HC Deb 11 August 1913 vol 56 cc2159-77

"In the case of the additional exemption from Income Tax under Section 69 of the Finance (1909–10) Act, 1910, there shall be no limit to the amount of the exemption for outlay shown to have been incurred in accordance with that Section."

Clause brought up, and read the first time.

Captain CLIVE

I beg to move, "That the Clause be read a second time."

I hope the Chancellor of the Exchequer will not treat this also as a hardy annual. It is three years since such a Clause has been moved, and the promises made by the Chancellor of the Exchequer from time to time justify me in hoping that he will accept this Clause on this occasion. The Clause, shortly, proposes to eliminate the 25 per cent. which was established when the Chancellor of the Exchequer made this concession to landowners to exempt from Income Tax their expenditure on repairs to cottages and buildings. I think when the Chancellor of the Exchequer gave that—I will not call it a concession, it was merely an act of justice—to the landowners, the reason he imposed that limit was that he had an enormous deficit to meet that year, and he did not think he could properly risk a liability of more than half a million at the time. We all know that that limit has not been anything like reached in the years during which that exemption was made. In the first year only £5,000 was claimed under the Section. In the next year £49,000, and last year. when it was thought it might be considerably more, because it was the last year during which arrears of rebate could be claimed on the whole three years, it was only £68,000, instead of the £500,000 which the Chancellor of the Exchequer expected. Perhaps I might be allowed to remind the Committee of the words used by the Chancellor of the Exchequer at that time. In the Debate on the Second Reading of the Finance Act he said:— If it is found that the £500,000 is not altogether disposed of by this concession, the Government will probably be in a position, at any rate next year, to increase the maximum. If there is any surplus, we propose to increase the maximum. On another occasion he said:— It must be for the first year experimental. Next year we may have something to spare and we may increase the allowance, may be up to 30 per cent., if the £500,000 runs to that extent, to the improving landowner. As recently as the Second Reading Debate on this Bill, in reply to an interruption by my hon. Friend the Member for Oswestry, the Chancellor of the Exchequer said:— I think there is a good deal to be said for that point. Inasmuch as £500,000 is not spent, I do not see there can he ally reason against raising the maximum. I will give further consideration to the point, and, if the hon. Member will put down an Amendment, I will see what we can do in the course of the Debates on this Bill. That is as much encouragement as a Member ever gets in regard to an Amendment or a new Clause. I think that justifies me in supposing that the Chancellor of the Exchequer may accept this Clause. Apart from the exigencies of the Budget in the year in which this concession was first made, I can see no reason for any limit, provided that the Commissioners are satisfied of the proofs of what has been spent in repairs by landowners. The limit, I think, acts especially hardly upon small estates, because on large estates I do not suppose the percentage spent upon repairs varies very much from year to year, but rather equalises itself. There may be a large expenditure on one farm and less on another. On small estates of two or three or half a dozen farms there may be no great expense in one year, but another year there may be some big roof to be entirely renewed Yet, though a landlord may have a long series of heavy outlays, he can only claim 25 per cent. I know one estate upon which during eleven years nearly the whole income was put back into the estate, not to increase rents, but to maintain it, and having been put in first-rate order the annual outlay still runs to the 25 per cent. which is allowed to be deducted. That percentage of 25 per cent. is only the normal expenditure necessary to maintain the estate in first-class order when it already is in first-class order to begin with. Where a landlord sets to work to spend a large sum upon his estate he is penalised by being allowed only to make this 25 per cent. reduction. I think landowners are the only class who are treated in that way, and practically they are found guilty until they can prove themselves innocent—they are held liable until they can prove the contrary.

I think the best solution is that which the hon. Member for Tewkesbury (Mr. Hicks Beach) proposes in a later Clause which places landowners under Schedule D, for they would then be treated like ordinary tradesmen and shop-keepers, and could invite the Commissioners to estimate the amount upon which Income Tax is payable, and that would be a considerable advantage. They might not accept the estimate of the Commissioners unless it is below what they are actually receiving, and if it exceeds the amount, then they have the power of submitting their accounts and paying exactly that which is due. On the Second Reading of this Bill the Chancellor of the Exchequer claimed that he had already done all that was necessary for the landowner, and he rather jeered at them because they did not take advantage of the concession he had made. I cannot think of anybody else who would be entitled to say, "I am justified in taking your money if you are not careful enough to see that I do not take too much." It should be quite as much the duty of the Chancellor, and those who work under him, to see that the subject is not overcharged, or wrongly charged, as it is to see that he pays that which he ought to pay, and the Chancellor of the Exchequer has no right to say it is the landowners' fault if they have not taken advantage of the concessions he has made. The Central Land Association is particularly associated with this question, and under the secretaryship of the hon. Member for Wilton they first brought this matter before the notice of the Chancellor of the Exchequer, and that body has endeavoured to bring it to the notice of landowners. That, however, is not their business; it ought to be the business of the State, when making the concession, to see that the merits of it, and the opportunities offered, are brought home to those whom it is intended to benefit. I hope the Attorney-General will see his way to accept this Clause.

