Commons Sitting of 16 July 1914

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Birkenhead Corporation Bill [Lords],
Read the third time, and passed, with Amendments.
London County Council (Money) Bill,
Read the third time, and passed.
Oxford and District Tramways Bill,
To be read the third time To-morrow.
Shropshire, Worcestershire, and Staffordshire Electric Power Bill [Lords],
Read the third time, and passed, with an Amendment.
Yorkshire Electric Power Bill [Lords],
Read the third time, and passed, with Amendments.
Beira Railway Company Bill [Lords],
As amended, considered; to be read the third time.
Skegness Gas Bill [Lords],
As amended, considered; Amendments made; Bill to be read the third time.
Sheffield Corporation Bill (by Order).
As amended, considered.
Mr. STUART-WORTLEY: With the indulgence of the House, I may be allowed to say on behalf of the promoters of the Bill that the House may have observed that until this morning a notice appeared on the Paper which would have raised a very serious issue indeed, and would have practically asked the House to reverse the decision of the Committee to which the Bill was referred. The last thing that I am going to ask the House to attempt to do is to revive the question that would have been raised by this Motion. The promoters have taken the best advice they could, and have come to the conclusion
2076
that, having regard to the lateness of the period at which we have arrived, the great embarrassment that would be caused to all the interests concerned, and to the other House in respect of the very late period at which they would be called upon to decide the very difficult question, we should be well advised to withdraw that Instruction. That is not in the least because we do not think we had and have still the very strongest and most equitable claim to the relief which we have been seeking. I see the Chairman of Committees here. I hope that his presence does not mean that he is going to tell us that we were unreasonable in raising this issue at the first, or that we are frivolous or vexatious in now withdrawing the claim which we first made.
The CHAIRMAN of WAYS and MEANS (Mr. Whitley): I beg to move, "That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time."
I am glad that the right hon. Gentleman has taken the course which he has indicated to the House. The only opinion which I have in the matter is that to move to recommit at this period of the Session would have been seriously to endanger the whole Bill. Of course I have no opinion on the merits of the proposal which the right hon. Gentleman advocates. The only thing that I should like to say is that, in my opinion, a proposal of that kind would in future years be better introduced by itself rather than in an Omnibus Bill dealing with a great many other matters.
Mr. KING: May I ask whether the Corporation of Sheffield have withdrawn their opposition?
The CHAIRMAN of WAYS and MEANS: That is so.
Sir J. D. REES: Is it understood that the Instruction to recommit is finally withdrawn?
The CHAIRMAN of WAYS and MEANS: That is so.
Question put accordingly, and agreed to.
Bill read the third time, and passed.
Local Government Provisional Order (No. 18) Bill,
Consideration, as amended, deferred till To-morrow.

EDUCATION (SCOTLAND).
Copy presented of (1) an Estimate of the sums receivable by the Education (Scotland) Fund for the year 1914–15, of the expenditure therefrom under Section 16(1) (a) to (f) of The Education (Scotland) Act, 1908, and of the balance available for allocation under Section 16 (2) of that Act; (2) the provisional allocation of such Balance in accordance with the terms of the Department's Minute of 28th June, 1912 [by Command]; to lie upon the Table.
TRADE REPORTS (ANNUAL SERIES).
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5346, 5348, 5349, and 5352 [by Command]; to lie upon the Table.
UNITED STATES (No. 1, 1914).
Copy presented of Notes exchanged between His Majesty's Ambassador at Washington and the United States Government on the subject of Oil Properties and Mining Rights in Mexico [by Command]; to lie upon the Table.
FOREIGN JURISDICTION ACT, 1890.
Copy presented of Order in Council, dated 18th June, 1914, entitled the Persian Coast and Islands (Slave Trade Jurisdiction) Order in Council, 1914 [by Act]; to lie upon the Table.
GOVERNMENT DEPARTMENTS (CONTRACTS).
Return presented relative thereto [ordered 24th April; Mr. Stanier]; to lie upon the Table, and to be printed. [No. 360.]

NATIONAL INSURANCE ACT.
Copy presented of Special Order, dated 15th July, 1914, made by the National Health Insurance Joint Committee and by the Insurance Commissioners, acting jointly, entitled the National Health Insurance (Subsidiary Employments) Consolidated Order, 1914 [by Act]; to lie upon the Table, and to be printed. [No. 361.]
Copy presented of Provisional Regulations, dated 13th July, 1914, made by the Insurance Commissioners, entitled the National Health Insurance (Insurance Committee) Regulations, 1914 [by Act]; to lie upon the Table, and to be printed. [No. 362.]

NATIONAL PHYSICAL LABORATORY.
Mr. MONTAGUmoved for "Copy of Accounts of Receipts and Expenditure, with Balance Sheets, for the three months, ended the 31st day of March, 1913, and for the twelve months ended the 31st day of March, 1914."
Mr. GINNELL: May I ask is the figure 1913 an error? If not, why is that particular quarter required?
Mr. SPEAKER: That was last year.
Question put, and agreed to.

WINE PRIVILEGES (DISCON- TINUANCE) BILL.
Ordered, That the Examiners of Petitions for Private Bills do examine the Wine Privileges (Discontinuance) Bill, with respect to compliance with the Standing Orders relative to Private Bills.
BANKRUPTCY BILL [Lords]
Read the first time; to be read a second time To-morrow, and to be printed. [Bill 328.]
DEEDS OF ARRANGEMENT BILL [Lords].
Read the first time; to be read a second time To-morrow, and to be printed. [Bill 329.]
ORAL ANSWERS TO QUESTIONS.

  Armenia.
  Mr. KINGasked the Secretary of State for Foreign Affairs whether the European inspectors appointed to Armenia will report to their respective Governments, and whether any reports received by the Foreign Office from inspectors in Armenia will be published?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): The inspectors-general will naturally report to the Turkish Government, by whom they are appointed.

  Putumayo.
  Mr. KINGasked whether, since the Report of the Select Committee on Putu-

  2079
  mayo was issued last year, any further instructions have been issued to Consuls relative to the slave trade or slave labour; and whether the Consular service has been strengthened in any districts where English companies are using coloured labour?
  Sir E. GREY: I would refer the hon. Member to the circular dispatch to His Majesty's Consular officers, of 15th December, 1913, copies of which have been laid before Parliament. The answer to the second part of the question is in the negative, but inquiries are being made in order that the matter may not be lost sight of.

  Armed Merchantmen.
  Mr. KINGasked whether the British policy of equipping armed merchantmen has been the subject of negotiations or communications between Great Britain and any other Power, with the view of ascertaining the way in which the use of such armed merchantmen would be regarded in the event of hostilities?
  Sir E. GREY: The answer is in the negative. No communications of the nature referred to have taken place.

  Persia.
  Sir GEORGE SCOTT ROBERTSONasked the Secretary of State for Foreign Affairs whether he has official information to the effect that the coronation of the Shah of Persia has been, or may be, postponed from the 21st July to the 18th September; and, if so, can he say whether the reasons for this change are political or financial; and is it possible for a quorum of the Medjliss to be elected by the 21st July?
  Sir E. GREY: The answer to the first part of the question is in the negative. As to the last part, I am unable to express an opinion.
  Sir G. SCOTT ROBERTSON: Is the right hon. Gentleman aware that anxiety has been expressed by all those interested in Persia as to the present state of that country?
  Sir E. GREY: I agree that there is great financial anxiety, but the question of my hon. Friend dealt with the postponement of the coronation. I have not heard that the coronation has been postponed.
  Sir G. SCOTT ROBERTSON: May I say political as well as financial anxiety?
  Sir E. GREY: Of course sound finance is at the bottom of everything, and if the financial position is unsound it will always cause anxiety.
  Sir G. SCOTT ROBERTSON: When does the right hon. Gentleman hope for a change in the financial position of Persia?
  Mr. SPEAKER: That is going a very long way beyond the question.

  Land Purchase (Ireland).
  Mr. BOLANDasked the Chief Secretary for Ireland whether the Congested Districts Board will reopen negotiations for the purchase of the unsold portion of the Warden estate, Sneem, county Kerry, with a view to securing a sale through voluntary co-operation on the part of the landlord, the tenants, and the Board?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell): The Congested Districts Board have recently been in communication with Colonel Warden in reference to the unsold portion of his estate near Sneem, county Kerry, and he has informed them that as at present advised he is not prepared to enter into negotiations for the sale of the property.
  Mr. PATRICK MEEHANasked the Chief Secretary to the Lord Lieutenant of Ireland how many of the evicted tenants who were allotted holdings on the Thompson estate, Kilcoke, Queen's County, received free grants; and if he can state whether Elizabeth McGrath will receive a free grant?
  Mr. BIRRELL: The Estates Commissioners have sanctioned grants for the purchase of live stock in the case of fifteen evicted tenants or the representatives of evicted tenants who have been provided by the Commissioners with holdings on the estate referred to. The reply to the latter part of the question is in the negative.
  Mr. GINNELLasked the Chief Secretary whether the Estates Commissioners have ruled that the non-residential grass farms on the congested estate of Lady Chapman, of Killua Castle, Westmeath, though not subject to the rent-fixing Acts, may be purchased by the graziers under the Purchase Acts instead of being distributed for relief of the congestion; and, if so, will he give the text of their ruling, with the Acts and Sections on which it is based; and will he state the aggregate area of non-residential land on the estate

  2081
  adjudged to the graziers and to the relief of congestion, respectively?
  Mr. BIRRELL: This estate is not a congested estate within the meaning of Section 6 (5) of the Irish Land Act, 1903, as amended by the Irish Land Act, 1909. The question of the nature of the tenancies in the farms referred to was heard and argued in Court before the Estates Commissioners, who, after considering the evidence as to the nature of the lettings, decided that the tenancies are yearly tenancies, but restricted to pasturage. The provisions of the Land Purchase Acts enable yearly tenants occupying lands under contracts of tenancy to purchase their holdings; the hon. Member will find the expression "tenant" defined in Section 57 of the Land Law (Ireland) Act of 1881, and Section 26 of the Purchase of Land (Ireland) Act, 1885. The vendor is including in the sale some 600 acres in her occupation as untenanted land for distribution by the Commissioners, but it is impossible at present to say the aggregate of pasture land that will be awarded to the tenants in question.
  Mr. SHEEHYasked the Chief Secretary whether it is contemplated by the Estates Commissioners or the Congested Districts Board to acquire the Dillon estate at Cardiffstown, county Meath, for the purpose of migration; whether he is aware that there are a number of uneconomic holders and landless qualified labourers who would be entitled to portions of those lands; and, if the Estates Commissioners acquire the lands, whether they will give first consideration to those entitled to portions of the property in the district?
  Mr. BIRRELL: The Estates Commissioners have acquired under Section 6 of the Irish Land Act, 1903, certain untenanted lands in the townlands of Rivers-town and Oldtown on the estate referred to. In the allotment of the untenanted land the Commissioners will have regard to the circumstances and suitability of the applicants for allotments, and to the terms of Section 17 of the Irish Land Act, 1903, which specifies the class of persons to whom advances can be made for the purchase of allotments under the Land Purchase Acts.

  Public Trustee (Ireland).
  Mr. J. P. FARRELLasked the Chief Secretary for Ireland whether, in view of the large accumulation of business in the
  2082
  hands of Mr. Stewart, Public Trustee, he is prepared to recommend the appointment of a Public Trustee with similar duties for Ireland?
  Mr. BIRRELL: I would refer the hon. Member to the reply given to the question asked on this subject by the hon. Member for North Wexford on the 9th June, 1913. I do not think this would be an opportune time to introduce legislation on the subject.

  Old Age Pensions.
  Mr. J. P. FARRELLasked what decision has been come to by the Local Government Board as regards the applications for old age pensions by Daniel Farrell, Newtown, and Bernard Mahon, Edgeworthstown, both of whose claims were passed by the local pensions committees and appealed against by the local pension officer?
  Mr. BIRRELL: No decision has yet been given in these cases.
  Mr. PATRICK MEEHANasked the Chief Secretary if he is aware that, on the hearing by the Local Government Board of an appeal by a pension officer against the granting of an old age pension by a pension committee, no evidence, either oral or by affidavit, is received on behalf of the claimant beyond what is contained in the claim form; if he is aware that such appeals are decided on the report of the pension officer or inspector without an opportunity being afforded the claimant of putting his case properly before the Local Government Board; and if he will take such steps as will in future secure the fullest facilities to claimants for presenting their cases to the Local Government Board on the hearing of such appeals?
  Mr. BIRRELL: The hon. Member appears to be under a misapprehension. It is not the case that no evidence is received by the Local Government Board on behalf of claimants beyond what was contained in the claim form. Before determining appeals it is the invariable practice of the Board to communicate with claimants and to request them to submit whatever evidence they have in support of their claims. All steps that are necessary for a proper decision in each case are taken by the Board.
  Mr. PATRICK MEEHAN: Is the right hon. Gentleman aware that the Local Government Board, in the case of Michael

  2083
  Ryan, a Queens' County claimant, would not receive affidavits or oral evidence but sent down an inspector and decided the appeal on his report.
  Mr. BIRRELL: The Local Government Board refuse to accept anything which is not evidence, and it does not follow because a statement is made that it is evidence.

  Evicted Tenants (Ireland).
  Mr. J. P. FARRELLasked whether the application of Daniel Murtagh, of Esker, for the erection, or assistance to erect, a house under the Evicted Tenants Act, 1907, will be entertained; and, if not, will he state the reason why?
  Mr. BIRRELL: No application for reinstatement in a holding under the Evicted Tenants Act, 1907, appears to have been received by the Estates Commissioners from Daniel Murtagh. In connection with the sale of the estate of John S. Ireland, county Longford, under the Irish Land Act, 1903, Daniel Murtagh agreed to purchase his holding, and it was vested in him by the Commissioners subject to an advance of £44. He applied for an advance for building purposes, but the Commissioners could not see their way to grant it.

  Loans to Small Farmers (Ireland).
  Sir WALTER NUGENTasked what machinery exists in Ireland which would enable small farmers with a judicial valuation or rent under £11 13s. 4d. per annum to obtain loans for building purposes; and whether, if no such machinery now exists, he will consult with the Irish Board of Works as to how the very urgent demand for such loans could best be met?
  Mr. BIRRELL: I have consulted the Board of Works in this matter, but they cannot suggest any machinery which would enable judicial tenants whose rents are less than £11 13s. 4d. to obtain Government loans for building purposes. The extent to which a judicial tenant can borrow from the Board is limited to three times his rent, and the smallest loan under the Land Law (Ireland) Act, 1881, which is at present permissible is £35. The former limitation is necessary for the security of the loan, and the reduction of the minimum of £35 would not facilitate building to any appreciable extent.
  Sir W. NUGENT: Will the right hon. Gentleman consider this question of loans to small farmers when introducing his Labourers Bill?
  Mr. BIRRELL: Yes, of course, it will facilitate building, though it is a very small sum.

  Intermediate Education (Ireland) Bill.
  Mr. GINNELLasked the Chief Secretary on what authority, and with whose concurrence, the proposed scheme for the application of the teachers' salaries Grant under the Intermediate Education (Ireland) Bill has been issued; whether the intermediate teachers have been consulted with reference to it; and whether teachers who have worked under the Intermediate Education Board during the past year only will be placed on the register as the Bill provides, or deprived of their living as the scheme provides?
  Mr. BIRRELL: The scheme for the distribution of the teachers' salaries Grant will be made by the Lord Lieutenant. The document to which the hon. Member refers was merely an outline indicating the main principles on which it is proposed to frame the scheme, and was prepared by me after careful consideration of representations made on behalf of both teachers and masters; but the scheme was submitted by me as an indication of the lines on which the actual scheme would be framed, and there will be ample opportunity to consider and deal with any alterations which may be suggested in this House or elsewhere. The assumption of the hon. Member in the last paragraph is quite unfounded.
  Mr. GINNELL: Will the scheme stand as presented to the House?
  Mr. BIRRELL: No; probably not.

  County Wexford.
  Mr. FFRENCHasked the Chief Secretary whether, seeing that Mr. Justice Gibson, addressing the grand jury at Wexford on the 7th instant, said, with regard to the general condition of the county, that he was informed as usual that it was excellent, peaceable, and orderly, trusted that in the coming autumn there would be a prosperous harvest, corresponding with the admirable character of the county, he is prepared to take any action against persons who endeavour, to foment disorder by false statements?
  Mr. BIRRELL: I have seen, and was glad to see, a newspaper report of the address of the learned judge. With regard to the latter part of the question, I cannot undertake to proceed by legal process against those fomenters of disorder who tell lies.

  Orange Celebration (Dublin).
  Mr. FFRENCHasked the Chief Secretary whether his attention has been called to the language used at an Orange celebration in Dublin by Mr. C. Erskine Barton, D.L., and J.P. for the county Wexford; and whether, in view of the attacks made by this magistrate on the Catholics of the county Wexford, he will call the attention of the Lord Chancellor to the speech in question, with a view to having his name removed from the commission of the peace?
  Mr. BIRRELL: The hon. Member has forwarded me a newspaper cutting of the speech referred to. I have laid the matter before the Lord Chancellor, who agrees with me that the speech of this gentleman is unworthy of notice.
  Mr. W. A. REDMOND: Will the right hon. Gentleman tell the House what are the necessary qualifications for appointment as deputy-lieutenant in Ireland, and whether making charges against and slandering one's fellow countrymen is one of them?
  Mr. BIRRELL: No, certainly not; it is a disqualification.

  Labourers (Ireland) Act, 1911.
  Mr. SHEEHANasked the Chief Secretary how the million of money provided under the Labourers (Ireland) Act, 1911, has been expended to date; whether any portion of it remains unallocated, and, if so, how much; will he state the number of labourers' cottages at present authorised, after inquiry, for which no advances by way of loan have been sanctioned; what is the number of cottages included in schemes which have been submitted to the Local Government Board, but into which no inquiries have yet been held; and whether he will give the names of the district councils which have formulated these schemes and the number embraced in each scheme?
  Mr. BIRRELL: In round numbers £660,000 has been actually sanctioned, and the balance (with the exception of about
  2086
  £90,000) is ear-marked for schemes which are at present authorised or in process of authorisation. These schemes provide for 1,465 cottages. The number of cottages included in schemes received but into which inquiries have not yet been ordered is 4,467. The following are the names of the councils and number of cottages embraced in each scheme: Delvin, 101; Urlingford, 7; Kinsale, 168; Croom, 150; Tulla, 28; Fermoy, 256; Mitchelstown No. 2, 28; Bandon, 114; Kanturk, 304; Cork, 642; Youghal No. 1, 53; Mullingar, 185; Killadysert, 41; Kells, 117; Listowel, 397; Gortnahoe, 27; Mallow, 246; Youghal No. 2, 27; Limerick No. l, 253; Slievemargy, 55; Newcastle, 132; Rathkeale, 291; Borrisokane, 69; Mitchelstown No. 1, 99; Ballymoney, 81; Carlow, 51; Cavan, 63; Tralee, 344; Cloneygowan, 47; Gorey, 91.
  Mr. SHEEHANasked the Chief Secretary whether he is aware that several rural district councils have, owing to the depleted condition of the Labourers' Fund, refrained from formulating fresh schemes for the provision of labourers' cottages and additional allotments, even where it has been shown that there is an urgent need for them; and whether, seeing that the million proposed to be granted under the Bill now before Parliament is insufficient to carry out the schemes already promulgated, he will consider the advisability of providing a larger sum?
  Mr. BIRRELL: It is possible that some Councils may have postponed action pending the provision of additional funds by Parliament, but since the announcement of the promise of the additional million, schemes are being received by the Local Government Board. There is no ground for the statement that the further million is insufficient to carry out schemes already lodged.
  Mr. SHEEHAN: Is the right hon. Member aware that the million will provide for only 5,000 cottages, and that there are already promulgated something like 10,000, which £1,000,000 could not possibly satisfy?
  Mr. BIRRELL: If the hon. Member knew how difficult it was to get a million he ought to be a little more grateful.
  Mr. SHEEHAN: Does the right hon. Gentleman deny the statement that a million is insufficient for present needs?
  Mr. BIRRELL: I cannot deny the statement, but it is a very large amount of money, and will go a very long way towards meeting the need for houses.
  Mr. SHEEHANasked the Chief Secretary what portion of the additional million provided under the Labourers Act of 1911 has been allocated to each county in Munster; will he give the names of the district councils in these several counties which received loans and the amount in each case; whether his attention has been called to the discretionary powers exercised by the Local Government Board in making advances under this Act; whether this discretionary power is to operate in future; and, if so, whether he intends to take steps to place unions who undertook heavy liabilities for the housing of their labourers prior to 1906 in the same position as those unions who took no such steps until cheap money was available?
  Mr. BIRRELL: The additional million referred to forms part of the total fund of five and a quarter millions specified in the Labourers Act of 1911, the allocation of which should be considered as a whole. Out of this Munster has received over a million and a half, and the portion of this amount which may be said to come out of the final million is about £75,000. It would require a considerable search to make out for each district council the amount of the loans which they received separately from the two Parliamentary Grants. The discretionary powers of the Local Government Board are exercised in pursuance of Statute and will operate in future. The hon. Member seems to have overlooked the fact that districts which undertook heavy liabilities for the housing of their labourers prior to 1906 are receiving a subsidy of £1 8s. 8d. per cottage for every cottage built on 1st November, 1906.
  Mr. SHEEHAN: Am I to understand from the statement of the right hon. Gentleman that out of the additional million voted in 1911 only £75,000 came to Munster?
  Mr. BIRRELL: I think that is so, having regard to the fact that they received over a million before.
  Mr. SHEEHAN: Does the right hon. Gentleman consider that, out of the million, it is a fair distribution to make to Munster?
  Mr. BIRRELL: I cannot pretend that the whole amount is divided with mathematical accuracy between the various provinces.
  Mr. SHEEHAN: Is the right hon. Gentleman aware that the Local Government Board is exercising a discretionary power against Munster and the counties, and in favour of districts that did not previously do their duty under the Labourers Acts?
  Mr. BIRRELL: No, I am quite sure that is not the fact.
  Mr. SHEEHAN: I am quite certain it is.

  Swedish Peat Institution (Jönköping).
  Mr. GINNELLasked the Vice-President of the Department of Agriculture (Ireland) whether representatives of the Department have visited the Swedish Peat Institution at Jönköping; and, if so, whether he will make the information obtained by them available in any form for persons desiring to use it in Ireland for the purposes for which presumably it was obtained?
  Mr. T. W. RUSSELL: A representative of the Department has visited the Jönköping peat station. If any person interested in the development of the peat industry in Ireland desires particulars about this station, the Department will be glad to arrange an interview with their representative, who will afford all available information on the subject.

  Civil Servants (Financial Investments).
  Mr. RUPERT GWYNNEasked the Secretary of State for the Colonies whether a circular has been issued from his Department to Civil servants employed under the Colonial Office setting forth Regulations or imposing restrictions as to their financial investments or speculations; and, if so, will he cause a copy to be laid upon the Table of the House?
  The SECRETARY of STATE for the COLONIES (Mr. Harcourt): No, Sir.
  Mr. R. GWYNNE: Are we to understand from the right hon. Gentleman that no circular has been issued from his office referring to the private investments or directorships of Civil servants in the Colonial Office?
  Mr. HARCOURT: I have issued a circular relating to the acceptance of directorships by Colonial Office officials,

  2089
  after their retirement, in companies trading in the Colonies of Great Britain, with which they were recently concerned.
  Mr. GWYNNE: Is that the only circular that has been issued?
  Mr. HARCOURT: Yes.

  Scottish Office of Works.
  Mr. JAMES HOGGEasked the hon. Member for St. George's-in-the-East, as representing the First Commissioner of Works, if he will state what is the nature of the rearrangement of work which is suggested at the Scottish Office of Works; whether they apply only to the new post of principal architect; and what will be the position of other members of the staff?
  Mr. WEDGWOOD BENN (Lord of the Treasury): The district work has been reorganised with a resulting saving of one assistant architect, and the work on historical buildings has been transferred to the Ancient Monuments branch. No change is made in the position of the principal architect or other members of the staff.
  Mr. HOGGE: Is it the fact that the new official who takes his place under the present head of the Scottish Office is to receive a salary of only £550, which is £250 less than the English salary, and that he is to rise to a maximum of only £750, instead of £1,000?
  Mr. BENN: Yes; the maximum salary of the principal architect is £750, and £100 special allowance.
  Mr. HOGGE: Is this arrangement to be made without this House of Commons agreeing to it, and without Members representing Scottish constituencies in this House having any opportunity to discuss it?
  Mr. BENN: The First Commissioner has consulted Scottish Members; moreover, the sums will be voted in the usual way by Parliament.
  Mr. PIRIE: When did the First Commissioner discuss this with the Scottish Members?
  Mr. BENN: The hon. Member must give me notice.
  Mr. KING: Is it not the fact that this arrangement is by way of large economies, and is it not rather unusual for a public office to reform itself?
  Mr. PIRIE: Are any further alterations contemplated, and is the hon. Gentleman aware that the Government have given a pledge to shortly introduce a Scottish Home Rule Bill, and would it not be better to wait till then?
  Mr. SPEAKER: That has nothing to do with the matter.
  Mr. HOGGEasked the hon. Member for St. George's-in-the-East, as representing the First Commissioner of Works, the date on which Mr. Oldrieve, of the Scottish Office of Works, retires; who is suggested as his successor; and will he be a Scotsman with knowledge of Scottish historical buildings?
  Mr. BENN: Mr. Oldrieve will retire about the middle of September. His successor will be Mr. J. W. Simpson, F.S.I., L.R.I.B.A., an architect on the staff of His Majesty's Office of Works. Mr. Simpson is not a Scotsman. He will have no connection with Scottish historical buildings, the care of these having recently been transferred to the Ancient Monuments Branch, which is represented in Scotland by an architect stationed at Edinburgh, who is a Scotsman.
  Mr. HOGGE: Are all the historical buildings at Stirling Castle under his charge?
  Mr. BENN: Perhaps my hon. Friend would ask me a special question about Stirling Castle. I cannot answer without notice.

  Ancient Font, Thurso, Caithness.
  Mr. MORTONasked the hon. Member for St. George's-in-the-East, as representing the First Commissioner of Works, whether his attention has been called to the removal of the ancient font from the vicinity of St. Peter's Church, Thurso, Caithness; and whether he has taken any steps to have the font returned and protected as an ancient and historic Scottish monument?
  Mr. BENN: The First Commissioner has had this case under consideration. In view of the fact that the font is not regarded as a monument of national importance by the Ancient Monuments Board for Scotland, he does not propose to take any action.

  Hamilton Place Gardens.
  Mr. MacCALLUM SCOTTasked by what authority the 3¼ acres of Hamilton

  2091
  Place Gardens are reserved by the Office of Works for the use of about 100 wealthy subscribers to the exclusion of the general public; and whether steps will be taken to give the public free access to public property?
  Mr. BENN: My hon. Friend's suggestion has often been considered, but the First Commissioner does not think it advisable to adopt it.

  NATIONAL INSURANCE ACT.

    SCOTTISH CLERKS' ASSOCIATION.
    Mr. NIELDasked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether application was made by the Scottish Clerks' Association, whose head office is in Glasgow, to have their special medical scheme whereby a member had free choice of doctor, paid the charge incurred, and upon verification of such payment was reimbursed by the society, and which scheme the society had worked successfully for many years, recognised by the Commissioners in the event of them granting the application of the society to be an approved society under the Act; whether the society was informed, and when, that their medical scheme was accepted; whether such acceptance was subsequently repudiated; and, if so, when and for what reason?
    Mr. BENN: As my right hon. Friend has previously stated in reply to similar questions, the scheme referred to has at no time been approved by the Commissioners; the two latter parts of the question do not therefore arise.

    MEDICAL BENEFIT.
    Mr. NIELDasked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether he is aware that the claim of Mr. A. W. Leonard, of Ealing, to make his own medical arrangements was granted in April, 1913, and that medical expenses were incurred of 7s. 6d., which sum was withheld for upwards of fifteen months, and in discharge thereof 5s. 1d. only has been recently offered by the Middlesex Insurance Committee, which sum consists of a dividend of 9s. 3½d. in the £ on the medical charges paid with charge for drugs in full; what is the reason for distinguishing between payments for medical charges and drugs as a basis for repayment; what
    2092
    are the reasons for the apparent insolvency of the fund; and whether it is proposed to attribute to these insured persons any portion of the accumulated funds created by insured persons making their own medical arrangements and paying their doctor apart from insurance contributions or benefits?
    Mr. BENN: The facts as stated are correct. As to the rest, the only fund for such persons is the aggregate available in respect of their medical benefit. This limited amount has to be applied in the form of a dividend.

    AGRICULTURAL LABOURERS' WIVES.
    Colonel PEELasked whether, in view of Schedule I., Part II. (j), of the National Insurance Act, 1911, wives of agricultural labourers temporarily employed during harvest are exempt from insurance as outworkers?
    Mr. BENN: The answer is in the negative. The persons referred in paragraph (j) of Part II. of the Schedule are outworkers as defined in paragraph (c) of Part I. of the same Schedule.
    Colonel PEEL: May I ask what benefits these temporarily insured persons get under the Insurance Act?
    Mr. BENN: They get the usual benefits.

