CLAUSE 3.—(Super-tax for 1914–1915.)

HC Deb 13 July 1914 vol 64 cc1522-77

(1) In addition to the Income Tax charged at the rate of one shilling and fourpence under this Act there shall be charged, levied, and paid for the year beginning on the sixth day of April, nineteen hundred and fourteen, in respect of the income of any individual, the total of which from all sources exceeds three thousand pounds, an additional duty of Income Tax (in this Act referred to as Super-tax) at the following rates:—

In respect of the first two thousand five hundred pounds of the income	nil.
In respect of the excess over two thousand five hundred pounds—
for every pound of the first five hundred pounds of the excess	fivepence
for every pound of the next one thousand pounds of the excess	sevenpence
for every pound of the next one thousand pounds of the excess	ninepence

for every pound of the next one thousand pounds of the excess	elevenpence
for every pound of the next one thousand pounds of the excess	one shilling and a penny
for every pound of the next one thousand pounds of the excess	one shilling and threepence
for every pound of the remainder of the excess	one shilling and fourpence.

(2) All such enactments relating to Super-tax as were in. force with respect to the Super-tax granted for the year beginning on the sixth day of April, nineteen hundred and thirteen, shall have full force and effect with respect to the Super-tax granted under this Section.

The CHAIRMAN

Perhaps it may be for the convenience of the Committee if I indicate the first two or three Amendments I propose to select for consideration. The first is that in the name of the hon. Member for Colchester (Mr. Worthington Evans), the next is that of the Chancellor of the Exchequer, and the third is that of the hon. Member for the Falmouth Division (Mr. Goldman).

Mr. JAMES HOPE

May I ask, Sir, if before arriving at this conclusion you are able to assure the House that you are fully seized of the importance and meaning of the Amendments standing in the name of the hon. Member for Stirling (Dr. Chapple), and if you cannot give that assurance would you allow the hon. Gentleman to make an explanatory statement?

The CHAIRMAN

I have given such study as I am capable of to the Amendment standing in the name of the hon. Member for Stirlingshire, and, after that study, I have arrived at the decision which I have just announced.

Mr. WORTHINGTON EVANS

I beg to move, in Sub-section (1), after the word sources ["from all sources"], to insert the words "after deducting therefrom the amounts paid for Undeveloped Land Duty and Mineral Rights Duty."

The object of this Amendment is to provide that the Super-tax should be payable only upon the income actually received by the person taxed. The Amendment is based on the principle of taxation, professed by hon. Gentlemen opposite, of putting the burden on the broadest backs and taxing those who are best able to bear the taxation. If ability to bear taxation is the proper test, the test must be applied to the net income received by the person taxed, and not to the gross income which, in fact, never reaches his hands. If this Amendment is not made, a different amount of tax will be payable by people of the same income. I can best illustrate that by comparing two cases. Take the case of a man with an income of £3,001. I select that figure because that is the first rate at which Super-tax is payable. Assume that he derives his income from stock and share investments: he will have to pay £190, or thereabouts, in Income Tax and £10 Super-tax, a total of £200, equivalent to about 6½ per cent. on his income. Take another man with exactly the same income of £3,001, and assume that £1,000 is derived from a building estate upon which Undeveloped Land Duty is payable, another £1,000 is derived from mining royalties upon which Mineral Rights Duty is payable, and the remaining £1,001 is derived from stock and share interest. There you have two men with exactly the same gross income. In the second case £1,000 is derived from an income of £2 a year per acre from 500 acres—I know such a case—where the Undeveloped Land Duty is equal to £1 per acre, the land being valued at between £500 and £600. In that case the man would have to pay £500 a year for Undeveloped Land Duty in respect of the income of £1,000 a year which he derives from letting building land for grazing pending building. In respect of the £1,000 derived from mineral royalties, he will have to pay Mineral Rights Duty of £25 a year. Therefore, his net income will be, not £3,001 upon which he is charged Super-tax, but £2,476, and yet he has to pay exactly the same amount of Super-tax and Income Tax, namely, £200, representing 8.1 per cent. on his actual net income, whereas, if the deductions of Undeveloped Land Duty and Mineral Rights Duty were first made, the tax payable would be £155, or 6½ per cent., the precise proportion that would be paid in the first case. I submit that on the principle to which the Government pretend to adhere of putting the tax upon those who can best bear it, you ought to have the same taxation for the same income, and not, as you will have if this Amendment is not accepted, a tax of 6½ per cent. in one case and 8 per cent, in another.

Mr. LEIF JONES

Would the hon. Member give the figures again?

Mr. WORTHINGTON EVANS

Yes, certainly.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

Including those for the Undeveloped Land Duty.

Mr. WORTHINGTON EVANS

In the first case there is an income of £3,001 from stocks, shares, and other investments, upon which there is an Income Tax of £190 in round figures, and £10 Super-tax; that is a total of £200, or 6½ per cent. on the income. In the second case I assume that the same gross income is received, but that only £1,001 is derived from stocks and shares, £1,000 from the grazing value of £2 an acre on 500 acres of land, and £1,000 from mining royalties which are specially taxed. With regard to the 500 acres of undeveloped land, which is let for the moment at £2 per acre, there is Undeveloped Land Duty of £1 per acre. The Chancellor of the Exchequer seems to think that that is an exceptional case, but anywhere round London he will find lots of land paying up to £1 an acre.

Mr. LLOYD GEORGE

Five hundred acres?

Mr. WORTHINGTON EVANS

Up to £1 an acre; and I imagine that must be so round nearly all the big centres of population. Thus there is £500 Undeveloped Land Duty, and the income from mining royalties is subject to Mineral Rights Duty of £50.

Mr. LEIF JONES

I thought you said £25.

4.0 P.M.

Mr. WORTHINGTON EVANS

It should be £50. Hence you have a net income of £2,451, and upon that income exactly the same amount is payable in the way of Income Tax and Super-tax as is payable in the first case on £3,001. If taxation is to be apportioned according to ability to pay, there can be no justification for continuing to tax one man at 6½ per cent. on his income and another man with exactly the same income at something over 8 per cent. Let me put this to the right hon. Gentleman. If this property were subject to a mortgage, he would allow, as a proper deduction from the gross rental received, the interest that was paid upon that mortgage. That is always done. That is a debt voluntarily incurred. Here we get a debt incurred by Statute, a liability placed upon that property, not the least bit less onerous than a mortgage, and having exactly the same effect of reducing the gross income by the sum for the interest on the mortgage, or the amount of the Undeveloped Land Duty. If you are entitled to deduct, as you are now if there is an interest on the mortgage, surely you ought to be not less entitled to deduct because Parliament comes in and puts a tax upon that income? The same principle of deduction is allowed in many other cases. For example, the premium on life insurance can be deducted, because it is the annual payment upon the gross income of the taxed person. The person does not have his income taxed or super-taxed upon the gross income, but is allowed to deduct what he pays for insurance. If it is thought to be fair to deduct the premium that he pays for insurance, surely it is even more fair that there should be a deduction allowed on the sum which Parliament places upon that property as a burden? Even in the case of our salaries of £400 a year we do not pay Income Tax or Super-tax upon the gross amount. The Chancellor of the Exchequer has recognised the principle of deduction. How he did it nobody has ever been able to discover. But he did it.

He said that £100 a year of the £400 was to be treated as necessary payments, and tax was only to be paid on £300. Surely it is much fairer to allow Undeveloped Land Duty to be deducted than a purely imaginary sum for the expense of a Member of Parliament. I do not want to argue—it is not open to me to argue—whether there ought or ought not to be Undeveloped Land Duty. It is there. Surely, then, Parliament ought to recognise that it is there, and allow it as a deduction along with the Mineral Rights Duty from the gross income upon which taxation is being levied. If not, the whole principle of ability to pay, and the idea that that ability to pay is the ground for taxing entirely goes by the board; because, although I have taken a case of £500, I dare say it will be quite possible in exceptional cases to find that a man's income was still further reduced by Undeveloped Land Duty and Mineral Rights Duty. I am not taking an exceptional price and an exceptional amount per acre, nor do I think that I have taken an exceptional number of acres. I gathered just now from the appearance of the right hon. Gentleman when I stated five hundred acres that he thinks that exceptional. Assume, for a moment, that it is exceptional; is it any the less just that the deduction should be made in the case I say, 50 acres? It is only a matter of degree. On 50 acres the tax would be levied at £50, which is not increment at all! Now that the Income Tax and the Super-tax are a permanent part of our taxation, it is the more necessary that obvious injustices, such as I submit this is, should be remedied, and I hope the Government may be able to accept my Amendment.

Mr. LLOYD GEORGE

I cannot see my way to accept this Amendment. It is an Amendment of the kind which has been moved before in Committee, more though in reference to the Income Tax than in respect of Mineral Rights Duty and Undeveloped Land Duty. The hon. and learned Gentleman made no case at all about Mineral Rights Duty. He has not said a word about it. His illustration is entirely concerned with Undeveloped Land Duty. I should rather like to take the case he gave. He said that he knows cases of the kind where a man with an income of £3,000 and 500 acres of undeveloped land pays £1 an acre in respect of the Undeveloped Land Duty. That means that the 500 acres are worth £240,000. Let us take the two cases. The first is that of a man who has £3,000. I assume that the £3,000 represents good capital value. Capitalise it on a basis of 5 per cent. and that man's property is worth £60,000. Take the man with the 500 acres of undeveloped land. His property will be worth very nearly £300,000. The hon. and learned Gentleman complains that the man who has got the property worth £60,000 is let off very easily compared with the man whose wealth is rolling in in the form of increase in value at the expense of the community. I should have thought that the latter was the very last man who ought to complain. On the contrary, some might consider the charge a most inadequate sum. Improvements have been created in his district and the value has no relation to anything he has done. Whatever is due to his own expenditure is deducted. The situation has nothing to do with agricultural value, because the agricultural value is £2 per acre. Therefore, the whole is value clearly created by the exertions of the community.

Lord HUGH CECIL

made an observation which was inaudible in the Reporters' Gallery.

Mr. LLOYD GEORGE

The Noble Lord is entering into the question of whether Undeveloped Land Duty ought or ought not to be charged. I am not discussing that. I am following the very good example of order set by the hon. and learned Gentleman, and simply discussing the rival positions of these two happy possessors of an income each of £3,000 a year. I now come to the second point, although I do not think I have anything to answer in relation to the Mineral Rights Duty; the hon. and learned Gentleman never mentioned it.

Mr. WORTHINGTON EVANS

I do not want to interrupt the right hon. Gentleman, but as a matter of fact I assumed in the second case a gross deduction of £50 a year as Mineral Rights Duty. I did not elaborate it, because I thought the House would know how the case stood.

Mr. LLOYD GEORGE

That the Mineral Rights Duty is in the same position as Income Tax is the contention set up by the Opposition, and it has been their general attitude throughout. I have always treated it as one of the land taxes. It is not Income Tax in any sense of the term. The position is that it is a contribution made by the owners of these mineral rights in respect of the income from land. Where every other interest in land is contributing heavily to local expenditure they are contributing nothing. You may have a colliery proprietor paying about five, six, or seven shillings in respect of what he has risked his capital on, while the owner of the mineral rights is only contributing his shilling. I do not look upon that in the same category as Income Tax. It is a totally different matter. I do not think there is any case for deducting either of these taxes before you arrive at the Super-tax. The Super-tax is not a separate tax; it is purely a graduation of the Income Tax. If the hon. and learned Member will look at the White Paper which has been circulated he will find that its scale has been graduated, so that the passing from the Income Tax category to the Super-tax scale is almost imperceptible. [Laughter.] It is not now really a serious business. The scale has now been so graduated that the payer really never knows when he is passing from one to the other. There is just the same claim for deducting these things in respect of Super-tax as there would be in the case of a man with £2,000, and it were proposed, to deduct off the Income Tax what is paid in respect of the first thousand. It comes to exactly the same thing. There is no reason why you should draw the line at £3,000, and say that the man with £3,000 shall be entitled to make all these deductions, when the man at £2,000 cannot do it. There is no logic at all in the position which the hon. and learned Member has taken up. There would be much more logic in a case for relief to the Income Tax payer now on the score that the Income Tax payer is practically paying rates. What hon. Members opposite forget is that not merely in respect of money which has been raised, but that which will be raised under this Budget, the Income Tax payer is making a contribution in respect of the rates. If anything is to be deducted at all from the Super-tax payer, then the Income Tax payer, too, ought to be in a position to make a deduction. If you begin making these deductions it comes to really the same thing in the end. If you are going to make them, they must be made all round. If they are made all round, then there is a deficiency which will have to be made up by an extra halfpenny or penny on the Income Tax.

Mr. WORTHINGTON EVANS

Then the proper people will pay it.

Mr. LLOYD GEORGE

I am not so certain about that! If the hon. and learned Gentleman means by the proper people the men whose property has been enhanced enormously in value from the rates spent upon it, and spent not merely upon it, but in the neighbourhood, then the proper person to get relief is not that man. It would be a curious method to give relief: to put a penny on the Income Tax in order to give something in the way of deduction, for the same person who got the relief would have paid for it!

Mr. BONAR LAW

(who was indistinctly heard): The right hon. Gentleman has not given as much consideration to this Amendment as I think it deserves. He referred to the prejudices in the minds of hon. Members behind me against royalties on minerals. But as regards royalties, he forgot this is a tax not only upon royalties but also upon minerals. The whole theory of Income Tax is that a man has to pay upon his net income and his net income alone. What happens here? A man has an income of £2,000. The right hon. Gentleman puts on a new tax which is as much a burden on property as anything else, and which diminishes that man's income to the extent, say, of £200 a year. You are, therefore, going to charge him in future, not upon his net income, but upon his income plus the additional charge which the Government laid on him. You may just as well say in case of a man who owns house property that when he makes a return for Income Tax he must do so without deducting the rates. In the one case as in the other, it is gross income; and I think the object of the Income Tax ought to be to get the revenue out of the net income of every man. All the right hon. Gentleman refers to is ability to pay the tax. That does not meet the case at all; it may be a reason for putting on additional land taxes, but it can be no reason for making a man pay Income Tax upon an income which he does not receive. Surely the right hon. Gentleman missed the whole point in his last remarks! He said it simply was a case of taking it out of one pocket and putting it into another. It is not that at all.