Sir RUFUS ISAACS

I recognise the spirit in which the hon. Member has moved this Amendment, and I quite see the force of the observations that he has made. It must be borne in mind that the restriction this Amendment would remove when introduced by the Chancellor of the Exchequer was a great improvement on the condition of things that had existed hitherto. I know the view of my right hon. Friend on this point up to the last moment, and his difficulty is that the amount of the deductions which are claimed under this concession are amounting to more year by year and are increasing from the point of view presented to him more rapidly than hitherto. It is a little too early to say at what stage you should increase this concession, which was only started in 1910. It is a little difficult to say at what stage you can remove a restriction altogether, and it must be remembered that what you remove you cannot very well replace, and therefore it is very difficult to say what amount or what further extensions should be made until we have had a little more experience of the working of the Act. We have only had three years' experience; indeed, I doubt whether we have had more than two, because the first year it scarcely seems to have been known. Although I do not far a moment want it to be understood that the Chancellor of the Exchequer recedes in the slightest degree from what he has said, I desire to say that we must wait still a little longer. It might very usefully form the subject of discussion when we come to consider the Revenue Bill next Session. This is not an answer in principle, I agree, to the arguments of the hon. Member, but it is a practical answer. There is nothing a Chancellor of the Exchequer ought to guard himself against more than the giving away of revenue, and the removing of restrictions of this character might have the effect of giving away revenue beyond the concession which he attempts in the first instance to make. Therefore, all I would ask the hon. Gentleman to bear in mind is that at this moment we cannot give effect to the view which he has put forward and which we accept.

Mr. PRETYMAN

It is very unfortunate that the Chancellor of the Exchequer cannot be here, though I quite understand the reason. This particular new Clause has been put upon the Paper by my hon. Friend on the distinct and direct invitation of the Chancellor of the Exchequer, who used words which are usually accepted in this House as a pledge to deal with the matter. He said:— I certainly will give further consideration to that point, and, if the hon. Member will put down an Amendment to that effect, I will see what can be done in the course of the Debates on this Bill. That is going very near to giving a pledge to do something. The Attorney-General has taken exactly an opposite line to that taken by the Chancellor of the Exchequer. It will be in the recollection of those in the House than when this matter was discussed on the Second Reading of the Finance Bill the Chancellor of the Exchequer took exactly the opposite view and chaffed us on this side of the House because the claims had been so ridiculously small. That was his whole point. Now the Attorney-General tells us that he cannot accept this Amendment because the sum is growing so fast that the danger of exceeding the limit of £500,000 is great. That is the only reason the Attorney-General could give us. The Chancellor of the Exchequer on the Second Reading told us that the sum was so ridiculously small that it was not worth considering, and he chaffed us for not having asked for more and invited us to put down an Amendment, and now the Attorney-General refuses the Amendment because the sum is growing so fast that although it is now only £68,000, it is likely to exceed £500,000. There is another very material point. The Attorney-General told us that he hoped a Clause might be introduced in the Revenue Bill next year.

Sir RUFUS ISAACS

That goes further than what I said.

Mr. PRETYMAN

I quite agree. The right hon. Gentleman said that the matter could be raised on the Revenue Bill. I have no doubt that he was present in the House a short time ago when we had a definite assurance from the Government that the Revenue Bill and the Committee stage of it would be brought on at an early period next Session. We have also been told that the Finance Bill will be taken later. The Attorney-General said that the Clause could be put down to the Revenue Bill, not that the Government undertook to put it down.

Sir RUFUS ISAACS

I said it might be discussed.

Mr. PRETYMAN

Will the Attorney-General give me an assurance that the Clause will be in order on the Revenue Bill?

Sir RUFUS ISAACS

At the moment I said it I certainly thought that it would be in order, but the very fact that the hon. Gentleman raises the point shows there is a doubt, and of course the Rules of Order are not for me to decide. It must not be taken that I have given any pledge that it will be accepted.

Mr. PRETYMAN

Will the right hon. and learned Gentleman give us his opinion that it could be introduced in the Revenue Bill? That would be of great value. I take it that having said we could introduce it in the Revenue Bill he himself is of that opinion.