    POST OFFICE EMPLOYÉS.
    Mr. GOULDINGasked the Postmaster-General whether it is the practice of the Post Office to pay the employer's contribution under the National Insurance Act where the employé is engaged for twenty-one hours a week, and to decline to do so where the employment is reduced to fourteen hours a week, although in both cases the Post Office is the first employer in the week; and, if so, will he say why the practice in the Post Office differs from that in the case of private employers?
    The POSTMASTER-GENERAL (Mr. Hobhouse): Under the National Insurance Acts the Insurance Commissioners have power to issue a special Order excluding from insurance persons engaged in employment of any class which is ordinarily adopted as subsidiary employment only, and not as the principal means of livelihood. They have issued such an Order in the case of persons employed for not more than eighteen hours weekly on the collection and delivery of

    2093
    letters under allowance or on the conveyance of Post Office mails to and from stations or piers. Special Orders relating to part-time employments have been issued by the Insurance Commissioners as regards many classes of subsidiary employment under private employers.

    Suffragist Prisoners.
    Lord HUGH CECILasked the Secretary for Scotland whether his attention has been called to the forcible feeding and medical treatment of a female prisoner recently confined in Perth prison, and whether he has made inquiry into the case; and, if so, what is the result of that inquiry?
    Mr. PRATTasked the Secretary for Scotland whether his attention has been called to the condition of Miss Frances Gordon on her release from Perth prison on 3rd July; and whether he will make a statement on the subject?
    Mr. T. M. HEALYasked the Secretary for Scotland whether Miss Gordon, suffragist prisoner in Perth, was released on the 3rd July, having been in prison from the 22nd June; whether he is aware that on the 24th June forcible feeding began and continued twice a day on the 25th, 26th, 27th, and 28th by injections into bowel; that subsequently, until released, injections were made into bowel three times a day, as well as forcible feeding once or twice a day; whether the prisoner was not allowed to see what was injected, but told that it was salt and water to do her good; whether matter was not retained, and stained the clothes which she brought out with her with a dark green stain; why was she allowed to see soap and water enemas which were given but never this; whether, when she was asleep, she was dragged to the edge of the bed on the side and the injections given by wardresses; whether the quantity of food given by the tube had to be diminished every day but was never retained; whether he is aware that after her release Dr. Mabel Jones, M.D., certified that on the 3rd July her appearance was like that of a famine victim, the skin brown, her face bones standing out, her eyes half shut, her voice a whisper, her hands quite cold, her pulse a thread, her wrist joints slightly swollen, stiff, and painful, the breath most offensive, and the contents of the bowel beyond control; and will any inquiry be held into this case?
    The SECRETARY for SCOTLAND (Mr. McKinnon Wood): Miss Frances Gordon was sentenced to one year's imprisonment for breaking into the mansion house of Springhall, near Rutherglen, with intent to set fire to it. Among the articles found on the premises were three flasks of paraffin and other combustibles, and a revolver. The prisoner fully admitted her intention to set fire to the house. I asked for and received a report from the prison doctor which contradicts a number of the allegations contained in Question 37, of which the most important are the statement as to her treatment when asleep, and the statement that the quantity of food was diminshed day by day and never retained. The doctor states that he is convinced that she had undergone a course of systematic drugging before entering the prison. She was found to be suffering from sickness and vomiting shortly after admission and before she had been fed or received any medical treatment in the prison. She was not fed till the 25th of June. On admission she was at once put to bed and treated as a sick prisoner. Her condition required the administration of enemata, and I have no reason to doubt that in the circumstances the doctor treated her case properly and humanely. The doctor states that there was very little difference in her appearance when she was discharged. She was carefully examined before leaving the prison, and the doctor states that there was no swelling of the wrists; that she made no complaint of pain; that she was able to converse, and did converse freely with the doctor's assistant who accompanied her on the journey to Glasgow; that it is true that the breath was offensive, but that it had been offensive from the date of admission; and that generally the statement as to her condition is exaggerated.
    Lord HUGH CECIL: May I ask the right hon. Gentleman whether he can lay on the Table the reports he has received from this medical officer; and whether in his answer he is guided wholly by the opinion of the medical officer whose action is called in question, or whether he has any independent opinion?
    Mr. McKINNON WOOD: I must be guided by the report of the medical officer who was responsible for this matter. I will consider the question of laying the report. I should like to do so.
    Sir W. BYLES: Has the right hon. Gentleman seen the report of Dr. Jones,

    2095
    and does his answer mean that the statements in that report are in the main, inaccurate?
    Mr. McKINNON WOOD: The report of Dr. Jones is largely founded on statements made by the prisoner herself, and not on the observations of Dr. Jones. The answer I have read deals with the allegations in that report.
    Mr. T. M. HEALY: Is it contemplated whether it is possible to establish facts by an independent inquiry, especially having regard to the fact that under somewhat analogous circumstances in Ireland the late Government sent an independent doctor to investigate prison treatment in Ireland?
    Mr. McKINNON WOOD: The statements are, of course, historical statements, as to what had taken place in the past. The prisoner has been released, and I do not know by what means I could test those statements. I do not see at the moment how an independent investigation could arrive at fresh facts. If it could I would be willing to grant it.
    Lord HUGH CECIL: Is it not very unsatisfactory that the medical officer's statements about his own action are to be treated as conclusive as to that action?
    Mr. FREDERICK WHYTE: May I ask why these women prisoners have in all recent cases been sent to Perth prison?
    Mr. McKINNON WOOD: The reason is that we have there doctors who are accustomed to deal with those cases and are thoroughly skilled.
    Lord ROBERT CECIL: Will the right hon. Gentleman be good enough to answer so much of question No. 37 which states that Dr. Jones certified that—
    "Her appearance was like that of a famine victim the skin brown, her face bones standing out, her eyes Half shut, her voice a whisper, her hands quite cold, her pulse a thread"—
    Mr. SPEAKER: If the Noble Lord refers to the last paragraph but one it will be quite sufficient.
    Lord ROBERT CECIL: The reason I did not do that was that part of that was answered.
    Mr. McKINNON WOOD: I think the only thing I can add to what I have said already in the reply which dealt with most of the details of the woman's condition, is to say that she was able to walk to the
    2096
    cab and from the cab to the railway station, and in the railway train she was able to sit up and, as the doctor puts it, admire the scenery and chat with the doctor's assistant.
    Mr. F. WHYTEasked the Secretary for Scotland whether the process of forcible feeding is at present being carried out in Perth prison; if so, whether he receives regular medical reports as to its effect upon the health of those prisoners who are subjected to it; whether he has received any report as to its effect on Miss Frances Gordon; and, if so, whether he can assure the House that no unusual method of forcible feeding was employed in her case?
    Mr. McKINNON WOOD: The answer to the first part of the question is in the affirmative. There are two cases at present. As regards the second part, I receive reports from time to time as occasion requires. The remainder of the question has been dealt with in my reply to questions 32, 33, and 37.
    Mr. WHYTE: Has the right hon. Gentleman taken into consideration the provisions of the Temporary Discharge, Act which the Home Secretary does in cases such as these?
    Mr. McKINNON WOOD: One woman has been released from prison under that Act although she was subject to a year's imprisonment.
    Mr. WHYTE: Did not the right hon. Gentleman say there are other women in prison just now in Perth undergoing forcible feeding?
    Mr. McKINNON WOOD: One of those women was released under the provisions of the Act to which my hon. Friend refers, and the police authorities found very great difficulty in getting rid of her. They had to carry her about in an ambulance for three hours before she would consent to enter any house.
    Mr. WEDGWOODasked the Home Secretary whether he will issue a circular to magistrates advising that suffragette prisoners had better be admitted to bail pending trial, in view of the objections to forcible feeding?
    The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): I cannot interfere with the magistrates' discretion in the matter of bail as regards these prisoners. I will, however, inform the prosecutors, whether the Director of

    2097
    Public Prosecutions or the police, that in my opinion applications for bail in these cases should not be opposed by the prosecution provided that the bail is in a suitable amount and, in some cases, the defendant gives an undertaking that she will not in the meantime commit other offences.
    Mr. MOUNT: Did the right hon. Gentleman receive the attention of the suffragettes this morning?
    Mr. McKENNA: Did I receive their attention.
    Mr. MOUNT: Yes.
    Mr. McKENNA: I believe there were some outside my house, but they failed to recognise me as I left.

    Education (Scotland) Fund.
    Major HOPEasked the Secretary for Scotland what are the maximum Grants payable during the current year for blind children in residential institutions under the Scottish Education Code Grant, and from the Education (Scotland) Fund?
    Mr. McKINNON WOOD: The Grants payable under the Scottish Code in respect of blind children are at the rate of £3 3s. per head for ordinary instruction, and a further £2 2s. where manual instruction is given. There is also the Fee Grant of 12s. per head, and any addition to that Grant which may be made in terms of Section 17 (11) of the Education (Scotland) Act, 1908. There is, at present, no special Grant for residential institutions, but the question of providing such a Grant is under consideration.

    Housing Scheme (Lanarkshire).
    Mr. DUNCAN MILLARasked the Secretary for Scotland what progress is being made in carrying out the new housing scheme at the village of West Benhar, Lanarkshire, where the whole buildings have been condemned as unfit for habitation under a closing order; whether a suitable site has been obtained for the new buildings, and on what terms; and whether the owner of the land will be taken as bound to make payment of compensation in the event of the new buildings being damaged by subsidence due to the workings of his mineral tenants?
    Mr. McKINNON WOOD: As this question did not appear in the Paper until yesterday, I have not yet been able to obtain the most recent information re-
    2098
    garding the scheme, but am in communication with the Local Government Board on the subject of my hon. and learned Friend's question.

    Scottish Education.
    Mr. HOGGEasked the Secretary for Scotland whether his attention has been called to the resolution passed by the Scottish School Board Association in favour of Scottish educational policy being determined in Scotland; whether a petition from Scottish Members of Parliment was presented to him urging the transference of the Scottish Education Department to Edinburgh; whether he can say how many Members signed the petition; and whether, in view of this expression of opinion in and out of the House, he is prepared to accede to the request?
    Mr. PIRIE: Before the right hon. Gentleman answers this question may I ask before he gives the numbers of the Scottish Members he will be careful to eliminate two signatures in the cases in which the signatories have repudiated them?
    Mr. McKINNON WOOD: The resolution in question, according to the report which I have seen in the Press, referred to legislation on educational matters. It has, therefore, no bearing on the question of the location of the office of the Scottish Education Department, with regard to which I would refer my hon. Friend to the statement which I made in the House on 23rd July, 1912, after consideration of the memorial to which he refers. To that statement I have nothing to add. My hon. Friend will recollect that the number of Members supporting the proposal was a matter of controversy which, I think, it is not necessary now to revive.
    Mr. HOGGE: What further evidence do the Government require?
    Mr. McKINNON WOOD: I am perfectly certain that a very large proportion of Scottish Members do not desire the Office to be transferred to Edinburgh.
    Mr. PIRIE: Will the right hon. Gentleman lay on the Table the memorial signed by the majority of the Scottish Members?
    Mr. McKINNON WOOD: With regard to that memorial, there were a certain number of signatures attached at the time, but other signatures were carried over from a former memorial. We do not regard the latter as having the same weight as the former.

  POST OFFICE.

    TELEPHONE SERVICE.
    Mr. HANCOCKasked the Postmaster-General whether he has given instructions for a telephone call office to be provided at the Midland Railway station, Ambergate; and why such office has not yet been provided?
    Mr. HOBHOUSE: No instructions have yet been given for the provision of a public telephone call-box at Ambergate Railway Station, but inquiry is being made to ascertain whether the facility is justified on financial grounds. As pointed out in my answer to the hon. Member on the 15th April last, this matter had to await the settlement of an agreement with the Midland Railway Company as to the terms applicable to such installations on their property.

    WIRELESS TELEGRAPHY (CONTRACT).
    Major ARCHER-SHEEasked the Postmaster-General whether his attention has been drawn to a statement of the directors of Marconi's Wireless Telegraph Company that nearly a year had passed since the ratification of the contract and that the slow progress that the company had been permitted to make seriously prejudiced their interests; and if he can make a statement as to what difficulties have arisen with the Post Office and what steps are being taken to expedite the erection of the stations?
    Mr. HOBHOUSE: I am aware that the Marconi Company have made a statement such as that referred to by the hon. Member. It is the fact that delay has occurred in proceeding with the construction of the Imperial wireless stations through difficulties which could not be foreseen, but some further delay has been caused by proposals submitted by the company for an improvement in the working arrangements. These proposals, which have been made for the purpose of increasing the efficiency of the installations, had to be carefully examined, and this has necessarily occupied an appreciable time. The chief difficulties now, however, have been removed or are on the point of solution. The arrangement for establishing direct communication between Egypt and India, which was explained to the House on the 2nd of March in reply to a question by Mr. Walter Guinness, necessitated some delay in connection with the acquisition of fresh sites in Egypt and India, The
    2100
    new sites for the Indian station have not as yet been formally accepted by the company. Work has been proceeding for some time on the construction of the masts for the English stations, and the construction of the foundations for masts of the Egyptian station is about to be commenced. Material has also been, or is on the point of being, sent out for the masts of the East African, Indian, and Singapore stations.
    Major ARCHER-SHEE: How is it that the Post Office did not examine the specifications and details of the contract before it was presented to Parliament for ratification?
    Mr. HOBHOUSE: That is a statement the accuracy of which I should question.

    Foreign Parliaments (Finance Committees).
    Mr. MOLTENOasked the Prime Minister whether he can see his way to obtain information in regard to the constitution, powers, and proceedings of finance committees in other Parliaments of the world, and will lay such information before the House as was done recently in the case of foreign affairs committees of other Parliaments?
    The PRIME MINISTER (Mr. Asquith): Yes, Sir, I will ask my right hon. Friend the Secretary of State for Foreign Affairs to obtain the desired information with regard to those countries, at any rate, whose constitutional practice is most likely to afford precedents of interest and value to ourselves.

    Shipping Accidents.
    Sir JOHN SPEARasked the Prime Minister if, having regard to the many accidents to shipping and loss of life recently experienced in consequence of collision during fogs, he will appoint an expert Committee to consider what regulations can be devised calculated to lessen such accidents?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Robertson): My right hon. Friend has asked me to answer this question. I shall be glad to consider any proposals or suggestions which the hon. Member may wish to make with a view to preventing collisions in fog, but I am inclined to doubt whether any useful purpose would be served by appointing an expert Committee on this subject at the present moment.
    Mr. CROOKS: Has the hon. Gentleman's Department considered the Kelmaye system?
    Mr. ROBERTSON: I must ask for notice of that.

  GOVERNMENT OF IRELAND BILL.

    ULSTER.
    Mr. HUNTasked the Prime Minister whether, in view of the fact that the Secretary of State for Foreign Affairs stated that the Army could not be used for the coercion of Ulster until a General Election had occurred, he can say whether this decision has been reversed; and, if not, whether His Majesty's Government propose to take any action when the people of Ulster set up a Government of their own?
    Mr. SWIFT MacNEILL: Before the right hon. Gentleman answers, may I ask if the last paragraph of the question is in order?
    Mr. SPEAKER: I think the Prime Minister will be able to take care of himself
    The PRIME MINISTER: The speech made by my right hon. Friend on the Second Reading of the Government of Ireland Bill, to which, I presume, the hon. Member refers, though his statement of it is incomplete and misleading, is on record, and has not in any way been modified. The latter part of the question is based on an hypothesis, and I am not called upon to reply to it.
    Mr. PRINGLE: Is my right hon. Friend aware that three different dates have been given for the setting up of the new Government?
    Mr. HUNT: Are we to understand that the Prime Minister does not know whether within a few weeks the Government will be responsible for law and order in Ireland? Will he say how much will be taken off the salaries of Ministers when a part of the United Kingdom is no longer under their jurisdiction?

    Cabinet Rank.
    Mr. WHELERasked the Prime Minister whether he can state the last occasion on which a Member of the Cabinet of any British Government retained his Cabinet rank without a seat in the House of Commons for more than five months?
    The PRIME MINISTER: I believe that the last case was that of Mr. Gladstone.
    Mr. SWIFT MacNEILL: Is it not a fact that Mr. Gladstone was a Tory, and not a Radical, Minister at the time?

  BRITISH ARMY.

    RECRUITING.
    Sir J. D. REESasked the Secretary of State for War what steps are being taken to improve recruiting at Home, in view of the fact that emergency measures are now required in order to complete the strength of the units of the British Army serving in India?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): I do not think I can at present add anything to what was stated by my right hon. Friend the Prime Minister in answer to an almost identical question put by the hon. Member for West Marylebone on the 1st instant.
    Major HOPEasked whether the number of recruits enlisted for the Regular Army during the current year continue to show week by week a reduction compared with the corresponding weeks of 1912–13?
    Mr. TENNANT: On the contrary, Sir, the number of recruits taken for the Regular Army has, except during four weeks, shown a consistent increase since the middle of January. Each individual week of this period has given better returns than the corresponding week of last year, with only four exceptions.

    ESTABLISHMENT DEFICIENCY.
    Major HOPEasked what was the deficiency of strength below establishment on 1st July in the Regular Army in the United Kingdom, in India, and in Colonial stations?
    Mr. TENNANT: I shall not be in a position to furnish this information for at least a week. The returns are not yet complete.

    RE-EXGAGEMENTS.
    Mr. AMERYasked how many men have been induced to re-engage by the bounty of £16 recently offered to soldiers in India, and how many would be required to re-engage in order to bring the establishment up to strength?
    Mr. TENNANT: The bounty is not being offered to induce men to re-engage, but for a quite different purpose, namely, to induce men due to transfer to the reserve

    2103
    to extend their Colour service. As regards the rest of the question, I would refer the hon. Member to the replies given to the hon. Members for Bath and the Isle of Wight on the 2nd and 7th instant respectively.
    Mr. AMERY: Will the right hon. Gentleman give the actual figures as to the number of men who have extended their service?
    Mr. TENNANT: It is much too soon to be able to give any figures; the offer came into force only last month.
    Sir J. D. REES: Is it not a fact that there is difficulty in keeping the British regiments in India up to strength?
    Mr. TENNANT: This offer would not have been made if the regiments were up to strength.
    Mr. AMERYasked how many Reservists have responded to the recent invitation to re-engage, and how many would be required to re-engage to complete the Home establishment of the Regular Army up to strength?
    Mr. TENNANT: The men in question are not being invited to re-engage, but to rejoin the Colours. The invitation has only just been issued, and no returns have yet been received of the numbers who have responded. The answer to the last part of the question depends on the progress of recruiting. The shortage on 1st June has already been stated.

    DESERTIONS.
    Mr. AMERYasked what were the total losses by desertion from the Regular Army in the five-year periods from 1904 to 1908 and from 1909 to 1913, respectively; and what was the percentage of desertions to the total number recruited in each of those periods?
    Mr. TENNANT: The hon. Member will find much more complete information on this point than I could possibly give in answer to a question on page 68 of the General Annual Return.
    Mr. AMERY: Is it a fact that the percentage of desertions has been much higher in the last five years than during the preceding five years?
    Mr. TENNANT: Speaking from memory, I think the hon. Member is mistaken.

    TIME-EXPIRED MEN.
    Sir JOHN SPEARasked the Secretary of State for War the number of time-expired men leaving the Army annually during the last five years; and the number of these men who have rejoined the Army during the same period of time?
    Mr. TENNANT: I would refer the hon. Member to pages 36–37 of the General Annual Return where full information on both points will be found.

    Betting and Gaming Acts.
    Sir J. D. REESasked the Attorney-General whether the Government proposes to codify the number of Betting and Gaming Acts which find a place on the Statute Book in order that magistrates, chief constables, and others concerned may know what the law actually is in order to its efficient administration?
    The ATTORNEY GENERAL (Sir John Simon): I would refer the hon. Member to my answer to the same question put to me by him on 8th April last.
    Sir J. D. REES: Does not this second question give the right hon. Gentleman an opportunity for repentance and for a reconsideration of the matter?
    Sir J. SIMON: I am still of the same opinion as I was on 8th April.

    Inspection of Quarries (Salop).
    Mr. HODGEasked the Secretary of State for the Home Department whether any quarries in the county of Salop have not been visited by an inspector of mines and quarries for a period of over four years; and, if so, whether arrangements will be made to visit such quarries at an early date?
    Mr. McKENNA: I am informed that there are some ten quarries regularly worked which have not been inspected within the period mentioned. Almost all of these are very small, employing only two or three persons. I have asked the inspector to arrange for the inspection of these quarries at the earliest opportunity.

    Building Trade Dispute (London).
    Mr. TYSON WILSONasked the Home Secretary if he is aware that the police are taking action against men who are acting as pickets in connection with

    2105
    the dispute in the building trade in London under the Police Acts and not under the Trade Union Acts and if he will state whether they are doing this with his sanction?
    Mr. McKENNA: The police do not take action under any Act against pickets as such, but where pickets offend against the law they are liable in the same way as other persons. I am informed by the Commissioner of Police that in six cases it has been necessary to proceed against men purporting to act as pickets for offences committed by them. Five cases have resulted in conviction by the Courts; the sixth is still pending.
    Mr. CLYNES: Can the right hon. Gentleman supply the House with the instructions under which the police act in these cases?
    Mr. McKENNA: If the hon. Member will put a question down, I shall be glad to look into the matter.
    Mr. THORNE: Is it within the discretion of the police to decide the number of pickets in each particular case?
    Mr. McKENNA: So far as I am aware the police have no authority to decide how many pickets there should be on a particular job; but it must depend on the circumstances of the case.
    Mr. TYSON WILSONasked the Home Secretary whether he has had any complaints from the officials of the societies connected with the building trades regarding the action of the police towards the men who are acting as pickets in the present dispute in the building trade in London; whether he has been asked to inquire into the action of the police; and, if so, whether he proposes to make any inquiry?
    Mr. McKENNA: Yes, Sir, I received some complaints a few days ago, and I referred them to the Commissioner of Police who is now making inquiry.

    Pit Ponies.
    Mr. BRIDGEMANasked the Home Secretary if he has added recently to the number of inspectors whose duty it is to look after the interests of pit ponies, or is he intending to do so?
    Mr. McKENNA: The answer to the first part of the question is in the negative. I have not yet been able fully to consider
    2106
    all the reports which have been sent in, and I am asking for further information in some cases.
    Mr. C. BATHURST: Is the right hon. Gentleman aware that there is at the present time a deplorable lack of proper inspection in the South Wales collieries?
    Mr. McKENNA: I do not think I can agree with that description of the hon. Gentleman.
    Mr. C. BATHURST: Will the right hon. Gentleman allow me, having some personal knowledge, to give him some information on the subject?
    Mr. McKENNA: I shall be very glad to receive any information.

    Air-guns (Injuries to Children).
    Mr. HOHLERasked the Home Secretary whether his attention has been called to the injuries caused to children by the use of air-guns at Luton, Chatham; and would he consider whether he could introduce a Bill to amend the law both in regard to the sale of air or other guns to and the possession thereof by children?
    Mr. McKENNA: My attention had not previously been called to the matter. I am informed by the police that a girl was recently injured accidentally at Luton by a pellet from an air-gun, but that they are not aware of any previous case of the kind. The Gun Licence Act, 1870, expressly includes air-guns, and Section 7 of that Act makes it an offence punishable by a fine not exceeding £10 for any person, unless he holds a licence, to use or carry an air-gun except in a dwelling-house or in the curtilage thereof.
    Mr. HOHLER: Is the right hon. Gentleman aware that the penalties are perfectly inoperative in regard to children who are in possession of these guns?
    Mr. McKENNA: Well, the only case I know of is the case in which I mentioned the circumstances in my reply to the hon. and learned Gentleman.

    Truck Act.
    Sir WILLIAM BYLESasked the Home Secretary what steps are being taken by the Home Office to deal with the violations of the Truck Act recorded in the factory inspector's report recently circulated; whether he is aware that home workers in Ulster who make shirts, under-

    2107
    clothing, and knitted goods for large firms are paid at the rate of 1d. per hour and subjected to pressure to take payment in shop commodities as a condition of receiving work, and that fines are still deducted from a very low wage in many trades; and whether the Bills now before the House dealing with these abuses will receive facilities from the Government?
    Mr. McKENNA: As the chief inspector's report shows, the inspectors take all possible steps, by warnings and where necessary, by prosecutions, to enforce observance of the Acts. As regards the position of the home workers in the Irish linen trade, the Courts have held that the Acts do not apply to the case of these outworkers, and this and other defects of the law dealt with in the Report of the Truck Committee can only be remedied by legislation. I hope very shortly to introduce a Bill for this purpose.
    Sir W. BYLES: Will the right hon. Gentleman answer the last part of the question?
    Mr. McKENNA: I assume my hon. Friend refers to Bills introduced by private Members?
    Sir W. BYLES: Yes.
    Mr. McKENNA: I have answered it in my reply: "I hope very shortly to introduce a Bill for this purpose."
    Mr. JAMES HOPE: Will the right hon. Gentleman use his influence to see that the power of dealing with these abuses in Ulster is retained by his own Department, and this House?
    Mr. McKENNA: That does not arise.

    Coal Mines (Fire-damp Indicator).
    Mr. DUNCAN MILLARasked the Home Secretary whether his attention has been directed to the success attending the demonstration given by Mr. Alfred Williams at the Hotel Cecil on 26th June in connection with the new fire-damp indicator of which he is the inventor; and whether, having regard to the satisfactory results obtained from this instrument, he will institute a further test by the Home Office experts with a view to recommending its adoption in all mines where firedamp is present?
    Mr. McKENNA: I have seen a report of the demonstration referred to in the
    2108
    question. The introduction of a reliable appliance for detecting fire-damp is, in view of the rapid introduction of electric safety lamps, a very important matter, and my Department is watching closely the various attempts which are being made to produce such appliances. The Department, however, could not properly undertake the responsibility of recommending any appliance on the strength of laboratory tests merely and before its reliability under working conditions below ground had been established by actual experience of its use.

    King's Visit to Scotland (Royal Standard).
    Mr. JAMES HOGGEasked the Secretary of State for War by whose authority the Royal Standard with the English quarterings was flown at Stirling Castle on the occasion of the visit of His Majesty the King; and whether any standards are available for use in Scotland by the military with Scottish quarterings?
    The PRIME MINISTER: The authority is contained in the King's Regulations and Orders for the Army, paragraph 1806 and appendix 7. The answer to the last part of the question is in the negative.
    Mr. HOGGE: Is the Prime Minister aware that the English Royal Standard flag was flown—
    The PRIME MINISTER: There is no English Royal Standard!
    Mr. HOGGE: Arising out of that answer is the right hon. Gentleman aware that the Royal Standard, as used in England, was flown over the Royal Palace of Holy-rood during the King's visit; also that that it is a breach of the Act of Union, and, as a Scottish Member, will the right hon. Gentleman assert our Scottish rights?
    The PRIME MINISTER: I am sorry that my hon. Friend is so imperfectly informed. The Standard that was used at Holyrood was the Standard of the United Kingdom, the quarterings of which were settled by the Royal Proclamation of the 1st January, 1801, which followed on the Act of Union of 1800.

    Government Housing Bill.
    Mr. CHARLES BATHURSTasked the Prime Minister how it is proposed under the Government Housing Bill, bearing in mind that only £3,000,000 will be available for the provision of cottages by

    2109
    the Government in rural districts and the consequent sporadic and piecemeal treatment of the housing problem, to prevent irresistible political pressure being brought to bear upon the Government to erect cottages in certain districts and neglect others equally deserving of their sympathetic activities?
    The PRIME MINISTER: Perhaps the hon. Member would address this question to the President of the Board of Agriculture, who is in charge of the Bill referred to.
    Mr. WEIGALLasked the President of the Local Government Board whether he can now say what action he proposes to take in reference to the Report of an inspector of the Board on the housing conditions in the rural district area of Horn-castle, Lincolnshire, issued over seven months ago, seeing that under the provisions of the Government Housing Bill none of the ninety-two cottages which the Report states are urgently required can be provided for agricultural labourers?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Herbert Samuel): I have had further inquiries made in the district in regard to the ability of persons to pay an economic rent for cottages, and have addressed a letter to the rural district council on that matter. I cannot agree with the statement contained in the latter part of the question.
    Mr. WEIGALL: Is not the right hon. Gentleman aware that in districts like these, if the cost of cottages is kept as low as possible and the highest rent charged which economic conditions of the agricultural industry will allow, that there will be a loss of between £2 and £3 per annum per cottage, and how is that to be met by the Government Bill?
    Mr. HERBERT SAMUEL: I sent an inspector down to make a further investigation, and it was found that in the localities in which he made the investigation that it was quite possible to obtain an economic rent.
    Mr. WEIGALL: Is not the right hon. Gentleman aware that all that that means is that there must be an uneconomic wage in order to pay an economic rent?
    Sir JOHN SPEARasked the President of the Board of Agriculture if, under the Government Housing Bill, police constables will be regarded as Government employés and houses be built for them?
    The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman): Perhaps the hon. Gentleman would allow me to answer that next week.

