complicated suggestion going far beyond the necessities which the Attorney-General suggested, and having no operation whatever, because until the duties have been imposed it does not attach; whereas the difficulty arises before the duties have been imposed and, indeed, before the Resolution is passed on which these duties will be imposed. It is absolutely waste paper. The Sub-section

Division No. 56.] AYES. [7.40 p.m.
Abraham, William (Dublin, Harbour) Dickinson, W. H. Hinds, John
Agnew, Sir George William Dillon, John Hobhouse, Rt. Roil. Charles E. H.
Arnold, Sydney Donelan, Captain A. Hodge, John
Atherley-Jones, Llewellyn A. Doris, William Hogge, James Myles
Balfour, Sir Robert (Lanark) Duffy, William J. Holmes, Daniel Turner
Baring, Sir Godfrey (Barnstaple) Duncan, C. (Barrow-in-Furness) Holt, Richard Durning
Barlow, Sir John Emmott (Somerset) Duncan, J. Hastings (Yorks, Otley) Howard, Hon. Geoffrey
Barnes, G. N. Edwards, John Hugh (Glamorgan, Mid) Hughes, S. L.
Barran, Sir John N. (Hawick Burghs) Esmonde, Dr. John (Tipperary, N.) Illingworth, Percy H.
Barton, W. Essex, Sir Richard Walter Isaacs, Rt. Hon. Sir Rufus
Beale, Sir William Phipson Falconer, James John, Edward Thomas
Beck, Arthur Cecil Farrell, James Patrick Jones, Edgar R. (Merthyr Tydvil)
Bentham, George Jackson Fenwick, Rt. Hon. Charles Jones H. Haydn (Merioneth)
Bethell, Sir J. H. Ferens, Rt. Hon. Thomas Robinson Jones, J. Towyn (Carmarthen, East)
Black, Arthur W. Ffrench, Peter Jones, Leif Stratten (Notts, Rushcliffe)
Boland, John Pius Field, William Janes, William S. Glyn- (Stepney)
Booth, Frederick Handel Fitzgibbon, John Jowett, F. W.
Bowerman, C. W. Flavin, Michael Joseph Joyce, Michael
Boyle, Daniel (Mayo, North) Furness, Stephen W. Keating, Matthew
Brace, William Gill, A. H. Kellaway, Frederick George
Brady, P. J. Ginnell, Laurence Kelly, Edward
Brocklehurst, W. B. Gladstone, W. G. C. Kennedy, Vincent Paul
Bryce, J. Annan Glanville, H. J. Kilbride, Denis
Buckmaster, Stanley O. Goddard, Sir Daniel Ford King, Joseph
Burke, E. Haviland- Goldstone, Frank Lambert, Rt. Hon. G. (Devon, S. Molton)
Burt, Rt. Hon. Thomas Greenwood, Granville G. (Peterborough) Lambert, Richard (Wilts, Cricklade)
Byles, Sir William Pollard Greenwood, Hamar (Sunderland) Lardner, James C. R.
Carr-Gomm, H. W. Greig, Colonel J. W. Lawson, Sir W. (Cumb'rld, Cockerm'th)
Cawley, Harold T. (Lancs., Heywood) Griffith, Ellis J. Leach, Charles
Chancellor, Henry G. Guest, Major Hon. C. H. C. (Pembroke) Lewis, John Herbert
Chapple, Dr. William Allen Guest, Hon. Frederick E. (Dorset, E.) Lundon, Thomas
Clancy, John Joseph Gulland, John William Lyell, Charles Henry
Clough, William Gwynn, Stephen Lucius (Galway) Lynch, A. A.
Clynes, John R. Hackett, J. Macdonald, J. M. (Falkirk Burghs)
Condon, Thomas Joseph Hall, Frederick (Narmanton) McGhee, Richard
Cornwall, Sir Edwin A. Hancock, J. G. MacNeill, J. G. Swift (Donegal, South)
Cory, Sir Clifford John Harcourt, Robert V. (Montrose) Macpherson, James Ian
Cotton, William Francis Hardie, J. Keir MacVeagh, Jeremiah
Cowan, W. H. Harvey, T. E. (Leeds, West) M'Callum, Sir John M.
Craig, Herbert J. (Tynemouth) Haslam, Lewis (Monmouth) M'Curdy, C. A.
Crawshay-Williams, Eliot Havelock-Allan, Sir Henry M'Kean, John
Crooks, William Hayden, John Patrick McKenna, Rt. Hon. Reginald
Crumley, Patrick Hayward, Evan M'Laren, Hon. H. D. (Leics.)
Davies, E. William (Elfion) Helme, Sir Norval Watson Markham, Sir Arthur Basil
Davies, Timothy (Lincs., Louth) Henderson, Arthur (Durham) Marks, Sir George Croydon
Davies, Sir W. Howell (Bristol, S.) Henderson, John M. (Aberdeen, W.) Marshall, Arthur Harold
Delany, William Henry, Sir Charles Meagher, Michael
Denman, Hon. R. D. Higham, John Sharp Meehan, Francis E. (Leitrim, N.)