Sir RUFUS ISAACS

Of course, when I was speaking I thought that the matter could be discussed on the Revenue Bill, and all I can say is that is my view at present. I certainly am not going to give any pledge in the matter. I know how technical these matters are. Various matters have to be considered before you can say whether a thing is in order or not, but, as far as I can say at present, I think that it would be in order, but I limit it to that.

Mr. PRETYMAN

I quite realise that the Attorney-General cannot decide a point of Order himself and that it must be decided by the Chair, but still it does carry great weight with us that the Attorney-General has given it as his opinion that a Clause to this effect can be introduced in the Revenue Bill. He will see that the point is very material with regard to the pledges the Government have given, because it makes a very great difference to my hon. Friend whether he can raise this matter on the Revenue Bill early next Session or whether he will be relegated to the Finance Bill in the last week of the Session. The issue is really one with which the Government do stand pledged to deal. The question of the five years' average appears to me to have been rather lost sight of when the Chancellor of the Exchequer spoke on the Second Reading, because he complained that very few claims had been sent in. Claims on an average of five years can be made more immediately in the case of large estates than in the case of small estates, because on large estates the accounts are carefully kept, and the labour is well defined to different objects. The first year this new concession came into operation the owners of large estates would, in many cases, be able to make claims on the accounts kept at the estate office, but in the case of small estates, where a man has a job here and a job there, doing repairs to an outbuilding one day and perhaps some work in the house another day, and where no regular accounts are kept showing exactly where different men were working at different times, it would take five years before a five years' average could be secured in order to make a claim. The Attorney-General will agree that the kind of people who would make these claims would be very scrupulous only to make a claim on sound evidence. I willingly admit that the Treasury, so far as my experience goes, have interpreted this Clause in a liberal spirit. They have not attempted to question accounts which, on the face of them, were genuine, and they have not attempted to ask questions which would make it difficult or impossible for owners to make their claims.

The Treasury have dealt with this in a perfectly fair spirit. Where the owner has been able to show that he has expended the money and where he has been able definitely to assert that he has spent it on repairs for the estate, then there has not been the kind of inquiry whether it has been spent on this particular cottage or that. But many of the owners of small estates have not been able to show what their expenditure on repairs and maintenance has been over the whole estate, and probably they will not be able to do that for a period of another two years, when the five years will have expired after the passing of the Act, and that is a reason, I believe, why fewer claims have been sent in than would otherwise have been the case. I must say I expected, after the pledges given by the Chancellor of the Exchequer, we should have had some definite concession, at any rate within the limit of the £500,000 which the Chancellor of the Exchequer pledged himself to devote to this purpose. I am bound to say, although we realise that the first concession was in reality a promise which entitled my hon. Friends behind me, and which entitled me to press him to carry out the original pledge, we are only getting now a sum of £68,500, and I hope when the next Revenue Bill comes in that will all be changed. I do not know whether my hon. Friend proposes to press this to a Division; if he does so, I shall support him in the Lobby as a protest. I think he will be perfectly justified in going to a Division, but in any case, when the Revenue Bill comes in next year, I hope the Chancellor of the Exchequer will make up his mind what he proposes to do, and will carry out his pledge.

Mr. HICKS BEACH

I support the Amendment. I have another Clause on the Paper which I prefer, but now that the subject has been raised I do not think the Committee will care to have another discussion on a similar Clause; therefore, I shall give my support to my hon. Friend's Amendment. It is only as a matter of equity and not as a concession at all that I advocate this. Income Tax is supposed to be levied on people in accordance with their income. Every person gets an income of a certain sort.

Mr. WEDGWOOD

This new Clause deals only with the limit of exemption. Is the hon. Member in order in dealing with the question whether the Income Tax corresponds with the income, and whether the Schedule A should be changed to Schedule D.

The DEPUTY - CHAIRMAN (Mr. Maclean)

The hon. Member has not yet raised that point.

9.0 P.M.

Mr. HICKS BEACH

I was saying that the Income Tax is supposed to be levied on the amount people may have received, and therefore I, for one, see no reason why it should differ between income derived from land and income derived from anything else. This Clause at present under discussion does not entirely carry that out. I support it because it goes a certain extent in that direction. I, for one, fail to see why a person who derived income from landed property should not be able to make a return under Schedule D in the same way as people carrying on other business make returns. The person you want to encourage is surely the person who spends money on his estate, and who does his best during his ownership to keep the estate in good condition and repair. A person must spend money in order to do that, and he should be encouraged, but under the present conditions, you do exactly the reverse. You penalise the man who spends money on his estate, and he gets nothing more in the way of benefit than the person who spends nothing. I think that should be rectified. The House will remember that in 1909–10 the Chancellor of the Exchequer put aside £500,000 in order to grant the concession he then made, and I venture to suggest that the difficulty which has been experienced in making out the return in accordance with the proposals of the Government is responsible for so few claims having been sent in.