    Strike on Fruit Farms (Swanley and Crockenhill, Kent).
    Mr. JAMES ROWLANDS: I beg to ask the President of the Local Government Board a question, of which I have given him private notice: Whether he is aware that a strike of the labourers on the fruit farms is taking place at Swanley and Crockenhill, Kent; that notices to quit their cottages have been served upon some of the labourers, and that in some cases applications are to be made to-morrow, the 17th, at the Dartford Petty Sessional Court for eviction orders, and in other cases for the following week; and whether he has any power to take action to prevent these people being evicted during a labour dispute; and, if so, what action he proposes to take?
    Mr. HERBERT SAMUEL: I regret I have no power to interfere in the matter.
    Mr. J. WARD: Who has? Has anyone any authority to interfere to prevent this cruelty to men who simply want fair play?
    Mr. HERBERT SAMUEL: It is a matter for the Courts of Justice.
    Mr. W. THORNE: Would they be justified in arming themselves to protect their homes?
    Mr. J. ROWLANDS: Will the right hon. Gentleman make inquiry to see whether this is not one of the cases in which more cottages are wanted, so that the labourers will be independent of tied cottages?
    Mr. HERBERT SAMUEL: Cases such as this have been in mind of the Government, certainly, in deciding upon their housing policy. The Government have no power to build cottages until the Bill now before the House is framed.
    Mr. W. CROOKS: Is it possible for the Law Officers of the Crown to appear and defend these men?
    Mr. HERBERT SAMUEL: That question should be addressed to the Attorney-General.
    Mr. CROOKS: May I ask the Attorney-General then?
    The ATTORNEY-GENERAL: I am afraid I must ask for notice.
    Mr. CROOKS: There is no time for notice: the case comes on to-morrow.
    Mr. J. ROWLANDS: I should be glad to supply the right hon. Gentleman with all the information.

    Burial Rates (Stoneydelph).
    Mr. NEWDEGATEasked the President of the Local Government Board whether he is now in a position to make a statement as to what steps the Local Government Board are going to take to prevent the inhabitants of Stoneydelph, near Tamworth, having to pay burial rates twice over, owing to the Local Government Board Order of 1913; and whether he is aware that a demand for the second burial rates is now being made on the inhabitants of Stoneydelph?
    Mr. HERBERT SAMUEL: Over a month ago the Local Government Board wrote a letter suggesting that the County Council of Warwickshire might be approached with a view to their making an Order under Section 57 (1) of the Local Government Act, 1888, altering the parish of Amington and Stoneydelph, but the matter is not one in which the Board have any authority to give a direction.

    Board of Guardians (West Ham).
    Mr. W. THORNEasked the President of the Local Government Board if he is aware that the West Ham Board of Guardians have refused to carry out their duties because of the Local Government Board's auditor refusing the guardians the right to use their own discretion in giving outdoor relief; and if he is willing to meet a deputation of the guardians with a view of settling the question?
    Mr. HERBERT SAMUEL: I have arranged to meet a deputation of the guardians to-morrow.

    Poor Law Institutions Order, 1913.
    Mr. HILLSasked the President of the Local Government Board whether there have been during the last five years any breaches, besides the recent one at Lambeth, of the Regulation made by the Poor Law Order of 1868, Article 4, and continued by the Poor Law Institutions Order, 1913, requiring the medical officer of each workhouse to report to the Local Government Board within twenty-four hours of having information of every
    2112
    sudden or accidental death in the workhouse; if so, on What dates and by the medical officers of what unions were the breaches committed; and what steps the Local Government Board have taken or would take to ensure obedience to this Regulation in future in all unions?
    Mr. HERBERT SAMUEL: There are not records which would enable me to answer the first two parts of the question. In any case of failure to report within the required time the Local Government Board would remind the medical officer of his duty under the Regulations.

    SS. "County of Devon."
    Major ARCHER-SHEEasked the President of the Board of Trade whether he has yet come to a decision on the question of proceeding against the managing owner, or owners, of the steamship "County of Devon," which was recently lost in the Atlantic, in view of the fact that the opinion of counsel was being taken as to the advisability of so doing?
    Mr. ROBERTSON: No, Sir. The matter is still before counsel.

  ROYAL NAVY.

    SHIPWRIGHTS.
    Sir C. KINLOCH-COOKEasked the First Lord of the Admiralty whether he is aware that shipwrights who remained on under the old system are handicapped by their decision; that shipwrights having from six to twelve years' service are required to take their orders from shipwrights, second class, many of whom have seen only six months' service, this being due to juniors on the old scale who accepted the new conditions passing over the heads of the more experienced and senior shipwrights who did not accept the Admiralty offer; and whether, in view of these circumstances, he can see his way to grant shipwrights who preferred to remain under the old system the rating of first-class petty officer so as to give them the same status as shipwrights, second class?
    The CIVIL LORD of the ADMIRALTY (Mr. Lambert): The advantages of accepting the new system were clearly put before the men at the time of its introduction, and it is not proposed to modify the conditions. It is still open to any shipwright to transfer to the new system.

    ARMED MERCHANT VESSELS.
    Mr. KINGasked the First Lord of the Admiralty whether a special set of rules and regulations has been formulated to apply to those merchant vessels armed by the Admiralty; and, if so, whether such rules and regulations have been, or will be, published?
    Mr. LAMBERT: Yes, Sir. Rules have been formulated, but for obvious reasons it is undesirable that they should be made public.
    Mr. KING: Are they supplied to commanding officers, and are they understood alone by the crews of these ships?
    Mr. LAMBERT: Perhaps the hon. Gentleman would put that down.
    Mr. KINGasked the First Lord of the Admiralty whether he has considered the view that the arming of merchant vessels for use in warfare is a breach of the law and customs of nations, and especially against the rules laid down by The Hague Convention of 1907; and whether this question will be submitted to the next Hague Conference?
    Mr. LAMBERT: I am advised that the view referred to in the first part of the question is incorrect. Whether the subject will be submitted at the next Hague Conference is a question requiring consi2deration, and cannot be answered at the present time.
    Mr. KING: Is it having consideration?
    Mr. LAMBERT: Oh, yes, Sir; it is having the consideration it requires.

    GREENOCK TORPEDO FACTORY.
    Colonel GREIGasked the First Lord of the Admiralty if he will say how many Government employés are now at the Greenock torpedo factory in Renfrewshire; and whether it is the intention of the Admiralty to increase the numbers now there?
    Mr. LAMBERT: 1,392 are at present employed. When the extension to the factory is completed, it will be possible to employ up to a total of 1,719.

    AERIAL NAVIGATION ORDER, 1913.
    Viscount DUNCANNONasked the First Lord of the Admiralty whether a decision has been arrived at with regard to the request for compensation made by the proprietors of the Dover Aerodrome
    2114
    for the loss to them due to the Aerial Navigation Order, 1913; whether he is aware that it is now more than a year since the matter was first brought to the notice of the Government; and whether he will use his influence to prevent further delay in arriving at a decision?
    Mr. LAMBERT: I am very much in sympathy with the wish to have this matter settled without further delay, but the Noble Lord will recognise that more than one Department is concerned, and that a proposal to compensate private persons for the passing of an Act of Parliament demands very careful consideration. I will certainly do what I can to expedite the matter.

    SHIPS' POLICE.
    Mr. HOHLERasked the First Lord of the Admiralty whether the employment on His Majesty's ship "Queen Mary" and His Majesty's ship "Vanguard" of chief and petty officers as ships' police in the place of a master-of-arms and ships' corporals is to be taken as indicating a change of policy by the Admiralty in the policing of His Majesty's ships; and whether it is contemplated to abolish or modify the system under which His Majesty's ships have hitherto been policed?
    Mr. LAMBERT: Such employment is being tried in a few ships, but pending wider experience of the system no statement as to change of policy can be made.
    Mr. HOHLERasked the Secretary to the Admiralty whether he is aware that there is a shortage of police ratings; will he state whether the Admiralty are endeavouring to obtain recruits for that rating; and will he consider the improvement of the pay and prospects of ships' police in order to obtain recruits?
    Mr. LAMBERT: The numbers are very slightly below requirements. Transfers to the ships' police are still being made in accordance with the Regulations. It is not proposed to modify their pay.
    Mr. HOHLER: The right hon. Gentleman has not answered that part of the question as to whether the Admiralty were endeavouring to obtain recruits?
    Mr. LAMBERT: I said the numbers are very slightly below the requirements.
    Mr. HOHLER: The question is: Are the Admiralty endeavouring to obtain recruits?
    Mr. LAMBERT: Naturally.

    ENGINEER-LIEUTENANTS.
    Mr. HOHLERasked the First Lord of the Admiralty whether he is aware that, under the existing Regulations, the practice of the Admiralty is such that an engineer-lieutenant promoted from the chief artificer engineers can rarely, if ever, qualify for the senior list; whether he is aware that engineer-lieutenants promoted from the chief artificer engineers have passed nearly the whole of their career as watch-keeping officers afloat, and on attaining the rank of engineer-lieutenant are almost invariably employed on shore; and will he consider the desirability of modifying the Admiralty Regulations by omitting, in the case of those promoted from the chief artificer engineers, the requirement as to three years as watch-keeper on a sea-going ship and thus enable them to qualify for the senior list and the advantages it carries?
    Mr. LAMBERT: The answer to the first three parts of the question is in the affirmative. It is proposed to consider the question of waiving the sea-service qualification in the case of these officers as one of the conditions of advancement to the rank of engineer-lieutenant commander.

    St. Mary Magdalene School (Paddington).
    Mr. KINGasked the President of the Board of Education whether he is aware that the girls' school of St. Mary Magdalene, Paddington, has no playground and has other defects prejudicial to efficient physical and mental instruction; whether the Board of Education will now reduce the number of scholars recognised in this school to such numbers as can be properly accommodated for physical instruction and all other subjects of the Code curriculum; and whether he will urge the local education authority to provide accommodation in a freer atmosphere for any who are displaced?
    The PRESIDENT of the BOARD of EDUCATION (Mr. Pease): The school is among those referred to in the Board's letter to the local education authority of 14th April as one having no playground upon the premises but exhibiting no special defect in the buildings. The local education authority have informed the Board that the managers propose to submit plans for a roof playground over the girls' school so soon as the new premises
    2116
    for the infants' department are completed. Under the circumstances the action suggested by the hon. Member does not seem necessary.
    Mr. KING: Is the right hon. Gentleman aware that the managers of this school have boasted in the Press that many a little dissenter within its walls has been converted to the Catholic faith?

    Blind Children in Institutions (Government Grants).
    Major HOPEasked the President of the Board of Education what are the maximum Government Grants, payable under the revised code, for blind children in residential institutions?
    Mr. PEASE: The maximum Grants proposed for residential institutions for the blind will be £13 per unit of average attendance.

    Crippled Children (Education Committees).
    Mr. GOLDSMITHasked the President of the Board of Education if he is considering the advisability of giving education committees power to board out crippled children not needing special treatment in suitable homes near ordinary elementary schools; and if he can say under what Act and Clause education committees are at present denied that power?
    Mr. PEASE: I will consider the matter. As a rule, however, an ordinary public elementary school is not a suitable place for crippled children. Such children should usually attend a special school. In reply to the last part of the question, I am not aware of any statutory provision conferring the power on education committees, and I think statutory authority would be required for the purpose.

    Local Collectors of Taxes.
    Mr. BRIDGEMANasked the Secretary to the Treasury if the proposed changes affecting the officials of Customs and Inland Revenue include making permanent the appointment of local collectors of taxes?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I would refer the hon. Member to the reply given by my right hon. Friend the Chancellor of the Exchequer to the hon. Member for the Isle of Thanet on the 13th instant.

BUSINESS OF THE HOUSE.

  WINTER SESSION.
  Mr. AMERYasked the Prime Minister when he proposes to take the Report stage and Third Reading of the British Nationality and Status of Aliens Bill?
  Mr. PETOasked the Prime Minister whether he can more closely define the date for the commencement of the proposed new Session in early winter, or whether he intends the House to understand that he accepts the astronomical definition of winter as commencing in the Northern Hemisphere with the sun's entry into the sign of Capricorn about the 21st December; and, if so, whether it is intended to adjourn the new Session for Christmas?
  The PRIME MINISTER: In reply to these questions, I must ask the hon. Members to await my statement to-morrow.

  GOVERNMENT OF IRELAND (AMENDMENT) BILL.
  Mr. BONAR LAW: May I ask the Prime Minister what will be the business for next week?
  The PRIME MINISTER: We propose to put down the Government of Ireland (Amendment) Bill for Monday. I do not know whether it is suggested that more than one day should be given to its consideration; if so, it will be taken on the following day. Subject to that we shall take the subsequent stages of the Finance Bill. Any further modification I will announce to-morrow.
  Mr. BONAR LAW: May I say, as regards the time required, that must depend upon the nature of the statement made by the right hon. Gentleman.
  HON. MEMBERS: It depends on yourself.
  Mr. KING: Does it not much more depend upon the attitude of the right hon. Gentleman.

  ORDER OF PROCEDURE (TITLE OE FINANCE BILL).
  Mr. JAMES HOPE: I desire to ask your ruling, Mr. Speaker, on a point of procedure: Whether, in the event of the title of the Finance Bill being amended, a
  2118
  Special Report of the alteration should be made to the House; whether such Report should be considered by the House before the Report of the Bill; and whether that would have to be effected outside the time allocated to the Finance Bill by the recent Order of the House?
  Mr. SPEAKER: No Motion will be required in regard to that. It will be a Report by the Chairman of Ways and Means.
  Mr. J. HOPE: Would it not be possible for the House to discuss this Special Report?
  Mr. SPEAKER: There will be no Special Report to discuss. The Chairman of Ways and Means will report to the House that the Bill has passed through Committee with Amendments, and that the title has been amended. That is the Report which will probably be made under Standing Order 34.
  Ordered, That the Proceedings on the Finance Bill have precedence this day of the Business of Supply.—[The Prime Minister.]

EDUCATION BOARD PROVISIONAL ORDERS CONFIRMATION (CAMBS., ETC.) BILL [Lords].
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the third time Tomorrow.

SELECTION (STANDING COMMITTEES).
Sir Daniel Goddard reported from the Committee of Selection; That they had discharged the following Members from Standing Committee B (in respect of the Places of Worship (Enfranchisement) Bill): Mr. Robertson, Mr. Cowan, and Mr. Ferens; and had appointed in substitution (in respect of the said Bill): Mr. Herbert Lewis, Sir Frederick Low, and Sir Ryland Adkins.
Sir Daniel Goddard further reported from the Committee; That they had added to the Standing Committee on Scottish Bills the following Fifteen Members (in respect of the Midwives (Scotland) Bill [Lords]): Major Archer-Shee, Mr. Ashley, Mr. Baird, Mr. Blair, Colonel Boles, Mr. Clough, Viscount Duncannon, Sir Henry Hibbert, Mr. Hohler, Mr. John, Mr. M'Ghee, Sir Cuthbert Quilter, Sir Samuel Scott, Mr. Scanlan, and Mr. John Taylor.
Reports to lie upon the Table.

MESSAGE FROM THE LORDS.
That they have agreed to:—
Superannuation (Ecclesiastical Commissioners and Queen Anne's Bounty) Bill,
Sea Fisheries (Yealm) Provisional Order Bill, without Amendment.
Amendments to—
Hightown Gas and Electricity Bill [Lords],
Motherwell Water and Sewage Purification Bill [Lords'],
Longwood and Slaithwaite Gas Bill [Lords], without Amendment.

CONTROL AND SUPERVISION OF CLUBS BILL.
Order [24th April] that the Bill be committed to a Standing Committee read, and discharged:—Bill withdrawn.

PRIVATE BILLS.
Local Government Provisional Order (No. 19) Bill,
Reported, with an Amendment [Provisional Order confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered Tomorrow.
Leeds Corporation Bill [Lords],
Liverpool United Gaslight Company Bill [Lords],
Reported, with Amendments; Reports to lie upon the Table, and to be printed.

BILLS PRESENTED.
  SHERIFF COURTS APPEAL COURT BILL.
  "To abolish the office of Sheriff Principal in Scotland, to reduce the number of judges of the Court of Session, and to establish a Court of Appeal for the Sheriff Court; and for other purposes connected therewith." Presented by Captain WARING; supported by Mr. John Henderson, Mr. Hogge, Mr. Pirie, Mr. Watt, and Mr. William Young; to be read a second time upon Thursday, 30th July, and to be printed. [Bill 330.]
  INDUSTRIAL PEACE BILL.
  "To make better provision for Industrial Peace, and other matters relating thereto." Presented by Dr. CHAPPLE; to be read a second time upon Tuesday, 28th July, and to be printed. [Bill 331.]
  RURAL CREDIT BANKS BILL.
  "To provide for the establishment of Rural Credit Banks." Presented by Mr. JARDINE; supported by Mr. Jesse Collings, Mr. Stanier, Mr. Hunt, Mr. Rothschild, Captain Morrison-Bell, Mr. Staveley-Hill, Colonel Burn, Mr. Macmaster, Mr. William Boyle, and Mr. Hamersley; to be read a second time upon Tuesday next, and to be printed. [Bill 332.]
ORDERS OF THE DAY.
  FINANCE BILL.
  Considered in Committee.
  FOURTH ALLOTTED DAY.— [Progress, 15th July.]
  [Mr. WHITLEY in the Chair.]
  FOURTH ALLOTTED DAY.— [Progress, 15th July.]

    NET CLAUSE.—(Provisions with Respect to Income Tax of Married Persons.)
    (1) If an application to the Commissioners of Inland Revenue is made for the purpose in such manner and form as may be prescribed by those Commissioners, either by a husband or wife, within six months before the commencement of any Income Tax year—

    (a) Income Tax (including Super-tax) for that year shall be assessed, charged, and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of the Income Tax Acts with respect to the assessment, charge, and recovery of Income Tax (including Super-tax), and the penalties for failure to make a return, shall apply as if they were not married; and

    (b) All the provisions of the Income Tax Acts which relate to claims for exemption, relief, or abatement, and the proof to be given with respect to those claims, shall also apply as if they were not married; and

    (c) The income of the husband and wife shall be treated as one in estimating the amount to be repaid or allowed in respect of any exemption, relief, or abatement which depends wholly or partially on total income, and the total amount of any exemption, relief, or abatement given in respect of the incomes of the husband and wife shall not exceed that which would have been given if an application had not been made under this Section; and

    (d) The benefit of any such exemption, relief, or abatement may be given either by way of reduction of assessment, or by repayment of any excess of tax which has been paid, or by both of those means, as the case requires, and shall, in the case of relief given in respect of earned income, be given in proportion to the income earned respectively by the
    2138
    husband and the wife, in the case of relief given in respect of insurance premiums, to be given to the husband or wife, as the case may be, by whom the premium is paid, and in any other case be given in proportion to the respective incomes of the husband and wife; and

    (e) For the purpose of any exemption, relief, or abatement, a return may be made by the husband or the wife of the total income of the husband and wife, but if the Commissioners of Inland Revenue are not satisfied with such return they may obtain a return from the wife or husband, as the case may be; and

    (f) The income of the husband and wife shall be treated as one in estimating total income for the purpose of Super-tax. and the amount of Super-tax payable in respect of the total income shall be divided between the husband and wife in proportion to their respective incomes, and the total amount payable shall not be less than it would have been if an application had not been made under this Section.

    (2) The Commissioners of Inland Revenue may require returns for the purposes of this Section to be made at any time, and Section fifty-five of the Income Tax Act, 1842, shall, with the necessary modifications, apply in the case of the refusal or neglect to make or wilful delay in making any such return.
    (3) Where Income Tax (including Super-tax) is charged on the profits or income of a married woman, whether in the name of her husband or separately in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable either by the husband or the wife shall extend both to the goods and chattels of the wife and to the goods and chattles of the husband.
    (4) Section eleven of the Revenue Act, 1911 (which relates to the assessment and recovery of part of the Super-tax from the wife in certain cases) shall cease to have effect; and Section five of the Finance Act, 1897 (which relates to the exemption of the income of a married woman in certain cases), shall not have effect in a case where an application has been made under this Section,—read a second time:—
    Mr. GODFREY LOCKER-LAMPSON: I beg to move, in Sub-section (1), to leave out the words "the Commissioners of

    2139
    Inland Revenue," and to insert instead thereof the words "a surveyor of taxes."
    This is not a drafting Amendment, although I dare say at first sight it appears to be such an Amendment. I submit to the Chancellor of the Exchequer that this Amendment clearly involves a question of principle. As the Clause stands, an application has to be made to the Commissioners of Inland Revenue if a separate assessment is required, just as in Clause 3 in the matter of the Super-tax and Clause 5 in regard to income accruing abroad. This seems to be another attempt to give the central body powers over the taxpayer which ought really to be exercised locally. If this introduction of the Inland Revenue officials is going to take place in every simple Bill amending the Income Tax law, the whole theory of the administration of the Income Tax is going to be upset. Hitherto, the rule has been that the taxpayer should always apply for relief to the local surveyor of taxes. They are the persons who know the local conditions and circumstances, and up to now the local surveyor of taxes has always acted on his own initiative according to what he believes to be a fair and equitable attitude in dealing with the special circumstances of the person who applies for relief.
    Hitherto, the taxpayer has been able to go direct to the surveyor of taxes and put his ease before him. As he possesses local knowledge and local experience, he is able to give full consideration to any representations which may be made by the taxpayer. What I really want to know from the Government is why in this Clause they should go behind the local surveyor of taxes and make every individual taxpayer come under the control of the central authority sitting in London, who do not know local conditions. I should like to point out that these words are going directly contrary to what has been the custom in the past. In the first place, the new procedure is going about in a very roundabout way, because when an application is made under this Clause, the matter must be referred to the local surveyor of taxes for information. But there is a very much stronger argument than that. Every notice of a similar character—that is to say, every application for relief or abatement has to go in the first instance, not to the Commissioners of Inland Revenue, but to the local surveyor of taxes, who knows the special circumstances. Such matters do not now come before the Commissioners
    2140
    of Inland Revenue at all. The surveyor of taxes is the medium, and the only medium, between the taxpayer and the local Commissioners, or the general Commissioners, whoever they may be. I should like to quote precedents. Take the case of a farmer who wishes to be assessed on his farming profits under Schedule D instead of Schedule B. In the ordinary way if he wishes to get that advantage he is obliged to apply, not to the Commissioners of Inland Revenue, but to the local surveyor of taxes, who happens to know the local circumstances. Take the case of a person giving notice to set off a loss under the Customs and Inland Revenue Act of 1890—that is to say, the loss he may have incurred in carrying on his trade or profession, or in the occupation of land. He also has to apply in writing, not to the Commissioners of Inland Revenue, but to the local surveyor of taxes. Take another case. Take appeals against the assessment under the Taxes Management Act of 1880. They also have got to be made in writing, not to the Commissioners of Inland Revenue, but to the local surveyor of taxes. Again, I would point out that Super-tax payers have to give notice, not to the Commissioners of Inland Revenue, but to the special Commissioners who make the asessment, and, of course, the Commissioners of Inland Revenue do not make the assessment at all.
    4.0 P.M.
    I have got other cases of a very similar nature where application has to be made to the local Commissioners, and I could quote them if necessary. Practically, in every single case application is made, not to the central administrative body in London, but to the man on the spot, who knows the special conditions and circumstances. I do submit that the matter of the form of notice ought not to be left to the Central Department in London at all. This is merely once again for the third time in the one Bill an encroachment upon the rights of the taxpayer by the central official administration sitting in London who are completely out of touch with the local taxpayer, and who do not in the least know the special circumstances and conditions, and probably have never seen them. Surely it is better to revert to the old practice of going to the local surveyor of taxes who should receive the application from the taxpayer. Everybody in the district knows where the local surveyor's office is, and the taxpayer can easily go to him and make his application. The form issued by the local surveyor

    2141
    of taxes is much more likely to be simple and intelligible than the form issued by the Commissioners of Inland Revenue whose forms are often quite unintelligible to the ordinary taxpayer. In view of all this, I do very much hope that the Government will see their way to accept this Amendment, which I believe contains a very important principle of administration, and refrain from introducing a new and very objectionable principle in the administration of the Income Tax laws.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I do not think that the fears of the hon. Member are well founded. There is no intention on the part of the Government in proposing this Clause to centralise the Income Tax administration. As the Clause stands it will give the option, and is intended to give the option, to make the return to the local surveyor of taxes, but there are certain taxpayers who even now object to making their return to the local surveyor of taxes and prefer to make it to the special Commissioners of Income Tax. I think I can meet what the hon. Member requires. I would suggest to him that we give an undertaking that the Regulations to be made by the Commissioners of Inland Revenue shall provide that the application may be sent either to the surveyor of taxes or straight to the Commissioners, and then, in order to allay any misapprehensions he may have about the centralisation of the machinery, I would suggest that we leave out the words, "To the Commissioners of Inland Revenue," and make some consequential Amendments lower down, so that it would read, "If an application is made for the purpose in such manner and form as may be prescribed by the Commissioners of Inland Revenue," etc. It will not then definitely provide that the return must be made to the Commissioners of Inland Revenue, but it will leave the necessary elasticity to give the taxpayer the option of making the return either to the surveyor of taxes or to headquarters.
    Sir G. YOUNGER: It is no doubt a common practice, and it certainly has always been my practice, to make the return to the special Commissioners, and I hope that there will be no interference with that practice.
    Mr. MONTAGU: It is precisely for that reason I prefer the Amendment I suggest to the Amendment of the hon. Member.
    Mr. G. LOCKER-LAMPSON: I think I am prepared to accept the suggestion of the hon. Member.
    Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
    Amendments made: In Sub-section (1) leave out the word "those," and after the word "Commissioners" ["by those Com missioners"] insert the words "of Inland Revenue."
    Mr. G. LOCKER-LAMPSON: I beg to move, in Sub-section (1), to leave out the word "before" ["within six months before the commencement of any Income Tax year"], and to insert instead thereof the word "after."
    This new Clause makes it obligatory on a marreid woman to apply for separate assessment within six months of the commencement of the Income Tax year. Quite apart from the intrinsic demerits of the proposal, it is an entirely new departure from existing practice, and I cannot really understand why it should have been introduced in this new Clause, unless it is for the purpose of benefiting the revenue by diminishing the very small amount of relief which is actually being given by the Clause. What are the precedents in regard to this question of application and time limit? Under the present system, in not a single case where the Income Tax Acts provide for notice to be given for any reason whatsoever, is it necessary to give notice before the year of assessment; it is always after the year of assessment. I will give three cases. In the case, for instance, of a farmer giving notice to be assessed on his profits under Schedule D instead of under Schedule B, as in the ordinary case, he has to give notice within two months after the commencement of the Income Tax year. I have got all the quotations from the Statute Books if the right hon. Gentleman wants them. Notice of Super-tax liability has to be given to the special Commissioners before 30th September in the tax year, or not till very nearly six months after the commencement of the tax year. Thirdly, notice to claim a reduced rate of duty on earned income has also got to be given before 30th September in the tax year—that is to say, the notice has not to be given until very nearly six months after the commencement of the tax year. Therefore, all these precedents that I have given, which are more or less on all fours because they

    2143
    are all applications for relief, are against the proposal which the right hon. Gentleman makes in his new Clause.
    This new Clause makes no provision in the case of persons marrying some time after the period within which notice has got to be given. Therefore, in such a case, no separate assessments can be obtained by married persons until the second year of their marriage. Surely it is very unreasonable to suppose that people are going to look forward six months. The proposal of the new Clause makes it quite impossible for the Section to have any effect whatever until the Income Tax year, 1915–16, because, if you have got to give notice within six months of the commencement of the Income Tax year, it cannot possibly affect this year, for, of course, the present year is well on its way. I submit that this time limit is also very unreasonable on another ground. Before the year of assessment a wife may have no income at all, and, indeed, she may not only have no income at all before the tax year, but she may not in the least know that she is going to have any income. During the year of assessment she may take up some employment or profession and suddenly make an income, but, owing to this time limit and not having known that she was going to make any income, she will be quite unable to get a separate assessment until the following year. I hope that the right hon. Gentleman will take into consideration that all the precedents for application are against him in this matter. All the applications for relief are allowed to be made in the tax year and have not to be made before the tax year. I hope that ho will take into consideration that it is very hard on persons who marry during the tax year, and in the case of the wife who happens to have had no income during the previous year, but who makes an income which she did not know she was going to make during the tax year.
    The ATTORNEY-GENERAL (Sir J. Simon): I am sorry that it does not seem to us possible to accept this proposal. It was thought by some yesterday that we were requiring this choice to be exercised by the husband or the wife six months before the beginning of the Income Tax year, but that is a mistake.
    Mr. CASSEL: I admit that I was wrong there.
    Sir J. SIMON: If we had made so harsh a provision as that, I say quite frankly that I think the criticism would have been well founded, but that is not the proposal. The proposal is that for six months, which would begin in October and end on 4th April—any time within those six months, and right up to the beginning of the Income Tax year—this claim may be made by any husband or wife who desires to make it. The hon. Gentleman says that they ought to have six months longer, but he will see that this result would follow: Under the ordinary practice, returns are made, say, in May, and assessments come to be made and delivered, say, in July, and, if you are going to say, "That is all very fine, but right up to the following October any husband or wife may delay before she or he claims to be treated separately," you throw the whole machinery, I will not say into confusion, but into this degree of embarrassment, that there is bound to be further delay before the machinery can be brought up to date. The Commissioners must know beforehand approximately the number of separate assessments which they will be called upon to make. It would be wholly unreasonable for them to have to set to work to make an assessment, say, in the summer in the case of a husband and a wife who have given no indication that they wanted to be separately assessed, and then, after they have done so, it may be in September or October, for the whole of their work to be wasted by one of the parties coming forward and saying, "I want to be separately assessed." That really is not possible. The cases to which the hon. Member referred as precedents are cases where the relief that is asked for does not destroy the assessment, but enables adjustments afterwards to be made on the basis of the assessment. It is quite a different thing if your object is to have relief, not on the basis of the assessment, but by beginning again and tearing up the assessment, and that is what the Amendment of the hon. Member would involve.
    Mr. G. LOCKER-LAMPSON: Can the right hon. Gentleman give one single instance under our present Income Tax law where an application has to be made before the commencement of the tax year?
    Sir J. SIMON: I think the hon. Gentleman will see that you may carry analogies too far. Can he show me any case which