This Undeveloped Land Duty or any other duty is a burden placed upon particular kinds of property without any regard to the ability of the owner to pay the larger charge. If you make this man pay his Income Tax upon net income, and not an imaginary income, it may be necessary to raise the Income Tax as a whole, but you would be raising it upon everybody in proportion to their income. What you are doing now is, you are really penalising the owner of a particular kind of property, nothing more nor less, and I think it is especially hard to put on this additional burden, because in the case of undeveloped land it falls upon agriculture. The land must be employed in some form of agriculture, and by making this additional burden you are simply, to that extent, putting an additional burden upon agriculture in this country. I am sure if hon. Gentlemen opposite would think that out, they would see that in effect there is no reason, if undeveloped land should have to pay duty, and if income in consequence is reduced, why a man should have to pay Income Tax upon an income which is not his; and I venture to say that on its merits this Amendment ought to be considered by the Government, and that the readjustments necessary ought to be made which would make the tax much fairer.

Sir ARTHUR MARKHAM

The hon. Gentleman who moved this Amendment tried to justify it on various grounds. As a matter of fact, as the Chancellor of the Exchequer has pointed out—though I did not catch the figures—taking Mineral Rights Duty at twenty years, where you get a total of something like £300,000, taking that at 4 per cent., it represents £12,000 a year, but the owner has only to pay a tax of something like 2 per cent. Here is a man in possession of property at a value of something like £300,000. If it is unrealisable, he can break it up and allow it to be acquired for other purposes for the community. So far as Mineral Rights Duty goes and Undeveloped Land Duty, the property pays not one penny of taxation. Why should not a landlord pay his share of the rates just as any other person? I hope the Chancellor of the Exchequer will stick to what he has said, because I am quite sure he has expressed the views of those who support him.

Mr. LEES SMITH

I was surprised to hear the doctrine of the Income Tax put forward by the right hon. Gentleman opposite. In the sense of the term in which the right hon. Gentleman used the words "net income" his doctrine would be obviously quite impracticable. The argument he used was that you ought to charge Income Tax not upon the income a person receives after he pays the expenses of his business, but on the income he has to spend when he pays his taxes. Why not deduct the Inhabited House Duty, which is in the nature of Income Tax, and the Licence Duty and the gun licences and dog licences on the same principle? The fact is we can only follow one or two quite plain courses: laying it down that only deductions would be allowed and expenses which are incurred in earning income can be followed. If you followed the other course advocated in this Amendment, this House would be leading up to hopeless chaos in trying to distinguish between a tax which was and a tax which was not Income Tax, and therefore the Amendment seems to me to be quite impracticable.

Lord HUGH CECIL

The hon. Gentleman is mistaken in thinking that Undeveloped Land Duty is necessary in order to make an income out of land. If you do not use your land you have to pay a penalty. So far as the general argument goes, I think that the sound principle of taxation is that the taxpayer should not be taxed upon a payment which he makes to the revenue, and that he should only be taxed upon what is his income. The whole basis of the argument by which the State is justified in putting on a tax is not that a person has a large property, but that you propose to levy Income Tax upon people who have large incomes. Income Tax means that you tax a man's income, but to tax a man upon the whole of his property is merely to turn Income Tax into a Finance Act. I strongly disapprove of the Undeveloped Land Duty Tax. On the same principle you might have to tax food, and why should you pick and choose? I do not want from Germany either a high protective tariff, conscription, or the right to fight duels; neither do I want this adaptation of the German system which the Chancellor of the Exchequer seems to have chosen. I quite agree we cannot go into these matters and all the muddle-headedness and insane assumption on the value supposed to underlie land values. The Chancellor of the Exchequer first of all talks nonsense upon land values, then he seeks to found a system of finance upon that nonsense, and thirdly, he taxes people upon a taxation they pay upon his financial scheme founded upon nonsense. It is wrong to talk nonsense in finance and it is wrong to found taxation upon nonsense, and, thirdly, it is wrong to tax people upon what they have already paid.

Mr. OUTHWAITE

The Noble Lord referred to the methods of the taxation of land and land values. In any taxation of land values we accept the principle that the State creates the value. What is the position as regards the unfortunate individual who possesses undeveloped land? If the land is worth a quarter of a million it should pay and ought to pay, and if it is not worth a quarter of a million it will not pay. If it is worth a quarter of a million the owner can turn in an income, say, of £10,000, and it seems to me that the principle or object of this system of the taxation of undeveloped land was to secure that the land should be brought into use. The Leader of the Opposition objected to this Undeveloped Land Tax on the ground that it is a tax upon agricultural land. I support the Chancellor of the Exchequer in the attitude he has taken up on this matter. Whenever we have regard to the complaints under which this land is held up we find it is held up in great urban centres, and regarded as agricultural land so that it may escape its just contribution to the rates and taxes. I really rose because of a statement made by the Leader of the Opposition in regard to this being a tax upon agricultural land. I think that misconception has arisen from the fact that this land was rated as agricultural land. The land we are dealing with is really urban land needed for building purposes, and it is being withheld from use. [HON. MEMBERS: "NO!"] I will take one or two examples.

Mr. EDWARD WOOD

May I ask, Mr. Whitley, whether if the hon. Member is permitted to pursue this line of argument, we shall be permitted to reply to him?

The CHAIRMAN

Of course, if I allow the hon. Member to pursue that line of argument I shall have to allow others to reply. It seems to me that the hon. Member is entitled to make a reply to the Leader of the Opposition, but he must not develop that line of argument upon the Undeveloped Land Duty. On this point the position taken up by the hon. Member for Colchester (Mr. Worthington Evans) is the correct one.

Mr. OUTHWAITE

I was replying to the statement made by the Leader of the Opposition that this was a tax on agriculture. Perhaps I might be allowed to give an illustration. Take, for example, the suburban area of Croydon, where there are 9,000 acres in the borough, and of that area I find 2,643 acres rated as agricultural land making a contribution of £520 to the rates. It is utterly absurd to suggest that that so-called agricultural land, which comes under the Undeveloped Land Duty is land properly devoted to agricultural purposes. As a matter of fact it is land which is needed for building. I will take one or two other large cities. In the city of Manchester I find that there are 21,000 acres of land of which 5,300 are rated as agricultural land, or, roughly, about a quarter of the area of that great city—

The CHAIRMAN

I think the hon. Member is now arguing on the merits of the Undeveloped Land Duty, and he must not do that.

Mr. OUTHWAITE

I was only pointing out that people find it advantageous to invest part of their capital in land, and keep it out of use, waiting for the people to make it more valuable every year.

Mr. PRETYMAN

I think the hon. Gentleman opposite has confused the issue. The real issue is, are people who happen to own realty to be charged a different Income Tax to the people who hold other kinds of property. The Income Tax professes to be levied at an equal rate, no matter what source the income may be derived from. We have imposed an Income Tax in this House upon all kinds of property. Then the Chancellor of the Exchequer selects one particular kind of property upon which he imposes additional taxation, thereby reducing the income which the owners of that property can derive from it. When that has happened the owners of that kind of property are to go on paying Income Tax on the old figure just as it their incomes had not been reduced. That is part of the old story we object to, and that is the way the rate of taxes paid by different members of the community is confused and has become impossible of comprehension. This is a claim not so much for the reduction of the amount of the duty as for fair treatment in the way those taxes are levied. If the Chancellor of the Exchequer thinks the Undeveloped Land Duty is too low a tax, let him propose more, and let us hear what the House has to say. But do not levy the Undeveloped Land Tax and then pretend that the owner has got the same income after his income has been reduced, because by that method you are taxing him upon a higher income than he has actually got, and you are setting aside the rate of taxation which has been imposed by this House, and charging a higher rate without the authority of this House. That is really what is being done. My hon. Friend was absolutely justified in saying that this was a tax upon agriculture. The reason for that is not because of any recondite questions in regard to the Undeveloped Land Duty as to whether it is agricultural land being put to its best use. I think the hon. Member for Hanley (Mr. Outhwaite) stated on the platform that land which is being used for agriculture is land which is unused land, but that is not the view we take.

Mr. OUTHWAITE

I never said that.

Mr. PRETYMAN

We consider agricultural land is land which is being put to a good use. The hon. Member opposite has called agricultural land unused land.

Mr. OUTHWAITE

I must deny that statement.

Mr. PRETYMAN

The hon. Member regards it as unused land. He made that statement, and I did not suppose that he would support it by argument. But that shows the bent of his mind, and that is the whole basis of this tax. We say that we are dealing with Income Tax.

The CHAIRMAN

I am afraid if we once begin to argue that question we shall inevitably go into a general Debate on the Undeveloped Land Duty.

Mr. PRETYMAN

I was only speaking of the Income Tax in passing, and I was making a passing reference to the hon. Member's arguments. We say agricultural land is affected, because the only income which can be derived from land of tins character on which these two taxes are paid is from the agricultural user. The whole of the income on which Income Tax is paid under this Amendment must be derived from the agricultural use of the land. It is therefore a direct burden upon agriculture and upon nothing else. If this Amendment is applied to the Super-tax and the Income Tax, obviously the argument is stronger, and I am sure if the Chancellor of the Exchequer sees his way to meet this case he would no doubt offer it to the Income Tax payers just as much as to the payers of Super-tax. I will take the case of a piece of land worth £500. On that piece of land £1 is payable for Undeveloped Land Duty, or just over that amount.

Mr. LLOYD GEORGE

indicated dissent.

Mr. PRETYMAN

But that is the fact.

Mr. LLOYD GEORGE

The statement I was challenging was that this land was worth £500. The income which is received has really no reference to the value of that sort of land. The hon. Member was presupposing land worth £500, but the Income Tax has no reference to that land.

Mr. PRETYMAN

The right hon. Gentleman will not deal with this case, and he goes on raising prejudice on another issue. What I was pointing out was that the whole income of this land is being derived from its agricultural use, and that is the only source from which the income can be derived. Take the ordinary case of a piece of ripening land, not absolutely ripe, upon which the larger amount of this duty will be leviable. That will be agricultural land. The ripe land has probably had sums of money spent upon it which exempt it from Undeveloped Land Duty. It is ripening land being used for agricultural purposes, which is mainly the subject of the Undeveloped Land Duty. Take a piece of land which has a site value of £500. On that there is £1 per acre Undeveloped Land Duty possible. The owner of that land previous to this enactment was deriving £1 from that land as agricultural rent, the sole income he gets from that land until it is ripe. It is not ripe but only ripening, and nobody will buy it. It has not got any frontage to the main road, and it is only producing the owner £1 for grazing purposes. The whole of the £1 is taken as Undeveloped Land Duty.

Without coming here and asking for special authority in the form of a new tax, the Chancellor of the Exchequer charges that man Income Tax at the full rate upon that £1 as if he was still receiving it, when, as a matter of fact, he is not really receiving a single farthing. Is it just or reasonable that a man who is receiving £1 income should have to pay the whole of it in the form of an Undeveloped Land Duty, and that you should continue to charge him Income Tax on that £1 as if he were still receiving it? That is confusing the issue and raising taxation upon a different level to that which you purpose to raise it. I do not think a stronger case could be made out than that for a readjustment of this tax in order that people may pay upon their real income. When you point this out, the Chancellor of the Exchequer begins to compare other kinds of property in regard to which the deductions and the assessments are upon an even basis. Here you are taking realty and treating it upon a different basis to every other form of property. One hon. Member opposite spoke about taxation in Germany. I do not know whether he reads the "Westminster Gazette," but a few days ago that journal gave the amount of taxation raised upon land in this country as being rather more than four times the amount raised upon land in Germany. The owners of land in this country, who pay at a rate four times greater than Germany, are still to pay Income Tax as if they still received the incomes from the lands. That seems a very unjust proceeding, and if the Chancellor of the Exchequer cannot alter it now, I hope he will give it careful consideration and make some readjustment.

Dr. CHAPPLE

I hope the fact that you overlooked my Amendment, Mr. Whitley, was not due to the fact that you did not understand it. [HON. MEMBERS: "Order, order!"] That observation arises out of the fact that hon. Members opposite seem to be casting a reflection upon your ability, Mr. Whitley, to understand my Amendment. The hon. Member opposite said the issue was confused. That is because we are not getting a clear idea of the different kinds of taxation. In the first place, there is a revenue tax, and, secondly, there is a policy tax. [HON. MEMBERS: "Hear, hear!"] I am glad to hear that hon. Members opposite are familiar with the aims and purposes of a policy tax. The Income Tax is simply a revenue tax, the purpose of which is to fill the Exchequer with funds, but the Undeveloped Land Duty is not a revenue tax at all.

Mr. JOYNSON-HICKS

Will the hon. Gentleman say whether he has the authority of the Government for that statement?

The CHAIRMAN

Before the hon. Member answers that question I must point out once again that it is not in order on this occasion to discuss the merits of the Undeveloped Land Duty. We are simply dealing with it as ail existing tax.

Mr. JOYNSON-HICKS

Will the hon. Gentleman answer that question?

Sir F. BANBURY

The hon. Member was not discussing the merits of the Undeveloped Land Duty. He was stating a fact, that it was not a revenue tax.

Dr. CHAPPLE

I have no intention whatever of discussing the merits of the Undeveloped Land Duty, but I am going to show how foolish it would be to make a deduction of the amount paid in Undeveloped Land Duty. Its purpose and intention is not primarily to produce revenue, but to produce a policy end, and the policy end is to bring idle land into use. No man need pay Undeveloped Land Duty, and a tax you need not pay is not a very burdensome tax. Every man can get out of the tax by making use of his land.

The CHAIRMAN

I really must impress upon hon. Members that this question does not arise on this Amendment.

Dr. CHAPPLE

I will not pursue it. The hon. Member opposite referred to land which produced an Undeveloped Land Duty of £1 per acre. That works out that it is worth £480 per acre. Can any one call land worth £480 per acre agricultural land, i.e. land which is used for agriculture, and which can be used for nothing better? Whenever it becomes building land it ceases to be agricultural land, and, if it is worth £480 per acre, it is a pure misnomer to call it agricultural land. The hon. Member who moved the Amendment suggested that you should deduct the £500 that is paid in Undeveloped Land Duty, but I maintain that you would stultify the whole purpose of the Undeveloped Land Duty by making any such deduction. If a man has land worth £80 per acre, and is paying £1 per acre Undeveloped Land Duty, it shows that it pays him to withhold that land from its best use because he could easily get out of the duty by bringing the land to its highest investment use.