Personally, I should have been quite content if the Chancellor of the Exchequer had seen his way to accept the new Clause of my hon. Friend only on condition that the total relief granted by the Exchequer should not exceed £500,000. I believe that would have met, to a very considerable extent, the cases of the people who did take the trouble to keep those accurate accounts demanded by the Treasury in order to show that they had spent more than the allowance of 25 per cent. on the upkeep of their estates. But, unfortunately, the Treasury have not seen their way to do this; they have only promised to give the matter due consideration next year if the subject is raised on the Revenue Bill. We have heard that sort of promise before, without any very material results, and I must confess, until we get something more satisfactory from the Government, I shall feel justified in urging my hon. Friend to take a Division on his Amendment. It is, I repeat, not a matter of concession. All we are asking for is that a man should receive some sort of an allowance in proportion to the amount of income which he spends on the necessary upkeep and repair of his estate. It must be an advantage to the country that landowners should do this, and it is in order to encourage them in so doing that I support my hon. Friend.

Mr. C. BATHURST

I feel I ought not to give a silent vote on this subject, because the matter was first raised by the Central Land Association at a time when I had the honour of being the secretary of that body, acting under the guidance of Lord Onslow, then chairman of the executive committee. In that capacity, and in conjunction with the Surveyors' Institute, the Land Agents' Society, and the Ecclesiastical Commissioners—I hope hon. Gentlemen opposite will agree these are very fair bodies to go to in order to obtain facts, because they represent the greater part of agricultural land in this country—

Mr. WEDGWOOD

The land-owning interest.

Mr. C. BATHURST

And this is a question which only affects the agricultural land-owning interest directly. As a result of the returns obtained through these media without any sort of selection, I discovered that there was in effect on all well-managed estates in the country an average of something like 30 per cent. expended under these sub-heads in England and Wales, and an average of 40 per cent. expended in Scotland, where the expenses as compared with income are much greater than south of the border. A deputation went to the Chancellor of the Exchequer in 1909, and I am bound to say that he listened most courteously and sympathetically to the views we laid before him. He made an admission at that time that if he were to meet what he admitted to be the well-founded grievances of what he called good agricultural landowners, it would probably involve the Exchequer in a sum of about £3,000,000, which he did not then see his way, as Chancellor of Cle Exchequer, to afford. I do not think that is an overestimate. It was an estimate made by the Chancellor of the Exchequer on the advice of his own technical experts in the Inland Revenue. If it is not an overestimate, what is the fact? It is that agricultural landowners, as compared with other income receivers in the country, are being mulcted to the tune of £3,000,000 a year, which not only ought they not to pay, but by paying which they are in fact failing to keep up their estates in such a condition as hon. Gentlemen interested in the land on both sides would like to see those estates maintained.

Mr. SNOWDEN

How does the hon. Member arrive at the estimate of £3,000,000?

Mr. C. BATHURST

The £3,000,000 is an estimate made by the Chancellor of the Exchequer himself, after taking the advice of his own officials at Somerset House. After comparing a large number of these returns, which I did as secretary of the Central Land Association, I should think that if anything it is probably an underestimate rather than an overestimate of the amount. However, for our purposes to-day, it is not really material. The question really is whether landowners ought to be treated in a different way as regards their net incomes from any other class of the community. I go as far as to say, and I think everybody in the House will agree with me, that those who desire landowners to do their duty, both as regards their tenants and the farm labourers living on their estates, ought to do all in their power to remove their reasonable grievances. I am sure this is a reasonable grievance. Whatever may be said of most landowners as a class, and of most agricultural landowners in particular, they are receiving a very small return upon the capital invested in their properties. I do not think my statement will be disputed, when I suggest that 3 per cent. would be regarded as a rather high average of the return from agricultural land. Compare that with those who have money invested in other property and undertakings, such as cotton manufacturers, steel manufacturers and mine owners, who must be receiving, at any rate in these days of booming industry, anything from 15 per cent. to 20 per cent., who are being allowed these very deductions that we ask in the case of the landowners shall be allowed on their small incomes. Surely, it is an unanswerable case. I should like to see the proposal of the hon. Member for Tewkesbury (Mr. Hicks Beach) adopted in preference to that before the Committee. It is so obviously fair that if Schedule D were made to apply to incomes of all sorts, in every case what was the actual net income and nothing but it would come to be taxed, as in fact it ought to be taxed. There is one little difficulty in the machinery at our disposal to-day, which is that we have to pay the full amount of Income Tax under Schedule A, and we have to recover it back as best we can from the Exchequer. I do not know why landowners as a class should be put to this extreme inconvenience and trouble to which other owners of property are not put. I hope that some hon. Members from the other side of the House who are, or who profess to be, interested in the im- provement of agricultural conditions, particularly the lot of the agricultural labourer and his housing, will say a word in support of this Amendment.