    2145
    is really parallel to this case in which the existing law is to be set on one side and what is at present regarded as one assessment is to be split into two and called two? There is no such case, and cases about relief and abatement are really not analogies at all.
    Mr. PRETYMAN: Everyone has to make a return for Income Tax before they are assessed.
    Sir J. SIMON: They ought to do so.
    Mr. PRETYMAN: That is the law. The assessment has to be based on the return which has to be made by the taxpayer. Would it not be sufficient if within the time that the return has to be made he or she stated, with the return, whether he or she desired to be separately assessed or not?
    Sir J. SIMON: That is not the proposal that is made. The proposal made is that any time up to 5th October the husband or wife may say, "I want to be separately assessed." The Amendment suggests that it should run on for another six months. If you leave people that option you get into confusion. The hon. Gentleman asks why we should not leave people to exercise the option when they make their returns. The answer is twofold. First of all, some people never do make a return, and, if they do not, they have an assessment delivered to them without a declaration having been made. In the second place, you make a return because you have had papers delivered to you on which to make it. Unless you give notice to the authorities that the husband or wife want a separate paper for assessment, all the records of the Department as to how many assessments are expected are thrown out, because at a later stage, an unreasonably late stage, somebody comes forward and says, "Set on one side all you have done, and please now make separate assessments." I am sure I want to do anything reasonably possible, but I hope the hon. Gentleman will see there is some substance in the difficulties raised by the revenue authorities
    Mr. PRETYMAN: If the application is made either within six months before or with the returns, then I think the right hon. Gentleman might agree.
    Sir G. YOUNGER: It appears to me the difficulty might be relieved if you gave the power within a month of the date of the Schedule. People are generally very
    2146
    careless in these matters. They forget the date of the commencement of the Income Tax year, and though they may have made up their mind to ask for a separate assessment, it is quite easily forgotten. They never attack Schedules on the spot. As a rule they delay filling them in as long as possible. I do not think it would be unduly interfering with the machinery of the Department if it were provided that within a month of the date of the Schedule the husband or wife should be entitled to make application. Personally, I see no difficulty about it.
    Mr. CASSEL: And may I point out that the course suggested by the hon. Baronet who has just spoken has this further advantage: it will give the party notice. It will take some time before people realise their position. After all, this is an obscure Section of the Finance Act which people generally will not be aware of, and if this is set out in the original notice, it will tell them what their rights are. Some reasonable time should be allowed from that date in which to make the claim.
    Sir F. BANBURY: I hope the right hon. Gentleman will accept this suggestion. I was somewhat convinced by his argument that six months was rather too long, but I do think that a month would not prove to be too long, and it will give people who, as the right hon. and learned Member admits, very often do not know their rights an opportunity of securing them under this concession. At the same time I do not think it would cause any real additional trouble to the revenue authorities.
    Mr. G. LOCKER-LAMPSON: In view of the proposal made by my hon. Friend the Member for Ayr Burghs, I am quite prepared to withdraw my Amendment if the Government can see their way to adopt his suggestion. Although it does not go quite so far as I should like to see, it does meet my point to a very great extent.
    Sir J. SIMON: I cannot possibly promise that now. However well founded the suggestion may be, it is a new suggestion, and it is not a prudent thing, when a new suggestion is made, from whatever quarter it comes, to commit oneself to it. I see no difficulty at the moment, but I dare say I am rather too anxious to meet hon. Gentlemen. I remember a case which arose in actual litigation where one of

    2147
    the parties concerned denied the receipt of this unpleasant buff reminder, and I cannot help thinking that one might have to encounter somewhat similar difficulties here. But if the hon. Gentleman likes to withdraw his Amendment, or to have it negatived, I will undertake to have inquiries made into the point.
    Sir G. YOUNGER: Will the right hon. Gentleman bear in mind that, in inquiries of this nature, the Inland Revenue officials are always too prone to create difficulties? I hope he will not attach too much weight to their representations in this respect.
    Sir J. SIMON: I will do my best to fairly consider the point.
    Sir F. BANBURY: Of course it would not be possible to fix the date within one month of the delivery, but that might easily be got over by saying within one month of the date of the notice. I would ask my hon. Friend to withdraw his Amendment on the understanding that this matter will be considered, and that we may have a little opportunity of again discussing it on the Report stage.
    Mr. G. LOCKER-LAMPSON: It is very difficult to know what to do in these cases, as one is not certain how far the right hon. Gentleman's disposition to meet us may carry him, but I will ask leave to withdraw my Amendment.
    Amendment, by leave, withdrawn.
    Mr. CASSEL: I beg to move, at the beginning of Sub-section (c), to insert the words "in any case where the total joint income of husband and wife exceeds £500."
    The effect of the Amendment would be this: Sub-section (b) of the Clause provides that
    "all the provisions of the Income Tax Acts which relate to claims for exemption, relief or abatement, and the proof to be given with respect to those claims shall also apply as if they were not married."
    That Sub-section standing by itself would, but for a later Sub-section for the purpose of abatement, exemption or relief, place the husband and wife in a position as if they were unmarried persons, but a later Sub-section introduces the penal provision, as I call it, with regard to marriage, and I want to limit it to cases where the joint income exceeds £500. The right hon. Gentleman the
    2148
    Chancellor of the Exchequer hardly did justice to my argument yesterday—no doubt unintentionally. The opinion I put forward was that logically this provision should apply to all cases under the Married Women's Property Act. I admitted it would be impossible to apply it to the case of incomes which would involve a large change and too large a loss of revenue. The right hon. Gentleman pounced on that weak spot, and to-day I find I am even accused of a sinister design, by means of this Amendment, to shuffle my own obligations on to the working classes, but that would be negatived by the limiting effect of my Amendment to the case where the joint income does not exceed £500. It would involve a comparatively small loss of revenue—indeed, no loss this year at all—and that might be a consolation to the right hon. Gentleman, although, perhaps, it would not be so much consolation to my right hon. Friend the Member for West Birmingham. The loss of revenue involved is certainly only very small if you limit it to the cases of joint incomes under £500.
    There is this point, to which I should like particularly to call the attention of the right hon. Gentleman. By the Clause as it stands you are depriving people whose joint incomes are under £500 of the benefit which they already enjoy under the existing law. If they make application under this Sub-section, if they relieve themselves of what the right hon. Gentleman admitted to be humiliation under the existing law by applying under this Section, they are actually worse off than they would be under the existing law, because Section 5 of the Act of 1897 provides that where the joint income is less than £500 they are to be treated as separate persons in so far as the income is earned. I quite agree with what the Attorney-General said, that you must at the end of the Clause do away with the effect of Section 5 of the Act of 1897 in cases where the application is made under this Sub-section, but if you do away with that you must introduce words somewhere else which will give people who apply under the Sub-section the benefit of the relief which Section 5 of the Act of 1897 provides. Let me call the right hon. Gentleman's attention to what would be the result of this. Suppose a schoolmaster and schoolmistress, respectively, earn £250 and £150. Under Section 5 of the Act of 1897 at present they would be assessed

    2149
    separately, the wife would pay no Income Tax at all and the husband would pay 9d. on £90, or £3 7s. 6d. If, however, the wife, in order to relieve herself of what the right hon. Gentleman admits to be a legal humiliation, applied for a separate assessment, the result of the Sub-section would be that she could no longer claim for purposes of abatement to have her income stated separately, and instead of £3 7s. 6d. now paid, the Income Tax on the same income would be £9. In the first place, unless this Amendment is accepted—and this is my view of it, although I do not want to be too dogmatic—you actually place the husband and wife with an income below £500 in a worse position.
    I quite agree that my Amendment would extend the relief further, and I intend it to have that effect, because I think, so far as incomes under £500 are concerned, we might very well make this concession. It would be following out the principle which Sir William Harcourt himself recognised in 1894 as being just. The Act of 1897 really replaced a similar Section in the Act of 1894 which Sir William Harcourt introduced, so far as these small incomes are concerned. Take the case of a schoolmaster with an income of £250 whose wife enjoys an income of £50 under her father's will. I think cases of this kind might get the same benefit as is given under similar circumstances to cases where the incomes of both parties are earned, and I am quite sure that by this concession the right hon. Gentleman would be conferring a great benefit upon a great many middle-class homes throughout the country. There is the case of the husband who is a schoolmaster, whose wife perhaps earns a little money as a teacher of music, or as a governess; or we have the case of a husband, an elderly man, who has retired from business, and whose income, derived from his savings while in business, is £200 a year, which is, of course, treated as unearned income. There are thousands of middle-class homes throughout the country where people consider that they are labouring under a serious injustice, and it is to these cases I want the right hon. Gentleman to give his attention. I have put the case of a man who has been working all his life and who has saved sufficient to provide an income of £200 a year for his old age. This is unearned income His wife, we will say, is a schoolmistress earning £120. In cases of that kind it
    2150
    would only be fair to treat them in the same way as they would be treated if they were brother and sister.
    Sir J. SIMON: I do not wish to interrupt the hon. and learned Gentleman, but will he take the difficult case I put last night and tell me how he proposes to deal with it, namely, the case where the wife has some small unearned income as well. That really is the difficulty.
    Mr. CASSEL: My Amendment meets that case. I say that in every case where the income is under £500 he ought to accept the principle of treating the two as if they were separate. I quite recognise the difficulty the Attorney-General has put to me. I urge that as a reason for accepting my Amendment, because unless my Amendment is accepted you will be actually depriving persons of the benefit who are enjoying it at present. I think the Attorney-General admits that. I ask him, in order not to bring about that result, which I am sure he does not desire to bring about, to extend the principle of Section 5 of the Act of 1897 to every case where the joint income is under £500. That is a case in which I cannot be accused of any nefarious intentions of the kind which has been suggested with regard to my speech of yesterday. I do not know whether the Attorney-General or the Chancellor of the Exchequer has followed the particular case which I have put of an elderly couple, where the income of one of them is unearned in name, but represents income from previous earnings they have been provident enough to save. The wife earns a little extra money by teaching music, or as a schoolmistress, or whatever else it may be. In cases of that kind do not treat the two persons for the purposes of Income Tax as if they were one person. They require more food—as I said yesterday and I think the right hon. Gentleman sympathised with my argument—and more money for clothes; they pay more rates, and make a larger contribution to the State in the shape of food taxes, and in the shape of duties on tea and sugar. A very small loss to the revenue is involved. I would ask the right hon. Gentleman in such cases to go so far as he can to make them a concession which would not cost him very much. There would not be much opportunity for evasion in these cases. The money can be made up without putting any additional burden on any married coupler with small incomes if some tax can be devised which

    2151
    will have that effect. I venture to submit the Amendment to the consideration of the right hon. Gentleman, in view of the fact that, unless he grants it, the husband and wife can only, so to speak, purchase their exemption from the existing humiliation, as the right hon. Gentleman described it, in certain cases at the expense of having to incur higher taxation than they do at present.
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): If I understand the Amendment of the hon. and learned Gentleman, his proposal now is that in cases where the joint incomes of husband and wife do not exceed £500 a year they should be assessed separately. He raises two points. One is a general point, which he raised yesterday, with regard to the £500 limitation, and the other is a point in reference to Section 5 of the Act of 1897, as to whether the effect of the whole of our Clause would be to deprive those who have a special privilege under that Section of the advantages they are now enjoying if they claim also the privileges we propose to extend to other married couples by this new Clause. They are separate points, and I should like to deal with them separately. With regard to the latter, I should like to consider that point. The reason why we have treated the matter in this way has already been given by my right hon. Friend the Attorney-General. The difficulty is in the case which the hon. and learned Gentleman gave—the simple case of the husband with an income of £200, earned or unearned, as the case may be, and the wife with an income of £120 which is all earned. That is a very simple case. In that case the Act of 1897 is a complete protection. The wife is assessed separately and gets the full benefit.
    Mr. CASSEL: Not under this Clause.
    Mr. LLOYD GEORGE: There is nothing she could gain under this Clause, because she is assessed separately already.
    Mr. CASSEL: She loses under this Clause.
    Mr. LLOYD GEORGE: The case which the hon. and learned Gentleman pressed upon the Government was another case. Supposing the income of the wife were a composite one.
    Mr. CASSEL: I cannot agree with the right hon. Gentleman on that point, that
    2152
    she is under the old law assessed separately. She is not assessable. It is the husband who is assessed, and if the husband puts in a claim—it is only he who can do it—the humiliation still exists under the old law, and she can only get out of that by making an application to come under this Clause.
    Mr. LLOYD GEORGE: Substantially it is a separate assessment. I agree that, perhaps, in form it is not. I also agree that the hon. and learned Gentleman is entitled to say on the general principle, which we ourselves have admitted here, that you are entitled in form as well as in substance to a separate assessment, and I agree that that is a point that is worthy of consideration before we part with this Clause. But that is quite a different thing. The other case is one where the wife's income is of a composite character, where, say, £100 is earned and £120 unearned. I agree that in that case the £120 unearned will still be treated as the husband's income. Therefore her alternative might conceivably be to lose the whole benefit of the Section in the Act of 1897 if she claims the full advantage of the present Clause. Those are two cases I should like to consider before we come to that part of the Clause which deals with Section 5 of the Act of 1897. It is a very different thing from the substance of the Amendment. The hon. and learned Gentleman proposes that there should be a separate assessment of all joint incomes of £500 and under. I entered into the reasons why the Government could not accept even the principle of separate assessment last night. But apart from the principle, there is also the fact that if we did so we should lose revenue. The hon. and learned Gentleman has treated the matter as if it were a trivial thing. It is very difficult to arrive at an accurate estimate, and we can only give him an approximate one. Our view is that it would involve a loss of £500,000, even on the assumption that there is no collusion or arrangement between husband and wife.
    Mr. CASSEL: That was the figure given for the £700.
    Mr. LLOYD GEORGE: I have not seen the figure for £500. In that case it must be something substantially under £500,000, but even then it must be something between £300,000 and £400,000—that is, if the £500,000 had reference to the £700. That does not cover the whole of the loss,

    2153
    as I pointed out yesterday. There will be a direct incitement to the husband and wife to make arrangements to distribute their investments in such a way as to secure exemption under the Income Tax law. It would be almost impossible to prevent it. The husband might transfer his shares into his wife's name, and the wife might do the same thing for her husband. The result would be that we should lose considerably more than £300,000 or £400,000, which we should lose supposing there were no change at all in the returns. That loss has to be made up by somebody. I do not see why it should be the household where the husband is the sole recipient of an income, which may be entirely earned. The hon. and learned Gentleman has taken the case of a schoolmaster's household in which he has income of £300 or £400. That is dependent entirely upon the health of the husband, and upon all sorts of accidents that happen to a man in that profession. He may be receiving £300 or £400 this year and practically nothing next year. He would still have to pay the full Income Tax.
    Mr. CASSEL: Not more than he pays now.
    Mr. LLOYD GEORGE: But somebody will have to pay it. That household would bear the whole burden. In the case of an income of £400 the burden would be £10 16s. 8d. if it were £200 earned and £200 unearned. That is a very substantial reduction from the income of a man earning only £400.
    Mr. CASSEL: He would pay no more than he pays now.
    Mr. LLOYD GEORGE: The hon. and learned Gentleman has said that twice, and I fully understand it. I want to point out that in the other household he proposes to bring it down to £3 10s. What possible reason can there be for a household which has an assured income from investments to the same amount contributing less by £7 than the other household where the income is very precarious? There is no justification for it. The hon. and learned Gentleman might tell me there are more mouths to feed, but there might be more mouths to feed in the first case than in the second. There might be more children in the first case than in the second. There might be no children at all in the second case. When I say we should lose £300,000 or £400,000, it might easily mount up to £750,000 by reason of arrangements. That
    2154
    £750,000 would have to be paid by somebody. Who is going to be taxed for that? Is the hon. and learned Member going to make the unfortunate husband who has not the good fortune to have a wife who brings £200 a year towards the household expenses bear, not merely his own contribution to the State, but his share of the contribution which up to the present has been made by the other household. Take the case of two neighbours living side by side. This year, on the same income, they are contributing £10 towards the expenses of the State. Next year, on the same income, one will contribute £10 and the other only £3. If you are going to levy your taxation and the Income Tax in proportion to the means of these households, it is a gross outrage upon every principle of fair play as between one household and another. It is carried too far. They are to have separate interests, separate institutions, and separate establishments. There is no justification for that theory at all. I am amazed at the hon. and learned Gentleman, and still more amazed at the Noble Lord who gave his sanction to a doctrine of that kind. It is grossly unfair to the other members of the community.
    Mr. PRETYMAN: I rise to protest against the last part of the right hon. Gentleman's speech, because I think he has placed the whole matter on an entirely false basis. We do not tax households, we tax individuals. If our taxation were based upon a tax upon households, the argument would have very great force, but we do nothing of the kind. I can give a very much harder case than the right hon. Gentleman has given under the existing law. Take the case of a house where the whole income, let us say the income of the husband is £400 a year. There may be a considerable household living on that £400 a year. You have another household of three sisters having a similar income divided between them. They will not pay a penny Income Tax, and yet you levy an Income Tax of £10 upon the first household. We should have to remodel our entire law if we were going to start on a basis of taxing households instead of taxing individuals.
    Mr. LLOYD GEORGE: Inhabited House Duty.
    Mr. PRETYMAN: Inhabited House Duty is not Income Tax. I am talking of the whole Income Tax. When the Chancellor of the Exchequer bases his argument

    2155
    as if he were taxing households, I say his argument is entirely beside the point, and though he may draw a very harrowing comparison between the two cases, they are entirely beside the argument of my hon. and learned Friend, and do not touch the issue. But though we tax individuals and not households, we have to remember that our national life is based upon households and upon family life, and where we can, without departing from the principle of taxing individuals, do something to relieve the burdens which fall upon small households with small incomes, we desire to do it. That, I think, is the principle upon which this Amendment is proposed. But when we come to the Chancellor of the Exchequer's statement that he cannot afford the money, although I do not think from what he said that he has made any calculation as to what the Amendment would really cost him—
    Mr. LLOYD GEORGE: I made a calculation on the Amendment on the Paper. That has been changed. I had to send to the Department to make as rapid a calculation as they possibly could.
    Mr. PRETYMAN: I entirely accept that. But if the Chancellor of the Exchequer had said that, and that he would ask what the cost would be, instead of saying it would be £500, which was the figure applied to the income of £700, I think it would have been a little fairer to my hon. Friend who moved the Amendment. I quite see the practical difficulty. These things sometimes have to be discussed one year and actually carried another, but I am inclined to think that the other suggestion of my hon. Friend—of giving some small allowance to married households—would be a better way of approaching this. The Amendment is a good one and the Chancellor of the Exchequer's argument does not meet it at all; but, approaching the whole subject from the point of view of households, it would be better to cover the whole ground by giving some small allowance, as my hon. Friend suggested, than to do it in this way.
    Mr. LEIF JONES: I do not wish in the least to oppose the suggestion of the hon. Member (Mr. Pretyman) that some relief should be given to married households. I think it is a very good suggestion, but it is a grievance of an entirely different character from that which has been made under the Amendment which we are now
    2156
    considering. What we are really considering is whether you are going to treat the married woman as an individual, or whether she is to be regarded merely as part of the household. Our claim is that the woman is just as much an individual in the house as the man, and unless that is frankly recognised by the Government I do not really see why they put down the Clause at all. It seems to me that a great many of the arguments of my right hon. Friend are really directed against the principle of the Clause which he has put down, which is the separate treatment of the income of the wife and the income of the husband, and I agree entirely with hon. Members opposite that that principle ought sooner or later, in our Income Tax Acts, to be carried to its logical conclusion, and we ought to treat quite separately the income of the husband and the income of the wife. I, of course, accept the practical difficulty of doing that now. Our financial scheme is established for the year. If this concession were to be made this year it would cost a great and an unknown sum of money, and naturally the Government cannot do it this year. The particular Amendment which we are considering does not involve any large sum of money. It involves this year, if the Clause stands as drafted, no expenditure at all, and it would involve a prospective expenditure perhaps of something like £400.
    Then we are told there will be collusive arrangements, and husband and wife will escape the tax. I think that idea of collusive arrangements is very much exaggerated. They are rather difficult to carry out. I speak with total inexperience, but I do not see amongst my acquaintance any marvellous generosity of character in husbands handing over half of their income to their wives to do what they like with. These arrangements involve a complete giving up of the control of the money, which in my observation is pretty dear generally to people who have money. I do not very much believe in all these collusive arrangements, which involve the real giving up of control of capital by the people who have it. My right hon. Friend while urging this collusive arrangement on the one hand, on the other hand draws a piteous picture of the state of the man who has got all the income while the wife has none. He does not then say this man will make over to the wife a part of his income, which he might do if it was capitalised income. The argument has

    2157
    disappeared. You have a man with £500 a year whose wife has nothing, and the household is going to pay very much more than an exactly similar household in which the husband has £250 and the wife has £250. On the first line of argument, if it is capitalised, that hardship will not occur. It is only in the case of unearned income. That particular grievance which he points out is entirely due to the fact that he still regards the two incomes as if they were the same, and if the Amendment means anything, it is that the man who marries a wife with nothing is not in the same position as a man who marries a wife with an income. While accepting the principle of dividing the two incomes the Clause does not really deal with it at all, because the moment the wife has an income he proceeds to reckon on it and dispose of it for the purpose of the family. The real difficulty that the Government have to face is that we are asking that the woman should be recognised as an individual in control of her own income, and treated accordingly. But we are asking for nothing this year. It does not involve any money. It is a simple instalment towards that separate treatment of the husband's and wife's income, which must be the ultimate fair position to take up. I really think, seeing that it costs no money, that the Government might make this concession to the justice of the principle.
    Mr. RAWLINSON: If the Chancellor of the Exchequer had been here last night he would hardly have repeated the argument he has used to-day. The household argument has been demolished by my hon. Friend (Mr. Pretyman), and was pretty well demolished last night. The suggestion that you are taxing households is absolutely incorrect, and once it is incorrect you can easily give instances of hard cases in two households adjoining, according to whether people are married or single at any particular time. The second point which has been put forward, the point of a collusive arrangement, was dealt with pretty strongly last night by the hon. Member (Mr. Worthington Evans), and it was pointed out that if people did this to any great extent they would be continually hit by the Death Duties when the wife dies before the husband. If the husband handed over half of his property to his wife and she predeceased him, he would have to pay rather more heavily in Death Duties. But to seriously suggest that that would happen to any large extent to incomes
    2158
    under £500 a year, is playing with the real facts of the case. Look at the position we are in if the Government do not accept this Amendment. This is a matter which has been brought before the House for the last ten years, and hopes have been held out this year that something will be done to remedy this grievance A Clause is brought in by the Government which does not in the very least meet the grievance, and as regards the people who are dealt with by the Amendment, with incomes under £500, it certainly makes the position worse, because it simply takes away such rights as they have under Section 5 of the Finance Act, 1897. If a married woman, in the case of a joint income under £500, wishes to make use of the Section she can only do it by giving up the monetary advantage which she gets at present under the Act of 1897. Far from it being a concession this concession goes no way at all. I ask the Chancellor of the Exchequer to put the simple case which has been urged on one or two occasions really to practical effect. Surely it could easily be done to give some sort of financial assistance to people who are in this position, and who are living under what until yesterday I always understood was an admitted grievance. I never till yesterday heard any Chancellor of the Exchequer suggest that it was not a grievance. The only answer ever given has been that it is too expensive to remedy. I submit that the Government are merely playing with the question in offering us this Clause. I do not wish to dissociate myself in any way from my Noble Friend. He is in favour of Woman Suffrage, while I am a strongly anti-suffrage person, but long before this question came up I regarded it simply as a long deferred act of justice. I press the Government very strongly to make some sort of concession.
    5.0 P.M.
    Sir J. SIMON: It seems to me that the speech to which we have just listened, and some other speeches in this Debate, do not make quite sufficient allowance for this. Our existing Income Tax law contains a scheme of provisions for exemptions and abatements, and it includes also provisions for amalgamating and making one the incomes of husband and wife. These two sets of provisions occur in one code of law, and although I do not in the least wish to exaggerate the connection, I do not think it is unreasonable to say that the scale of abatements, and the limit of

    2159
    exemptions are fixed, and that they have been fixed, having regard to the general scheme of the tax. One of the things essentially involved in the Income Tax law was that you would amalgamate the incomes of husband and wife. I would ask the Committee to bear that in mind. I rather sympathise with the view of those who say it is not the best and fairest provision to make if you say that the fact that a lady with an income marries a man with an income, results for Income Tax purposes in regarding the two incomes as the undivided income of one person. There is much more than that to be considered in what the hon. and learned Gentleman said. It ought to be approached along a different avenue altogether by considering whether there should be some system of allowances in those cases. That might be right, but when dealing with the Income Tax code itself, which has the system of exemptions and abatements, and also the system of amalgamating the incomes of husband and wife, you do not reach a solution of the matter by dealing with the system of amalgamation without touching the system of exemptions and abatements.
    I think if you say that under the Income Tax law nobody who has not more than £160 a year is to be liable to pay Income Tax, and if you now superimpose on that a regulation that, even although a woman who marries has an income, she and her husband are to be treated as quite separate for Income Tax purposes, it is obvious that every man with £300 a year will be disposed to make an arrangement by which the wife is to be regarded as having £150 a year and the husband another £150 a year. If that were to be the law, it would add another attraction to the lady, who would be able to say, "If you only marry me, you will have to pay no more Income Tax for the rest of your life." I think that in fairness hon. Members ought to remember that the existing code contains these two things side by side, and it does not follow that there is not substance in the objection to the way in which the amalgamation is made to operate at present. But is it right to say, "Leave these exemptions and abatements as they stand. Do not revise the machinery in the light of this proposal at all, but make this change by itself and in itself, and let everything else take care of itself." I suggest to the Committee that that is a consideration which we ought
    2160
    not altogether to overlook, for it is a consideration which has a practical bearing on the question we are discussing. My hon. Friend behind me urged the Government to accept this proposal, because, he said, it would not cost you anything this year. Well, one must look forward a little bit beyond twelve months, and the mere circumstance that it is not going to cost anybody anything this year is not a reason for imposing on the Chancellor of the Exchequer, whoever he may be next year, this provision, unless the provision can be justified by a re-arrangement of the abatements and exemptions. I hope it will not be thought that those who feel it to be their business to resist the proposal—and I confess I do—are to be treated as people who will not consider that there is anything at all to be dealt with in regard to this matter. If you are going to change the provisions and arrangements with respect to the incomes of husband and wife, you should remember that they have a relation to the whole principle of the tax, and that other conditions which now apply in connection with the Income Tax would have to be elaborately considered in relation to those provisions, and that is the reason why, apart from anything else, it is necessary to resist this proposal now. For my part, I think a strong case may be made out for special consideration, and for not treating a man and a woman for Income Tax purposes as one and the same. The hon. and gallant Gentleman repeated in another form an argument which was used several times last night. He said, "Surely it is a monstrous thing to treat man and wife as one, while two sisters or two brothers who are living together are not treated as one for Income Tax purposes."
    Mr. PRETYMAN: That is not quite what I said. I pointed out that if the Chancellor of the Exchequer's logic was good, there was a case for treating the incomes of husband and wife separately.
    Sir J. SIMON: I beg pardon. I think that point was raised many times in the Debate yesterday. There is some force in that argument, but do not let us give it more force than it deserves. There is some substance in the point, but there is also a difference. It is not a good reason to say that because two persons are living together in the same house they are in the same relation to each other as husband and wife. Two sisters have no obligation to

    2161
    support one another. There are hundreds of reasons which differentiate the two cases. There, again, although the argument is well worth weighing, I do ask hon. Members not to allow it to carry them beyond what is fair and reasonable. We cannot accept the proposal in the Amendment without having many other changes.
    Mr. CASSEL: What do the Government propose to do under the Act of 1897? Unless you accept this Amendment, you are going to put married people in a worse position than they are in now.
    Sir J. SIMON: I have some difficulty in seeing how it can be said that people will be placed in a worse position. I think the real point is—and it is quite true—that under the Act of 1897, though the total income is under £500, the wife earns something. She does not claim exemption or abatement in her own name. The claim is made in the name of her husband, and the
    position is exactly the same as before, but that is a thing which, perhaps, may be considered, so that we might relieve the wife of what some persons regard as the stigma of being obliged to have the claim made through her husband.
    Mr. CASSEL: Has the hon. and learned Gentleman considered this point? If they claim the benefit of this Section, they would, I think, in some cases be placed in a worse position.
    Sir J. SIMON: I cannot see how they would be placed in a worse position at all. I quite see the point which the hon. and learned Gentleman makes, and if he will put himself in communication with me, I will see what he has to suggest.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 139; Noes, 267

    Division No. 175.]