Mr. HAMILTON

My hon. Friend who moved the Amendment gave an instance of very great unfairness to the Income Tax payer. The Chancellor of the Exchequer did not attempt to answer the principle raised by my hon. Friend. He immediately jumped off on a side issue, and said, "Here is a very wealthy man with 500 acres of undeveloped land, and he can easily afford to be taxed on income which he never receives." Other speakers have followed on the same line. The question is this: Is a man to pay Income Tax on money which he never receives as income? This week-end a friend of mine, a lawyer in Manchester, told me of an actual instance where a client receives £22 per year rent for some land—undeveloped land I dare say, let for agricultural purposes, near Manchester. It has all been up for sale, but he cannot sell it. He therefore has to pay £22 per year in Undeveloped Land Duty, and he has to pay Income Tax on that huge income of nothing. That is the principle at the bottom of this Amendment. The man does not receive the £22. It is taken from him by the Treasury in Undeveloped Land Duty, and he never sees it at all. When he is charged Income Tax he is charged on the £22 which he has never received. It is not fair to charge Income Tax on an income which a man never sees and never receives, and I hope that my hon. Friend will take the Amendment to a Division.

Mr. EDGAR JONES

There is a fundamental difference between hon. Gentlemen opposite and those who advocate this duty. We say that it is the man's own fault if he is in that position. He has no need to be in that position. He could get out of it, and it is not in the best interests of the community that he should of his own free choice remain in that position. That is the point taken up by hon. Members on this side of the House, and the difficulty is that Ave cannot argue the whole case. The Leader of the Opposition regarded it as an Income Tax. Of course, if we accepted that point of view there would be a good deal to be said for the arguments advanced by hon. Gentlemen opposite, but we do not regard it as an Income Tax, and if the Chancellor of the Exchequer decided to do this, he would surrender the whole argument for the duty altogether. [HON. MEMBERS: "Policy!"] It is not entirely a matter of policy. A man with £240,000 capital value would be getting a regular legitimate income; it would not be merely a potential income, and, while he was getting it, he would be paying Income Tax; but this man, with his £240,000 capital, leaving it there to increase in capital value, with a potential income in times to come, is not paying Income Tax at the present time. I should like to hear from an hon. Member opposite where the analogy of the Dog Tax breaks down. Let us suppose that the Chancellor of the Exchequer in his next Budget decided to put an extra tax of £1 per dog on everybody who has got more than ten dogs. You can take the case of a man who, for his own purposes, keeps 100 dogs. Are you going to pretend that because he chooses to pay £100 it should be deducted as an Income which he never receives? I do submit that once you accept the principle of the Undeveloped Land Duty—of course it is an arguable point, and will be argued to the end of our days—there is absolutely no case at all for allowing it to be deducted any more than allowing a man to deduct his Dog Duty for Income Tax purposes, and I am glad that the Chancellor of the Exchequer will give no countenance at all to the demand.

Mr. WEIGALL

I should not have risen had not the last speaker asked for an answer to the wholly futile analogy of the Dog Tax. On the one hand, the keeping of 100 dogs is a purely voluntary action, and, on the other hand, the Undeveloped Land Duty is levied on the £240,000 capital value arrived at by hypothetical means, and wholly unrealisable. I could give the Chancellor of the Exchequer any number of cases of men who own land on the outskirts of every large industrial centre, which they cannot sell, which has been valued at between £400 to £500 per acre and charged with Undeveloped Land Duty, but which is unripe, and only used, and can only be used, for agricultural purposes. I could give a typical instance of a property I looked after for twelve years. There were 300 acres outside the city of Northampton. It was up in the open market for sale at from £400 to £500 per acre. If a man has got £60,000, and is enjoying an income of £2,000, you may say that he is reasonably taxed on his income, but you cannot put him on the same plane as the man who has a hypothetical £240,000, which he cannot realise, and the only income from which is an agricultural income of £2 or £3 per acre. Hon. Gentleman on the opposite side of the House, for their own political purposes, will insist on shutting their eyes to this one bald fact. There is no justification for selecting for extra taxation any form of income.

The CHAIRMAN

Hon. Gentlemen seem determined to debate the merits of the Undeveloped Land Duty. I am afraid we shall never get on if we do that.

Mr. WEIGALL

I only wanted to point out that the man with £240,000 unrealisable capital arrived at by absolutely hypothetical means cannot be put on the same plane for Income Tax purposes as the man with £60,000 realisable property bringing him in an assured income. There is no justification for not allowing the man who owns the hypothetical £240,000 of undeveloped land to be charged for Income Tax purposes on the net income he receives the same as the man who owns the £60,000.

Mr. POLLOCK

I am glad that the analogy of the Dog Tax was given. You pay Income Tax on the assumption that you receive or could receive some income, and my hon. Friend has moved to insert his Amendment, because, he says, you do not receive income in respect of payments which you make on behalf of Undeveloped Land Duty. "Yes," hon. Members opposite say, "but you could receive it if you liked," and the analogy of the man who keeps dogs is given, because it is said if he did not spend the money in keeping dogs he would have it in his pocket. Does that analogy really apply to this particular case?

Mr. E. JONES

That was not my analogy.

Mr. POLLOCK

Then will the hon. Member please let me have it?

Mr. E. JONES

I said that once you admitted it was a special tax put on for a special purpose, as the Dog Tax, then the analogy applied. The analogy applies to the proposal to deduct it.

5.0 P.M.

Mr. POLLOCK

The hon. Member was much clearer in his first speech. He has rather blurred the impression by making his second speech. Do you get any income in respect of which you pay this Undeveloped Land Duty, or do you wilfully refuse to receive the income you could refuse? That is really the point. This case is put over and over again: "Here is land outside a big town. It goes up in value because of its proximity to the town, and therefore it is charged Undeveloped Land Duty on the basis that it is not really agricultural land, and would produce much more annually if developed as it can be developed." We have had three years of this system, and I would ask hon. Members opposite if they are not aware of the existence of vast quantities of land for which there are willing sellers, but for which there are no purchasers. The Chancellor of the Exchequer has put an end to cottage building and to sales of land in immediate proximity to large industrial centres—

The CHAIRMAN

I am sorry to intervene so often, but clearly we shall never come to the end of the Finance Bill if we follow up all the lines of argument opened up by the Amendments. I must ask the hon. and learned Member to keep to the simple point—admitting the Undeveloped Land Tax—is it right or wrong that this deduction should be made.

Mr. POLLOCK

I was only pointing out that there is no money received in respect of which Income Tax can be paid. I only put it forward as part of my argument.

The CHAIRMAN

The hon. Member is quite entitled to state that point, but not to develop it.

Mr. POLLOCK

I beg to state, with all respect, that that is all I was doing. I was only pointing out that, in fact, there is no income received here in respect of which Income Tax is being paid. There is no income which can be said to be received or to be wilfully refused, and that is the point at issue between us. How does any owner of land wilfully refuse? The argument of hon. Members opposite is that he does so by refusing to accept the price offered, or by neglecting to develop the land. Can you show there are cases of persons who are wilfully refusing? The ordinary case put from the other side is that of some rich person, but in my belief this matter affects not so much the greater estates in the country as the smaller estates—the estates owned by persons who are just on the margin of the Super-tax. There are many cases in which the Super-tax falls very hardly on a person who may be in possession of an income which is just on the border line. There may be a great many calls upon that income, and it may be the sole source from which a large number of persons draw their sustenance. You have to show that there are these cases of wilful refusal to accept income. As a matter of fact, no illustrations of that have been put forward, and to deal with estates where there are many thousands of pounds involved is altogether beside the real facts of the case. Because no illustration has been given of wilful refusal to accept the income that could be received I support this Amendment, which I believe is required in the interests of justice to persons whose incomes are on the border line. It does not concern the very wealthy to any great extent.

Mr. HIGHAM

The Amendment was moved on the ground that the tax was being levied on incomes which were not being received. But that argument was set aside by the hon. Member for Colchester (Mr. Worthington Evans), who said that tax should be levied on real income. I contend there is an entire mistake in use of the word "income" from the point of view of the hon. Member. Let me illustrate my point. An investor spends, say, £100,000 in buying a cotton mill, and he invests £20,000 on land near the mill and round the town. Up to the present moment these two investments have been dealt with on an entirely different footing. The mill in the first year makes a profit of £10,000, and the owner spends the whole of that sum in renewing the machinery, and otherwise improving the mill. His income thus goes back into the mill, but still he has to pay Income Tax on every farthing of it. On the land round the mill he builds houses for his workmen, and he spends £100,000 altogether; consequently the land goes up in value year by year, but he pays no Income Tax upon it. In the second year his mill again makes a profit of £10,000, and the money all goes back into it in improvements. Again he pays an Income Tax on every farthing of the profit. This may go on for four, five or six years. But in regard to the land, he is keeping that for ripening purposes. He invests any income he gets from the land in the land, and he pays no Income Tax on it at all. Still worse, if eventually he sells the land for £150,000, he will not even pay Income Tax on the £50,000 profit, because it was no part of his ordinary business—it was something outside his business. But if he sells the mill at a profit of £50,000, he is taxed on that increase of capital. My hon. Friends opposite do not seem to recognise this fact, that this land having been bought for ripening purposes, it is not what comes from it for agricultural use, but its increasing value year by year, that ought to pay Income Tax and Super-tax in exactly the same way as the cotton mill does.

Mr. NEWMAN

The hon. Member has just managed to get through his speech without being called to order, and I hope I shall be able to do the same, although I am not very sanguine. The hon. Member who introduced this Amendment gave as an instance the case of a man who owned a certain acreage, on which he paid £200 a year, the land being worth £150,000. Of course, when he quoted that instance he put up a coco-nut for the Chancellor of the Exchequer to knock down, and having knocked it down, the right hon. Gentleman seized it, broke it open, and ran away sucking the milk from it. I am really sorry this particular instance was adduced, because hon. Members must know that great quantities of land can always thus be put as a cock-shy. I am not only this particular man who is called upon to pay the Undeveloped Land Duty. There is another class of men smaller in number, but still substantial men whose interests we have to consider. I want to take the case of market gardeners. Hon. Members laugh at that, as I expected they would. They suggest that there are no market gardeners or nursery gardeners who are called upon to pay Super-tax. But that is not so, and I can assure the Committee that, in my own Division, there are certainly two and probably three market gardeners whose incomes exceed £3,000 a year. There is one man who grows grapes, not by the pound or the bunch, but by the ton, and I am certain his income is well over £3,000 a year. He would, therefore, have to pay Super-tax. It may be suggested that a man who can make £3,000 a year out of his business ought to pay Super-tax. Only a comparatively small amount of money is needed to be sunk in a big business of this sort, and if a man invested £20,000 in it and got a return of 15 per cent. that would make him liable to Super-tax. Market gardening is not the small business it used to be considered. Hon. Members no doubt think of market gardeners as men who have to rise very early in the morning—

The CHAIRMAN

I must ask the hon. Member to keep to the Amendment.

Mr. NEWMAN

It is surely unfair to take money away from these men by way of Undeveloped Land Duty. I know a case of a man who has just had to pay £60 for Undeveloped Land Duty. Naturally he thinks it unfair that he should be liable to pay Super-tax as well. I have a new Clause on the Paper proposing to allow certain deductions to be made in the case of Income Tax which I am sure the Chancellor of the Exchequer will accept, and I really think that, in common justice, he should accept this Amendment as well.

Mr. LEIF JONES

I do not think one need feel much sympathy for the man referred to by the last speaker, who has had to pay £60 as Undeveloped Land Duty, seeing that that was possibly on a valuation of £28,800. If hon. Members wish to bring forward cases for opposing this duty on the ground of poverty, they should adduce instances of real hardship.

Mr. NEWMAN

We want justice.

Mr. LEIF JONES

I rose to deal with the argument put forward by the hon. and gallant Member for Chelmsford (Mr. Pretyman), who always poses in this House as the great champion of the agricultural owner. I have some interest in agricultural ownership, and I should be sorry if this championship were to succeed in this instance, because it would mean levying heavier taxation on the owners of agricultural land than they are called upon to pay at the present time. [HON. MEMBERS: "Why?"] It is admitted that if this Amendment were carried the result would be that the Super-tax would have to be levied at a higher rate on those who are liable to pay it, because the money has to come from somewhere, and any deficiency caused by effecting this particular saving, must be made up by the other payers of Income Tax. Thus if you succeeded in carrying this Amendment you will increase the burden all round of the ordinary owner of agricultural land, who is not, as a rule, the owner of undeveloped land. To take a step in taxation which should have the result of throwing upon owners of agricultural land taxes which, under the Budget are going to be paid in part by owners of undeveloped land, is to pursue a policy which I should not have expected the hon. and gallant Member to advocate, seeing that he poses as the champion of agricultural land in this country. I should like to point out to the hon. and gallant Member that the owners of undeveloped land do not contribute to the rates of their district in the same proportion as the owners of ordinary agricultural land. It may fairly be argued, however you dislike the Undeveloped Land Duty, it is a means of getting some contribution from it in lieu of the contribution it does not make towards the rates, and whether or not we admit there is anything in the complaint as to the holding up of land, it is clear that land which is of much more value than the agricultural land round about it is not paying an equal contribution to the rates. As to the case of a man with 300 acres, dealt with by the hon. Member for the Horncastle Division (Captain Weigall), who was not able to sell it for the price he asked for it, surely he could have sold it at a value.

Captain WEIGALL

I do not think he could.

Mr. LEIF JONES

On his own showing the agricultural land was worth £3 and £4 an acre, and I suspect that he could have sold it for more than thirty times the agricultural value. It is not unfair to regard the Undeveloped Land Duty as a contribution somewhat corresponding to the rates. If you are going to allow landowners to deduct the rates before they pay Income Tax, it will be very unfair to allow the Undeveloped Land Duty payer to deduct his tax before he pays Income Tax.

Mr. F. HALL (Dulwich)

The hon. Member has rather let the cat out of the bag. He said in reply to my hon. Friend that we were not going to argue that land could not be sold. The argument from hon. Members opposite has always been that these landowners hold up land so that it is impossible to build houses upon it for poor people. This is the first time I have heard that statement—it was made honestly, although possibly by mistake—by the hon. Member for the Rushcliffe Division (Mr. Leif Jones) that land might be sold for a value. We admit that in all probability the land could be sold for a value. The Government value the land and state whether it is agricultural land or land fit for building purposes. The owner can do nothing. He may appeal, and he does appeal time after time, but the result is that he has got to grin and bear it or sell the land. We have had a discussion this afternoon in regard to the Undeveloped Land Duty, but I notice that part of my hon. Friend's Amendment says, "After deducting all payments."

The CHAIRMAN

The hon. Member moved the Amendment without those words. We disposed of the question of Income Tax on the last day of the Committee stage.

Mr. F. HALL

Unfortunately, I was called out by a wretched green ticket and did not hear the Amendment moved. I hope after the remarks which fell from one of the right hon. Gentlemen's well-known supporters that he will consider whether there is not something in the argument that before you state that a man is liable for Super-tax you should consider whether the land is worth the amount that has been placed upon it by the Government, or whether it was reasonably taxed as land, having regard to the purposes for which it could be utilised.