gives a sort of indemnity against irregularities which we ought never to admit in the very large and exceptional form and under the special conditions of the 1910 Act. I do not suppose a single hon. Member, except the legal Members, have looked into that Section 95. If they do they will see it goes far beyond the necessities referred to. It is a long Section, containing many Sub-sections, and belonging to abnormal conditions which attached to that year and are never likely to arise again. I entirely agree with what has been said by my hon. and learned Friend who moved this Amendment.

Question put, "That the words, 'Section ninety-five of the Finance (1909–10) Act, 1910, shall have effect with respect to any duties imposed by the Finance Act of this,' stand part of the Bill."

The House divided: Ayes, 246; Noes, 96.

Millar, James Duncan Pointer, Joseph Stanley, Albert (Staffs, N.W.)
Molloy, Michael Ponsonby, Arthur A. W. H. Strauss, Edward A. (Southwark, West)
Molteno, Percy Alport Price, C. E. (Edinburgh, Central) Sutherland, J. E.
Mond, Sir Alfred M. Pringle, William M. R. Sutton, John E.
Montagu, Hon. E. S. Radford, G. H. Taylor, John W. (Durham)
Mooney, John J. Raffan, Peter Wilson Taylor, Theodore C. (Radcliffe)
Morgan, George Hay Reddy, Michael Taylor, Thomas (Bolton)
Morrell, Phillip Redmond, John E. (Waterford) Thomas, J. H.
Morison, Hector Redmond, William Archer (Tyrone, E.) Thorne, W. (West Ham)
Morton, Alpheus Cleophas Rendall, Athelstan Toulmin, Sir George
Muldoon, John Richardson, Thomas (Whitehaven) Wadsworth, J.
Munro, R. Roberts, Charles H. (Lincoln) Walsh, Stephen (Lancs., Ince)
Murphy, Martin J. Roberts, George H. (Norwich) Walters, Sir John Tudor
Needham, Christopher T. Roberts, Sir J. H. (Denbighs) Ward, John (Stoke-upon-Trent)
Neilson, Francis Robertson, Sir G. Scott (Bradford) Wardle, George J.
Nicholson, Sir Charles N. (Doncaster) Robinson, Sidney Waring, Walter
Nugent, Sir Walter Richard Roch, Walter F. (Pembroke) Warner, Sir Thomas Courtenay
Nuttall, Harry Roche, Augustine (Louth) Watt, Henry A.
O'Brien, Patrick (Kilkenny) Roe, Sir Thomas Webb, H.
O'Connor, John (Kildare, N.) Rowlands, James Wedgwood, Josiah C.
O'Connor, T. P. (Liverpool) Rowntree, Arnold White, J. Dundas (Glasgow, Tradeston)
O'Donnell, Thomas Russell, Rt. Hon. Thomas W. White, Patrick (Meath, North)
O'Dowd, John Samuel, J. (Stockton-on-Tees) Whyte, A. F. (Perth)
O'Kelly, Edward P. (Wicklow, W.) Scanlan, Thomas Wiles, Thomas
O'Kelly, James (Roscommon, N.) Schwann, Rt. Hon. Sir Charles E. Williams, J. (Glamorgan)
O'Malley, William Scott, A. MacCallum (Glas., Bridgeton) Wilson, John (Durham, Mid)
O'Shaughnessy, P. J. Sheehy, David Wilson, W. T. (Westhoughton)
O'Shce, James John Shortt, Edward Winfrey, Richard
O'Sullivan, Timothy Simon, Rt. Hon. Sir John Allsebrook Wing, Thomas
Outhwaite, R. L. Smith, Albert (Lancs., Clitheroe) Wood, Rt. Hon. T. McKinnon (Glasgow)