    AYES.

    [5.10 p.m.

    Agg-Gardner, James Tynte

    Foster, Philip Staveley

    Pease, Herbert Pike (Darlington)

    Amery, L. C. M. S.

    Ganzoni, Francis John C.

    Peel, Lieut.-Colonel R. F.

    Anstruther-Gray, Major William

    Gardner, Ernest

    Perkins, Walter Frank

    Ashley, Wilfrid W.

    Gibbs, G. A

    Peto, Basil Edward

    Baird, John Lawrence

    Gilmour, Captain John

    Pollock, Ernest Murray

    Baker, Sir Randolf L. (Dorset, N.)

    Glazebrook, Capt. Philip K.

    Pretyman, Ernest George

    Baring, Major Hon. Guy V. (Winchester)

    Grant, J. A.

    Prothero, Rowland Edmund

    Barnston, Harry

    Greene, Walter Raymond

    Pryce-Jones, Colonel E.

    Bathurst, Charles (Wilts, Wiiton)

    Guinness, Hon. Rupert (Essex, S.E.)

    Randles, Sir John S.

    Beach, Hon. Michael Hugh Hicks

    Gwynne, R. S. (Sussex, Eastbourne)

    Rees, Sir J. D.

    Beckett, Hon. Gervase

    Hamilton, C. G. C. (Ches., Altrincham)

    Ronaldshay, Earl of

    Benn, Arthur Shirley (Plymouth)

    Hardy, Rt. Hon. Laurence

    Rutherford, John (Lancs., Darwn)

    Benn, Ion Hamilton (Greenwich)

    Helmsley, Viscount

    Rutherford, Watson (L'pool, W. Derby)

    Bentinck, Lord Henry Cavendish-

    Henderson, Major H. (Berks, Abingdon)

    Sanders, Robert Arthur

    Blgland, Alfred

    Herbert, Hon. A. (Somerset, S.)

    Sandys, G. J.

    Bird, Alfred

    Hewins, William Albert Samuel

    Sassoon, Sir Philip

    Blair, Reginald

    Hills, John Waller

    Scott, Sir S. (Marylebone, W.)

    Boles, Lieut.-Colonel Dennis Fortescue

    Hill-Wood, Samuel

    Sharman-Crawford, Colonel R. G.

    Boscawen, Sir Arthur S. T. Griffith-

    Hoare, Samuel John Gurney

    Smith, Rt. Hon. F. E. (L'p'l, Walton)

    Bowden, G. R. Harland

    Hope, James Fitzalan (Sheffield)

    Spear, Sir John Ward

    Boyle, William (Norfolk, Mid)

    Hope, Major J. A. (Midlothian)

    Stanley, Hon. G. F. (Preston)

    Boyton, James

    Horne, Wm. E.

    Steel-Maitland, A. D.

    Brassey, H. Leonard Campbell

    Horner, Andrew Long

    Strauss, Arthur (Paddington, North)

    Bridgeman, William Clive

    Hunt, Rowland

    Sykes, Alan John (Ches., Knutsford)

    Bull, Sir William James

    Ingleby, Holcombe

    Sykes, Sir Mark (Hull, Central)

    Burn, Colonel C. R.

    Jardine, Ernest (Somerset, East)

    Talbot, Lord Edmund

    Butcher, John George

    Jones, Leif (Notts, Rushcliffe)

    Thomas-Stanford, Charles

    Campion, W. R.

    Kerry, Earl of

    Thomson, W. Mitchell- (Down, N.)

    Carlile, Sir Edward Hildred

    Keswick, Henry

    Tickler, T. G.

    Cave, George

    Kinloch-Cooke, Sir Clement

    Tryon, Captain George Clement

    Cecil, Lord Hugh (Oxford University)

    Law, Rt. Hon. A. Bonar (Bootle)

    Valentia, Viscount

    Chaplin, Rt. Hon. Henry

    Lloyd, George Butler (Shrewsbury)

    Walrond, Hon. Lionel

    Clay, Captain H. H. Spender

    Locker-Lampson, G. (Salisbury)

    Warde, Colonel C. E. (Kent, Mid)

    Clyde, James Avon

    Locker-Lampson, O. (Ramsey)

    Watson, Hon. W.

    Coates, Major Sir Edward Feetham

    Lyttelton, Hon. J. C.

    Weigall, Captain A. G.

    Craig, Norman (Kent, Thanet)

    Mackinder, Halford J.

    Wheler, Granville C. H.

    Craik, Sir Henry

    Macmaster, Donald

    White, Major G. D. (Lancs., Southport)

    Croft, Henry Page

    Magnus, Sir Philip

    Williams, Colonel R. (Dorset, W.)

    Currie, George W.

    Mason, James F. (Windsor)

    Wilson, Captain Leslie O. (Reading)

    Dickinson, Rt. Hon. Willoughby H.

    Morrison-Bell, Major A. C. (Honton)

    Wilson, Maj. Sir M. (Bethnal Green, S.W.)

    Duke, Henry Edward

    Mount, William Arthur

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Duncannon, Viscount

    Neville, Reginald J. N.

    Worthington Evans, L.

    Eyres-Monsell, Bolton M.

    Newdegate, F. A.

    Yate, Colonel C. E.

    Faber, George D. (Clapham)

    Newman, John R. P.

    Younger, Sir George

    Faber, Capt. W. V. (Hants, W.)

    Orde-Powlett, Hon. W. G. A.

    Falle, Bertram Godfray

    Ormsby-Gore, Hon. William

    TELLERS FOR THE AYES.—

    Fisher, Rt. Hon. W. Hayes

    Paget, Almeric Hugh

    Mr. Cassel and Mr. Rawlinson.

    Flannery, Sir J. Fortescue

    NOES.

    Abraham, William (Dublin, Harbour)

    Griffith, Rt. Hon. Ellis Jones

    Murray, Captain Hon. Arthur C.

    Acland, Francis Dyke

    Gulland, John William

    Neilson, Francis

    Addison, Dr. Christopher

    Gwynn, Stephen Lucius (Galway)

    Nolan, Joseph

    Agar-Robartes, Hon. T. C. R.

    Hackett, John

    Norton, Captain Cecil W.

    Alden, Percy

    Hall, Frederick (Yorks, Normanton)

    Nugent, Sir Walter Richard

    Allen, Arthur A. (Dumbartonshire)

    Hancock, John George

    Nuttall, Harry

    Allen, Rt. Hon. Charles P. (Stroud)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    O'Brien, Patrick (Kilkenny)

    Asquith, Rt. Hon. Herbert Henry

    Harcourt, Robert V. (Montrose)

    O'Connor, T. P. (Liverpool)

    Baker, Joseph Allen (Finsbury, E.)

    Hardie, J. Keir

    O'Doherty, Philip

    Balfour, Sir Robert (Lanark)

    Harmsworth, Cecil (Luton, Beds)

    O'Donnell, Thomas

    Barlow, Sir John Emmott (Somerset)

    Harvey, A. G. C. (Rochdale)

    O'Dowd, John

    Barran, Sir John N. (Hawick)

    Harvey, T. E. (Leeds, West)

    O'Kelly, Edward P. (Wicklow, W.)

    Barran, Rowland Hurst (Leeds, N.)

    Haslam, Lewis (Monmouth)

    O'Malley, William

    Beauchamp, Sir Edward

    Hayden, John Patrick

    O'Neill, Dr. Charles (Armagh, S.)

    Beck, Arthur Cecil

    Hayward, Evan

    O'Shaughnessy, P. J.

    Benn, W. W. (T. Hamlets, St. George)

    Helme, Sir Norvai Watson

    O'Sullivan, Timothy

    Bentham, George Jackson

    Henderson, J. M. (Aberdeen, W.)

    Outhwaite, R. L.

    Bethell, Sir John Henry

    Henry, Sir Charles

    Parker, James (Halifax)

    Birrell, Rt. Hon. Augustine

    Herbert, General Sir Ivon (Mon. S.)

    Parry, Thomas H.

    Black, Arthur W.

    Hewart, Gordon

    Pearce, Robert (Staffs, Leek)

    Boland, John Pius

    Higham, John Sharp

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Boyle, Daniel (Mayo, North)

    Hobhouse, Rt. Hon. Charles E. H.

    Phillips, Colonel Ivor (Southampton)

    Brady, Patrick Joseph

    Hodge, John

    Phillips, John (Longford, S.)

    Brocklehurst, William B.

    Hogge, James Myles

    Pollard, Sir George H.

    Brunner, John F. L.

    Holmes, Daniel Turner

    Ponsonby, Arthur A. W. H.

    Bryce, John Annan

    Hope, John Deans (Haddington)

    Pratt, J. W.

    Buckmaster, Sir Stanley O.

    Hudson, Walter

    Price, C. E. (Edinburgh, Central)

    Burns, Rt. Hon. John

    Hughes, Spencer Leigh

    Price, Sir Robert J. (Norfolk, E.)

    Burt, Rt. Hon. Thomas

    Illingworth, Percy H.

    Primrose, Hon. Neil James

    Buxton, Noel (Norfolk, North)

    John, Edward Thomas

    Pringle, William M. R.

    Byles, Sir William Pollard

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Radford, G. H.

    Carr-Gomm. H. W.

    Jones, Edgar R. (Merthyr Tydvil)

    Raffan, Peter Wilson

    Cawley, Sir Frederick (Prestwich)

    Jones, H. Haydn (Merioneth)

    Rea, Rt. Hon. Russell (South Shields)

    Cawley, Harold T. (Lancs., Heywood)

    Jones, J. Towyn (Carmarthen, East)

    Rea, Walter Russell (Scarborough)

    Chancellor, Henry George

    Jones, William (Carnarvonshire)

    Reddy, Michael

    Chapple, Dr. William Allen

    Jones, William S. Glyn- (Stepney)

    Redmond, John E. (Waterford)

    Clancy, John Joseph

    Joyce, Michael

    Redmond, William (Clare, E.)

    Clough, William

    Kellaway, Frederick George

    Redmond, William Archer (Tyrone, E.)

    Clynes, John R.

    Kelly, Edward

    Rendall, Athelstan

    Collins, Sir Stephen (Lambeth)

    Kennedy, Vincent Paul

    Richardson, Thomas (Whitehaven)

    Compton-Rickett, Rt. Hon. Sir J.

    Kenyon, Barnet

    Roberts, Charles H. (Lincoln)

    Cornwall, Sir Edwin A.

    Kilbride, Denis

    Roberts, George H. (Norwich)

    Cotton, William Francis

    King, Joseph

    Roberts, Sir J. H. (Denbighs)

    Cowan, William Henry

    Lambert, Rt. Hon. G. (Devon, S. Molton)

    Robertson, Sir G. Scott (Bradford)

    Craig, Herbert J. (Tynemouth)

    Lambert, Richard (Wilts, Cricklade)

    Robertson, John M. (Tyneside)

    Crooks, William

    Law, Hugh A. (Donegal, West)

    Robinson, Sidney

    Crumley, Patrick

    Lawson, Sir W. (Cumb'rld, Cockerm'th)

    Roch, Walter F. (Pembroke)

    Cullinan, John

    Leach, Charles

    Roche, Augustine (Louth)

    Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)

    Levy, Sir Maurice

    Roe, Sir Thomas

    Davies, Timothy (Lincs., Louth)

    Lewis, Rt. Hon. John Herbert

    Rowlands, James

    Davies, M. Vaughan- (Cardiganshire)

    Lough, Rt. Hon. Thomas

    Runciman, Rt. Hon. Walter

    Dawes, James Arthur

    Low, Sir Frederick (Norwich)

    Russell, Rt. Hon. Thomas W.

    De Forest, Baron

    Lundon, Thomas

    Samuel, Rt. Hon. H. L. (Cleveland)

    Delany, William

    Lyell, Charles Henry

    Samuel, J. (Stockton-on-Tees)

    Denman, Hon. Richard Douglas

    Lynch Arthur Alfred

    Scanlan, Thomas

    Dewar, Sir J. A.

    Macdonald, J. Ramsay (Leicester)

    Scott, A. MacCallum (Glas., Bridgeton)

    Dillon, John

    Macdonald, J. M (Falkirk Burghs)

    Seely, Rt. Hon. Colonel J. E. B.

    Donelan, Captain A.

    McGhee, Richard

    Sheehy, David

    Doris, William

    Maclean, Donald

    Sherwell, Arthur James

    Duffy, William J.

    MacNeill, J. G. Swift (Donegal, South)

    Simon, Rt. Hon. Sir John Allsebrook

    Duncan, C. (Barrow-in-Furness)

    MacVeagh, Jeremiah

    Smith, Albert (Lancs., Clitheroe)

    Duncan, Sir J. Hastings (Yorks, Otley)

    M'Callum, Sir John M.

    Smith, H. B. Lees (Northampton)

    Edwards, Sir Francis (Radnor)

    McKenna, Rt. Hon. Reginald

    Smyth, Thomas F. (Leitrim, S.)

    Edwards, John Hugh (Glamergan, Mid)

    M'Laren, Hon. H. D. (Leics.)

    Soames, Arthur Wellesley

    Esmonds, Dr. John (Tipperary, N.)

    M'Micking, Major Gilbert

    Spicer. Rt. Hon. Sir Albert

    Esmonds, Sir Thomas (Wexford, N.)

    Manfield, Harry

    Strauss, Edward A. (Southwark, West)

    Esslemont, George Birnie

    Markham, Sir Arthur Basil

    Sutherland, John E.

    Falconer, James

    Marks, Sir George Croydon

    Sutton, John E.

    Farrell, James Patrick

    Marshall, Arthur Harold

    Taylor, Theodore C. (Radcliffe)

    Fenwick, Rt. Hon. Charles

    Mason, David M. (Coventry)

    Taylor, Thomas (Bolton)

    Ffrench, Peter

    Meagher, Michael

    Tennant, Rt. Hon. Harold John

    Field, William

    Meehan, Francis E. (Leitrim, N.)

    Thomas, James Henry

    Fitzgibbon, John

    Meehan, Patrick J. (Queen's Co., Leix)

    Thorne, G. R. (Wolverhampton)

    Flavin, Michael Joseph

    Millar, James Duncan

    Thorne, William (West Ham)

    Gelder, Sir W. A.

    Molloy, Michael

    Toulmin, Sir George

    George, Rt. Hon. D. Lloyd

    Molteno, Percy Aiport

    Trevelyan, Charles Philips

    Ginnell, Laurence

    Mond, Rt. Hon. Robert

    Verney, Sir Harry

    Gladstone, W. G. C.

    Montagu, Hon. E. S.

    Walsh, Stephen (Lancs., Ince)

    Glanville, Harold James

    Morgan, George Hay

    Walters, Sir John Tudor

    Goddard, Sir Daniel Ford

    Morrell, Philip

    Ward, John (Stoke-upon-Trent)

    Goldstone, Frank

    Morison, Hector

    Wardle, George J.

    Greenwood, Hamar (Sunderland)

    Muldoon, John

    Waring, Walter

    2164

    2165

    Warner, Sir Thomas Courtenay T.

    Whyte, Alexander F, (Perth)

    Wing, Thomas Edward

    Wason, Rt. Hon. E. (Clackmannan)

    Wiles, Thomas

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Wason, John Cathcart (Orkney)

    Wilkie, Alexander

    Yeo, Alfred William

    Watt, Henry A.

    Williams, Aneurin (Durham, Mid)

    Young, William (Perth, East)

    White, J. Dundas (Glasgow, Tradeston)

    Williams, Penry (Middlesbrough)

    Yoxall, Sir Jamas Henry

    White, Patrick (Meath, North)

    Williamson, Sir Archibald

    Whitehouse, John Howard

    Wilson, Hon. G. G. (Hull, W.)

    TELLERS FOR THE NOES.—

    Whittaker, Rt. Hon. Sir Thomas

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Mr. G. Howard and Mr. Webb.

    Mr. CASSEL: I beg to move, at the end of Sub-section (c), to leave out the word "and," and to insert instead thereof the words "Provided that from the duty thus ascertained to be payable by husband and wife, respectively, there shall be deducted by way of special allowance to married persons a sum equal to twenty-five per cent. of the duty."
    This Amendment embodies the alternative suggestion which I made yesterday. I put forward several alternatives with a view to learning the general opinion, and I think that this is the best method of dealing with what is felt to be a serious problem. If the right hon. Gentleman will give me any sort of assurance that it is a matter to which he will give favourable consideration, I shall not trouble the House further.
    Mr. LLOYD GEORGE: I indicated yesterday to the hon. and learned Gentleman that this is a much more equitable method of meeting the grievance outlined in his speech, and for the reasons which I gave this afternoon I think that the Amendment of which I disapproved was unfair as between a household where the whole income was earned by the husband, and a household where the income was a composite one. This treats them quite fairly in that respect. I would prefer that we should approach this question on the line on which we have approached it up to the present—the line of making allowances in respect of children, because, after all there is a great deal of difference in the matter of expense between a childless household and a household which has children. I would infinitely prefer to see the matter dealt with on the line of increasing the allowances in respect of children rather on that of making these percentage deductions in the case of married households. I agree, however, with the hon. and learned Gentleman that there ought to be a distinction between the case of married households and the case of incomes enjoyed by single persons. The Committee to inquire into the question will be set up at once, and we shall specially invite their consideration of this question, and see that this suggestion is before them. We will make
    2166
    sure that they will, of course, consider the method which has been indicated by the Budget of 1909–10 and the present Budget, and that they will consider the respective merits of these various proposals for what is an admitted grievance. Beyond that I should not like to go at present, and I hope that the hon. and learned Gentleman will see his way to accept that.
    Mr. CASSEL: In the circumstances I will withdraw the Amendment.
    Sir J. D. REES: I agree with what the Chancellor of the Exchequer has said. I believe that that is the line to take. Should I be in order here in urging upon the right hon. Gentleman, in pursuance of the policy of which he has himself just said that he approves, to consider whether in Clause 7 of this Bill the words "a thousand pounds" shall be inserted instead of "five hundred pounds," so that the relief given in Section 68 of the Finance Act of 1909 in respect of Income Tax will be given to persons in receipt of incomes of from £500 to £1,000, instead of only to persons in receipt of incomes of under £500 a year. There are very large numbers of people in this country, particularly public servants who have retired whose total resources might be about this amount, who are particularly hardly hit by this provision, and who have very considerable difficulty in giving their children the education which their parents had. I have a suggestion down as to a new Clause in substitution for an Amendment which was closured, but it is not likely to be reached, and I would ask the Chancellor of the Exchequer if he will take the suggestion into consideration. It would meet a hardship which is very much felt by a very large and very deserving class. I am not on this occasion speaking for myself, but for a great many others. I am expresing their views, which I hope will find acceptance.
    Mr. LLOYD GEORGE: I can promise this to the hon. Gentleman, that we shall submit to this Committee the question whether, if a Chancellor of the Exchequer is in a position of extending this

    2167
    relief, it ought to be given in the first instance in the form of increasing the relief given to persons whose incomes are under £500, or in the form of extending the area of relief so as to take in a class with larger incomes.
    Amendment, by leave, withdrawn.
    Mr. CASSEL: I beg to move, to leave out Sub-section (3).
    This Sub-section inflicts a real injustice. If you leave it out the thing will work quite fairly. It provides that where there is a separate assessment under the Clause the husband is liable to have his goods distrained for the wife's tax, and the wife is liable to have her goods distrained for the husband's tax. In some cases where no application is made under the Section under the law as it stands, the husband becomes responsible for the whole thing and becomes liable to have his goods distrained for the whole thing. That is perfectly reasonable. This Subsection proposes, for the first time in our law, that the wife's goods can be distrained for the husband's tax and the husband's goods can be distrained for the wife's tax. If application is made under this Clause and the Sub-section applies, the tax would be assessed on the wife and the husband would have no opportunity of taking part in the assessment. It would be done without his knowledge, and the first notice which he would have of it might be that his goods would be distrained for that assessment. That is utterly inequitable from every point of view. It is a monstrous proposition, that where the wife's tax is assessed without the knowledge of the husband a distress should be levied on the husband's goods. And from another point of view in cases where no application is made under the Section, this provides where a tax is assessed on the husband without any opportunity of interference on the part of the wife, without any opportunity for the wife to say that the assessment ought to be less, that then you should have the right to levy the distress on the wife's goods. I think that the right hon. Gentleman, when he realises the effect of this Sub-section, will come to the conclusion that it should be left out.
    Mr. LLOYD GEORGE: I find myself in general agreement with the objects of the hon. Gentleman, and if he can see his way to withdraw the Amendment I propose to leave out the words "either by" ["either
    2168
    by the husband or"] and also in the line following the word "both ["both to the goods and chattels"], so that the Subsection would read as follows:—
    "Where Income Tax (including Super-tax) is charged on the profits or income of a married woman, whether in the name of her husband or separately in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable by the husband or the wife shall extend to the goods and chattels of the wife, goods and chattels of the husband as well."
    I leave out the words "and to," and substitute the words "as well." The wife's goods in that case would not be liable to pay for the husband's debt.
    Sir P. MAGNUS: The husband's goods would be liable to distraint in respect of the wife's debt for Income Tax.
    Mr. LLOYD GEORGE: I think that is reasonable. I go to the extent of accepting that the wife's goods are free of liability for the husband's debts. The difficulty in these cases is that arrangements are made between husband and wife in which, in many instances, the goods of the wife are in the name of the husband, and the goods of the husband in the name of the wife, so that the officials become utterly unable to get the tax. As regards fine or imprisonment, that is regarded as a very unsatisfactory method of recovering the tax. We wish to make the wife liable for the debt where it is hers, and unless we do so the ends of justice, we find, are defeated. We do not want to put further difficulties in the way of the Inland Revenue.
    Mr. RAWLINSON: I do not think the Chancellor of the Exchequer has met the subject of the Amendment at all. He called attention to the instance of married couples, the husband's income being separate from the wife's. It is the custom of the Treasury to assess their incomes together, but I understand that under the Amendment suggested by the right hon. Gentleman, where the husband is living separate from the wife, and the wife is separately assessed—the wife living away from the husband, and there being possibly hostile relations between them—if she incurs a debt in respect of Income Tax, and does not pay, the goods of the husband are liable to distraint in respect of that debt. That is the Amendment which the Chancellor of the Exchequer has

    2169
    submitted to the House. I think it is quite sufficient to state it to show that it is absolutely indefensible. The Chancellor of the Exchequer yesterday mentioned the case of a dentist and an actress, where a distraint was put into the professional man's rooms in Harley Street, or wherever they may be. What is the defence the Chancellor of the Exchequer put forward? He said that if they did not do that, and if they did not make the husband's furniture liable for the wife's debt, then there would be fraud as to who owned the goods on which distraint was levied. But the Chancellor of the Exchequer now proposes an Amendment which makes the wife's goods not liable for the husband's debt.
    If there are these fraudulent arrangements to which the right hon. Gentleman referred—I know that they exist in certain parts of the country—it is just as easy to evade the husband's debt as it is to evade the wife's debt. As the resources of the Exchequer are apparently not sufficient to prevent that form of evasion, you are therefore making the husband's furniture liable for the wife's debt. Surely, there is no possible reason for putting this Amendment in. Why should not the wife remain liable for the husband's debt as well? Surely, if there is any strength in the argument which the right hon. Gentleman puts forward as to opportunities for fraud by arrangements between husband and wife it is equally strong in the one case as in the other. I venture to suggest that this is an official Sub-section, with the object of making the collection of the tax easy and without difficulty. As a matter of fact, imprisonment is bad, and distress is a very dangerous remedy; but the Chancellor of the Exchequer knows that there are other ways of recovering debts that are perfectly well known to lawyers. I submit that this Sub-section should be struck out entirely.
    Mr. C. BATHURST: I am bound to say that I think the Chancellor of the Exchequer's Amendment by no means meets the case. Surely, if the wife declines or neglects to pay Income Tax on her own income, at any rate, the distress ought to be levied primarily on her goods and chattels. Under the Amendment the Chancellor of the Exchequer now proposes the husband's goods can be distrained, although the wife is the person who has been remiss in not paying the Income Tax on her own income. It seems to me that such a provision is likely
    2170
    to cause considerable domestic disquietude. I can picture a lady of means spending a considerable part of her large income upon her back and allowing distraint upon the extremely modest wardrobe of her husband for the Income Tax which she ought herself to have paid. Surely the law can be expressed, without any possible loss to the Exchequer, in such a way that, if the wife is herself remiss, the distraint should be primarily on her goods, and only secondarily on the goods of her husband.
    Mr. CAVE: I want to put this further consideration. This Clause, even as it is proposed to be amended, seems to take away a great part of the effect of paragraph (a) at the beginning of the Clause. See the position that is produced. Under the present law the husband has a voice in returning the income of his wife as part of his own income. Under this provision a return may be made by the wife herself, the assessment may be made upon her, and the husband may know nothing whatever of it, and, what is even more important, the demand may be made upon her without his knowing anything of it. He might be liable for the payment, but he likes to have a demand, and a chance of meeting it. It seems to me—and I do not think I am putting it at all too high—that it is really very burdensome that the man should be liable to have a distress upon his goods without his receiving any warning beforehand, without even knowing that he is liable or able or competent to pay. Surely that is not just. It makes the matter very much worse than it is now, for of course people consider it a disgrace to have a distraint put upon their goods. Under the present proposal the wife may have quarrelled with her husband and be living apart from him, and she may make her return to Income Tax, and without warning, the husband's goods may become liable for her failure to pay the tax. I do not think that can be intended, for it would be a very great hardship upon the husband. It seems to me that the simple course is either to leave out this Sub-section—which is probably the better way—or to make some other provision by which, at all events, the husband may get some notice that he has to pay his wife's Income Tax or his goods will be subject to distraint.
    Mr. LLOYD GEORGE: (whose remarks were to a large extent inaudible): The hon. and learned Gentleman is perfectly right, but

    2171
    arrangements have to be made in regard to those who are anxious to avoid payment. Though it might be perfectly legitimate to resort to imprisonment to effect collection, yet we do not want to do that, because, in respect to those persons, the difficulty is that once the bailiff seizes an article of furniture it is immediately said that it does not belong to the particular person whose goods are being distrained upon, but to the other, and the Inland Revenue are perfectly helpless in such circumstances. In these discussions the Inland Revenue are regarded as a sort of enemy to be guarded against; but the Department acts in the interests of the public, and the more difficulties that are created in the collection of the tax the more complex must be the machinery and the greater the number of officials. The suggestion made by the hon. Gentleman opposite is a very valuable one, and I will give it my consideration. It is that in the first instance the distraint should be levied upon the wife's goods. The answer to that is that you never know whose goods they are; still, the suggestion seems to me to be a practical one, and I shall consider it. I was very much surprised that the hon. and learned Gentleman (Mr. Rawlinson) said that the husband should not be responsible for the wife's debt.
    Mr. RAWLINSON: Certainly, if they are living apart.
    Mr. LLOYD GEORGE: They may live apart, but it cannot be known that they have quarrelled, unless they have taken legal steps for a separation. The only case we take is the case where the husband and wife are living separately and trading separately. We are recognising a sentimental grievance which has been presented and are doing our very best to meet it. We ought at the same time to be protected.
    Mr. PRETYMAN: The Chancellor of the Exchequer has done absolutely right in putting before the Committee the view of the Inland Revenue. But even recognising that and the possibility of somebody desiring to go to prison for ulterior purposes, I submit that a greater mischief and a greater evil would be done by passing this Clause. Surely the Chancellor must recognise that this particular Sub-section goes, quite outside the general area of the whole Clause, the object of which purports to be to remove certain special disabilities from which joint house-
    2172
    holds suffer. It appears to me that this Sub-section goes outside of those who make special application and deals with every married household in the country. That is a very important point. Under the guise of conferring a voluntary privilege upon a certain number of married people, you are putting a permanent and very severe disability upon every married household in the country.
    Mr. LLOYD GEORGE: Does the hon. Gentleman suggest that I am making a provision to which the person is not subject now? His goods are liable now to be distrained for Income Tax, and I am not extending that in the least. I do not propose the slightest extension. The only proposal I make is that the wife should be liable to distraint in respect of her debt, and that this separate treatment shall not deprive us of the right we have got now of seizing the husband's goods for the wife's debts.
    Mr. PRETYMAN: I am sure the right hon. Gentleman cannot deny that this Sub-section covers the whole ground.
    Mr. LLOYD GEORGE: I will say this, though I do not wish to express an opinion on legal matters, that in the case which he indicates we have the right now, and we are not seeking to take any fresh powers.
    Mr. PRETYMAN: I am bound to say the right hon. Gentleman puts the matter on a different ground, but I do think when the whole tone of this Clause is taken into consideration, and its object that he would be perfectly justified in altering the law as it stands now. It would be in consonance with the whole Clause where the application is made by the woman to separate her income from that of her husband to provide that the husband should not then be distrained upon for Income Tax for which the wife has a wholly separate income. I admit that the point is one of some difficulty; but I should greatly prefer that the Amendment should be accepted. I really think it is a worse evil from the point of view of the community that the husband should be distrained upon for the wife's debts, than that there should be some difficulty in the matter.
    Mr. BUTCHER: The Chancellor of the Exchequer has made a very important statement. He said he does not intend by this Clause to extend the existing liability of the husband in any way. If