Sir FREDERICK BANBURY

I should like to ask the Chancellor of the Exchequer one question. I understand the point we are discussing is that a man should not be called upon to pay Income Tax on an income he does not receive. The argument of hon. Members opposite is that he could sell this undeveloped land and by means of the price receive an income. If the Chancellor of the Exchequer adheres to that argument. I would ask him why he does not put a tax upon an investment in the shares of the company which does not pay a dividend?

The CHAIRMAN

That is quite another question.

Sir F. BANBURY

May I point out that the deduction proposed by the Amendment is proposed because there is no question of income in it? I am arguing that in the case of an investment which does not pay a dividend that it is not charged because there is no income. There is no tax put upon an investment to compel a man to sell that investment and reinvest the money in something which produces an income. I will not infringe your ruling. Sir, and discuss the merits of the Undeveloped Land Tax.

Mr. ELLIS DAVIES

The statement made by the Member for the Horncastle Division (Captain Weigall) is rather important. He based his argument for the Amendment on the fact that land which is at the present moment subject to Undeveloped Land Duty is not realisable in the market. For the last two years the argument on the other side has been that the Government valuers were fixing the values—

The CHAIRMAN

The hon. Member is again following the wrong line. That is one of the points on which other Members were ruled out of Order, and I cannot allow him to raise it.

Mr. ELLIS DAVIES

The hon. Member made a statement, and I assumed I was entitled to point out its bearings on the arguments addressed to the Committee.

The CHAIRMAN

The hon. Gentleman is not entitled to follow up a point on which I have ruled out other hon. Members and stopped them from dealing with it.

Mr. ELLIS DAVIES

May I point out that you did not pull up the hon. Member for the Horncastle Division. [HON. MEMBERS: "Order, order."] I accept your ruling, Sir. I would only make the point that the answer to the argument in favour of the Amendment, namely, that the land was not producing income, is that if the land is realisable it is the fault of the owner if he does not realise it and obtain an income therefrom. The hon. Member who moved the Amendment suggested that a man was entitled to deduct the interest he pays on a mortgage. That is true, but the Income Tax on the mortgage money is paid by the owner of the mortgage. In this case the suggestion is that the owner of the land should be exempted altogether from paying the duty. The hon. and gallant Member for Chelmsford (Mr. Pretyman) suggested that this was a tax upon agricultural land. I did not gather that he suggested it was a tax upon agriculture. If so, the only possible way in which it could be that would be for the landowner to add the Undeveloped Land Duty to the rent he was obtaining on the agricultural land. If there is any real objection to the Land Duties it is that the revenue already obtained from the undeveloped land of this country is a great deal smaller than it ought to be.

Mr. JAMES HOPE

I will assume that all the arguments of hon. Gentlemen oppo- site as to the Undeveloped Land Duty are perfectly sound, because I am afraid that were I to combat them I should come under your ruling, Sir. I will assume that it is as easy to get rid of the land at a fair price as it is to kill your dog. But what of the Mineral Rights Duty in the case of a man working the minerals direct? In that case he is doing what hon. Members want him to do. He is developing the natural resources of his property, and developing them to the public advantage. It is a burden which he cannot get rid of. He cannot, like the owner of undeveloped land who is supposed to be able to sell it, sell the rights and reinvest the money. He is doing the very thing it was proposed that he should be taxed to do, although the undeveloped mineral tax broke down in 1909—he is making the best use of his property according to the most advanced theories of the Glasgow school. He is getting a legitimate income, yet if he goes over the £3,000 margin you are taxing him on that part of his income no less than three times over.

Mr. NEWTON

As there may be a Division, I should like to be a little clearer in my own mind than I am at present on the matter. I am quite sure I shall not fall foul of your ruling, Sir, because I agree that the great bulk of the speeches have been out of order. The point of the Amendment is that Income Tax should not be charged upon income which is not received. If that is so, it is not necessary for hon. Gentlemen opposite to take the case of a man with an interest in undeveloped land who is piling up his fortune. I think the expression used by the Chancellor of the Exchequer was "Rolling up his fortune." That may be perfectly true. We are not debating the merits of the Undeveloped Land Duty now. If the argument of the Chancellor of the Exchequer is correct, his proper course is to deal with undeveloped land in a more drastic manner. I should have thought he would have admitted that his various Land Taxes did deal with the problem of undeveloped land. He is now attempting to deal again with the same problem by inflicting an injustice in the mode of assessing Income Tax. There seems to be no answer to that point. An hon. Member opposite said that the Undeveloped Land Duty was a Policy Duty. I am rather inclined to sympathise with him, although I remember the Prime Minister said that if these taxes brought in no revenue they had no right to remain in the Budget. If the Undeveloped Land Duty be a Policy Duty, I do not believe hon. Members will say that the Income Tax is also a Policy Duty. In common justice the grievance of which we complain should be removed, and if it is desired to do anything further with regard

to Undeveloped Land Duty it should be done by means of the Land Taxes.

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

The Committee, divided: Ayes, 115; Noes, 257.

Division No. 163.]	AYES.	[5.28 p.m.
Agg-Gardner, James Tynte	Gibbs, George Abraham	Parker, Sir Gilbert (Gravesend)
Amery, L. C. M. S.	Gilmour, Captain John	Pease, Herbert Pike (Darlington)
Anstruther-Gray, Major William	Goldman, Charles Sydney	Peto, Basil Edward
Baird, John Lawrence	Goldsmith, Frank	Pollock, Ernest Murray
Baldwin, Stanley	Goulding, Edward Alfred	Pretyman, Ernest George
Banbury, Sir Frederick George	Gwynne, R. S. (Sussex, Eastbourne)	Prothero, Rowland Edmund
Barnston, Harry	Hall, Frederick (Dulwich)	Pryce-Jones, Colonel E.
Benn, Arthur Shirley (Plymouth)	Hambro, Angus Valdemar	Quilter, Sir William Eley C.
Bennett-Goldney, Francis	Hamilton, C. G. C. (Ches., Altrincham)	Rawson, Colonel Richard H.
Boles, Lieut.-Col. Dennis Fortescue	Hardy, Rt. Hon. Laurence	Remnant, James Farquharson
Boscawen, Sir Arthur S. T. Griffith-	Harris, Henry Percy	Ronaldshay, Earl of
Bowden, G. R. Harland	Henderson, Major H. (Berks, Abingdon)	Samuel, Sir Harry (Norwood)
Brassey, H. Leonard Campbell	Henderson, Sir A. (St. Geo., Han. Sq.)	Samuel, Samuel (Wandsworth)
Bridgeman, William Clive	Hewins, William Albert Samuel	Sanders, Robert Arthur
Burn, Colonel C. R.	Hills, John Waller	Smith, Rt. Hon. F. E. (L'p'l., Walton)
Campion, W. R.	Hoare, Samuel John Gurney	Spear, Sir John Ward
Carlile, Sir Edward Hildred	Hope, James Fitzalan (Sheffield)	Stanley, Major Hon. G. F. (Preston)
Cassel, Felix	Hope, Major J. A. (Midlothian)	Stewart, Gershom
Cecil, Evelyn (Aston Manor)	Jessel, Captain H. M.	Strauss, Arthur (Paddington, North)
Cecil, Lord Hugh (Oxford University)	Joynson-Hicks, William	Swift, Rigby
Cecil, Lord Robert (Herts, Hitchln)	Kerry, Earl of	Sykes, Sir Mark (Hull, Central)
Clyde, James Avon	Lane-Fox, G. R.	Talbot, Lord Edmund
Coates. Major Sir Edward Feetham	Law, Rt. Hon. A. Bonar (Bootle)	Terrell, George (Wilts, N.W.)
Cotton, William Francis	Lloyd, George Butler (Shrewsbury)	Thomas-Stanford, Charles
Crichton-Stuart, Lord Ninian	Locker-Lampson, G. (Salisbury)	Tickler, T. G.
Croft, Henry Page	Locker-Lampson, O. (Ramsey)	Tryon, Captain George Clement
Dalrymple, Viscount	Lockwood, Rt. Hon. Lt.-Col. A, R.	Valentia, Viscount
Dalziei Davison (Brixton)	Lowe, Sir F. W. (Birm., Edgbaston)	Weston, Colonel J. W.
Denniss, E. R. B.	Mackinder, Halford J.	Williams. Col. R. (Dorset, W.)
Dickson, Rt. Hon. C. Scott	Meysey-Thompson, E. C.	Wills, Sir Gilbert
Duncannon, Viscount	Mills, Hon, Charles Thomas	Wilson, Captain Leslie O. (Reading)
Eyres-Monsell, Bolton M.	Morrison-Bell, Capt. E. F. (Ashburton)	Wood, Hon. E. F. L. (Yorks, Ripon)
Faber, George Denlson (Clapham)	Morrison-Bell, Major A. C. (Honlton)	Wood, John (Stalybridge)
Falle, Bertram Godfray	Mount, William Arthur	Yate, Colonel C. E.
Fell, Arthur	Neville, Reginald J. N.	Younger, Sir George
Fisher, Rt. Hon. W. Hayes	Newman, John R. P.
Forster, Henry William	Newton, Harry Kottingham	TELLERS FOR THE AYES.—Mr.
Foster, Philip Staveley	Nicholson, William G. (Petersfield)	Worthington Evans and Captain
Ganzoni, Francis John C.	Ormsby-Gore, Hon. William	Weigall.
Gastrell, Major W. Houghton	Paget, Almeric Hugh
NOES.
Abraham, William (Dublin, Harbour)	Buckmaster, Sir Stanley O.	Denman, Hon. Richard Douglas
Acland, Francis Dyke	Burns, Rt. Hon. John	Dickinson, Rt. Hon. Willoughby H.
Adamson, William	Burt, Rt. Hon. Thomas	Dillon, John
Addison, Dr. Christopher	Buxton, Noel (Norfolk, North)	Doris, William
Agnew, Sir George William	Byles, Sir William Pollard	Duffy, William J.
Ainsworth, John Stirling	Carr-Gomm, H. W.	Duncan, C. (Barrow-in-Furness)
Allen, Arthur A. (Dumbartonshire)	Cawley, Harold T. (Lancs., Heywood)	Edwards, Sir Francis (Radnor)
Armitage, Robert	Chancellor, Henry George	Elverston, Sir Harold
Arnold, Sydney	Chapple, Dr. William Allen	Esmonde, Sir Thomas (Wexford, N.)
Baker, Harold T. (Accrington)	Clancy, John Joseph	Esslemont, George Birnle
Baker, Joseph Allen (Finsbury, E.)	Clough, William	Falconer, James
Balfour, Sir Robert (Lanark)	Clynes, John R.	Farrell, James Patrick
Baring, Sir Godfrey (Barnstaple)	Collins, Godfrey P. (Greenock)	Fenwick, Rt. Hon. Charles
Barlow, Sir John Emmott (Somerset)	Collins, Sir Stephen (Lambeth)	Ffrench, Peter
Barnes, George N.	Compton-Rickett, Rt. Hon. Sir J.	Field, William
Barran, Sir J. N. (Hawick)	Cornwall, Sir Edwin A.	Fitzgibbon, John
Beale, Sir William Phipson	Craig, Herbert J. (Tynemouth)	Flavin, Michael Joseph
Beck, Arthur Cecil	Crooks, William	Furness, Sir Stephen Wilson
Benn, W. W. (T. Hamlets, St. George)	Crumley, Patrick	George, Rt. Hon. D. Lloyd
Bethell, Sir J. H.	Cullinan, John	Ginnell, Laurence
Birrell, Rt. Hon. Augustine	Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)	Gladstone, W. G. C.
Black, Arthur W.	Davies, Ellis William (Eifion)	Glanville, Harold James
Boland, John Pius	Davies, Timothy (Lincs., Louth)	Goddard, Sir Daniel Ford
Booth, Frederick Handel	Davies, Sir W. Howell (Bristol, S.)	Goldstone, Frank
Bowerman, Charles W.	Davies, M. Vaughan- (Cardigan)	Greenwood, Hamar (Sunderland)
Boyle, Daniel (Mayo, North)	Dawes, James Arthur	Greig, Colonel James William
Brady, Patrick Joseph	De Forest, Baron	Grey, Rt. Hon. Sir Edward
Brunner, John F. L.	Delany, William	Griffith, Rt. Hon. Ellis Jones
Gulland, John William	Marshall, Arthur Harold	Richardson, Thomas (Whitehaven)
Gwynn, Stephen Lucius (Galway)	Mason, David M. (Coventry)	Roberts, Charles H. (Lincoln)
Hackett, John	Meagher, Michael	Roberts, Sir J. H. (Denbighs)
Harcourt, Rt. Hon. L. (Rossendale)	Meehan, Francis E. (Leitrim, N.)	Robertson, Sir G. Scott (Bradford)
Harcourt, Robert V. (Montrose)	Meehan, Patrick J. (Queen's Co., Leix)	Robertson, John M. (Tyneside)
Harmsworth, Cecil (Luton, Beds)	Middlebrook, William	Robinson, Sidney
Harmsworth, R. L. (Caithness-shire)	Molloy, Michael	Roch, Walter F. (Pembroke)
Harvey, T. E. (Leeds, West)	Mond, Rt. Hon. Sir Alfred M.	Roche, Augustine (Louth)
Hayden, John Patrick	Money, L. G. Chiozza	Rowlands, James
Hayward, Evan	Montagu, Hon. E. S.	Runciman, Rt. Hon. Walter
Henderson, Arthur (Durham)	Mooney, John J.	Russell, Rt. Hon. Thomas W.
Henry, Sir Charles	Morgan, George Hay	Samuel, Rt. Hon. H. L. (Cleveland)
Hewart, Gordon	Morrell, Philip	Scanlan, Thomas
Higham, John Sharp	Morison, Hector	Scott, A. MacCallum (Glas., Bridgeton)
Hinds, John	Morton, Alpheus Cleophas	Seely, Rt. Hon. Col. J. E. B.
Hobhouse, Rt. Hon. Charles E. H.	Muldoon, John	Sheehy, David
Hodge, John	Munro, Rt. Hon. Robert	Sherwell, Arthur James
Hogge, James Myles	Murray, Captain Hon. Arthur C.	Simon, Rt. Hon. Sir John Allsebrook
Holmes, Daniel Turner	Needham, Christopher T.	Smith, Albert (Lancs., Clitheroe)
Holt, Richard Durning	Neilson, Francis	Smith, H. B. Lees (Northampton)
Hope, John Deans (Haddington)	Nolan, Joseph	Smyth, Thomas F. (Leitrim, S.)
Hughes, Spencer Leigh	Norton, Captain Cecil W.	Strauss, Edward A. (Southwark, W.)
Illingworth, Percy H.	Nugent, Sir Walter Richard	Sutherland, John E.
Johnson, W.	O'Brien, Patrick (Kilkenny)	Sutton, John E.
Jones, Edgar (Merthyr Tydvil)	O'Connor, T. P. (Liverpool)	Taylor, Theodore C. (Radcliffe)
Jones, H. Haydn (Merioneth)	O'Doherty, Philip	Taylor, Thomas (Bolton)
Jones, J. Towyn (Carmarthen, East)	O'Dowd, John	Tennant, Rt. Hon. Harold John
Jones, Leif (Notts, Rushcliffe)	Ogden, Fred	Thorne, G. R. (Wolverhampton)
Jones, William (Carnarvonshire)	O'Kelly, Edward P. (Wicklow, W.)	Thorne, William (West Ham)
Joyce, Michael	O'Kelly, James (Roscommon, N.)	Toulmin, Sir George
Kellaway, Frederick George	O'Malley, William	Trevelyan, Charles Philips
Kelly, Edward	O'Neill, Dr. Charles (Armagh, S.)	Verney, Sir Harry
Kennedy, Vincent Paul	O'Shaughnessy, P. J.	Walton, Sir Joseph
Kenyon, Barnet	Outhwaite, R. L.	Ward, John (Stoke-upon-Trent)
Kilbride, Denis	Palmer, Godfrey Mark	Wardle, George J.
King, Joseph	Parker, James (Halifax)	Wason, Rt. Hon. E. (Clackmannan)
Lambert, Rt. Hon. G. (Devon, S. Molton)	Parry, Thomas H.	Wason, J. Cathcart (Orkney)
Lambert, Richard (Wilts, Cricklade)	Pearce, Robert (Staffs, Leek)	Webb, H.
Lardner, James C. R.	Pearce, William (Limehouse)	White, J. Dundas (Glasgow, Tradeston)
Law, Hugh A. (Donegal, West)	Pease, Rt. Hon. Joseph A. (Rotherham)	White, Sir Luke (Yorks, E.R.)
Lawson, Sir W. (Cumb rid, Cockerm'th)	Philipps, Col. Ivor (Southampton)	White, Patrick (Meath, North)
Leach, Charles	Phillips, John (Longford, S.)	Whitehouse, John Howard
Levy, Sir Maurice	Pirie, Duncan Vernon	Whittaker, Rt. Hon. Sir Thomas P.
Lewis, Rt. Hon. John Herbert	Pollard, Sir George H.	Whyte, Alexander F. (Perth)
Low, Sir Frederick (Norwich)	Pratt, J. W.	Wiles, Thomas
Lynch, Arthur Alfred	Price, C. E. (Edinburgh, Central)	Williams, Aneurin (Durham, N.W.)
Macdonald, J. M. (Falkirk Burghs)	Price, Sir Robert J. (Norfolk, E.)	Williams, Penry (Middlesbrough)
McGhee, Richard	Priestley, Sir W. E. B. (Bradford, E.)	Williamson, Sir Archibald
Maclean, Donald	Primrose, Hon. Neil James	Wilson, Hon. G. G. (Hull, W.)
Macnamara, Rt. Hon. Dr. T. J.	Pringle, William M. R.	Wilson, W. T. (Westhoughton)
MacNeill, J. G. Swift (Donegal, South)	Radford, George Heynes	Winfrey, Sir Richard
MacVeagh, Jeremiah	Raffan, Peter Wilson	Wood, Rt. Hon. T. McKinnon (Glasgow)
M'Callum, Sir John M.	Rea, Rt. Hon. Russell (South Shields)	Yeo, Alfred William
M'Curdy, Charles Albert	Rea, Walter Russell (Scarborough)	Young, William (Perthshire, East)
McKenna, Rt. Hon. Reginald	Reddy, Michael	Yoxall, Sir James Henry
M'Laren, Hon. H. D. (Leics.)	Redmond, John E. (Waterford)
M'Laren, Hon. F.W.S. (Lincs, Spalding)	Redmond, William (Clare, E.)	TELLERS FOR THE NOES.—Mr. Geoffrey Howard and Captain Guest.
Markham, Sir Arthur Basil	Redmond, William Archer (Tyrone, E.)
Marks, Sir George Croydon	Richardson, Albion (Peckham)