Mr. WEDGWOOD

The hon. Member is so very reasonable that I believe he would acknowledge at once that if we made a change in the collection of Income Tax upon landed property, and changed it from Schedule A to Schedule B, or extended the limits, so that £3,000,000 a year less was calculated under Schedule A than at the present time, and if the landowners got the benefit of the £3,000,000, the value of their agricultural land would immediately rise by the capitalised amount of twenty years' purchase of the £3,000,000. The change in the taxation under Schedule A, if made in the way hon. Members opposite propose, would result in landowners benefiting to the extent of twenty years' purchase of £3,000,000 or thereabouts. It seems to me there is a great deal in all the arguments used on the other side. I am quite certain they honestly believe that it is to the advantage of the country that the landlord should spend a great deal of his gross income on repairs and improvements. With that we on these benches are in hearty agreement. What we say is that the incentive or inducement to improve ought to be given to landlords, but not at the expense of the rest of the community, and that the total amount which is raised under Schedule A at the present time from the landed property should be based not upon the improvements that the landlord makes, but upon the value of the land, whether he makes improvements or not. In that case the bad landlords would pay more, and the good landlords—those we want to encourage—will pay less. All those estates which are well improved would gain the £3,000,000 advantage. I doubt whether it is £3,000,000. I dare say it is £1,000,000. Good landowners would thereby receive the advantage, and the bad landowners, whom we want to discourage, would contribute to the benefit of the others, thus making the account square, so that the taxpayers as a whole would not suffer any additional burden.

Mr. HICKS BEACH

Does that mean that the hon. Member would base the Income Tax on the capital value? If he would, that is in direct contradiction to every other basis of Income Tax.

Mr. WEDGWOOD

That is my suggestion. Under Schedule A, Income Tax is levied upon the rental or rateable value. I suggest that it should be levied upon the capital value of the land instead of upon the property with the improvements. Thereby you would effect exactly those improvements the hon. Member for the Wilton Division (Mr. C. Bathurst) and the hon. Member for Tewkesbury (Mr. Hicks Beach) have advocated. You would encourage the man who improved his property, and at the same time avoid the pitfall of making a large present to the landed interest at the expense of the rest of the taxpayers of the country. You would effect an increase of employment, an increase of housing, and an increase of housing, and an increase in money well spent, and would not be making a present to the landowners. I submit to hon. Members opposite that if they will look at the question fairly, not from the point of view of the landlord interest, but from the point of view of the public interest, they will see it would be unfair to relieve one particular class, the landlord class, of this vast body of taxation, thereby increasing the value of their land, land which has been subject to Income Tax under Schedule A for over seventy years—it would be unfair to relieve them of the hereditary burden they have borne all those years at the expense of the rest of the taxpayers of the country. I regard all Amendments which relieve landlords at the expense of the rest of the taxpayers as being bad, although the intention of hon. Members opposite to encourage improving landlords is at bottom an excellent one. Hon. Members opposite really desire to see improving landlords encouraged—I am sure no hon. Members really want to help the bad landlord who starves his land from capital and is probably an absentee—why not then, not by putting Income Tax under Schedule B instead of Schedule A, put it on a sound foundation and call upon the owners of land to contribute under Schedule A of the Income Tax, not according to the use to which they actually put the land, but according to the use to which the land might be put?

Mr. MOUNT

I cannot agree with the conclusion to which the hon. Member has arrived, but I agree with some of the arguments on which he has founded those conclusions. He seems to have admitted that landlords have a claim to be put upon Schedule D, instead of upon Schedule A.

Mr. WEDGWOOD

No.