    2173
    that is so, what is the good of the Clause? He has got his liability already, and it is not intended by the Clause to impose any further liability. What then do we want the Clause for? I cannot conceive, if the law imposes this liability on the husband, why you should have a useless Clause. I do, however, think that there is a new liability imposed on the husband by the Clause. As the Clause stands, the effect of it as a whole is this, that for the first time you have a separate assessment on the one side of the husband's income, and on the other of the wife's. Having done that, you go on to provide that the husband's furniture shall be liable to be distrained for the wife's Income Tax, and that the wife's furniture shall be liable for distraint for the husband's Income Tax. The Chancellor of the Exchequer admits that it is unjust that the wife's furniture should be liable for distraint for the husband's Income Tax. I say it is at least as unjust from the point of view of equality of the sexes, and we have got very near that point, that you should make the husband's furniture liable for his wife's taxes as to make the wife's furniture liable for the husband's taxes.
    The Chancellor of the Exchequer's real opposition to the Amendment is that it would injure the collection of taxes. I have great sympathy with that objection. The Chancellor of the Exchequer says that some people regard the Inland Revenue as an enemy. If there is an enemy in the case of an unjust law the enemy is not the Inland Revenue, who administer it, but some other person. I might suggest that it was the Chancellor of the Exchequer. I should have thought that that was a pretty obvious inference. I do not want to injure the collection of taxes once they are imposed in a reasonable way, but distraint is by no means the only way of getting the taxes. The very fact that this is a tax on the wife's income shows that she has an income to be taxed. If you want to get the tax, you can impound her income. There are a great many very excellent ways of getting the tax. Since she has the capital or income on which the tax is placed, why do you not go for the capital or income. In the same way, if the husband is liable for a tax he has got capital or income on which the tax arises. Therefore, if you have got no furniture to distrain you can impound the capital or income. Distraint is not only not the only way but it is not the best way. If the Chancellor leaves out this Clause as a whole he will be removing
    2174
    the injustice, in the first place, and, in the second place, he will be leaving himself with a perfectly excellent and adequate way of getting the tax.
    Sir F. BANBURY: I do not think the Chancellor of the Exchequer has met our argument. Our point is this: Under this Bill the Chancellor for the first time is going to empower a married woman to make a separate return, and we think that the husband should not be liable for that return, about which he knows absolutely nothing, and which has been made without his knowledge or without his connivance. The Married Women's Property Act gives to the woman her property in her sole discretion. She can use it as she likes, and now for the first time, instead of the husband having to make the return the wife has the option of making a return. The wife may refuse to tell the husband what her income is, or where the securities are, and yet, under this Clause, the Chancellor of the Exchequer is able to distrain on the husband's goods. The only answer the Chancellor of the Exchequer has given to that is that there might be fraud, and that the payment of the tax might be avoided if he had not this power.
    Mr. LLOYD GEORGE: I have already pointed out the fact that whereas the husband is liable for the wife's debts, the wife is not liable for the husband's debts.
    6.0 P.M.
    Sir F. BANBURY: The Chancellor of the Exchequer has altered the situation in that he has given to the wife for the first time the power to return her income separately, without any reference whatever to the husband. Under those circumstances, it does seem to me that it is very hard and unjust upon the husband to say that he has got to pay a tax upon something about which he knows absolutely nothing at all, and to say that the chief reason is that unless that is done the revenue may be defrauded. That, to my mind, is a quite inadequate reason. There are any quantity of frauds going on against the Inland Revenue by all sorts of people. You do not in those cases pass an Act which says that you may distrain on the goods of somebody else, because it is less trouble to do so than to send the person to prison. You say at once that the person who does the wrong shall be answerable. You do not make answerable somebody else who has nothing whatever to do with it. I do not

    2175
    know that the matter is before the Committee, but personally I think that the provision which makes the husband liable to make his wife's return, and also for the payment, is absolutely wrong. But this Clause goes much further than that, and makes a grievance already serious very much worse. Under these circumstances I hope the Chancellor of the Exchequer will accept the Amendment.
    Sir FREDERICK LOW: There is a matter here that requires to be dealt with. I am not sure, on the construction of the Sub-section, whether it applies to the case of a married couple living separately. I think it certainly ought to be made clear that it does not. I suggest that on Report words should be introduced, making it clear that the Sub-section applies only to the cases of married people living together. Where a man and his wife are living separately I believe that under the existing law the wife's income can be assessed for Income Tax. If that is so, it would be an outrageous thing if, where a married woman was living separately from her husband, and assessed under a former Income Tax Act altogether separately, the husband who had nothing in the world to do with the matter should wake up one morning and find a bailiff in his house, distraining in respect of his wife's debts. I am sure that that cannot be intended. I suggest that some such words as "living together" should be inserted to make the matter quite clear. We are told that the proviso is intended to deal with a set of circumstances which all who are engaged at all in the administration of the common law know is continually arising—the claim, where an execution is levied upon the husband, that the goods belong to the wife. That cannot arise in the ease where husband and wife are living separately.
    Mr. HOHLER: The Chancellor of the Exchequer stated that under the present law the husband's goods are liable to be distrained upon for the wife's debts. I know of no such provision in any Statute, and I do not believe that any such provision exists. It is far too wide a proposition to say that the husband's goods are liable to distraint for his wife's debts. That is only the case if the debt has been incurred by the wife upon the husband's authority. Therefore it is only in a very limited sense that the statement of the Chancellor of the Exchequer is true. The right hon. Gentleman spoke with such
    2176
    confidence that I thought he was referring to some Section of an Act of Parliament of which I was ignorant but I do not believe that any such Section exists. The position is that for the first time you are making the goods of the husband liable for the wife's debts in a matter in which they would not be liable at common law or by Statute at the present moment. My hon. land learned Friend (Mr. Butcher) has already pointed out that there is no reason for it in this case, because if the wife is liable for Income Tax she has property against which you can recover the debt. The Crown can take action in the High Court or the County Court, and there is nothing to prevent them from getting the money by appointing a Receiver.
    The other argument of the Chancellor of the Exchequer was that there was so much collusion and fraud. I do not admit it, but for the moment I will assume it to be true. The right hon. Gentleman seemed to suggest that it had something to do with the question of votes for women. Whether there is anything in that or not I do not know. The answer is that you have to deal with this difficulty in every walk of life. Take a case of bankruptcy. There are no assets—at any rate, not sufficient to pay the debts in full. Who ever suggested in such a case that, for the benefit of the creditors, and to prevent any of the transactions to which objection is taken, you should make the wife's property liable for the debts of the husband or vice versa? These things are tried on every day, and there is not the least difficulty in dealing with them. Why should the Crown be particularly favoured in this respect? If the Financial Secretary has any authority for the Chancellor's statement, I hope he will quote it. It is a great hardship that you should be imposing a disability upon this honourable relation in life and giving no advantage whatsoever.
    Mr. WATSON RUTHERFORD: I think it would be very unfortunate if this important point were left without some further attention on the part of the Chancellor of the Exchequer. I do not desire to minimise the knowledge or ability of the Financial Secretary, but this is a very important subject. We have had a sort of half-assurance that it will be looked into. I entirely agree with my hon. Friend that you cannot recover against the husband's property for the wife's debts. You must

    2177
    go to Court and get a judgment against the husband before you can touch the husband's effects in respect of the wife's debts, and in order to get a judgment you must satisfy the Court that the husband is really liable. There are plenty of cases where the wife incurs debts for which the husband is not liable. The same thing applies to the wife in an even greater degree. There are some isolated cases in which the wife is responsible for the debts of the husband, but they are very few. It would be very difficult to give a concrete instance where the wife's property could be made responsible for debts independently incurred by the husband. But we have in this Clause a new and extraneous power, absolutely outside the whole spirit of the Clause, under which, without a judgment and summarily, a bailiff can be sent in to distrain upon the goods of a husband for a debt about which he knows nothing, for which he has not been made liable by a judgment, and in regard to which he has had no chance of putting forward his view at all. The same thing applies to the property of the wife. Having regard to the observations of the Chancellor of the Exchequer, which show that he did not really appreciate the difficulty or the extent of the new liability that he was seeking to create, unless we get an assurance that the whole subject will be thoroughly looked into with a view to providing that no further liability shall be thrown upon husband or wife, there will be nothing for it but that my hon. Friend should press his Amendment. We should then be able to record our votes against a proposition so novel and unjust, and I think that everybody who has heard the discussion would feel bound to support my hon. Friend.
    Mr. MONTAGU: Most of the arguments which have been addressed to this bench lately have dealt with legal points, and whereas I see a whole bevy of hon. and learned Gentlemen opposite, I cannot at the moment reinforce myself with the assistance of the learned Attorney-General, although I have received some valuable assistance and advice from my hon. and learned Friend behind me (Sir F. Low). All I can say is that I have had legal advice and have been advised by all those who took part in the deliberations preceding this Bill, that this Clause as drawn does not apply to married women living separately from their husbands; and that that is due to Section 45 of the Income Tax Act, 1842. The Chancellor of the Ex-
    2178
    chequer has already promised, and I repeat that promise, that if the legal position is not as I have described it, the matter shall be dealt with before Report, because it is not intended to impose any new liability upon the husband. I cannot accept the hon. Member's suggestion that there is no new liability on the wife. There is. When she is separately assessed for her own income, it is right that we should be able to distrain upon her goods.
    Mr. RUTHERFORD: What about the husband's goods?
    Mr. MONTAGU: I was talking about the legal liability of the wife. In regard to the husband, I am informed that when a husband and wife are living together the husband has always been liable for his Wife's income, as the two have been lumped. I do not think there will be any new liability, although the circumstances will be different. The wife's income has been charged as his. If hon. Members will read Section 45 of the Act of 1842 they will see that it provides:—
    "That the profits of any married woman living with her husband shall be deemed the profits of the husband."
    The husband, therefore, was always liable for distraint for the Income Tax if his wife was living with him. This Section makes the wife liable as well in respect of her own income. In regard to the suggestion of the hon. and gallant Gentleman that this Sub-section goes beyond necessity, I think that also ought to be considered before the Report stage. The situation that arises now, as the hon. and gallant Gentleman will see, arises from the fact that there are words now left in the Sub-section which were necessary in the Sub-section as it stood, but which now, as the Chancellor of the Exchequer has foreshadowed the Amendment which he proposes to move to relieve the wife of this distraint on her husband's income, are not now necessary. The words are: "In the name of her husband or separately," and the Clause might now read, "Where the Income Tax is charged on the profit or income of a married woman in pursuance of this Section." By this means the Section would not be open to the criticism that it fell outside the Clause. That is, I think, all I need say. We must consider this question before the Report, and in view of the very distinguished legal advice—differing from the legal advice which I have received this

    2179
    afternoon—I promise to consult my legal advisers again before we reach the Report stage.
    Mr. POLLOCK: I think the hon. Gentleman in charge has given us very good reason for really leaving out this Clause. I am not prepared to accept undertakings of a vague nature—although, I am sure, given in perfectly good faith—that we hereafter are to have some sort of Clause in which the criticisms which have been offered may be avoided. That is not enough. The whole time-table under this Section is subject to the guillotine, and we do not know that we will have an opportunity of discussing what are the alterations which are going to be brought in to make this Sub-section a suitable Subsection, having regard to the new situation which has been created. I am not prepared to excuse the right hon. Gentleman himself from a knowledge of the law. I believe he learned some law in days gone by. Under those circumstances I think he ought to be able to answer some of the questions which have been put to him. The hon. Member for Norwich has given us a most important and incisive criticism which really riddles this Clause, and makes it imperative that we shall vote—and I hope he will join us—in excluding this from the Amendment of the Chancellor of the Exchequer.
    What is the new situation? It is really no good to begin talking of Section 45 of the Act of 1842. That does not govern the matter now. We are dealing with this Clause, Sub-section (1), paragraph (a). It will be observed that the income is to be assessed, charged, and recovered on the income of the husband and wife as though they were not married. The paragraph goes on: all the provisions of the Income Tax Act with respect to the assessment charge, and recovery of Income Tax (including Super-tax) and the penalties for failure to make a return are to be recoverable both from husband and from wife as though they were not married. Hon. Members will find that Section 55 of the Income Tax of 1842 is specially imposed in this new Clause in order to bring in the husband and the wife severally. Under it every pain and penalty which is enforced by Section 55 applies. We are told that the Government will put in some Amendment to meet the difficulty of the hon. Member for Norwich. He sits on the same side of the House as the Government—and that is enough! We are told that there are not any Law
    2180
    Officers to advise hon. Gentlemen opposite. There ought to be. The Committee ought not to be left in the position in which no answer can be made with authority from the Front Government Bench. Under those circumstances, the Committee ought not to be ready to pass this Clause creating an entirely new burden upon the husband and the wife; and under those circumstances the Committee ought to insist on behalf of the persons who may be affected by this Bill that the Clause shall be seen and considered by those competent to judge on both sides of the House, and only then, and not till then, should the Committee be prepared to allow this Clause to pass as part of the Bill.
    Mr. C. BATHURST: The whole discussion upon this Amendment, on both sides of the House, has clearly shown that, in fairness to both husband and wife, this paragraph ought to be cut out. However that may be, the Chancellor of the Exchequer expressed considerable sympathy with what I put forward just now, on the principle that half a loaf is better than no-bread, on the subject of priority of distraint where the wife declines or neglects to pay Income Tax in respect of her own property. I do not quite see why that sympathy should not be translated into words and incorporated in this paragraph:—if the Chancellor of the Exchequer has any real sympathy with it. May I tell the House how it is possible to do what I suggest? It should be done thus—taking the last three lines of the Clause:—
    "The power to distrain in the case of non-payment of any Income Tax payable … by the wife shall be exercised primarily upon the goods and chattels of the wife, and failing such distraint upon the goods and chattels of the husband."
    In any case, whether those are apt words or not—and I do not care what the words may be—the right hon. Gentleman expressed some sympathy with this priority of distraint, failing the elimination of the Clause altogether. He has pointed out—although I think he has over-emphasised it—the danger of conflict between the Chancellor of the Exchequer and the Income Tax payer. He has not sufficiently recognised the equal danger of conflict, and sometimes considerable domestic discomfort, resulting from such conflict as between husband and wife, particularly if the wife happens to be a lady of some means. This often results in considerable feminine self-will and obstinacy which

    2181
    does not promote sympathy and confidence in money matters as between husband and wife. The right hon. Gentleman said that he could not accept my suggestion as it would be difficult to distinguish between the goods of husband and wife. I venture to say that where a wife is separated from her husband there would be no difficulty. Where she is not separated there are some goods which are so obviously and in their very nature feminine belongings—I am not going into the niceties and delicacies of domestic differentiation, but I suggest there are certain obviously feminine belongings—upon which distraint could be made before attempting to levy distraint upon the goods of the husband. I do not quite see why distraint should be the remedy resorted to in such cases where you have Income Tax payable. In nine cases out of ten there is a separate bank-
    ing account in the name of the wife. Why not levy a Writ of Distringas upon the wife's account at the bank. [An HON. MEMBER: "She may have no money there."] If she has not got any at the moment, she will have some ultimately. A Writ of Distringas would be a far more effective remedy than distraint.
    Question put, "That the words of the Sub-section down to the word 'either'—['where Income Tax (including Super-tax) is charged on the profits or income of a married woman, whether in the name of her husband or separately in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable ']—stand part of the proposed Clause."
    The Committee divided: Ayes, 271; Noes, 166.

    Division No. 176.]

    AYES.

    [6.24 p.m.

    Abraham. Wiliiam (Dublin, Harbour)

    Cullinan, John

    Herbert, General Sir Ivor (Mon., S.)

    Acland, Francis Dyke

    Davies, Timothy (Lines., Louth)

    Hewart, Gordon

    Addison, Dr. Christopher

    Davies, M. Vaughan- (Cardiganshire)

    Higham, John Sharp

    Adkins. Sir W. Ryland D.

    Dawes, James Arthur

    Hothouse, Rt. Hon. Charles E. H.

    Ainsworth, John Stirling

    De Forest, Baron

    Hodgs, John

    Alden, Percy

    Delany, William

    Hogge, James Myles

    Allen, Arthur A. (Dumbartonshire)

    Denman, Hon. R. D.

    Holmes, Daniel Turner

    Allen, Rt. Hon. Charles P. (Stroud)

    Dewar, Sir J. A.

    Hope, John Deans (Haddington)

    Arnold, Sydney

    Dillon, John

    Hudson, Walter

    Asquith, Rt. Hon. Herbert Henry

    Donelan, Captain A.

    Hughes, Spencer Leigh

    Baker, Joseph Allen (Finsbury, E.)

    Doris, William

    lilingworth, Percy H.

    Balfour, Sir Robert (Lanark)

    Duffy, William J.

    Jardine, Sir John (Roxburgh)

    Barlow, Sir John Emmott (Somerset)

    Duncan, C (Barrow-in-Furness)

    John, Edward Thomas

    Barnes, George N.

    Duncan, Sir J. Hastings (Yorks, Otley)

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Barran, Sir John N. (Hawick)

    Edwards, Sir Francis (Radnor)

    Jones, Edgar R. (Merthyr Tydvil)

    Barran, Rowland Hurst (Leeds, N.)

    Edwards, John Hugh (Glamorgan, Mid)

    Jones, H. Haydn (Merioneth)

    Beale, Sir William Phipson

    Esmonde, Dr. John (Tipperary, N.)

    Jones, J. Towyn (Carmarthen, East)

    Beauchamp, Sir Edward

    Esmonde, Sir Thomas (Wexford, N.)

    Jones, Leif (Notts, Rushcliffe)

    Beck, Arthur Cecil

    Esslemont, George Birnie

    Jones, William (Carnarvonshire)

    Benn, W. W. (T. Hamlet, St. George)

    Falconer, James

    Jones, William S. Glyn- (Stepney)

    Bentham, George Jackson

    Farrell, James Patrick

    Joyce, Michael

    Bethell, Sir J. H.

    Fenwick, Rt. Hon. Charles

    Kellaway, Frederick George

    Birreil, Rt. Hon. Augustine

    Ffrench, Peter

    Kelly, Edward

    Black, Arthur W.

    Field, William

    Kennedy, Vincent Paul

    Boland, John Plus

    Fitzgibbon, John

    Kilbride, Denis

    Booth, Frederick Handel

    Flavin, Michael Joseph

    King, Joseph

    Bowerman, Charles W.

    Gelder, Sir W. A.

    Lambert, Rt. Hon. G. (Devon, S. Molton)

    Boyle, Daniel (Mayo, North)

    George, Rt. Hon. D. Lloyd

    Lambert, Richard (Wilts, Cricklade)

    Brady, Patrick Joseph

    Ginnell, Laurence

    Law, Hugh A. (Donegal, West)

    Brocklchurst, William B.

    Gladstone, W. G. C

    Lawson, Sir W. (Cumb'rld, Cockerm'th)

    Brunner, John F. L.

    Glanville, Harold James

    Leach, Charles

    Bryce, John Annan

    Goddard, Sir Daniel Ford

    Levy, Sir Maurice

    Buckmaster, Sir Stanley O.

    Goldstone, Frank

    Lewis, Rt. Hon. John Herbert

    Burns, Rt. Hon. John

    Grey, Rt. Hon. Sir Edward

    Lough, Rt. Hon. Thomas

    Burt, Rt. Hon. Thomas

    Griffith, Rt. Hon. Ellis Jones

    Low, Sir Frederick (Norwich)

    Buxton, Noel

    Gulland, John William

    Lundon, Thomas

    Byles, Sir William Pollard

    Gwynn, Stephen Lucius (Galway)

    Lyell, Charles Henry

    Carr-Gomm, H. W.

    Hackett, John

    Lynch, A. A.

    Cawley, Sir Frederick (Prestwich)

    Hall, Frederick (Yorks, Normanton)

    Macdonald, J. Ramsay (Leicester)

    Cawley, Harold T. (Lanes., Heywood)

    Hancock, John George

    Macdonald, J. M. (Falkirk Burghs)

    Chancellor, Henry George

    Harcourt, Rt. Hon. Lewis (Rossendale)

    McGhee, Richard

    Chapple, Dr. William Allen

    Harcourt, Robert V. (Montrose)

    Maclean, Donald

    Ciancy, John Joseph

    Hardie, J. Keir

    MacNeill, J. G. Swift (Donegal, South)

    Clough, William

    Harmsworth, Cecil (Luton, Beds)

    MacVeagh, Jeremiah

    Clynes, John R.

    Harvey, A. G. C. (Rochdale)

    M'Callum, Sir John M.

    Collins, Sir Stephen (Lambeth)

    Harvey, T. E. (Leeds, West)

    M'Curdy, Charles Albert

    Compton-Rickett, Rt. Hon. Sir J.

    Haslam, Lewis (Monmouth)

    McKenna, Rt. Hon. Reginald

    Cornwall. Sir Edwin A.

    Hayden, John Patrick

    M'Laren, Hon. H. D. (Leics.)

    Cotton, William Francis

    Hayward, Evan

    M'Micking, Major Gilbert

    Cowan, William Henry

    Helme, Sir Norval Watson

    Manfield, Harry

    Crooks, William

    Henderson, John M. (Aberdeen, W.)

    Markham, Sir Arthur Basil

    Crumley, Patrick

    Henry, Sir Charles

    Marshall, Arthur Harold

    Meagher, Michael

    Pratt, J. W.

    Sutton, John E.

    Meehan, Francis E. (Leitrim, N.)

    Price, C. E. (Edinburgh, Central)

    Taylor, Theodore C. (Radcliffe)

    Meehan, Patrick J. (Queen's Co., Leix)

    Price, Sir Robert J. (Norfolk, E.)

    Taylor, Thomas (Bolton)

    Millar, James Duncan

    Pringle, William M. R.

    Tennant, Rt. Hon. Harold John

    Molloy, Michael

    Radford, George Heynes

    Thomas, James Henry

    Molteno, Percy Alport

    Raffan, Peter Wilson

    Thorne, G. R. (Wolverhampton)

    Mond, Rt. Hon. Sir Alfred

    Rea, Rt. Hon. Russell (South Shields)

    Thorne, William (West Ham)

    Montagu, Hon. E. S.

    Rea, Walter Russell (Scarborough)

    Toulmin, Sir George

    Morgan, George Hay

    Reddy, Michael

    Trevelyan, Charles Philips

    Morrell, Philip

    Redmond, John E. (Waterford)

    Verney, Sir Harry

    Morison, Hector

    Redmond, William (Clare, E.)

    Walsh, Stephen (Lanes., Ince)

    Morton, Alpheus Cleophas

    Redmond, William Archer (Tyrone, E.)

    Ward, John (Stoke-upon-Trent)

    Muldoon, John

    Richardson, Thomas (Whitehaven)

    Ward, W. Dudley (Southampton)

    Munro, Rt. Hon. Robert

    Roberts, Charles H. (Lincoln)

    Wardle, G. J.

    Murray, Captain Hon. Arthur C.

    Roberts, George H. (Norwich)

    Waring, Walter

    Neilson, Francis

    Robertson, Sir G. Scott (Bradford)

    Wason, Rt. Hon. E. (Clackmannan)

    Nolan, Joseph

    Robertson, John M. (Tyneside)

    Wason, John Cathead (Orkney)

    Norton, Captain Cecil W.

    Robinson, Sidney

    Watt, Henry A.

    Nuttall, Harry

    Roch, Walter F. (Pembroke)

    White, J. Dundas (Glasgow, Tradeston)

    O'Brien, Patrick (Kilkenny)

    Roche, Augustine (Louth)

    White, Patrick (Meath, North)

    O'Connor, T. P. (Liverpool)

    Roe, Sir Thomas

    Whitehouse, John Howard

    O'Doherty, Philip

    Rowlands, James

    Whittaker, Rt. Hon. Sir Thomas P.

    O'Donnell, Thomas

    Runciman, Rt. Hon. Walter

    Whyte, Alexander F. (Perth)

    O'Dowd, John

    Russell, Rt. Hon. Thomas W.

    Wiles, Thomas

    O'Kelly, Edward P. (Wicklow, W.)

    Samuel, Rt. Hon. H. L. (Cleveland)

    Wilkie, Alexander

    O'Malley, William

    Samuel, J. (Stockton-on-Tees)

    Williams, Aneurin (Durham, N.W.)

    O'Neill, Dr. Charles (Armagh, S.)

    Scanlan, Thomas

    Williams, Penry (Middlesbrough)

    O'Shaughnessy, P. J.

    Scott, A. MacCallum (Glas., Bridgeton)

    Williamson, Sir Archibald

    O'Sullivan, Timothy

    Seely, Rt. Hon. Colonel J. E. B.

    Wilson, Hon G. G. (Hull, W.)

    Outhwaite, R. L.

    Sheehy, David

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Parker, James (Halifax)

    Sherwell, Arthur James

    Wilson, W. T. (Westhoughton)

    Parry, Thomas H.

    Simon, Rt. Hon. Sir John Allsebrook

    Wing, Thomas Edward

    Pearce, Robert (Staffs, Leek)

    Smith, Albert (Lancs., Clitheroe)

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Smith, H. B. Lees (Northampton)

    Yeo, Alfred William

    Philipps, Colonel Ivor (Southampton)

    Smyth, Thomas F. (Leitrim, S.)

    Young, William (Perthshire, East)

    Phillips, John (Longford, S.)

    Soames, Arthur Wellesley

    Yoxall, Sir James Henry

    Pirie, Duncan V.

    Spicer, Rt. Hon. Sir Albert

    Pollard, Sir George H.

    Strauss, Edward A. (Southwark, West)

    TELLERS FOR THE AYES.—

    Ponsonby, Arthur A. W. H.

    Sutherland, John E.

    Mr. G. Howard and Mr. Webb.

    NOES.

    Agg-Gardner, James Tynte

    Dalrymple, Viscount

    Horner, A. L.

    Amery, L. C. M. S.

    Dalziel, Davison (Brixton)

    Hume-Williams, William Ellis

    Anstruther-Gray, Major William

    Denison-Pender, J. C.

    Hunt, Rowland

    Archer-Shee, Major Martin

    Dickson, Rt. Hon. C. Scott

    Hunter, Sir Charles Rock.

    Ashley, Wilfrid W.

    Duke, Henry Edward

    Ingleby, Holcombe

    Baird, John Lawrence

    Duncannon, Viscount

    Jardine, Ernest (Somerset, East)

    Baker, Sir Randolf L. (Dorset, N.)

    Eyres-Monsell, Bolton M.

    Jessel, Captain Herbert M.

    Banner, Sir John S. Harmood-

    Faber, Cant. W. V. (Hants, W.)

    Joynson-Hicks, William

    Barlow, Montague (Salford, South)

    Falle, Bertram Godfray

    Kerry, Earl of

    Barnston, Harry

    Fisher, Rt. Hon. W. Hayes

    Keswick, Henry

    Bathurst, Charles (Wilts, Wilton)

    Flannery, Sir J. Fortescue

    Kinloch-Cooke, Sir Clement

    Beach, Hon. Michael Hugh Hicks

    Fletcher, John Samuel

    Lane-Fox, G. R.

    Beckett, Hon. Gervase

    Forster, Henry William

    Lewisham, Viscount

    Benn, Arthur Shirley (Plymouth)

    Foster, Philip Staveley

    Lloyd, George Butler (Shrewsbury)

    Benn, Ion Hamilton (Greenwich)

    Ganzoni, Francis John C.

    Locker-Lampson, G. (Salisbury)

    Bentinck, Lord H. Cavendish-

    Gardner, Ernest

    Locker-Lampson, O. (Ramsey)

    Bigland, Alfred

    Gastrell, Major W. Houghton

    Lyttelton, Hon. J. C.

    Bird, Alfred

    Gibbs, George Abraham

    MacCaw, William J. MacGeagh

    Blair, Reginald

    Gilmour, Captain John

    Mackinder, Halford J.