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

Mr. LLOYD GEORGE

I beg to move, at the end of the Clause, to insert the words:

"Provided that in estimating total income for the purposes of Super-tax for the year beginning the sixth day of April, nineteen hundred and fourteen, a deduction may be made (in addition to those authorised in paragraph (a) of Sub-section (2) of Section sixty-six of the Finance (1909–10) Act, 1910) of any additional sum on which it is shown to the Commissioners of Inland Revenue that duty would have been repayable in respect of maintenance, repairs, insurance, and management if this Act had been in force during the year by reference to which the total income is estimated."

The object of this Amendment is to enable Super-tax payers to get the advantage this year of the abolition of the 25 per cent. in respect of repairs. In the Budget of 1909 we extended the limit of deduction to 25 per cent. in respect of repairs and maintenance. In the present year we propose to remove that limit altogether, so that a landowner who spends more than 25 per cent. of his income on repairs, insurance, and management, shall be able to deduct the full amount for legitimate expenditure upon the maintenance and repair of his property. If we had not introduced this Amendment the Super-tax payer would be in the position he was in in 1910, and he might not be able to claim the full amount because he is taxed in respect of his income for the preceding year, and therefore we propose in the present Amendment that Super-tax for 1914–15 should be charged as if the abolition of the 25 per cent. limit had effect for Income Tax purposes for 1913–14. I think that will commend itself to the Committee.

Mr. PRETYMAN

I am obliged to the Chancellor of the Exchequer for moving this Amendment, which I think is satisfactory. I do not suppose we shall get an opportunity of discussing Clause 8, but I take it what this really means is that the owner of property may be practically assessed to Income Tax on Schedule D. The value of the concession which the right hon. Gentleman is giving, both in this Amendment and in the Section to which it refers, will largely depend upon administration, and owners of land, so far as my knowledge goes, have no cause whatever to complain of the way in which the enactment he has referred to in the 1909–10 Finance Act has been administered. It has been liberally and reasonably administered, but that was under the 25 per cent. limit, and I know it is the experience of many landowners that the 25 per cent. limit is so easily reached that you do not have to go into any detail at all. All you have to do is to state the sum which has been expended, making it up to the 25 per cent. limit. That does not involve any accuracy, because you can go so far beyond that figure in a great many cases. You have only to state enough to cover the 25 per cent. Now with this Amendment it will be necessary to go into detail, and the Department will have to exercise rather more care. Until there has been some little experience of the administration of this new Clause, I am not quite sure how it will work out. We do not know exactly yet what items of estate expenditure will be passed and accepted as maintenance, repairs, management, insurance, and so on. I dare say hon. Members opposite hardly appreciate what an enormous proportion of the income of an owner of agricultural property in many parts of the country is outgoings, over which he really has no control. I could show figures which would perhaps surprise them. If this is administered on the Schedule D principle, and it all the real, legitimate outgoings—I will not say necessary, because that might be differentially interpreted—upon an agricultural estate are admitted in this, and are deducted for the first time, an agricultural owner is put in respect of that much on the same footing as owners of other kinds of property, and I think the Chancellor of the Exchequer realises, now that the rate of Income Tax is so high, and when Super-tax is also brought into being, that it would create an intolerable hardship upon an owner of land who has nominally an income of thousands a year on which he is assessed on Schedule A, with a 25 per cent. maximum deduction, when on every £100 of which it consists, possibly the owner may not put more than £8 or £10 into his own pocket. They are the kind of cases which exist in large numbers.

So far as principle goes this is a fair proposal, and I am obliged to the Chancellor of the Exchequer for doing it this year. He can hardly have done otherwise than include it this year, or the increased burden would have been very heavy indeed. If my hon. Friend the Member for Wiltshire had been here, I should have left him to reply, for I think it was in the first instance in response to questions from him that the Chancellor of the Exchequer dealt with this matter. I have to thank the right hon. Gentleman for the Amendment, and I hope it will be administered in what I will call the Schedule D spirit.

Mr. EDWARD WOOD

There is one point which I think should be made clear, and that is whether or not my hon. Friend has correctly interpreted the feelings and the desire of the Chancellor of the Exchequer in saying that this concession is tantamount to placing landowners under Schedule D. If that is the intention of the Chancellor of the Exchequer, I think, he will find it necessary either to insert an Amendment of his own, or to accept one of the Amendments standing in the name of hon. Friends of my own on Clause 8; otherwise the scheme as limited to £8 houses will still stand, and the demand we have made to be placed under Schedule D will still remain unmet. If that is not so, the right hon. Gentleman will really have met the Amendment standing in the name of the hon. Member for Falmouth to add to Clause 8 the words:—

"and, so far as houses are concerned, this provision shall be extended to all houses without any limitation of annual value."

The right hon. Gentleman knows that it is rather an important point. It has always been the main point advanced by the agricultural interest, and I hope he will give it his attention. The only other matter I wish to ask is this: Now that we have got the Chancellor of the Exchequer to this point, is it necessary to have the calculation on a five years' average? It would be simpler in many cases if you were able to take the figures of the preceding year and use them for the purpose of your calculation. It would be simpler for many people who have no facilities for keeping correct records if they were allowed to produce the figures for the preceding year.

Mr. POLLOCK

I wish to call attention to one point which, perhaps, the Attorney-General will consider, namely, whether or not the proviso is satisfactory as it stands. I would ask him to consider whether the word "year" in the last line ["during the year"] should not be altered to "period." That may be right or wrong, but my impression is that it would better meet the purpose of the Chancellor of the Exchequer if he said "if this Act had been in force during the period by reference to which the total income is estimated." I can conceive of cases in which if the Act had only been in existence during a particular year, that would not be enough for the part of the income so derived for the purpose of Super-tax for the previous year. You will find that if this proviso was held to be in force during the year, that would not be satisfactory.

Mr. GOLDMAN

In view of the fact that Clause 8 will probably not come under discussion, I wish to ask the Chancellor of the Exchequer whether in respect of all houses owners are to come under Schedule A or Schedule D? Under Schedule D a man is entitled to deduct in respect of expenditure for insurance and repairs. The question I wish to ask is whether the limitation of £8 which is continued under the 1910 Act is to be continued under the present Act, or whether the limitation is to be removed, so that in future owners will get deductions in respect of repairs, insurance, management, and maintenance? I may point out to the Chancellor of the Exchequer that a man might be carrying on business in houses just as another man might be carrying on any other ordinary business. The man in an ordinary business would have a deduction in respect of expenses of management. I do not see why the owner of houses should not have the right to an abatement in respect of the management of these houses.

Mr. G. LOCKER-LAMPSON

I should like to ask the Chancellor of the Exchequer why he brings in the Commissioners of Inland Revenue. He knows very well that the special Commissioners are the only Commissioners who have power of assessment under the Super-tax Clauses. They are the only people to whom appeals can be made under the principal Act of 1909–10. I do not see why the Commissioners of Inland Revenue should be brought in at all. It seems to me that you are creating a very roundabout way of dealing with the matter, because the surveyor of taxes is the man who deals with the accounts to see what repayment has to be made. Under the right hon. Gentleman's new Clause the surveyor of taxes will have to send the claims as set out to the Commissioners of Inland Revenue, and they will have to send them to the special Commissioners, who will make the assessment. It appears to me that it would be very much simpler to leave it, as at present, to the surveyor of taxes to deal directly with the special Commissioners. I do very much dislike the idea of the Income Tax payer being brought more and more under the power of the central administration which is represented by the Commissioners of Inland Revenue.

Mr. LLOYD GEORGE

I will endeavour to deal with the various points which have been raised. With regard to the last point raised by the hon. Member opposite (Mr. Locker-Lampson), the reason why this is done is because the surveyor of taxes is the person who inspects the accounts and the claims made for deductions, and the Commissioners of Inland Revenue, and not the special Commissioners, operate through the surveyor of taxes. I am under the impression that this is the machinery of the Act of 1909–10, but I will look into that matter. I think it is the best way of dealing with it. I cannot see that anybody can check the amounts except the surveyor of taxes, and the Commissioners of Inland Revenue will operate through him. Another point was raised by an hon. Member, who asked me whether what is now proposed is practically extending the principle of Schedule D. I do not like to use these words: I prefer the other words, as to whether a deduction is to be allowed on useful and legitimate expenditure. I prefer adopting that phrase instead of the expression that this is extending the principle of Schedule D. It is not applicable to the same kind of case. What you really want is that where a landlord spends money not only legitimately, but serviceably, upon the repair of his property, he should be entitled to a deduction. You wish to include the man who is spending upon repairs and upon the upkeep of his cottages. That is the sort of expenditure you want to see reduced before the landlord is called upon to pay Income Tax. He may spend an enormous sum of money on improvements which may be in the nature of capital expenditure. I did not understand the hon. Gentleman to mean that. That would be deducted under Schedule D. I understood him to refer to improvements which could not be deducted under Schedule D. I mean expenditure for maintenance, repairs, and the general upkeep of the property. The hon. Gentleman is very keen and alert, and I used the word, which I am afraid was rather too comprehensive, and I am afraid I could not altogether stand by that.

6.0 P.M.

The hon. Member for Ripon (Mr. E. Wood) raised a question as to what would be the effect of a subsequent Amendment on Clause 8. In so far as that refers to the question now before the Committee, I think it will be in order to refer to it now. There are many landlords who spend various sums on their property for maintenance and repairs, and if you began to investigate every step a landlord takes you would add enormously to the work of the Inland Revenue Commissioners and their officials. We would have to increase the number of officials very considerably, and we do not wish to do that. Whether it would be desirable to raise the limit is another matter. One hon. Gentleman put the point to me the other day in the course of Debate, that now that the Government propose to build houses for agricultural labourers, the £8 limit seems to be rather out of place. I think it is well worth while to consider whether that limit ought not to be raised. I am not prepared to give an answer on that point now, but I might be able to give an answer before we reach the Report stage of the Bill. That is an Amendment which could be made on the Report stage. I think there is something to be said for raising the £8 limit, because it does not cover every case of agricultural property. You must assume, for the purpose of rent, that you are charging an economic rent. Therefore, I think there is a great deal to be said for raising the limit. It is desirable that every encouragement should be given to landlords to keep their property properly in repair. These cottages have not paid in the vast majority of cases. Therefore I think it very desirable, in so far as taxation can give any encouragement in cases of that kind, that at any rate we should not charge full taxes upon something which is not really an income. Because if cottages are kept in good repair, the net income received by the landlord in many cases is not considerable, and, therefore, I think that there is a good deal to be said upon this other point. I would rather like to hear suggestions—and, as I have no desire to prolong the Debate, not so much in Debate as afterwards—as to what would be a fair limit for cottages in the rural areas. I do not think that you could raise it very considerably. Otherwise you would get into an area where the machinery of the Income Tax Commissioners would absolutely break down, because they could not possibly investigate the hundreds of thousands of cases which would be added on. However, I agree that there is a great deal to be said for raising the limit.