Mr. MOUNT

I understood, at any rate, that that was part of his argument, though he went on to say that by so doing you would add a great deal of material value to the landlord. I should like to put to him a concrete proposal that by the present system of taxation you are imposing a burden upon the landowners in the country which it is not quite fair that they should be asked to bear. I should like to ask the hon. Member whether he would not consider a little more carefully whether there is not something to be said upon the other side even on the lines of the argument which he has brought forward. I should like to remind the Committee of what was the object which the Chancellor of the Exchequer has in view, and which previous Chancellors of the Exchequer had had in view, in making this allowance which has been made under Schedule A. There is no doubt they realise that the owners of property under Schedule A had a claim to certain remissions of taxation under the Income Tax for the amount they were spending in the upkeep of their property, but they were also careful to try and avoid, so far as they could, any undue loss to the Exchequer, and, therefore, they made a limit, in the first place 12½ per cent. and later on 25 per cent., upon the amounts which were allowed to landowners under Schedule A. But the present Chancellor of the Exchequer, when he made the allowance of 25 per cent., made it perfectly clear that he was prepared to forego an amount of £500,000 a year to the Exchequer. There has not been anything like that amount spent by the Chancellor of the Exchequer in any one year under the 25 per cent. allowed, and I think we are entitled to ask why it is that when we were promised an allowance to meet the necessary repairs and upkeep which landowners ought to spend upon their properties, when he was prepared to allow £500,000 a year, whether we should not have, at any rate, a considerable extension of the limit which he is prepared to give for the purposes of these repairs. I welcome what was said by the hon. Member with regard to the encouragement which ought to be given to good landlords, to those who spend a considerable amount of their gross income upon the upkeep of their property; but if he is prepared to support in the Lobby those opinions which he has voiced, we ought to claim that he should go into our Lobby and support our Amendment, because there is no doubt that many a landlords does consider whether he shall do certain repairs and alterations and improvements one year or another, because he feels that he will have to pay an Income Tax of 1s. 2d., or it. may be 1s. 8d., upon the expenditure which he has incurred. If the hon. Member and his Friends really intend to do what they can to encourage landlords to spend as much money as they can on their property, I suggest that he should come and support us in the Lobby.

Sir F. BANBURY

I do not think the hon. Member (Mr. Wedgwood) quite understands the question. It is not a question as to whether Income Tax is right or wrong, but merely one of justice. Income Tax means a tax upon your income, and in every case that I know, except in the case of an owner of land, tax is levied upon the income that you receive. In the case of a landowner the tax is levied not upon the income that he receives, but upon a fictitious amount which he is supposed to receive, and all I understand my hon. Friend desires to do is to put the landlord in the same position as anyone else with regard to the payment of Income Tax. I do not agree with the hon. Member in his foible of a single tax, but I believe he is a fairminded person. I want him to divest his mind of any question about land and to look at the matter as it really is. His method of raising taxes may be better than this, but if you have an Income Tax it should be a tax upon income and not a tax upon something which you do not receive and which is not income. Under these circumstances I hope we shall have the hon. Member in the Lobby with us. Should he vote with us on this occasion, he will in no way be precluded from advocating a different system of taxation later on, but he will merely show that he is fairminded and wishes to put all people, even if they have the misfortune to own land, upon an equal footing with regard to the justice of their demands and the justice of the claims which are made upon them.

Mr. WHELER

I should not have risen to support the Clause if it had not been for the very disappointing reply the Attorney-General gave. I was in the House when the Chancellor of the Exchequer made the statement which has been referred to, and I certainly took it as being something very near a promise that something should be done in this direction. We are only asking that Income Tax under this heading should be deducted where income has been received, and if we are not going to be met in this way, speaking as a landowner myself who has endeavoured to do his best with the property entrusted to him, it is a very great discouragement to those who want to improve their property and erect dwelling-houses for the people who live on it. I have gone through this calculation and seen what I could get out of it on my own estate. The amount I got was very small in proportion to the expenditure, which I was only too ready to make and go on making to-day, though as far as deductions for Income Tax are concerned, they are only a mite in proportion to the expense one incurs. I think the Chancellor of the Exchequer, knowing this Clause was coining on, might have taken a little less time away from the House. There are other Clauses not so important to him, but this is a Clause on which he undoubtedly gave us an understanding that something would be done. We are only asking for something to be done in common fairness to those who are doing their best to improve their property, and the least he could have done would be to try and be here and give some explanation, because the Attorney-General has taken a line entirely different from what the Chancellor of the Exchequer took when it came up before. It is very hard to reconcile the two lines of argument, the Attorney-General's to-night and the Chancellor of the Exchequer's a few weeks ago, and it seems to me that because the Chancellor of the Exchequer knows he is in a difficulty he is not here, and it is a very unsatisfactory state of affairs, and I shall certainly join in the protest by voting against the Amendment.