    Boles, Lieut.-Colonel Dennis Fortescue

    Glazebrook, Captain Philip K.

    Macmaster, Donald

    Boscawen, Sir Arthur S. T. Griffith-

    Goldman, C. S.

    Magnus, Sir Philip

    Bowden, G. R. Harland

    Grant, J. A.

    Mason, James F. (Windsor)

    Boyle, William (Norfolk, Mid)

    Greene, Walter Raymond

    Mildmay, Francis Bingham

    Boyton, James

    Gretton, John

    Mount, William Arthur

    Brassey, H. Leonard Campbell

    Guinness, Hon. Rupert (Essex, S.E.)

    Neville, Reginald J. N.

    Bridgeman, William Clive

    Gwynne, R. S. (Sussex, Eastbourne)

    Newdegate, F. A.

    Bull, Sir William James

    Haddock, George Bahr

    Newman, John R. P.

    Burn, Colonel C. R.

    Hall, D. B. (Isle of Wight)

    Nicholson, William G. (Petersfield)

    Butcher, John George

    Hall, Marshall (E. Toxteth)

    Nield, Herbert

    Campion, W. R.

    Hamilton, C. G. C. (Ches., Altrincham)

    Ormsby-Gore, Hon. William

    Carlile, Sir Edward Hildred

    Hardy, Rt. Hon. Laurence

    Pease, Herbert Pike (Darlington)

    Castlereagh, Viscount

    Harris, Henry Percy

    Peel, Lieut.-Colonel R. F.

    Cave, George

    Helmsley, Viscount

    Perkins, Walter Frank

    Cecil, Evelyn (Aston Manor)

    Henderson, Major H. (Berks, Abingdon)

    Peto, Basil Edward

    Chaloner, Colonel R. G. W.

    Hewins, William Albert Samuel

    Pollock, Ernest Murray

    Clay, Captain H. H. Spender

    Hills, John Waller

    Pretyman, Ernest George

    Clyde, James Avon

    Hill-Wood, Samuel

    Prothero, Roland Edmund

    Coates, Major Sir Edward Feetham

    Hoare, Samuel John Gurney

    Pryce-Jones, Colonel E.

    Craik, Sir Henry

    Hohler, Gerald Fitzroy

    Randies, Sir John S.

    Crichton-Stuart, Lord Ninian

    Hope, James Fitzalan (Sheffield)

    Rawlinson, John Frederick Peel

    Currie, George W

    Hope, Major J. A. (Midlothian)

    Rees, Sir J. D.

    2184

    2185

    Rolleston, Sir John

    Sykes, Sir Mark (Hull, Central)

    Wheler, Granville C. H.

    Rutherford, John (Lanes., Darwen)

    Talbot, Lord Edmund

    White, Major G. D. (Lanes., Southport)

    Rutherford, Watson (L'pool, W. Derby)

    Terrell, George (Wilts, N.W.)

    Williams, Colonel R. (Dorset, W.)

    Samuel, Samuel (Wandsworth)

    Thomas-Stanford, Charles

    Wilson, A. Stanley (Yorks, E.R.)

    Sanders, Robert Arthur

    Thomson, W. Mitchell- (Down, North)

    Wilson, Captain Leslie O. (Reading)

    Sandys, G. J.

    Tickler, T. G.

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Scott, Sir S. (Marylebone, W.)

    Tobin, Alfred Aspinall

    Wood, John (Stalybridge)

    Sharman-Crawford, Colonel R. G.

    Touche, George Alexander

    Worthington Evans, L.

    Smith, Rt. Hon. F. E. (L'pool, Walton)

    Tryon, Captain George Clement

    Wortley, Rt. Hon. C. B. Stuart-

    Spear, Sir John Ward

    Valentia, Viscount

    Yate, Colonel C. E.

    Stanley, Hon. G. F. (Preston)

    Walker, Colonel William Hall

    Younger, Sir George

    Starkey, John Ralph

    Walrond, Hon. Lionel

    Steel-Maitland, A. D.

    Warde, Colonel C. E. (Kent, Mid)

    Stewart, Gershom

    Watson, Hon. W.

    TELLERS FOR THE NOES.—

    Swift, Rigby

    Weigall, Captain A. G.

    Mr. Cassel and Sir F. Banbury

    Sykes, Alan John (Ches., Knutsford)

    Weston, Colonel J. W.

    Question, "That the Clause, as amended, be added to the Bill," put, and agreed to.

    Amendments made:
    In Sub-section (3) leave out the words "either by the husband or" ["Income Tax payable either by the husband or the wife shall extend both to the goods and chattels of the wife."], and insert instead thereof the word "by."
    Leave out the word "both," and insert instead thereof the words "by her."
    Leave out the word "both."
    Leave out the word "and," and insert instead thereof the words "as well as."

    NEW CLAUSE.—(Provision as to Partnership Businesses carried on Abroad.)
    "(1) Where any trade or business is carried on by two or more persons in partnership, and the control and management of such trade or business is situate abroad, the said trade or business shall be deemed to be carried on by persons resident outside the United Kingdom and the said partnership shall be deemed to reside outside the United Kingdom, notwithstanding the fact that some of the members of the said partnership are resident in the United Kingdom and that some of the trading operations of the said partnership are conducted within the United Kingdom.
    Where any part of the trade or business of a partnership firm whose management and control is situate abroad consists of trading operations within the United Kingdom the said firm shall be assessable in respect of the profits of such trading operations within the United Kingdom to the same extent, and no further, than a person resident abroad is assessable in respect of trading operations by him within the United Kingdom, notwithstanding the fact that one or more of the members of the said firm are resident in
    2186
    the United Kingdom, provided that for the purpose of assessing any such firm in respect of the profits of the said trading operations within the United Kingdom an assessment may be made on the said firm in respect of the said profits in the name of any partner resident in the United Kingdom."
    Clause brought up, and read the first time.
    Motion made, and Question proposed. "That the Clause be read a second time."
    Mr. WORTHINGTON EVANS: I do not know whether the Government propose to explain this new Clause. It would be a very much more convenient course if they did so, as I do not want to lose my right I to speak upon it, and it would be more convenient if the Government told the House whether there is to be any alteration of the present law by this new Clause.
    Mr. LLOYD GEORGE: The only alteration is to extend the law which is now applicable to companies to partnership firms.
    Mr. WORTHINGTON EVANS: I understand the law with regard to companies is that, notwithstanding that they are registered in England, if the control and management of the company is situated abroad, then the company is treated as a foreign company and only taxed upon the profits, if any, which are made in this country, and are not taxed upon the profits made abroad, and I understand this Clause is intended to extend that to private firms which are not limited companies. I believe there has been a great deal of doubt about that law. It has been the subject of very many decisions, and it would, in my judgment, have been wiser if the Government, when attempting to extend the law itself, put into the Clause some declaration at least as to what the law is. But my quarrel with this Clause is rather a different one.

    2187
    The exemption from taxation, whether it be for a company or private firm, depends upon whether the control and management of that company or firm is at home or abroad. But there are companies, such as life assurance companies, which are controlled and managed at home, though they carry on business abroad. The particular business is really conducted abroad, but they have possessions which are controlled and managed in this country, because their chief board of directors is here, and their head office is here, although their business may be carried on abroad. I have a manuscript Amendment which I put in, and which I hope presently to move when we come to Committee on the Clause. As I understand from the Chairman that I shall have to discuss the question whether it is in order or not, I had better make a statement of the case for that Amendment now upon Second Reading. Moreover, it will give the Government time to consider the justice of the case. This is what I want to achieve: Accepting the principle that where the control and management is abroad the taxes are only to be paid on the profits made in this country, accepting that principle both as to partnership and ordinary companies, I want the same principle applied to life insurance companies in the only way it can be effectively applied. If you use the words "control and management," they cannot come within this Clause so long as they have a board of directors in this country, though, nevertheless, they carry on quite separate business abroad.
    Let me give one case I know of—that of a company which has a large number of assets established, which has branches in France, Italy, Belgium, and Austria, and practically all European countries, and in South Africa and the Argentine and Canada, whose total premium income is about £1,000,000, 85 per cent, of which is derived from foreign business in the various places I have enumerated. It has outside policies of over £24,000,000, 83 per cent, of which are foreign, and foreign shares of £10,500,000, £8,500,000 of which are invested in foreign securities—that is, about 79 per cent, invested in foreign securities. This Clause will not exempt that insurance company because the control and management of the business is legally vested in this country, because it-has its head office and directors in this country; but these assets, which are foreign securities, are necessarily part of the
    2188
    business of that company, because that company is not allowed to establish and carry on business in any one of the countries I have named unless it deposits large sums of money invested in the national securities of the place where it carries on business, and for that purpose it has invested £4,500,000 in various foreign securities with various foreign Governments or foreign Government departments.
    The CHAIRMAN: I think I quite follow the point. The point is really the reverse of the case dealt with by this Clause. It may be a quite good subject for consideration, but I think it needs a separate Clause.
    Mr. WORTHINGTON EVANS: If that is your ruling, Mr. Whitley, of course I accept it, but I would like to point this out: If the control and management of the partnership is outside the scope of this Clause, something happens. I suggest that the control and management of life assurance companies in the special circumstances I have stated are outside this country, for purposes comparable to those in which this Clause is enacted, in connection with private partnerships. They have no control or management in respect of these securities, and I ask that this Clause should be extended by words which would bring in life assurance companies—words which are parallel with the words "control and management" used here, applying only to private firms. I suggest exactly the same should apply to life assurance companies, as the object of this Clause provides for private partnership.
    The CHAIRMAN: It may be quite the same object, but it is an entirely different subject. It is the reverse of what is proposed under this Clause, and the hon. Member must bring up the matter for consideration in some other way.
    Mr. WORTHINGTON EVANS: If I had put down an Amendment stating that instead of two persons carrying on a partnership, one single person alone ought to come within this Clause, it would be within the Clause; and if I say a company controlled and managed abroad it should come in, it is not the reverse, but it is an explanation, I agree.
    The CHAIRMAN: The hon. Member has told me he is dealing with a company controlled and managed in this country. It is not an analogous case at all.
    Mr. WORTHINGTON EVANS: Then I must continue my argument, if I may, in

    2189
    reference not to any specific Amendment, but as objecting to this Clause as not going far enough, and contrast what will be done under this Clause to the advantage of private individuals, and what might be done if the Clause were so worded to the advantage of other individuals. I think that will possibly be in order as a criticism of the Clause.
    The CHAIRMAN: I will hear the argument first.
    Mr. WORTHINGTON EVANS: This Clause is intended to help private partnership, and I am sure that nothing like such a good case can be made out for private partnership as can be made out for a class of companies with which I must not deal now in detail. The hon. Member for Elgin and Nairn (Sir A. Williamson) had a Clause on the Paper in exactly the same form, and he made a very interesting speech in the earlier stages of this discussion on Clause 1, in which he pointed out the disabilities of Clause 5, and of taxing income which was made abroad. He showed that if that class of taxation continued, then private firms would radicate themselves abroad. He pointed out that that would be very much to the detriment of the trade of this country, and instead of having their head office in England, which would mean giving orders to English manufacturers and employment to English workpeople, they would have their head office somewhere else, and the German drummer would come along and would succeed in getting orders to the detriment of the English people.
    I was very surprised to find that the hon. Member put down a Clause which is to have the effect of enabling companies to pass over their control and management abroad, so that the victims of the German drummer are no longer the friends of the English manufacturers, and that they have relief which is not given to firms who have their head office in this country. The hon. Gentleman put this Clause down and the name of the Chancellor of the Exchequer has now been put to the Clause, and so it comes forward as a Government Clause and not the Clause of a supporter of the Government, who is well known as a member of a very large firm of the highest possible repute trading in London, Liverpool, and abroad. The hon. Member has been fortunate in having enlisted the support of the Chancellor of the Exchequer to such a degree, and unlike private Members, he has not to run the risk of putting down a new Clause in his own name. I think if
    2190
    he had to run the same risk as I have to run on behalf of life insurance companies, he would never have been called upon to move this Clause. The hon. Member has secured the friendly assistance of the Chancellor of the Exchequer, consequently his name disappears and that of the Chancellor of the Exchequer takes his place. This Clause, which is to give work to the German drummer and to lose work which might otherwise come to the British manufacturer and to British working men—
    Sir A. WILLIAMSON: This proposal has nothing to do with giving orders to the German drummer except to prevent it being done.
    Mr. WORTHINGTON EVANS: I read the hon. Member's speech, and if he will compare what I have said with the record of it he will find that there is not much difference between my recollection and what he actually said. I suggest that while it may have some advantages it is not a Clause which would be anything like as useful in maintaining the credit of the City business, and the strength and the financial supremacy of the City as a Clause which enables those who are going out to seek business like life assurance abroad, and who have to make deposits abroad out of their control and management, but under the control and management of a foreign Government as a condition precedent to setting up their business there—I say this Clause is nothing like as useful as one which enables those people doing life assurance work to have equivalent advantages which these other firms are claiming for themselves. What would happen if that were done would be that the life assurance companies who have to deposit money with foreign Governments would not then have to pay, as under Clause 5, Income Tax on all their dividends and interest received on all those deposit securities, but they would only have to pay upon the profits made in this country. In one case of which I have the details it makes so large a difference that instead of paying a rate of tax on their profits of is. 3d., which is supposed to be the Income Tax, this one company I have in mind will in future have to pay a rate of taxation equivalent to 7s. 4d. in the £. Surely that is a gross injustice which requires careful consideration, and in my judgment ought to be considered before we dispose of a Clause which deals, it is true, with something deserving of a remedy but nothing like so deserving as the case which I have put before the House. There

    2191
    are some hon. Members who say that the individual trader is a relatively small man. I know the hon. Member opposite will not say that, but some traders are relatively small men, and those who argue that way think that the life assurance people are great capitalists, but that is not so. In this particular company to which I have referred—
    Mr. LLOYD GEORGE: I should like to ask you, Mr. Chairman, whether the point raised by the hon. Member is in order? The hon. Gentleman is entering in great detail into the case of life assurance companies. I have a complete answer to his argument, but I am afraid if I attempt to give it you will be bound to call me to order. This may be a good or a bad Clause, but there are quite fifty other grievances which are also deserving of consideration, and I have enumerated one of them.
    The CHAIRMAN: The hon. Member must not discuss the merits of a subsequent Amendment.
    Mr. WORTHINGTON EVANS: When one feels that he has no other opportunity of raising something that is important it is very difficult to resist straying from the point. The Government has given us no chance of putting down Clauses, and we are driven by devious means to get in at least a part of our arguments. I recognise that I have strayed a little. I can only say that this Clause as it stands is one which, if it is to put private partnership on the same footing as companies, I am not going to oppose it for a moment. The law is very difficult indeed on this point, and I think the Attorney-General will be prepared to say that in the last few years it has not been improved very much. It is by no means easy to say what is management and what is control. One would have thought if a company were registered here that you would say the management and control was here; but it has been held that that is not so, for you can have the management elsewhere, as long as the board of directors meet and transact the bulk of the business abroad. The same with private partnership which is dealt with here. You are creating difficulties to the traders. It will be extremely difficult for them to know what control and management is, because this Clause permits one of the partners of a business the control and management of which is abroad to live in England. Supposing
    2192
    he is not controlling and managing the everyday details of the business, but has a preponderating capital interest and makes his policy fit in with the business he is carrying on in England, and he is interested in business in several other foreign places. He is the actual controller of that business. He is very likely the man who is in London the biggest capitalist of the group of firms, and he is very likely the real controller of the firm, although he is not the manager of that firm. It seems to me that the Government is asking Parliament to create a lot of difficulties for the trader in the future, and it would have been far better if this Clause was reconsidered and made much clearer.
    7.0 P.M.
    Mr. CAVE: I am not opposed to this Clause by itself, but I wish to point out that it does widen the inequality to which attention was called upon a previous Clause. See what the effect will be! Take the case where partners are resident in England and have a business which is carried on either wholly or partly out of this country, and of which the main control is out of this country. Under this provision those partners will not pay a tax upon their foreign profits, unless, of course, they come to this country. They will escape a considerable charge which otherwise might possibly fall upon them. They will be wealthy men living in this country, but receiving a large income abroad, investing and keeping their income abroad, and thus, they will escape the payment of the tax over here. That is one result of this Clause. Just look at the other side. Take the case of a man who, instead of having a business carried on mainly abroad, has shares in a company carrying on business abroad. There is very little difference between the two cases except in form, but this man under this very Bill will have to pay taxation upon the whole of the profits he derives from that company, even though he invests that money abroad. I fail to see that equity is being done in these two cases, and when you couple this with Clause 5 you have a grave injustice done. That is the only point to which I wish to call attention. I do not know why it is that the Government while they resisted our arguments on Clause 5, and defeated our Amendments, are now themselves bringing in a proposal which will immensely emphasise the strength of the arguments we used. That is the only

    2193
    point I want to make on the Clause, but I think it is one with which the right hon. Gentleman ought to deal.
    Sir J. SIMON: The hon. Gentleman below the Gangway who spoke last but one introduced a matter which I confess I should have thought not entirely relevant to this Debate, and he offered as an apology that if he did not do so on this Clause he might not have an opportunity of doing so at all. I can only conclude that he was not here when the hon. Member for Sevenoaks (Mr. H. W. Forster), speaking from the Front Opposition Bench, went over exactly the same ground and received an answer from the Chancellor of the Exchequer on Clause 1. This new Clause has nothing in the world to do with the matter to which the hon. Gentleman refers. It is designed to do nothing more than this, Speaking generally, our Income Tax law, so far as it applies to individuals, applies to those who reside in the United Kingdom. When you endeavour to apply that principle to an incorporated company, the question, of course, arises, how is it to be done, and, though I agree that sometimes disputes arise in particular cases, it is merely because of the difficulty of the subject matter; the principle is fairly plain. Where an incorporated company is controlled and managed in this country, when, as it sometimes said, its head and seat are in this country, then it comes within our Income Tax provisions; and, on the other hand, if its control and management are outside the United Kingdom, it does not come within our Income Tax law.
    There does not seem any obvious reason that there should be any different mode of treatment of a partnership which is not incorporated, and consequently we have a provision which has nothing in the world to do with where the trade is carried on, but which has to do with where the control and management of the business is to be found. Since an incorporated company which is controlled and managed abroad escapes our Income Tax, so ought a partnership which is controlled and managed abroad, and the circumstances that one of the members of the partnership, or it may be more than one, reside in this country should not alone result in the partnership being treated as though it came within our Income Tax law, always assuming that the control and management of the partnership are not themselves to be found within the United Kingdom.
    2194
    It does not seem to me that proposal is open to any criticism on the ground of unfairness or inequality. The hon. and. learned Gentleman the Member for Kingston (Mr. Cave) thinks that we may under this Clause unduly favour certain rich persons who remain here under this Clause and are partners in a concern. The fact that a member of the partnership resides here or there has nothing to do with, it. If the partnership is, in fact, managed abroad, there should not be any reason, why you should not deal with it in the same way as you deal with an incorporated company. If the hon. Gentleman who spoke first cares to look at the Debate of Thursday, 2nd July, he will find almost in so many words that which he has been putting forward—first of all, in a speech by the hon. Member for Seven-oaks, and, secondly, in the reply of the Chancellor of the Exchequer. I can only suppose that the hon. Gentleman did not happen to be here on that ocasion.
    Mr. PRETYMAN: I admit that it is a very difficult subject, but I am bound to say that the effect of the right hon. Gentleman's speech upon me has been to remove a doubt within my mind as to whether I was justified in voting against Clause 5. I did vote against Clause 5, although I approved very strongly of the principle of trying to catch for Income Tax purposes money which is placed abroad to avoid being taxed. I voted against the Clause because I thought we should get into greater difficulty even than, the advantage we expected would justify. What does this show? It shows two things. You are already beginning to move these new Clauses to get yourselves, out of difficulties before Clause 5 has begun to operate at all. Here you are distinctly and directly, in the first place, encouraging and, in fact, making it almost obligatory on people a part of whose business is abroad to transfer the management of the business from this country to a foreign country. That is perfectly plain. It is clear that the management of a business which is largely carried on abroad may be transferred to the foreign country with an obvious advantage to that foreign country and a disadvantage to this country. That is the first point, and I need not enlarge upon it, because it must be quite obvious. The next point is this: You are here putting a premium on evasion again. I speak subject to correction, but, as I read it, it is quite plain. Where any trade or

    2195
    business is carried on by two or more persons in partnership, and the control and management of such trade or business is situated abroad, then that foreign business is to escape. What is meant by that? "Where the control and management of any trade or business." I suppose it simply means this: Where a firm has an office in London or in Liverpool or anywhere else in this country, and also has a centre of trade in three or four ports or trading centres in foreign countries, all it will have to do will be to transfer the nominal management of that part of the business situated abroad into the hands of somebody who will be representing them and resident in that country. You are, as my right hon. Friend has just pointed out, greatly increasing the gross inequalities of the Income Tax which already exist. If you accept Clause 5 this is the kind of thing you will have to do, and I think when we get to the Report stage every Member ought to remember the discussion we have had on this proposal.
    The criticism I am making is not so much on this particular Clause by itself as on this Clause combined with Clause 5. We are, by Clause 5, with this Clause tacked on, inviting British subjects to transfer the management of their business to foreign countries. Otherwise, they will be heavily penalised. The honest trader hates subterfuge and tries to maintain that which is the greatest asset of British trade—its high name. I only heard the other day of a case where a valuable and important foreign order was refused by a British firm because it would not give a receipt at a different figure than that at which the goods were really being-delivered. A foreign firm got it because it was willing to give the receipt at a different figure in order to please the purchaser. That is the kind of thing which gives the British trader an advantage, and you are hitting straight at the whole morality of British trade when you introduce a Clause like this. My hon. Friend gave a case where the Income Tax, instead of being Is. 3d., will be 7s. 3d. It is a burden which cannot be borne, and British traders will be absolutely obliged, while they really manage their business in this country, to pretend that they are managing it in a foreign country. I am perfectly convinced that the Chancellor of the Exchequer will have to find some Clause, other than Clause 5, with this Clause
    2196
    super-added. Here we are discussing under very great difficulties the most far-reaching changes, and I say that the Guillotine Closure removes the responsibility very largely from the House and the Committee and places it upon the Government. I hope that the Chancellor of the Exchequer, with his legal advisers, will really consider the effect of Clause 5 as it is at present drafted, with this Clause super-added, upon British industry, and that when we come to the Report stage he will be able to present some new proposals which will not have the disastrous result which I can see will follow if this proposal is carried into law.
    Mr. J. WARD: I must add my appeal, not necessarily for the withdrawal or the defeat of the Clause as it stands, but certainly for the reconsideration of it on the Report stage. This discussion has called to my mind a very serious debate which occurred in my Constituency. There is one great firm in Stoke-on-Trent who some six or seven years ago, as it was stated before Mr. Chamberlain's Commission, transferred a considerable portion of its business for the purpose of supplying the local trade to German territory, and they have great works there at the present time. There are less charges for land and the capital expenditure is less, and in addition to that the head of the firm—and this almost locates it—stated that he could actually get work done for some 35 per cent, less than he could in this country. Never mind what we may say about Tariff Reform. Here is a firm which has transferred a portion of its work—work that is done by other firms in this country—to Germany for the purpose of getting an advantage in supplying the local trade and for the purpose of making a greater profit. Some three or four years ago they discussed the question of transferring the management and the centre of their business to Germany. It has not done so, but it pays 35 per cent. less in wages there and its competitors are obliged to get over a tariff over which they have not to get because they are now manufacturing in that country, and it is a moral certainty, if you are going to add to that the advantage that they have only to transfer their management to the other side to escape Income Tax on that branch of their business which brings them in the highest profit, that they will do so. If that is really the result of this proposal, it is a very serious one indeed.

    2197
    I should have imagined that we should have done something to have made it most difficult for a firm to shift its business or to get any fiscal advantage by doing so. I do not mention the firm's name, because I do not want to give them an advertisement, but I believe the case is well known to the Chancellor of the Exchequer. All that they have got to do now apparently is to transfer their centre to Germany where they have constructed works and where they are developing their business; and, whereas now under the present arrangement they have to pay Income Tax not merely on the profits they earn in this country but also on the profit they earn in Germany, the whole of the profit derived from the German works will then cease to pay Income Tax in this country. It is a serious matter, and unless someone can point out that these things cannot occur, I feel I ought not to vote for the Clause. At any rate, if I do vote for it, it will be on the understanding that we get a better explanation of the effects of the Clause, and an undertaking that the matter will he again considered before the Report stage.
    Mr. MILLS: I should like to ask the Chancellor of the Exchequer one question. He gave us to understand that the object of the Clause was to bring partnerships and incorporated companies into line so that the Income Tax laws shall have the same effect on both. I understood him to say that a man with a partner in the business, who said the management, was abroad, would not be liable to Income Tax. I should like to ask if under Clause 5, in case the partnership was broken up and the business was turned into a limited liability company, the partner who had shares instead of profits would be able to receive the dividends, and not be called upon to pay Income Tax upon them? It seems to me, if this is not so, the remarks of the right hon. Gentleman rather lacked point when he said he was bringing partnerships and incorporated companies into line in this matter.
    Mr. CASSEL: I should like to endorse what my hon. Friend the Member for Uxbridge (Mr. Mills) has just said. This Clause really provides an avenue by which wealthy people can escape the effect of Clause 5. It provides that if a man, instead of taking shares in an incorporated company, takes shares in an unincorporated syndicate he can get his accumulations from abroad free of Income Tax. It
    2198
    may be that a syndicate is formed for the purpose of dealing in and holding shares. Suppose you form a syndicate for holding shares, selling and buying them, and collecting the dividends. If you take a share in the syndicate you escape under this Clause, but if you buy the shares of the company direct you come under Clause 5. I submit that both this Clause and Clause 5 should go before the Royal Commission before we make any change. I ventured to urge that argument at the time we were considering Clause 5, and I say that the fact that this Clause is brought forward confirms the strength of my argument. It provides means by which wealthy men can and will escape from the operation of Clause 5. I submit, further, there is a difference between the cases of partnerships and companies. It is much easier to tell where the control of a company is than where the control of a partnership is. I have had, on several occasions, to deal with questions as to the control of companies, and, as a rule, the decisive factor has been the place where the board meets, because then you have minute books and records of the meeting. But where is the control of a partnership? There is nothing so definite or tangible as in the case of a company, and there will be many cases in which it will be perfectly easy to show that the control or management of the partnership is abroad, although the real effective control is in this country. My main objection to this Clause is its effect when read in conjunction with Clause 5.
    Mr. POLLOCK: I hope the Chancellor of the Exchequer will reconsider his adoption of this Clause. What has happened is quite clear. The Chancellor and his draftsmen put forward the Bill and determined to hold by Clause 5, which, imperfectly, is intended to enshrine some method by which you can tax the foreign accumulations of persons now not liable to Income Tax. The hon. Member for Elgin and Nairn (Sir A. Williamson) came forward and said, "I have a useful Clause," and the Chancellor of the Exchequer, who was thinking more about Clause 5, replied, "I will take your Clause and father it." So it came back in his name, and the right hon. Gentleman now finds himself fathering both the Clauses. He will have to select which he will stick to. It is no use having both, and I believe if the right hon. Gentleman will ask his draftsmen they will tell him it is really impossible to work these

    2199
    two Clauses together. As has been admirably pointed out, the effect of Clause 5 may be to largely destroy this new Clause. If the Committee is minded to stop foreign accumulations avoiding Income Tax, and if that is the purpose of the Government, we must not stultify that by making an easy door by means of which these evasions can take place. No doubt the hon. Member for Elgin and Nairn will feel it hard that the Clause, as to which he entertained such high hopes, should be abandoned, but when the Committee has realised what it is doing—when it realises that it will only stultify Clause 5—I think it will agree that the Chancellor of the Exchequer should undertake to give this matter fuller consideration at his leisure, and when the whole field has been surveyed. So far as the Clause itself goes, apart from Clause 5, I am inclined to agree with the Attorney-General that it is a matter largely of administration and proof. It does not effect in itself a very large alteration of the law, but once you have got Clause 5 it makes a very considerable alteration, and, under these circumstances, I hope the Chancellor of the Exchequer will select which of the two Clauses he will have and will realise that he cannot have both.
    Mr. J. M. HENDERSON: I have considerable doubt about this Clause and what its effect is going to be. I should like to put a case or two to the right hon. Gentleman. A limited company is, at the present moment, subject to taxation, even if its profits are made outside this country. But I have the case of a company in my mind in which I am both a shareholder and an auditor. The money is all in South Africa, and the management of the various branches is also there, but the head office is in London. We pay Income Tax in South Africa, and the shareholders here are subject to Income Tax. The chairman makes a journey every year to South Africa and goes round the branches. He is resident in this country, but spends only about three or four months in England. Yet we are taxed both in South Africa and here. I want to know how this Clause is going to work. Suppose there are two or three partners, each of whom alternately goes out to the various branches and controls the management there. What are you going to do? Are you going to treat the company as if the management is out-
    2200
    side the United Kingdom? What I want to get at is this. The Clause reads:—
    "Provided that for the purpose of assessing any such firm in respect of the profits of the said trading operations, within the United Kingdom an assessment may be made on the said firm in respect of the said profits in the name of any person resident in the United Kingdom."
    That refers only to profits in the United Kingdom. What I want to get at is this: Can these partners, in respect of the profits made on their foreign visit, be brought under Clause 5? I have another case in mind. A friend of mine resides a good deal in this country, but has a large property in Argentina, and is spending a very considerable capital in developing it. He has agents out there, of course. He will presently begin to reap the benefit. The control and management is in Buenos Ayres. Are you going to relieve him of Income Tax? If you are not going to relieve him, I strongly object to your relieving any firm.
    Mr. RUTHERFORD: If he has a partner he will escape.
    Mr. J. M. HENDERSON: I can only repeat that this is a matter which requires very careful handling, and I certainly do not think this Clause should pass.
    Mr. BOYTONMay I supplement the question put by the hon. Member for Ux-bridge (Mr. Mills). If I were a member of a limited partnership—a member of a firm sending money from abroad, and the management of that firm was abroad, should I be entitled to receive dividends or income earned abroad without payment of Income Tax under the Limited Partnerships Act?
    Mr. JOYNSON-HICKS: There are two or three ways in which business is carried on abroad. Say an individual carries on a big business in the Argentine, and owns all the cattle there, but lives in this country. The head of the business will be here. I want to suggest this to the Chancellor of the Exchequer as showing the absurdity of this Clause. If the individual chooses he can create two of his managers in the Argentine as partners, and the management and control of the business in the Argentine will be in the hands of these two persons. Let us see exactly how this Clause will work. In the first case, an Englishman residing here, having a manager in the Argentine, another in Hong