Parker, James (Halifax) Smith, H. B. Lees (Northampton) Young, William (Perthshire, East)
Parry, Thomas H. Smyth, Thomas F. (Leitrim, S.) Yoxall, Sir James Henry
Pearce, Robert (Staffs, Leek) Snowden, Philip
Phillips, John (Longford, S.) Stamen, Arthur Wellesley TELLERS FOR THE AYES.—Mr. Wedgwood Benn and Mr. W. Jones.
Pirie, Duncan V. Spicer, Rt. Hon. Sir Albert
Agg-Gardner, James Tynte Finlay, Rt. Hon. Sir Robert Peel, Lieut.-Colonel R. F.
Ashley, Wilfrid W. Fisher, Rt. Hon. W. Hayes Pollock, Ernest Murray
Baird, John Lawrence Fitzroy, Hon. Edward A. Rawlinson, John Frederick Peel
Baldwin, Stanley Gastrell, Major W. Houghton Rolleston, Sir John
Barlow, Montague (Salford, South) Gilmour, Captain John Royds, Edmund
Bernston, Harry Gordon, Hon. John Edward (Brighton) Rutherford, John (Lancs., Darwen)
Bathurst, Charles (Wilts, Wilton) Guinness, Hon. W. E. (Bury S. Edmunds) Rutherford, Watson (L'pool, W. Derby)
Bentinck, Lord Henry Cavendish- Haddock, George Bahr Sanders, Robert Arthur
Bigland, Alfred Hall, D. B. (Isle of Wight) Sanderson, Lancelot
Bird, Alred Hall, Frederick (Dulwich) Spear, Sir John Ward
Blair, Reginald Hambro, Angus Valdemar Stanley, Hon. G. F. (Preston)
Boscawen, Sir Arthur S. T. Griffith- Harris, Henry Percy Staveley-Hill, Henry
Bridgman, William Clive Harrison-Broadley, H. B. Steel-Maitland, A. D.
Burn, Colonel C. R. Henderson, Major H. (Berkshire) Strauss, Arthur (Paddington, North)
Butcher, John George Hewins, William Albert Samuel Sykes, Mark (Hull, Central)
Carlile, Sir Edward Hildred Hill-Wood, Samuel Talbot, Lord Edmund
Cassel, Felix Hoare, Samuel John Gurney Terrell, George (Wilts, N.W.)
Cave, George Hope, Major J. A. (Midlothian) Thompson, Robert (Belfast, North)
Cecil, Lord Hugh (Oxford Univ.) Houston, Robert Paterson Thomson, W. Mitchell- (Down, North)
Chaloner, Col. R. G. W. Jardine, Ernest (Somerset, E.) Touche, George Alexander
Clive, Captain Percy Archer Jessel, Captain H. M. Tryon, Captain George Clement
Coates, Major Sir Edward Feetham Kerr-Smiley, Peter Kerr Valentia, Viscount
Cooper, Richard Ashmole Law, Rt. Hon. A. Bonar (Bootle) Warde, Col. C. E. (Kent, Mid)
Cripps, Sir Charles Alfred Lewisham, Viscount Weigall, Captain A. G.
Croft, Henry Page Lonsdale, Sir John Brownlee Weston, Colonel J. W.
Dalrymple, Viscount Lowe, Sir F. W. (Edgbaston, Birm.) Wheler, Granville C. H.
Dalziel, Davison (Brixton) Lyttelten, Hon. J. C. (Droitwich) Willoughby, Major Hon. Claud
Dickson, Rt. Hon. C. Scott MacCaw, Wm. J. MacGeagh Wills, Sir Gilbert
Du Cros, Arthur Philip M'Calmont, Major Robert C. A. Wood, John (Stalybridge)
Duke, Henry Edward M'Neill, Ronald (Kent, St. Augustine's) Yate, Colonel C. E.
Eyres-Monsell, Bolton M. Malcolm, Ian
False, Bertram Godfray Morrison-Bell, Capt. E. F. (Ashburton) TELLERS FOR THE NOES.—Mr. Hohler and Mr. Denniss.
Fell, Anther Nield, Herbert

I beg to move, in Sub-section (2), to leave out the word "this" ["Finance Act of this or any previous year"].