Captain CLIVE

I should like to support the appeal my hon. Friend has made. We all recognise that the Chancellor of the Exchequer is but human, and is a very hard worker, but this is a case that concerns his honour very directly. The Chancellor of the Exchequer has now on three separate occasions given, not a pledge, because he is too clever a politician to commit himself to an absolute pledge, but he has given what in all reason amounts to a promise that he will favourably consider this. You cannot go on favourably considering for three years, and then at the end of that period say that the time is not long enough, and that you should have a fourth year, and do nothing. Surely that is not treating the matter in a proper way! Even the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) has spoken in sympathy with us, although he has a different way of arriving at the same result. Nobody, not even the Attorney-General himself, has advanced any argument against our proposal. I am sure that the speech which the right hon. and learned Gentleman made was not one which would have gained for him his high position in the law. I suggest to him that this is a matter of honour. I should like to move the adjournment of the Debate in order that the Chancellor of the Exchequer might be invited to come and give his reasons for his change of front since so recent a time as the Second

Reading of the Bill. Everybody must have felt that on the Second Reading a promise was given that a properly worded Amendment on this subject would be accepted, and now the Chancellor of the Exchequer is not here to explain his change of front. The right hon. and learned Gentleman is naturally unable to give the explanation, and so the Debate becomes a hollow farce, instead of being a proper discussion of a perfectly reasonable proposal.

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

The Committee divided: Ayes, 55; Noes, 189.