Mr. PRETYMAN

Will the right hon. Gentleman undertake that when we get to the Report stage this matter can be dealt with? It arises only under Clause 8. The right hon. Gentleman's Amendment only refers to rural cottages. When you come to small house property in towns the question can be raised with great effect, but it cannot be argued on this Amendment. It is very important that we should get an opportunity of raising this point if we cannot reach Clause 8 to-night under the Guillotine Closure. Will the Chancellor of the Exchequer undertake that Clause 8 will be reached in such a manner that this matter can be discussed?

Mr. LLOYD GEORGE

The hon. Gentleman knows perfectly well what time we have at our disposal. If he can so arrange the Amendment that this matter can be raised, it shall be done.

Mr. PRETYMAN

It is for the Government to arrange the time-table and not for us.

Mr. LLOYD GEORGE

It will depend very largely upon the Amendments in the name of the hon. Member for St. Pancras, and how much time he is going to take on the first Clause.

Mr. PRETYMAN

It is an Amendment to Clause 8 itself.

Mr. LLOYD GEORGE

I do not think so.

Sir F. BANBURY

The Government cannot alter the time-table now. The only way in which it could be done is for the Government to put down a new Clause?

Mr. WATSON RUTHERFORD

The great objection to this Amendment as it stands is that it refers to Section 60 of the Finance Act of 1909–10. When we refer to that Section, we find that the whole benefit of it is restricted to the smallest class of property, namely, that which is limited to £8. I think upon the merits that it is hardly a proper thing for the Government to come within that limit, because though there are plenty of cottages rented at less, there are, as the Chancellor quite rightly pointed out, other conditions attached to the letting in the way of service, and, therefore, there is an increased rent which is paid in another manner. What is really wanted is that the benefits of Clause 8 of this Amendment, as applying to that particular Section of the Finance Act of 1909, should be extended to all labourers' dwellings and small properties both in the country and in the towns.

The DEPUTY - CHAIRMAN (Mr. Maclean)

There is an Amendment handed in which I have not been able to accept. This is only relative to Clause 8, and I ask the hon. Member not to pursue it.

Mr. RUTHERFORD

I was pointing that the real objection to this Amendment is the limit which is found in the Clause of the previous Bill. To the extent to which it will give some relief to small agricultural property, it is, of course, a good thing. But the whole principle which is at the bottom of this Amendment is one of a highly debatable character. I do not know whether I should be in order in referring to the world at large, but the principles which obtain, for instance, in Germany, which the Chancellor is very fond of quoting on the subject of spending money on property improvement, are quite different from those which obtain in this country.

The DEPUTY-CHAIRMAN

That is too wide a question for the Amendment.

Mr. RUTHERFORD

I bow to your ruling, but there should be some stage in connection with this Bill in which this matter can be to some extent manipulated, as it is a very important question; but of course if you rule me out of order in referring to it, I shall sit down.

Mr. LANE-FOX

There is one question which the Chancellor did not answer at all. It had reference to the five years' average necessary in order to claim this reduction. To ascertain that average would involve a freat deal of unnecessary clerical work, which would be extremely difficult in the case of an estate that has not got a well organised estate office. The Financial Secretary to the Treasury knows that in the case of small estates very often this would be a considerable hardship, as a great mass of figures would be involved in giving the average for so many years. I submit, that now that the thing is in more working order and that the Treasury have further experience, they could reduce the period. I do not know whether the previous years' expenditure, if taken as a test, would be sufficient, but I do think that five years is too much. It means keeping separate accounts for these particular works as distinct from all other works on the estate, for which reductions cannot be obtained. For instance, the amount of nails or lime used in that way would have to be kept separate from that used on other parts of the estate, for which reductions cannot be obtained, and to go into these figures for five years means an elaborate system of keeping accounts. Some of the estate officers have become more accustomed to it, and therefore it is not quite so hard as it was, but it still means that small estates which have not got an elaborate estate office and a staff of clerks, would have very great difficulty in making these claims at all. The result is that the claims made are not as many as the claims that might be made. Therefore I hope very much that the Government will consider the point as to whether they cannot make the details of the machinery less elaborate, and the process of claiming rather easier, more particularly in the case of small estates. The relief is more wanted in the case of these estates, and therefore the difficulties put in the way of obtaining it are all the harder. I welcome the suggestion of the right hon. Gentleman that he may be able to remove the difficulty in reference to the £8 houses. It is obvious to everybody that the £8 limit will be absolutely out of proportion to all existing conditions. It will be rather ridiculous when all cottages are paying economic rents, and general house rents all over the country have been rising in proportion. Nobody wants, and I am quite certain that the Chancellor of the Exchequer does not want, anything done to make more difficult the building and maintenance of property, and any reduction of this sort which will make it easier to secure the proper measures of repair, and anything that will cause cottages not to be looked on as a distinct loss, and an absolute drawback, will be a very great inducement to what, after all, has been for many years the great source of cottage production in this country, namely, the private owners.

The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu)

In reference to the point raised by my hon. Friend as to the five years' system, may I remind him that that system was arranged when the deduction was originally made in 1910, as a result of a compromise? The original suggestion was to have a period of seven years. The Chancellor of the Exchequer was pressed to make it three years, and eventually the system of five years was adopted, and I think that it has worked very well. After all, it must be remembered that the objections which the hon. Member took are not so great as he thinks. The smaller the estate the simpler the matter of keeping the accounts. In any case, whatever average you take, whether it is three, five, or seven years, the accounts have got to be kept from year to year. Therefore it is really not any great burden on the man who keeps the account, whatever the period of years may be, and there is no reason to alter it.

Mr. CASSEL

There is one point on which we are entitled to more explanation than we have had. The right hon. Gentleman did not answer the question of the hon. Member for Salisbury as to why the Commissioners of Inland Revenue are introduced in this Amendment instead of the Income Tax Commissioners. I was not here, but I understood from my hon. Friend that no answer was given. There appears to be no answer possible why a different set of Commissioners should deal with claims arising in the current year from that which would deal with them in future years. In future years the claims would come before the Income Tax Commissioners. It is a perfectly simple point, and I only desire to have an explanation. Throughout this Bill there are signs that the Government wish to get the whole control of the Income Tax away from the Income Tax Commissioners into the hands of the Commissioners of Inland Revenue. That is a very serious departure. If it is to be done, it ought to be done deliberately, with the knowledge and intention, after full discussion of the matter, that the jurisdiction of the Commissioners of Income Tax should be transferred to the Commissioners of Inland Revenue. It ought not to be done stealthily, and transferred into a Clause here and a Clause there, and then, when the House comes to consider the question, the Government will be in a position to say that the Inland Revenue Commissioners will deal with this, and therefore the whole thing will be referred to them. It does seem to me to be absurd that one set of Commissioners will deal with the claims in future years, and that an entirely different set of Commissioners will deal with the claims in the current year.

Mr. G. LOCKER-LAMPSON

I have handed in a manuscript Amendment, cutting out the words "Commissioners of Inland Revenue," and unless the Government can give some better reply than the Chancellor of the Exchequer gave a few moments ago, I shall have to press that Amendment. It appears to me that you are going about this matter in a roundabout way. I do not see in the least why the surveyor of taxes should not be put into direct communication with the special Commissioners rather than, first of all, having to go to the Commissioners of Inland Revenue, and then afterwards to the special Commissioners.

The ATTORNEY-GENERAL (Sir John Simon)

This is not really a very complicated matter, and it is not necessarily a matter of principle. The real explanation is that the special Commissioners do not deal with any sort of concessions at all, and that is why the Commissioners of Inland Revenue will deal with these matters. There is really no matter of principle between us at all. It is simply a reduction referring to the Super-tax, and it is properly left to be dealt with by the Commissioners of Inland Revenue. There is no subtlety about the point, and it is merely an ordinary arrangement. It would be quite unusual and contrary to practice for the surveyors to be in direct communication with the special Commissioners.

Mr. CASSEL

I do not wish unduly to press the point, and I agree it is not very vital; but in subsequent years is it not the case that the Income Tax Commissioners will deal with these questions. The right hon. Gentleman did not deal with that point. If in subsequent years the Income Tax Commissioners are to deal with them, why should they not do the same in this year?

Mr. JOYNSON-HICKS

It is my business as a lawyer representing clients, to be in touch with the Commissioners. I happen now to be dealing with a case of Super-tax before the Commissioners in Wellington Street, in regard to deductions. I have had to go to the special Commissioners in Wellington Street to deal with a large number of deductions, such as interest paid by banks, insurance premiums, and so forth, and all these points are dealt with by them. I want to know whether in a case where I have got a reduction on a claim in respect of Income Tax, I have, in, addition to my return made in Wellington Street, to make another return to the Commissioners at Somerset House, so that I would have to go over the whole of the work twice, at additional expense to my clients? Assuming that the right hon. Gentleman the Attorney-General himself has got to deal with a question arising on the Super-tax, is he to go to different sets of Commissioners in order to get one set of deductions in regard to interest or insurance premiums, and to another set in regard to other points, making it that the job has to be done twice over? The Amendment proposes a practical form for dealing with the matter from day to day.

Mr. PRETYMAN

Is not that a change in the present practice? The present practice, as I understand, is that you really do not make a special claim with regard to Super-tax; you make your claim in respect of the Income Tax in the first instance. When the Income Tax is settled, then, in returning income for Super-tax, you return exactly the amount which has been settled in respect of the whole estate, when allowance has been made. If it is a question of referring them to the Income Tax authorities, who had made the allowance in the first instance on Income Tax, does not the proposal of the Government vary the present practice?

Sir J. SIMON

I do not think so, though I do not want to make any statement about the matter which might go beyond my clear understanding of it. I do not speak with any certainty, but really I think it will be found that the provision makes no change in the present practice. I will undertake, however, to look further into the matter.

The CHAIRMAN

The next Amendment on the Paper is in the name of the hon. Member for Falmouth (Mr. Goldman), but, since I indicated to the hon. Gentleman that it was one which he might propose, it has occurred to me that it would involve a charge, that while some people would gain a reduction, other people would have to pay a higher tax. I would like to bear him on that point.

Mr. GOLDMAN

The whole Amendment produces a reduction, and if I am allowed to proceed with it I should endeavour to make that clear.

The CHAIRMAN

As I understand the Amendment, it proposes to substitute the current year for the preceding year in assessing the Super-tax. Is that so?

Mr. GOLDMAN

Yes.

The CHAIRMAN

Supposing that in the current year some incomes have gone up and others gone down, then certain incomes would have to be charged more highly under the proposal of the hon. Member.

Mr. GOLDMAN

In some cases you charge on the basis of averages. In all matters of business you go on the basis of averages in the current year, and you still find a reduction.

The CHAIRMAN

I quite admit that, but it seems to make this substitution—must increase the tax of some. I am very sorry this did not occur to me earlier, but it appears to be a fatal objection to the Amendment. The point, however, can be raised by the Amendment now on the Paper in the name of the hon. Member for Salisbury (Mr. Godfrey Locker-Lampson). I refer to the third of the hon. Member's Amendments, which raises this very point, without the difficulty of increasing the charge.

Mr. G. LOCKER-LAMPSON

I rather wanted to move the third Amendment, if that be in order.

The CHAIRMAN

Under the powers entrusted to me I can select the third Amendment, but that does not necessarily rule out the two first, if we have time.

Mr. G. LOCKER-LAMPSON

I beg to move, at the end of the Clause, to add:

"Provided that any person who proves that his income from all sources for the year ended the 5th day of April, nineteen hundred and fifteen, did not exceed three thousand pounds, shall not be liable to Super-tax, and if an assessment has been made and the duty paid, he shall be entitled, on application, to repayment of the duty so paid."

I hope that the House will accept this reasonable Amendment. This Super-tax, after all, is really a tax on a person, and basins the liability on the income of the preceding year is merely a method of calculation for the sake of convenience. That is borne out by the marginal note, which says "the Super-tax for 1914–15," showing that it is the Super-tax of the current year. I think that is the view which is generally accepted. It seems to me that unless the arrangement I propose is accepted, a great deal of hardship will be incurred by a good many people who come under the Act. The lowering of the Super-tax limit to £3,000 will naturally bring under liability a large number of people who have hitherto been exempt from Super-tax, and a large proportion of those people possibly will have had an income of over £3,000 for the year ending 5th April, 1914, when the liability only attached to incomes of over £5,000. Let me illustrate exactly what I mean. Take the income, say, for four years—1913, 1914, 1915, and 1916. Say it was £3,300, then £2,800 this year, £2,700 next year, and £2,500 the year after. The incomes for each of the three years since the lowering of the limit by this Bill is under £3,000, yet because the income for the year previous to the passing of this Bill was over £3,000, the taxpayer has to pay the Super-tax in the first of the three years, when his income was tinder £3,000. There seems to me to be absolutely no justice or sense in that. The Super-tax, according to the marginal note of the Bill, is for 1914–15, and I do not think you have any right to make a man pay Super-tax in respect of his income in the preceding year, supposing his income this year falls below the Super-tax limit. I think the Amendment is a very reasonable one, and I beg to move it.

Sir J. SIMON

The hon. Gentleman has very fairly explained the particular case that he has in mind and which he proposes should be dealt with by this Amendment. Undoubtedly the case is one that deserves to be carefully considered. I would submit to him and to the Committee that, having regard to the scheme of Super-tax, his Amendment ought not to be accepted, and that we ought to treat the proposal in this Bill as being a proposal, to substitute three thousand for five thousand as the figure above which you cannot go without rendering yourself liable to pay Super-tax. May I point out to him that the arguments which he puts forward now would have applied with exactly the same force to the Super-tax when it was first imposed? That was in the year 1910, and in so far as the Super-tax was then collected or based on. average of previous years, it would be just as true, as it will be under this Clause, to say that since averages produce some intermediate figure between unequal figures, it is quite possible that in the year 1910 a man who had to pay Super-tax did not have £5,000 that year or anything like it. The hon. Gentleman must also remember that the case that he puts is only one variety of a great many alternatives. It is not true to say, although it is very commonly said, that Super-tax is exacted on the average of the three previous years. It is true so far as regards that part of the Super-tax which depends on the statutory income which itself depends on an average. But supposing we have an income from investments, different considerations would apply. It is an essential part of our Super-tax scheme and a device for the purposes of simplicity that you should say, so far as you use averages, calling the years one, two, three, four, and five, that in the year five a man for Super-tax is to be treated as if his statutory income was in the year four, and his statutory income in the year four might involve an average of the years one, two and three. It is perfectly true that that does in some cases involve what the hon. Member has said, and what the hon. Member for Falmouth (Mr. Goldman) was pointing out, and that that does mean that persons with falling incomes are asked to pay Super-tax on the basis rather of their past enjoyment than their present realisation.