I move this Amendment for the purpose of endeavouring to get an explanation from the Attorney-General, which he did not give me on the last Amendment. This is a matter in which the bankers are very much interested. They want to know what has to be done between the period of the 5th and 22nd April. During that time the interest of millions of securities is falling due, so it is a very large question, and I should like to have an explanation, as this Act will really have no effect in protecting the bankers with regard to the deductions made during that period until the Finance Act of this year passes. If it does not protect them until the Finance Act of this year is passed, what is the use of putting it into the Act? It is quite a novel principle to amend an Act before it is passed. That is the arrangement which the Government is proposing. I should like the right hon. Gentleman to tell us specifically whether the bankers can rely upon this quite apart from the Finance Act of this year, so as to be protected between the 5th and 22nd April.


I beg to second the Amendment.


What I said of The object of this Amendment is to of this Sub-section is not to impose a charge, but to give an indemnity in respect to any deductions made. The duties imposed by the Finance Act will be legalised by Sub-section (1). Sub-section (1) would impose the duty in the Finance Act, and then the deductions made in pursuance of that will be legalised. Of course, they will not be legalised by this Sub-section until you have imposed the duties.


What effect will it have?


It will have effect once the duties are imposed. It does not impose duties, because, if it did, it would be a charging Section. But what it does is to say that when the Act is passed and the precise duties have been imposed that if deductions have been made in the previous fortnight or three weeks there shall be authorised deductions, and it gives indemnity for deductions so made.


The point really is that on the 22nd April they would be illegal, but that the subsequent enactment may make them legal. If the world came to an end on the 22nd April, these taxes would have no effect.


And no action could be brought.


That is true. I see no objection in putting that into the Bill, because in the interval they are illegal.


In view of the explanation given, I do not press the Amendment.

Amendment, by leave, withdrawn.


I beg to move, at the end of Sub-section (2), to add the words, but so as not to prejudice or affect any pending proceedings on the decision of any Court of Law, or any matter in respect of which the decision of a Court of Law was given prior to the passing of the Act. The object of this Amendment is to save the position of Mr. Gibson Bowles. I am sure the Government would not wish to retrospectively legislate so as to entitle the Bank of England to bring an action against Mr. Gibson Bowles, and to recover the very sum which in his action it was decided they were not entitled to. I tried to make that clear in the Committee stage, and I hope, so far as Mr. Gibson Bowles is concerned, it will be made clear.


I cannot accept the Amendment in these words, but I will accept an Amendment to give effect to what the hon. Gentleman wishes. If there is any fear that by reason of this Sub-section some action might be brought by the Bank of England against Mr. Gibson Bowles of the same nature as that in which he succeeded I have no objection to putting in words which would guard against that. There is no intention by the Bank of England of taking any such step. There are other means of reaching Mr. Gibson Bowles and compelling him to pay the tax properly due. Although I do not for a moment anticipate that such action will be taken. I am prepared to meet the hon. Gentleman to this extent, to insert words to prevent this applying to any past proceedings in a Court of Law. There are difficulties in regard to pending proceedings, but so far as I am aware there are no pending proceedings, but in view of the discussion in Committee, as the hon. and learned Gentleman will recognise, there might be proceedings before the Royal Assent is given to the Act. I think the better words would be the words on the Paper in the name of the hon. Member for Kingston (Mr. Cave), and if the hon. Gentleman moves his Amendment in this form, "but this provision shall not affect any past proceedings in any Court of Law," I shall be prepared to accept it.


I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.


I beg to move, at the end of Sub-section (2), to add the words "but this provision shall not affect any past proceeding in any Court of Law."

Question put, and agreed to. Mtn.

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