Division No. 271.] AYES. [9.27 p.m.
Baird, John Lawrence Guinness, Hon. Rupert (Essex, S.E.) Pryce-Jones, Colonel E.
Banbury, Sir Frederick George Hall, Frederick (Dulwich) Rawlinson, John Frederick Peel
Barlow, Montague (Salford, South) Hamersley, Alfred St. George Ronaldshay, Earl of
Barnston, Harry Hamilton, C. G. C. (Ches., Altrincham) Salter, Arthur Clavell
Bathurst, Charles (Wilts, Wilton) Harris, Henry Percy Samuel, Samuel (Wandsworth)
Boyle, William (Norfolk, Mid) Henderson, Major H. (Berks, Abingdon) Sanders, Robert Arthur
Boyton, James Henderson, Sir A. (St. Geo., Han. Sq.) Stanley, Hon. G. F. (Preston)
Bridgeman, W. Clive Hewins, William Albert Samuel Stewart, Gershom
Cassel, Felix Hibbert, Sir Henry F. Talbot, Lord E.
Chaloner, Colonel R. G. W. Houston, Robert Paterson Terrell, G. (Wilts, N. W.)
Dalziel, Davison (Brixton) Ingleby, Holcombe Thompson, Robert (Belfast, North)
Dickson, Rt. Hon. C. Scott Larmor, Sir J. Wheler, Granville C. H.
Duke, Henry Edward Lewisham, Viscount White, Major G. D. (Lancs., Southport)
Eyres-Monsell, Bolton M. Lloyd, George Butler (Shrewsbury) Wood, John (Stalybridge)
Fell, Arthur Lyttelton, Hon. J. C. (Droitwich) Worthington-Evans, L.
Fisher, Rt. Hon. W. Hayes Magnus, Sir Philip
Fletcher, John Samuel Mount, William Arthur
Gilmour, Captain John Pease, Herbert Pike (Darlington) TELLERS FOR THE AYES..—Captain Clive and Mr. Hicks Beach.
Grant, James Augustus Pollock, Ernest Murray
Gretton, John Pretyman, E. G.
NOES.
Abraham, William (Dublin, Harbour) Delany, William Henderson, J. M. (Aberdeen, W.)
Acland, Francis Dyke Denman, Hon. Richard Douglas Henry, Sir Charles
Adamson, William Devlin, Joseph Higham, John Sharp
Alden, Percy Dillon, John Hodge, John
Allen, Rt. Hon. Charles P. (Stroud) Donelan, Captain A. Hogg, David C.
Baker, Harold T. (Accrington) Doris, William Hogge, James Myles
Baker, Joseph Allen (Finsbury, E.) Duffy, William J. Holmes, Daniel Turner
Balfour, Sir Robert (Lanark) Duncan, C. (Barrow-in-Furness) Howard, Hon. Geoffrey
Barlow, Sir John Emmett (Somerset) Esmonde, Dr. John (Tipperary, N.) Hudson, Walter
Beauchamp, Sir Edward Falconer, James Hughes, Spencer Leigh
Beck, Arthur Cecil Ferens, Rt. Hon. Thomas Robinson Illingworth, Percy H.
Boland, John Pius Ffrench, Peter Isaacs, Rt. Hon. Sir Rufus
Booth, Frederick Handel Field, William John, Edward Thomas
Bowerman, C. W. George, Rt. Hon. D. Lloyd Jones, Rt.Hon.Sir D.Brynmor (Swansea)
Brady, Patrick Joseph Gill, A. H. Jones, J. Towyn (Carmarthen, East)
Bryce, J. Annan Gladstone, W. G. C. Jowett, Frederick William
Burke, E. Haviland- Goldstone, Frank Joyce, Michael
Buxton, Noel (Norfolk, North) Greig, Colonel J. W. Keating, Matthew
Byles, Sir William Pollard Griffith, Ellis J. Kellaway, Frederick George
Cawley, Sir Frederick (Prestwich) Guest, Major Hon. C. H. C. (Pembroke) Kelly, Edward
Chancellor, H. G. Guest, Hon. Frederick E. (Dorset, E.) Kennedy, Vincent Paul
Chapple, Dr. William Allen Gulland, John William Kilbride, Denis
Clancy, John Joseph Gwynn, Stephen Lucius (Galway) King, J.
Clough, William Hackett, John Lambert, Richard (Wilts, Cricklade)
Collins, G. P. (Greenock) Harcourt, Rt. Hon. H. L. (Rossendale) Lardner, James C. R.
Condon, Thomas Joseph Harcourt, Robert V. (Montrose) Law, Hugh A. (Donegal, West)
Cotton, William Francis Harmsworth, Cecil (Luton, Beds) Lawson, Sir W. (Cumb'rid, Cockermith)
Cowan, William Henry Harmsworth, R. L. (Caithness-shire) Leach, Charles
Crumley, Patrick Harvey, T. E. (Leeds, West) Lewis, Rt. Hon. John Herbert
Cullinan, John Hayden, John Patrick Lundon, Thomas
Davies, Timothy (Lincs., Louth) Hayward, Evan Lyell, Charles
Davies, Sir W. Howell (Bristol) Hazleton, Richard Lynch, Arthur Alfred
Macdonald, J. Ramsay (Leicester) O'Malley, William Sheehy, David
McGhee, Richard O'Neill, Dr. Charles (Armagh, S.) Shortt, Edward
Macnamara, Rt. Hon. Dr. T. J. O'Shaughnessy, P. J. Smith, Albert (Lancs., Clitheroe)
MacNeill, J. G. Swift (Donegal, South) O'Shee, James John Smyth, Thomas F. (Leitrim, S.)
Macpherson, James Ian O'Sullivan, Timothy Snowden, Philip
MacVeagh, Jeremiah Outhwaite, R. L. Strauss, Edward A. (Southwark, West)
Markham, Sir Arthur Basil Parker, James (Halifax) Taylor, Thomas (Bolton)
Meagher, Michael Parry, Thomas H. Tennant, Harold John
Meehan, Francis E. (Leitrim, N.) Pearce, Robert (Staffs, Leek) Thomas, J. H.
Meehan, Patrick J. (Queen's Co., Leix) Pearce, William (Limehouse) Thorne, G. R. (Wolverhampton)
Molloy, M. Phillips, John (Longford, S.) Thorne, William (West Ham)
Money, L. G. Chiozza Ponsonby, Arthur A. W. H. Toulmin, Sir George
Mooney, John J. Price, C. E. (Edinburgh, Central) Trevelyan, Charles Philips
Morgan, George Hay Pringle, William M. R. Wardle, George J.
Morrell, Philip Raffan, Peter Wilson Waring, Walter
Morison, Hector Rea, Walter Russell (Scarborough) Warner, Sir Thomas Courtenay
Morton, Alpheus Cleophas Reddy, M. Watt, Henry A.
Muldoon, John Redmond, John E. (Waterford) Webb, H.
Munro, R. Redmond, William (Clare, E.) Wedgwood, Josiah C.
Munro-Ferguson, Rt. Hon. R. C. Redmond, William Archer (Tyrone, E.) White, J. Dundas (Glasgow, Tradeston)
Murray, Captain Hon. A. C. Richardson, Albion (Peckham) White, Sir Luke (Yorks, E.R.)
Neilson, Francis Richardson, Thomas (Whltehaven) White, Patrick (Meath, North)
Nolan. Joseph Roberts, Charles H. (Lincoln) Williams, John (Glamorgan)
Norton, Captain Cecil W. Roberts, G. H. (Norwich) Williamson, Sir Archibald
O'Brien, Patrick (Kilkenny) Robertson, John M. (Tyneside) Wilson. Hon. G. G. (Hull, W.)
O'Connor, John (Kildare, N.) Robinson, Sidney Wilson, W. T. (Westhoughton)
O'Connor, T. P. (Liverpool) Roche, Augustine (Louth) Wing, Thomas Edward
O'Doherty, Philip Roe, Sir Thomas Wood, Rt. Hon. T. McKinnon (Glasgow)
O'Donnell, Thomas Runciman, Rt. Hon. Walter Yoxall, Sir James Henry
O'Dowd, John Samuel, Rt. Hon. H. L. (Cleveland)
O'Kelly, Edward P. (Wicklow, W.) Scanian, Thomas TELLERS FOR THE NOES.—Mr. Wedgwood Benn and Mr. W. Jones.
O'Kelly, James (Roscommon, N.) Scott, A. MacCallum (Glos., Bridgeton)