On the other hand, it is also true, and I trust it may be the actual experience of some of us, that the person who was asked to pay Super-tax is asked to do so, on a figure lower than that which he is earning in that particular year. If you are going to adopt the principle of averaging at all there is no justification for departing from that principle this year any more than there was in the original Super-tax provision of 1909–10. It is surely clear if the system of averaging is justified at all it is because it works out fairly over a series of years. In the case of Super-tax there is another reason for adopting these methods. You are able to collect the Super-tax fairly promptly. Thus the special Commissioners in Wellington Street in the present year already know the worst and the best about us for last year. If you are going to introduce considerations of what a man's actual income is in the year in which he pays, you upset the whole system of averages on which it depends. You confer a favour in the case where it suits the man and you do not make it extra in the case where you ought to do so. Consequently I suggest it is much better to keep to your present system.

Mr. G. LOCKER-LAMPSON

This Amendment has absolutely nothing whatever to do with averages, but merely applies to the present year.

Sir J. SIMON

With great respect, it has everything to do with that question. What you are saying is as far as this year is concerned if a man can show that his income in the year which started from the 5th of April last is not as much as £3,000 he shall be free of Super-tax. Suppose you have this case, after the provisions of the present Bill are passed, in which a man earned £2,000 two years ago, and £3,000 last year, and £4,000 in the present year, you do not on that account propose to tax the man on £4,000. You are going to take an average.

Mr. G. LOCKER-LAMPSON

He would pay on the £4,000 next year.

Sir J. SIMON

He might not. It is a perfectly possible point to make that there ought to be no averages at all, but it is not possible, basing your Super-tax upon average for the sake of simplicity and prompt collection, to depart from that system in the one case which happens to suit the taxpayer. For these reasons I am sorry I must reufse to accept the Amendment.

Mr. GOLDMAN

I regret that the right hon. Gentleman does not see his way to accept the Amendment, and, more than that, the right hon. Gentleman actually advocates a principle which I consider to be highly objectionable, namely, the assessing of Super-tax and Income Tax on two different years of income. Our present system is that Income Tax is assessed on the basis of income for the current year, but, as regards the Super-tax, the assessment is in respect of the income made for the previous year. My hon. Friend spoke of the hardship that may arise owing to the level of the Super-tax being reduced in the present year. Let me take the case of a man earning from £2,500 to £4,500. He has paid his Income Tax on the past year, and has closed his books with reference to the matter. Suddenly now he is asked to pay Super-tax in respect to the previous year. It think it is highly objectionable that you should you perpetuate a system of retrospective taxation, and I think the House and the Committee should not sanction the principle of imposing taxes in respect of years that have passed. There is also the case of the professional man earning, say, £4,000, who is suddenly disabled, laid aside by sickness, prevented from following his profession, or who, owing to great reverses in business, may make heavy losses. He may not be earning anything like his usual income, and it is at the moment of his greatest poverty that you are going to call on him to pay in respect of the years of his greatest prosperity. I think that is a very great hardship that ought not to be tolerated by any Member in this Committee. There is then the case which is nearer home, namely, that of a Member of the Cabinet, which would be a very hard case, indeed, if, as a result of a change of Government, he suddenly had his income reduced from £5,000 to £400. The year of his diminished splendour is the year in which he is called upon, not only to pay Income Tax, but to pay Super-tax in respect of a salary which he no longer enjoys. That seems to offer another terror to the prospect of an early Dissolution.

The Attorney-General referred to the question of averaging, which is a great hardship in the case of men whose business is going backward. The profits may reduce, say, from £10,000 to £8,000, and then to £6,000, and in the present year, say, the loss may be £4,000, and such a man might have to pay Income Tax on an amount which worked out at £3,300, but for the purposes of Super-tax he would pay on the average of the three years £10,000, £8,000, and £6,000, so that while he is paying Income Tax on £3,300 he will pay Super-tax on £8,000. I think those are anomalies that do not agree with a sound financial system. The Attorney-General says that this Amendment was introduced for the sake of simplicity, but a more complicated system you could not, I think, imagine, and you are increasing those complications, because a man has to make a return, not only for the ordinary Income Tax, but another for the Super-tax in respect of the previous years on the average of the three previous years. That adds enormously to the complexity of the system. The only way of dealing with the Income Tax in a sound and safe manner is to charge the Income Tax and Super-tax either during the year in which it is earned, or at the end of the year in which it has been received.

Mr. LEES SMITH

The hon. Member for Falmouth (Mr. Goldman) and the hon. Member for Salisbury (Mr. G. Locker-Lampson) are rather on different points. The hon. Member for Falmouth put forward the argument that you should substitute the current for the preceding year for Super-tax. The hon. Member for Salisbury interrupted the Attorney-General to point out that his Amendment was confined to this year alone In any case the arguments of both hon. Members appear to me, if I understood them right, to be open to a very fatal objection which they do not appreciate. The Super-tax is levied upon the income of the preceding year. Their point is, that if the income of the current year has fallen below the income for last year, that the man should be permitted to substitute for Super-tax purposes the income of the current year for the income of last year. But that is only one side of the picture. If you are going to give the Super-tax payer the option against the Government, you must in justice give the Government the option against the Super-tax payer. The hon. Members assume that the man's income is diminishing. But suppose the Special Commissioners find from the Returns that the income has increased, in justice to the Government they must be permitted to levy Super-tax on the increased income of the current year. The hon. Member has not proposed that.

Mr. G. LOCKER-LAMPSON

They will get it the next year.

Mr. LEES SMITH

My answer to that is that in the case that the hon. Member takes the Super-tax payer will get the relief the next year. The hon. Member does not permit the Government to have an option against the Super-tax payer. I know that there are very good reasons for it, but as he does not permit it he advocates a merely one-sided arrangement, which makes the Amendment wholly impracticable.

Mr. PRETYMAN

There seems to be an entire misapprehension. If we claimed that the taxpayer had a right to substitute the income of the current year when it suited him the State might equally claim the right to substitute the income of the current year when it was to their interest to do so. But that is not what the Amendment proposes. The Amendment deals with one case only. It does not cover the whole ambit of the Super-tax. It does not suggest that a man whose income drops from £5,000 to £4,000, or from £10,000 to £6,000 is to have any difference made. All it says is—and I think there is a good deal to be said for it—that there should be for the year a limit of actual income below which a man should not be charged any Super-tax at all. When Super-tax is paid for the previous year it must be and can only be paid out of the income of the year in which it is levied. I have a case in my personal knowledge where an eminent surgeon, who was earning at least £10,000 a year, contracted blood poisoning in the course of an operation in the hospital; he has been incapable of practice since, and has absolutely lost his income. A harder case could not arise. It is like dying on the field of battle. He has lost the whole of his income from an act of self-sacrificing duty, and great financial difficulties have resulted to his family and all concerned. If this Amendment were carried it would simply mean that, as that man has no income during the year, he would not be charged Super-tax on the incomes of the previous year. I do not know whether my hon. Friend intends to press his Amendment; if he does, I shall vote with him. The Chancellor of the Exchequer is not here, but it is a case which I think he might be asked to consider. It would not alter the principle of the Amendment to substitute £2,000 or £1,000 for £3,000. You simply say that there must be a certain limit of actual income available in that year below which you will not ask a man for Super-tax. It would not operate in many cases. It does not alter the principle of the tax at all. It does not authorise anybody to substitute the income of this year for the income of the previous year simply to suit themselves; it merely says that there shall be a limit below which Super-tax cannot be levied. Professional incomes, for example, are very subject to fluctuation. If the Attorney-General said that before Report he would bring the matter before the Chancellor of the Exchequer for consideration, I think perhaps my hon. Friend would be satisfied.

Sir J. SIMON

I will certainly do that, but it must be on the clear understanding that I have not made any representation or promise of any sort. I should not be justified in doing that. I understand the point; it could not be put more clearly. I agree that it is not of the essence of the proposal to mention £3,000; it might well be some different figure. The point is that we should be sure that there is a fund out of which the Super-tax can be paid.

Mr. JOYNSON-HICKS

Personally, I do not think the Amendment is necessary at all. I have held for some time past—I do not know whether there has been any decision on the point—that the Act of 1909, which instituted the tax distinctly enacts that Super-tax shall not be payable unless there is a Super-tax income. Section 66 says:—

"In addition to the Income Tax charged at the rate of one shilling and twopence under this Act, there shall be charged, levied, and paid for the year beginning on the 6th day of April, 1909, in respect of the income of any individual, the total of which from all sources exceeds £5,000, an additional duty…."

That is the taxing Section. No Super-tax is payable unless the income of the individual exceeds £5,000. By the next Section, when you have got the fact that Super-tax is payable by reason of the incomes being over £5,000—now £3,000—you have to take for the purpose of computing what that income is the income of the previous year. It may be a delicate or fine point. I do not think there has been a decision of it, but if the Attorney-General is consulting the Chancellor of the Exchequer with regard to the proposal of my hon. Friend I hope he will take that point into consideration.

Sir HOWELL DAVIES

I do not know what the Government propose to do in this matter, but it seems to me that if the Attorney-General is making a proposal to the Opposition to consider the point it will be entirely upsetting the principle already adopted.

Sir J. SIMON

I am not making any proposal at all.

Sir HOWELL DAVIES

The reduction of the amount from £5,000 to £3,000 does not in any way affect the principle on which the Super-tax has been charged. I know from personal experience and from the experience of friends that when Supertax was imposed many people had to go back to 1907. In one business of a speculative character a very large income was brought in, although that income was succeeded, not merely by lean years, but by loss years, and Super-tax had to be paid in 1910 in respect to that large income derived in 1907. I contend that the reduction which is now being claimed does not justify an alteration in the system. If the system is altered, those who had to pay on back years when the Super-tax was imposed will have a just grievance against the Government. Therefore, I hope the Government will stand firm in this matter.

Sir F. BANBURY

I do not know whether my hon. Friends will remember that five or six years ago there was a Clause in the Income Tax Acts providing that if an individual returned his income at a certain amount, and then found that his income did not reach that figure, he could obtain a deduction in respect of the Income Tax. That was altered by the present Government. When I objected to the alteration, the answer was that very few people knew of that particular provision, but that a certain number seemed to be finding it out, and, as they were finding it out, the Government were losing money, and therefore the provision must be withdrawn. I am not sure whether it was the present Chancellor of the Exchequer—I rather think it was the Prime Minster. If that provision had been in force my hon. Friend would have had nothing to say. I pointed out at the time that the only hardship that really arose was in the case of falling incomes. It did not matter in an ordinary business where the income varied from year to year, sometimes up, sometimes down, because it came right in the average. But, in the case of falling incomes, it operated very severely, and that, of course, is the case to which my hon. Friend alluded. It is true that there is nothing in the Amendment about averages. In some cases for the Super-tax you take averages; in others you do not. When you make the return for Super-tax on incomes from investments and landed property you do not take an average. Where you take the figures for the one year—that is, the last year—I do not see any hardship, because you really had that money, and, if the Super-tax is right, there is no hardship. I do not believe in the Super-tax; but that is not the point. If you are to have a Super-tax, there is no hardship in its being said that because in 1913 you received £7,000 you shall pay Super-tax in respect of that income in 1914. But when you go on averages it is a different matter altogether. With a falling income you may then pay Super-tax on an income which you have never had, and never will have. Therefore, if my hon. Friend had drawn his Amendment a little differently, and made it apply to cases where income has to be averaged for the purposes of Super-tax, I should have voted for it. I am not sure that I shall not vote for it now, but it will be on different grounds. I think the Government might very well, without injuring themselves, take some steps to remedy the injustice to which I have referred.

Mr. G. LOCKER-LAMPSON

In view of the promise of the Attorney-General to communicate with the Chancellor of the Exchequer, I ask leave to withdraw the Amendment.

Mr. WATSON RUTHERFORDrose—

The CHAIRMAN

The Mover of the Amendment has asked leave to withdraw. The hon. Member cannot debate that; he can only refuse leave.

Mr. W. RUTHERFORD

I object. The Attorney-General has really given no assurance whatever. This is a most important point, and the only chance of saying what we think about it is by going into the Division Lobby.

It being Seven of the clock, the CHAIRMAN proceeded, pursuant to the Order of the House of 8th July, to put forthwith the Amendment already proposed from the Chair.

Question put, "That those words be there added."

The Committee divided: Ayes, 147; Noes, 284.

Division No. 164.]	AYES.	[7.0 p.m.
Agg-Gardner, James Tynte	Crichton-Stuart, Lord Ninian	Houston, Robert Paterson
Amery, L. C. M. S.	Croft, H. P.	Hunt, Rowland
Ashley, W. W.	Dalrymple, Viscount	Hunter, Sir C. R.
Astor, Waldorf	Dalziel, Davison (Brixton)	Jessel, Captain H. M.
Baird, J. L.	Denison-Pender, J. C.	Joynson-Hicks, William
Baker, Sir Randolf L.(Dorset, N.)	Denniss, E. R. B.	Kerry, Earl of
Baldwin, Stanley	Dickson, Rt. Hon. C. Scott	Kinloch-Cooke, Sir Clement
Banbury, Sir Frederick George	Duncannon, Viscount	Lane-Fox, G. R.
Baring, Maj. Hon. Guy V.(Winchester)	Eyres-Monsell, Bolton M.	Lawson, Hon. H.(T. H'mts, Mile End)
Barlow, Montague (Salford, South)	Faber, George Denison (Clapham)	Lewisham, Viscount
Barnston, Harry	Falle, Bertram Godfray	Lloyd, George Butler (Shrewsbury)
Bathurst, Charles (Wilts, Wilton)	Fell, Arthur	Locker-Lampson, G.(Salisbury)
Beach, Hon. Michael Hugh Hicks	Fisher, Rt. Hon. W. Hayes	Lockwood, Rt. Hon. Lt.-Col. A. R.
Benn, Arthur Shirley (Plymouth)	Forster, Henry William	Lowe, Sir F. W.(Edgbaston)
Bennett-Goldney, Francis	Foster, Philip Staveley	Mackinder, H. J.
Bentinck, Lord H. Cavendish-	Gastrell, Major W. H.	Malcolm, Ian
Bird, A.	Gibbs, G. A.	Mildmay, Francis Bingham
Boles, Lieut.-Col. Dennis Fortescue	Gilmour, Captain J.	Mills, Hon. Charles Thomas
Boscawen, Sir Arthur S. T. Griffith-	Goldman, Charles Sydney	Morrison-Bell, Capt. E. F. (Ashburton)
Bowden, G. R. Harland	Goldsmith, Frank	Morrison-Bell, Major A. C.(Honiton)
Boyton, J.	Goulding, Edward Alfred	Mount, William Arthur
Brassey, H. Leonard Campbelt	Gretton, John	Neville, Reginald J. N.
Bridgeman, William Clive	Guinness, Hon. W. E.(Bury S. Edmunds)	Newman, John R. P.
Burgeyne, A. H.	Gwynne, R. S.(Sussex, Eastbourne)	Newton, Harry Kottingham
Burn, Colonel C. R.	Hall, D. B.(Isle of Wight)	Orde-Powlett, Hon. W. G. A.
Butcher, John George	Hall, Frederick (Dulwich)	Ormsby-Gore, Hon. William
Campion, W. R.	Hambro, Angus Valdemar	Paget, Almeric Hugh
Carlile, Sir Edward Hildred	Hamilton, C. G. C.(Ches., Altrincham)	Parker, Sir Gilbert (Gravesend)
Cassel, Felix	Harris, Henry Percy	Pease, Herbert Pike (Darlington)
Cautley, H. S.	Harrison-Broadley, H. B.	Peel, Lieut.-Colonel R. F.
Cave, George	Henderson, Major H.(Berks, Abingdon)	Pollock, Ernest Murray
Cecil, Evelyn (Aston Manor)	Henderson, Sir A. (St. Geo., Han. Sq.)	Prothero, Rowland Edmund
Cecil, Lord Hugh (Oxford University)	Hewins, William Albert Samuel	Pryce-Jones, Colonel E.
Chaloner, Col. R. G. W.	Hibbert, Sir Henry F.	Quilter, Sir William Eley C.
Clay, Captain H. H. Spender	Hoare, S. J. G.	Rawlinson, J. F. P.
Clyde, J. Avon	Hohler, G. Fitzroy	Rawson, Colonel R. H.
Coates, Major Sir Edward Feetham	Hope, Major J. A.(Midlothian)	Rees, Sir J. D.
Craik, Sir Henry	Horne, Edgar	Ronaldshay, Earl of
Rutherford, John (Lancs., Darwen)	Swift, Rigby	Williams, Colonel R.(Dorset, W.)
Samuel, Sir Harry (Norwood)	Sykes, Alan John (Ches., Knutsford)	Willoughby, Major Hon. Claud
Sanders, Robert A.	Sykes, Sir Mark (Hull, Central)	Wills, Sir Gilbert
Sanderson, Lancelot	Talbot, Lord E.	Wilson, Captain Leslie o.(Reading)
Sandys, G. J.	Terrell, G. (Wilts, N.W.)	Wood, Hon. E. F. L.(Ripon)
Scott, Sir S.(Marylebone, W.)	Thomas-Stanford, Charles	Wood, John (Stalybridge)
Smith, Rt. Hon. F. E.(L'p'l, Walton)	Thynne, Lord Alexander	Worthington Evans, L.
Spear, Sir John Ward	Tickler, T. G.	Yate, Colonel C. E.
Stanley, Hon. G. F,(Preston)	Tryon, Captain George Clement	Younger, Sir George
Steel-Maitland, A. D.	Valentia, Viscount
Stewart, Gershom	Walker, Col. William Hall	TELLERS FOR THE AYES.—Mr.
Strauss, Arthur (Paddington, North)	Weigall, Captain A. G.	Watson Rutherford and Mr. Peto.
NOES.
Abraham, William (Dublin, Harbour)	Duncan, Sir J. Hastings (Yorks, Otley)	Lardner, James C. R.
Acland, Francis Dyke	Edwards, Sir Francis (Radnor)	Law, Hugh A. (Donegal, West)
Adamson, William	Edwards, John Hugh (Glamorgan, Mid)	Lawson, Sir W. (Cumb'rld, Cockerm'th)
Addison, Dr. C.	Elverston, Sir Harold	Leach, Charles
Agar-Robartes, Hon. T. C. R.	Esmonde, Sir Thomas (Wexford, N.)	Levy, Sir Maurice
Agnew, Sir George William	Esslemont, George Birnie	Lewis, Rt. Hon. John Herbert
Alnsworth, John Stirling	Falconer, J.	Low, Sir F.(Norwich)
Allen, Arthur Acland (Dumbartonshire)	Farrell, James Patrick	Lundon, T.
Allen, Rt. Hon. Charles P. (Stroud)	Fenwick, Rt. Hon. Charles	Lyell, Charles Henry
Armltage, R.	Ffrench, Peter	Lynch, A. A.
Arnold, Sydney	Field, William	Macdonald, J. Ramsay (Leicester)
Asquith, Rt. Hon. Herbert Henry	Fitzgibbon, John	Macdonald, J. M.(Falkirk Burghs)
Baker, Harold T.(Accrington)	Flavin, Michael Joseph	McGhee, Richard
Baker, Joseph A.(Finsbury, E.)	France, G. A.	Maclean, Donald
Balfour, Sir Robert (Lanark)	Furness, Sir Stephen Wilson	Macnamara, Rt. Hon. Dr. T. J.
Baring, Sir Godfrey (Barnstaple)	George, Rt. Hon. D. Lloyd	MacNeill, J. G. Swift (Donegal, South)
Barlow, Sir John Emmott (Somerset)	Ginnell, L.	MacVeagh, Jeremiah
Barnes, George N.	Gladstone, W. G. C.	M'Callum, Sir John M.
Barran, Sir John N. (Hawick B.)	Glanville, H. J.	M'Curdy, C. A.
Barran, Rowland Hurst (Leeds, N.)	Goddard, Sir Daniel Ford	McKenna, Rt. Hon. Reginald
Beale, Sir W. Phipson	Goldstone, Frank	M'Laren, Hon. H. B. (Leics.)
Beauchamp, Sir Edward	Greenwood, Hamar (Sunderland)	M'Laren, Hon. F.W.S. (Lincs., Spalding)
Beck, Arthur Cecil	Greig, Colonel J. W.	Harkham, Sir Arthur Basil
Benn, W. W.(T. H mts., St. George)	Grey, Rt. Hon. Sir Edward	Marks, Sir George Croydon
Bethell, Sir J. H.	Griffith, Rt. Hon. Ellis Jones	Marshall, Arthur Harold
Black, Arthur W.	Gulland, John William	Mason, David M.(Coventry)
Boland, John Pius	Gwynn, Stephen Lucius (Galway)	Meagher, Michael
Booth, Frederick Handel	Hackett, J.	Meehan, Francis E.(Leitrlm, N.)
Bowerman, C. W.	Hancock, J. G.	Meehan, Patrick J.(Queen's Co., Leix)
Boyle, Daniel (Mayo, North)	Harcourt, Rt. Hon. L.(Rossendale)	Middlebrook, William
Brady, P. J.	Harcourt, Robert V.(Montrose)	Molloy, M.
Brunner, John F. L.	Harmsworth, Cecil (Luton, Beds)	Mond, Rt. Hon. Sir Alfred M.
Bryce, J. Annan	Harvey, A. G. C. (Rochdale)	Money, L. G. Chiozza
Buckmaster, Sir Stanley O.	Harvey, T. E. (Leeds, W.)	Montagu, Hon. E. S.
Burns, Rt. Hon. John	Haslam, Lewis (Monmouth)	Mooney, John J.
Burt, Rt. Hon. Thomas	Hayden, John Patrick	Morgan, George Hay
Byles, Sir William Pollard	Hay ward, Evan	Morrell, Philip
Carr-Gomm, H. W.	Henderson, Arthur (Durham)	Morison, Hector
Cawley, Sir Frederick (Prestwich)	Henderson, J. M. (Aberdeen, W.)	Morton, Alpheus Cleophas
Cawley, H. T. (Lancs., Heywood)	Henry, Sir Charles	Muldoon, John
Chancellor, H. G.	Hewart, Gordon	Munro, Rt. Hon. Robert
Chappie, Dr. William Allen	Higham, John Sharp	Murray, Captain Hon. Arthur C.
Clancy, John Joseph	Hinds, John	Needham, Christopher T.
Clough, William	Hobhouse, Rt. Hon. Charles E, H.	Neilson, Francis
Clynes, John R.	Hodge, John	Nolan, Joseph
Collins, G. P.(Greenock)	Hogge, James Myles	Norton, Captain Cecil W.
Collins, Sir Stephen (Lambeth)	Holmes, Daniel Turner	Nugent, Sir Walter Richard
Compton-Rickett, Rt. Hon. Sir J.	Holt, Richard Durning	O'Brien, Patrick (Kilkenny)
Cornwall, Sir Edwin A.	Hope, John Deans (Haddington)	O'Connor, John (Kildare, N.)
Cotton, William Francis	Hudson, Walter	O'Connor, T. P.(Liverpool)
Craig, Herbert J.(Tynemouth)	Hughes, Spencer Leigh	O'Doherty, Philip
Crooks, William	Illingworth, Percy H.	O Dowd, John
Crumley, Patrick	Johnson, W.	Ogden, Fred
Cullinan, J.	Jones, Edgar (Merthyr Tydvil)	O'Kelly, Edward P.(Wicklow, W.)
Dalziel, Rt. Hon. Sir J. H.(Kirkcaldy)	Jones, H. Haydn (Merioneth)	O'Kelly, James (Roscommon, N.)
Davies, E. William (Eifion)	Jones, J. Towyn (Carmarthen, East)	O'Malley, William
Davles, Timothy (Lincs., Louth)	Jones, Leif (Notts, Rushcliffe)	O'Neill, Dr. Charles (Armagh, S.)
Davies, Sir W. Howell (Bristol, S.)	Jones, William (Carnarvonshire)	O'Shaughnessy, P. J.
Davies, M. Vaughan- (Cardigan)	Jones, W. S. Glyn- (Stepney)	Outhwaite, R. L.
Dawes, J. A.	Joyce, Michael	Palmer, Godfrey Mark
De Forest, Baron	Kellaway, Frederick George	Parker, James (Halifax)
Pelany, William	Kelly, Edward	Parry, Thomas H.
Denman, Hon. R. D.	Kennedy, Vincent Paul	Pearce, Robert (Staffs, Leek)
Dewar, Sir J. A.	Kenyon, Barnet	Pearce, William (Limehouse)
Dickinson, Rt. Hon. Willoughby H.	Kilbride, Denis	Pease, Rt. Hon. Joseph A.(Rotherham)
Dillon, John	King, Joseph	Philipps, Col. Ivor (Southampton)
Doris, W.	Lamb, Sir Ernest Henry	Phillips, John (Longford, S.)
Duffy, William J.	Lambert, Rt. Hon. G. (Devon, S.Molton)	Pirie, Duncan V.
Duncan, C. (Barrow-in-Furness)	Lambert, Richard (Wilts, Cricklade)	Pollard, Sir George H.

Pratt, J. W.	Runciman, Rt. Hon. Walter	Wardle, George J.
Price, C. E.(Edinburgh, Central)	Russell, Rt. Hon. Thomas W.	Warner, Sir Thomas Courtenay
Price, Sir Robert J.(Norfolk, E.)	Scanlan, Thomas	Wason, Rt. Hon. E.(Clackmannan)
Priestley, Sir Arthur (Grantham)	Scott, A. MacCallum (Glas., Bridgeton)	Wason, John Cathcart (Orkney)
Priestley, Sir W. E. B.(Bradford, E.)	Seely, Col. Rt. Hon. J. E. B.	Webb, H.
Primrose, Hon. Neil James	Sheehy, David	White, J. Dundas (Glasgow, Tradeston)
Pringle, William M. R.	Sherwell, Arthur James	White, Sir Luke (Yorks, E.R.)
Hadford, G. H.	Simon, Rt. Hon. Sir John Allsebrook	White, Patrick (Meath, North)
Raffan, Peter Wilson	Smith, Albert (Lancs., Clitheroe)	Whitehouse, John Howard
Rea, Rt. Hon. Russell (South Shields)	Smith, H. B. L. (Northampton)	Whittaker, Rt. Hon. Sir Thomas P.
Rea, Walter Russell (Scarborough)	Smyth, Thomas F. (Leitrim, S.)	Whyte, A. F.(Perth)
Reddy, Michael	Soames, Arthur Wellesley	Wiles, Thomas
Redmond, John E.(Waterford)	Spicer, Rt. Hon. Sir Albert	Williams, Aneurin (Durham, N.W.)
Redmond, William (Clare, E.)	Strauss, Edward A.(Southwark, West)	Williams, P.(Middlesbrough)
Redmond, William Archer (Tyrone, E.)	Sutherland, J. E.	Williamson, Sir A.
Richards, Thomas	Sutton, John E.	Wilson, Hon. G. G.(Hull, W.)
Richardson, Albion (Peckham)	Taylor, Theodore C. (Radcliffe)	Wilson, W. T. (Westhoughton)
Richardson, Thomas (Whitehaven)	Taylor, Thomas (Bolton)	Winfrey, Sir Richard
Roberts, Charles H.(Lincoln)	Tennant, Rt. Hon. Harold John	Wing, Thomas Edward
Roberts, George H.(Norwich)	Thomas, J. H.	Wood, Rt. Hon. T. McKinnon (Glas.)
Roberts, Sir J. H.(Denbighs)	Thorne, G. R.(Wolverhampton)	Yeo, Alfred William
Robertson, Sir G. Scott (Bradford)	Toulmin, Sir George	Young, W.(Perthshire, East)
Robertson, J. M. (Tyneside)	Trevelyan, Charles Philips	Yoxall, Sir James Henry
Robinson, Sidney	Verney, Sir Harry
Roch, Walter F. (Pembroke)	Walton, Sir Joseph	TELLERS FOR THE NOES.—Mr.
Roche, Augustine (Louth)	Ward, John (Stoke-upon-Trent)	Geoffrey Howard and Captain Guest.
Rowlands, James	Ward W. Dudley (Southampton)

Question, "That the Clause stand part of the Bill," put, and agreed to.

The CHAIRMAN then proceeded successively to put forthwith the Questions necessary to dispose of the business to be concluded at Seven of the clock this day.