    2201
    Kong, and another in California, carries on a business, and is taxed on the profits over here. In order to come within this Clause, all he has to do is to make the managers in these different places small partners in the business, and then to travel round. It would be easy to say that the control and management of those businesses were in California, the Argentine and Hong Kong. That would clearly be the case under the existing law if they were partners and not managers. That is the absurd conclusion which would be arrived at under the provisions of this extraordinary Clause.
    Another very common way in which business is carried on abroad—it may be either an individual or a partnership in England—it may be in the Argentine, is not to carry it on in the individual name or in the name of the partnership in England, but in the name of separate private limited companies. There would be one for Argentina, another for Hong Kong, and a third in California. That is to-day the commonest way of carrying on extensive businesses throughout the world—separate companies are formed for separate branches. If the original scheme of this Clause is carried out the partners in these different countries will save Income Tax, but if it is a limited company with merely a few people owning all the shares, they have to pay Income Tax, although the money is kept abroad and accumulated abroad. That is under the provisions of Clause 5. If it is a partnership, it would escape under the provisions of this particular Clause. These are three ways in which anybody who has had experience in the City of London knows that businesses are conducted. It shows the ridiculous character of the provisions embodied in this Clause. It is perfectly obvious that this Clause, with Clause 5, should be submitted to the Royal Commission, and that the whole question of the incidence of Income Tax on foreign investments considered together. I am not at all averse to the foreign investments of a rich man, who wants to collect income abroad, being taxed for the benefit of the British community here, but under the provisions proposed by the Chancellor of the Exchequer there is loophole after loophole to enable the rich man, who wishes to transfer his business abroad, getting the advantage of Clause 5.
    Mr. LLOYD GEORGE: I have listened to the Debate, and I am still at a loss to understand whether the Clause is opposed
    2202
    or supported by hon. Gentlemen opposite. Two or three hon. Gentlemen who have opposed it have prefaced their observations, by saying that they did not oppose it. What I want to know is, are they for giving it a Second Reading, or against giving it a Second Reading? The hon. Member for Uxbridge (Mr. Mills) started by saying "I am not opposed to this Clause."
    Mr. MILLS: Quite so.
    Mr. LLOYD GEORGE: The hon. and learned Member for Kingston (Mr. Cave) said exactly the same thing.
    Mr. CAVE: By itself.
    Mr. LLOYD GEORGE: The hon. Member for Chelmsford (Mr. Pretyman) also said the same thing, but the whole of their arguments have been directed to opposing the Clause root and branch. The hon. and learned Member for Warwick and Leamington (Mr. Pollock), said that this Clause rendered Clause 5 nugatory. As he voted against Clause 5, that is a very good reason why he should vote for this.
    Mr. POLLOCK: I did not vote against it, because unfortunately there was no Division.
    Mr. PRETYMAN: I made a mistake in saying that I voted against it. I intended to say that there was no Division.
    Mr. JOYNSON-HICKS: I did not vote against it.
    Mr. PRETYMAN: It was I who misled the Chancellor of the Exchequer.
    Mr. POLLOCK: I am going to vote against this Clause.
    Mr. LLOYD GEORGE: I am sure this is the first time that the hon. Gentleman (Mr. Pretyman) has misled me. What is the objection of my hon. Friend the Member for Stoke-on-Trent (Mr. J. Ward)? His case was that of a company.
    Mr. J. WARD: Oh, no!
    Mr. LLOYD GEORGE: I assumed that it was.
    Mr. J. WARD: It was a family concern of brothers.
    Mr. LLOYD GEORGE: Take a case of that kind. My hon. Friend's objection is based on the fallacy that people are going to destroy their businesses and to change their domicile and place of abode merely

    2203
    in order to escape Income Tax. They are going to direct their businesses from the places in which it suits them best from the business point of view. They are not going to damage their businesses and move them from one locality to another merely because they can go to one district where they will have to pay a shilling Income Tax, whereas, if they remain here, they will have to pay 1s. 6d.
    Mr. CASSEL: Several companies have changed their domicile.
    Mr. LLOYD GEORGE: There may be cases. I am not going into the question whether tariffs affect the matter one way or the other. The hon. Member said they are going to change the place of control and management of their businesses. The idea is that, whereas they now control and manage their business at Stoke-upon-Trent, they will go to Heidelburg or Mannheim, or somewhere of that sort. That is not the case. Business men do not do that. I understand they are very smart business men. These smart business gentlemen who are now making money at Stoke-upon-Trent are not going to take it abroad and live in Germany. They are going to have the control of their business at Stoke-upon-Trent. Why they should live in Stoke-upon-Trent when their business is somewhere else I do not know, except, of course, that they have the privilege of being represented by my hon. Friend. I agree with him they would consider the management and control of their business from the point of view of its efficiency. They are not going to transfer the control to Germany or anywhere else. The control will be where they are. They are the brains of the business, and where the brains are, there the control will be. My hon. Friend need not therefore be alarmed about that particular company. So far as this Clause is concerned, it will not alter the position in the slightest degree, unless they transfer themselves body and soul to Germany, and I cannot imagine them doing that. Now let me take the other point put by the hon. Member for Colchester (Mr. Worthington Evans). It is perfectly true that you can make legal arrangements and set up syndicates which will enable you to evade taxes. I am perfectly well aware of that, and of the fact that it is being done now. It is not done by arrangements abroad, but by arrangements in this country. The
    2204
    hon. Gentleman went through some very elaborate and ingenious schemes which he explained for the benefit of the taxpayers.
    Mr. WORTHINGTON EVANS: No, for the benefit of the Chancellor of the Exchequer. I hope you will stop it.
    Mr. LLOYD GEORGE: The moment it is done, the Inland Revenue can submit a scheme to the House of Commons which will stop all that kind of spider's web, and snap it without the slightest difficulty. I can assure the hon. Gentleman that they are perfectly well aware of these arrangements even now. I do not mind telling him I considered whether it should be stopped this time, and the only reason why it was not done was because I was advised that at the present moment it was not worth while. These ingenious arrangements are entered into by very able people who exercise their brains in this way very often because they have nothing else to do. Able business men have too much to do with making money to waste their time in arrangements of this sort. I can assure him, from the information at my disposal, that there are very few cases at the present moment of this kind. The moment they attain any dimensions he may depend upon it that a Chancellor of the Exchequer, whoever he is, standing at this box, will one day-propose a scheme which will put an end to the practice. You need not go to Canada or Van Dieman's Land to set up that kind of thing. A man might be able to do it, under certain conditions, even here, if it were worth his while. It is not worth a business man's while to bother himself with all sorts of arrangements of that kind in order to be able to escape taxes. All this discussion proceeds upon the assumption that business men are really devoting brains, which they can convert into much more money in other directions, to seeing how they can dodge the tax-gatherer, but it is not worth their while. If the hon. Gentleman had wasted his time, in preparing schemes for dodging the Super-tax and the Income Tax, he would not be the successful solicitor he is. He knew much better than to do that. All this talk about very ingenious ways of getting round this particular Clause are really quite irrelevant. [HON. MEMBERS: "No!"] When they come, we shall have to deal with them. So much for these ingenious arrangements.
    Mr. CASSEL: I do not think the right hon. Gentleman has followed my point. It was not merely a point of ingenious arrangements, but I dealt with the ordinary case of taking shares in a syndicate—an unincorporated syndicate—as compared with the case of taking shares in a company.
    Mr. LLOYD GEORGE: Why should they be unincorporated syndicates? At the present moment they can do it as long as it is a company. All we are doing is to put private firms in the same position as a company. [HON. MEMBERS: "No!"] If that is not the case, then give a Second Reading to the Clause and point out to us in what respects there is a differentiation. That is our proposal. If you can do it at all, you can do it now by means of a limited liability company. All we say is that it is very unfair that a private firm trading in this country should be put at a disadvantage in comparison with a limited liability company. We are not proposing any extension to the law—in any shape or form. All we are proposing is that both should be put in the same position. All the arguments which have been addressed to the Committee in the course of this Debate have been based on the assumption that the real control is here. I do not know anything about the Argentine case. I do not know whether my hon. Friend (Mr. J. M. Henderson) has imagined this case or whether he is acquainted with it. I do not know whether it is a business man who is controlling the business.
    Mr. HENDERSON: No, he is not.
    Mr. LLOYD GEORGE: Then what on earth has that to do with this Clause?
    Mr. J. M. HENDERSON: He has got to pay the tax, and the other people will get off.
    Mr. LLOYD GEORGE: If he has a business which he is controlling here or in the Argentine—
    Mr. J. M. HENDERSON: He is a single individual, and although the control is there, he gets no relief.
    Mr. LLOYD GEORGE: Supposing it were a partnership, and the control were-there?
    Mr. J. M. HENDERSON: He would then get relief.
    Mr. LLOYD GEORGE: I do not know what the business is. I think it had something to do with investing in land.
    Mr. JOYNSON-HICKS: Undeveloped, land.
    Mr. LLOYD GEORGE: If that is so, rents are in in Clause 5. I understood the hon. Member really to refer to a gentleman who has invested his money in. the Argentine. I suggest that we should read the Clause a second time, and then we can deal with these points of detail.
    Mr. PRETYMAN: I hope that after the right hon. Gentleman's explanation my hon. Friend will vote against this Clause. The Chancellor of the Exchequer will understand that our objection is not to this Clause alone, but to this Clause coupled with Clause 5. I think he has totally failed to deal with the real difficulty, which is that what he has to do in Clause 5 and this Clause is not only to avoid evasion, but he has at the same time to avoid super-taxing businesses which are really foreign businesses, and if taxed upon their rents and profits abroad, and in the words of the Section: are "securities, stocks, shares or rent abroad," their Income Tax would not be raised from 1s. to 1s. 6d., as the Chancellor of the Exchequer said, but as in the actual case given, from 1s. 3d. to 7s. 3d. Although this Clause will do something to clear them, really the combination of the two is an absurdity, and I hope in view of that my hon. Friend will divide against this Clause.
    Question put, "That the Clause be read a second time."
    The Committee divided: Ayes, 225;. Noes, 95.

    Division No. 177.]

    AYES.

    [7.47 p.m.

    Abraham, William (Dublin, Harbour)

    Beale, Sir William Phipson

    Boyle, Daniel (Mayo, North)

    Adamson, William

    Benn, W. W. (T. Hamlets, St. George)

    Brady, Patrick Joseph

    Addison, Dr. Christopher

    Bentham, George Jackson

    Brocklehurst, W. B.

    Allen, Arthur A. (Dumbartonshire)

    Bethell, Sir J. H.

    Bryce, J. Annan

    Arnold, Sydney

    Black, Arthur W.

    Buckmaster, Sir Stanley O.

    Baker, Harold T. (Accrington)

    Boland, John Pius

    Burns, Rt. Hon. John

    Baker, Joseph Allen (Finsbury, E.)

    Booth, Frederick Handel

    Burt, Rt. Hon. Thomas

    Barnes, George N.

    Bowerman, Charles W.

    Byles, Sir William Pollard

    Carr-Gomm, H. W.

    Jardine. Sir J. (Roxburgh)

    Ponsonby, Arthur A. W. H.

    Cawley, Sir Frederick (Prestwich)

    John, Edward Thomas

    Pratt, J. W.

    Cawley, Harold T. (Lanes., Heywood)

    Johnson, W.

    Price, C. E. (Edinburgh, Central)

    Chancellor, Henry George

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Pringle, William M. R.

    Chapple, Dr. William Allen

    Jones, Edgar (Merthyr Tydvil)

    Raffan, Peter Wilson

    Clancy, John Joseph

    Jones, H. Haydn (Merioneth)

    Rea, Rt. Hon. Russell (South Shields)

    Clough, William

    Jones, J. Towyn (Carmarthen, East)

    Reddy, Michael

    Clynes, John R.

    Jones, Leif (Notts, Rushcliffe)

    Redmond, John E. (Waterford)

    Collins, Sir Stephen (Lambeth)

    Jones, William (Carnarvonshire)

    Redmond, William (Clare, E.)

    Compton-Rickett, Rt. Hon. Sir J.

    Jones, William S. Glyn- (Stepney)

    Rendall, Athelstan

    Cornwall, Sir Edwin A.

    Joyce, Michael

    Richardson, Albion (Peckham)

    Cotton, William Francis

    Kellaway, Frederick George

    Richardson, Thomas (Whitehaven)

    Cowan, W. H.

    Kelly, Edward

    Roberts, Charles H. (Lincoln)

    Crooks, William

    Kennedy, Vincent Paul

    Roberts, George H. (Norwich)

    Crumley, Patrick

    Kilbride, Denis

    Roberts, Sir J. H. (Denbighs)

    Cullinan, John

    King, Joseph

    Robertson, Sir G. Scott (Bradford)

    Davies, Timothy (Lincs., Louth)

    Lambert, Rt. Hon. G. (Devon, S. Molton)

    Robertson, John M. (Tyneside)

    Dawes, James Arthur

    Lambert, Richard (Wilts, Cricklade)

    Robinson, Sidney

    De Forest, Baron

    Law, Hugh A. (Donegal, West)

    Roch, Walter F. (Pembroke)

    Delany, William

    Lawson. Sir W. (Cumbr'ld, Cockerm'th)

    Roche, Augustine (Louth)

    Dillon, John

    Leach, Charles

    Roe, Sir Thomas

    Donelan, Captain A.

    Lewis, Rt. Hon. John Herbert

    Rowlands, James

    Doris, William

    Low, Sir Frederick (Norwich)

    Russell, Rt. Hon. Thomas W.

    Duffy, William J.

    Lundon, Thomas

    Samuel, J. (Stockton-on-Tees)

    Duncan, C. (Barrow-in-Furness)

    Lynch, Arthur Alfred

    Scanlan, Thomas

    Edwards, Sir Francis (Radnor)

    Macdonald, J. Ramsay (Leicester)

    Scott, A. MacCallum (Glas., Bridgeton)

    Esmonde, Dr. John (Tipperary, N.)

    Macdonald, J. M. (Falkirk Burghs)

    Sheehy, David

    Esmonde, Sir Thomas (Wexford, N.)

    McGhee, Richard

    Sherwell, Arthur James

    Esslemont, George Birnie

    MacNeill, J. G. Swift (Donegal, South)

    Simon, Rt. Hon. Sir John Allsebrook

    Falconer, James

    MacVeagh, Jeremiah

    Smith, Albert (Lanes., Clitheroe)

    Farrell, James Patrick

    M'Callum, Sir John M.

    Smith, H. B. Lees (Northampton)

    Fenwick, Rt. Hon. Charles

    M'Curdy, C. A.

    Smyth, Thomas F. (Leitrim, S.)

    Ffrench, Peter

    McKenna, Rt. Hon. Reginald

    Strauss, Edward A. (Southwark, West)

    Field, William

    Marks, Sir George Croydon

    Sutherland, John E.

    Fitzgibbon, John

    Marshall, Arthur Harold

    Sutton. John E.

    Flavin, Michael Joseph

    Meagher, Michael

    Taylor, Theodore C. (Radcliffe)

    Gelder, Sir W. A.

    Meehan, Francis E. (Leitrim, N.)

    Taylor, Thomas (Bolton)

    George, Rt. Hon. D. Lloyd

    Meehan, Patrick J. (Queen's Co., Leix)

    Tennant, Rt. Hon. Harold John

    Gladstone, W. G. C.

    Millar, James Duncan

    Thomas, J. H.

    Glanville, Harold James

    Mollay, Michael

    Thorne, G. R. (Wolverhampton)

    Goldstone, Frank

    Molteno, Percy Alport

    Thorne, William (West Ham)

    Grey, Rt. Hon. Sir Edward

    Montagu, Hon. E. S.

    Toulmin, Sir George

    Griffith, Rt. Hon. Ellis Jones

    Morgan, George Hay

    Trevelyan, Charles Philips

    Gwynn, Stephen Lucius (Galway)

    Morison, Hector

    Walsh, Stephen (Lanes., Ince)

    Hackett, John

    Morton, Alpheus Cleophas

    Ward, John (Stoke-upon-Trent)

    Hall, Frederick (Yorks, Normanton)

    Muldoon, John

    Wason, Rt. Hon. E. (Clackmannan)

    Hancock, John George

    Munro, Rt. Hon. Robert

    Wason, John Cathcart (Orkney)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Murray, Captain Hon. Arthur C.

    Webb, H.

    Harcourt, Robert V. (Montrose)

    Neilson, Francis

    White, J. Dundas (Glasgow, Tradeston)

    Hardie, J. Keir

    Nolan, Joseph

    White, Patrick (Meath, North)

    Harmsworth, Cecil (Luton, Beds)

    Nugent, Sir Walter Richard

    Whitehouse, John Howard

    Harvey, A. G. C. (Rochdale)

    O'Brien, Patrick (Kilkenny)

    Whittaker, Rt. Hon. Sir Thomas P.

    Harvey, T. E. (Leeds, West)

    O'Connor, T. P. (Liverpool)

    Whyte, Alexander F. (Perth)

    Haslam, Lewis

    O'Doherty, Philip

    Wilkie, Alexander

    Hayden, John Patrick

    O'Donnell, Thomas

    Williams, Aneurin (Durham, N.W.)

    Hayward, Evan

    O'Dowd, John

    Williams, Penry (Middlesbrough)

    Henderson, Arthur (Durham)

    O'Kelly, Edward P. (Wicklow, W.)

    Williamson, Sir Archibald

    Henderson, J. M. (Aberdeen, W.)

    O'Malley, William

    Wilson, Hon. G. G. (Hull, W.)

    Henry, Sir Charles

    O'Neill, Dr. Charles (Armagh, S.)

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Herbert, General Sir Ivor (Mon., S.)

    O'Shaughnessy, P. J.

    Wilson, W. T. (Westhoughton)

    Hewart, Gordon

    O'Sullivan, Timothy

    Winfrey, Sir Richard

    Higham, John Sharp

    Outhwaite, R. L.

    Wing, Thomas Edward

    Hobhouse, Rt. Hon. Charles E. H.

    Parker, James (Halifax)

    Young, William (Perthshire, East)

    Hodge, John

    Parry, Thomas H.

    Yoxall, Sir James Henry

    Hogge, James Myles

    Pearce, Robert (Staffs, Leek)

    Holmes, Daniel Turner

    Pease, Rt. Hon. Joseph A. (Rotherham)

    TELLERS FOR THE AYES.—

    Hudson, Walter

    Phillips, John (Longford, S.)

    Mr. Iliingworth and Mr. Gulland.

    Hughes, Spencer Leigh

    Pirie, Duncan V.

    NOES.

    Ashley, Wilfrid W.

    Campbell, Captain Duncan F. (Ayr, N.)

    Crichton-Stuart, Lord Ninian

    Baird, John Lawrence

    Campion, W. R.

    Currie, George W.

    Baldwin, Stanley

    Carlile, Sir Edward Hildred

    Dalrymple, Viscount

    Barnston, Harry

    Cassel, Felix

    Dickson, Rt. Hon. C. Scott

    Bathurst, Charles (Wilts, Wilton)

    Cator, John

    Duke, Henry Edward

    Beach, Hon. Michael Hugh Hicks

    Cave, George

    Du Pre, W. Baring

    Bentinck, Lord H. Cavendish

    Cecil, Evelyn (Aston Manor)

    Fisher, Rt. Hon. W. Hayes

    Bird, Alfred

    Cecil, Lord Hugh (Oxford University)

    Flannery, Sir J. Fortescue

    Blair, Reginald

    Cecil, Lord R. (Herts, Hitchin)

    Fletcher, John Samuel

    Boyton, James

    Chaloner, Colonel R. G. W.

    Forster, Henry William

    Bridgeman, William Clive

    Clyde, J. Avon

    Gardner, Ernest

    Burn, Colonel C. R.

    Courthope, George Loyd

    Gastrell, Major W. Houghton

    Butcher, John George

    Craik, Sir Henry

    Gilmour, Captain John

    2208

    2209

    Glazebrook, Captain Philip K.

    MacCaw, William J. MacGeagh

    Spear, Sir John Ward

    Goldman, C. S.

    Macmaster, Donald

    Stewart, Gershom

    Gretton, John

    Neville, Reginald J. N.

    Strauss, Arthur (Paddington, North)

    Guinness, Hon. Rupert (Essex, S.E.)

    Newman, John R. P.

    Swift, Rigby

    Hall, Frederick (Dulwich)

    Newton, Harry Kottingham

    Talbot, Lord Edmund

    Hamilton, C. G. C. (Ches., Altrincham)

    Nield, Herbert

    Thomas-Stanford, Charles

    Hardy, Rt. Hon. Laurence

    Orde-Powiett. Hon. W. G. A.

    Tickler, T. G.

    Harris, Henry Percy

    Perkins, Walter Frank

    Walker, Colonel William Hall

    Hope, James Fitzalan (Sheffield)

    Peto, Basil Edward

    Weigall, Captain A. G.

    Hope, Major J. A. (Midlothian)

    Pretyman, Ernest George

    Weston, Colonel J. W.

    Horner, Andrew Long

    Pryce-Jones, Colonel E.

    Wheler, Granville C. H.

    Hunt, Rowland

    Rawlinson, John Frederick Peel

    White, Major G. D. (Lancs., Southport)

    Jardine, Ernest (Somerset, East)

    Rees, Sir J. D.

    Wilson, Captain Leslie O. (Reading)

    Joynson-Hicks, William

    Royds, Edmund

    Wolmer, Viscount

    Lane-Fox, G. R.

    Rutherford, John (Lanes., Darwen)

    Worthington Evans, L.

    Lewisham, Viscount

    Rutherford, Watson (L'pool, W. Derby)

    Yate, Colonel C. E.

    Lloyd, George Butler (Shrewsbury)

    Salter, Arthur Clavell

    Locker-Lampson, G. (Salisbury)

    Sanders, Robert Arthur

    TELLERS FOR THE NOES.—

    Lowe, Sir F. W. (Birm., Edgbaston)

    Sanderson, Lancelot

    Mr. Mount and Mr. Pollock.

    Lyttelton, Hon. J. C.

    Sharman-Crawford, Colonel R. G.

    Question. "That the Clause be added to the Bill," put, and agreed to.

    Mr. WORTHINGTON EVANS: I beg to move, to leave out the words "that some members of the said partnership are resident in the United Kingdom and"
    With the omission of these words the Clause will give relief to all firms so long as the partners are not resident here. The Chancellor of the Exchequer just now in 'dealing with this very point, said that people were not going to go abroad in order to avoid Income Tax, and the gentlemen at Stoke-upon-Trent who had their business were not going to live in Heidelberg in order to avoid Income Tax, but that the control would be where those people lived.
    The CHAIRMAN: I must really ask the hon. Member a question. If none of the members of the partnership were to reside 'in the United Kingdom, how could they be taxed?
    Mr. WORTHINGTON EVANS: I do not know how they could be taxed.
    The CHAIRMAN: The hon. Member's Amendment would negative the Clause.
    8.0 P.M.
    Mr. WORTHINGTON EVANS: I am not going to provide the means of taxing them. I could alter it to bring it in order and move to omit the word "some" and insert the word "one," so as to prevent it applying if two, three, or four partners are resident in the United Kingdom. 'There is very good ground for that, because the Chancellor of the Exchequer said that the control of the partnership would be where the partners resided, and if you allow this Clause with the partners residing here you will make it an instrument for evasion, because if, as the Chancellor of the Exchequer says, the real control will be where the partners reside, the whole affair will be a colourable attempt to evade the provisions of
    2210
    Clause 5. The real reason I want to move this is in order to get from the Chancellor of the Exchequer a definite answer to a very simple question. If a man was a member of one of these partnerships which are to be free from tax, is it not the case that he would pay no tax upon the profits in the partnership except that on the profits which arise from trade in the United Kingdom, or except such part of the profit as was remitted to the United Kingdom? I believe that is undoubtedly the case. If that individual converted that private business into a limited company—I now want the Chancellor of the Exchequer to answer the same question—that limited company would only be taxed upon the profit that it made while trading in this country—that is, so far as the limited company is concerned, always assuming that the control is abroad. Now I want to take the case of a former partner who is now a shareholder in a limited company, and who lives in this country. Upon what income does he have to pay tax? Does he not, in fact, have to pay tax upon the whole of the dividends which are paid upon the shares that he holds in that limited company, whether those dividends are brought into this country or not? To make it even plainer, I will put it this way: Supposing while he was a partner his share of the total profits of that firm was £2,000, of which £500 arose from trading in this country. As a partner he would pay tax on £500, and he would not pay tax on the other £1,500 unless it was brought into this country. Supposing the dividends on the shares which he holds when the concern is converted into a limited company amount to £2,000—exactly the same figure—upon what would he pay the tax? Is it not the case that he would pay on £2,000, whether he brought it into the country or not? If that

    2211
    is the case—as I feel certain it is—how can the right hon. Gentleman justify the taxation of one man because he is a member of an unlimited partnership and not the other man because he is a member of a company, the subject-matter of the business being exactly the same?
    Mr. JOYNSON-HICKS: I wish to follow up the point put by my hon. Friend (Mr. Worthington Evans) by putting a slightly smaller variation in the conduct of the partnership business. Supposing that, as frequently happens in connection with big businesses, a branch house is converted into a limited liability company, the whole of the shares in that branch being, of course, held by the partnership here. If the partnership firm, say, a big firm in London, which has four branches in different parts of the world for convenience, convert one branch into a limited company, say, a branch in Hong Kong, am I not right in saying that under this Clause the profits of the business which remains part of the unregistered partnership would have to pay Income Tax?
    Sir A. WILLIAMSON: The hon. Member for Colchester (Mr. Worthington Evans) must remember that while I am a foreign trader, I am also a representative in the House of Commons of a kind of commerce that is of importance to the country. It is difficult for me to speak on this question without being suspected of acting from personal motives. I assure the House that is by no means the case, because this is a matter of vital interest to the country, and not merely to me as an individual. Many points can be raised with respect to the incidence of the Income Tax, but I wish to point out that there is one broad fact which it would be well for the House of Commons to have in mind. We have been speaking of the incomes of individual residents in this country, but we have been entirely losing sight of the fact that firms trading abroad have partners living abroad who are not British subjects at all. You have some of these firms in London with ramifications all over the world. If by reason of that you are going to impose British Income Tax on all the partners who reside abroad, both Britishers and foreigners, you do cause a sense of injustice to arise in the minds of those partners, and you because pressure to be brought to bear on
    2212
    the heads of the house in England to sever the connection that exists between the firm here and the branch abroad. It appears to me that that would be a disadvantage in the long run to British trade. I think the hon. Member for Colchester will agree that that would be so. There is another point. It is suggested that a company could be made instead of a firm. So it could, and it would be an advantage to the capitalists here if the business were a company instead of a firm from this point of view. If it were a company in the United States or the Argentine, then the partner would have to pay Income Tax on the dividends declared, and not on the whole profits. But if it is a company in this country it has to pay not only on the profits available for dividends, but on the gross profits, which, as the House knows, are very much in excess of the net profits.
    I take the cases of firms engaged in more or less hazardous enterprises. They put large sums of money into speculative businesses. They put, say, £100,000, into a factory, or it may be a gold mine, and it turns out disappointing. When they come to make up the balance-sheet the partners say, "This has proved to be a failure and we have to write off £100,000. We have lost in this venture." The British Income Tax officials will not allow you to write off that amount. They say, "That is a loss of capital." They are therefore, penalised in that respect as compared with the position of those who are merely shareholders in a foreign company. I think a firm should be put in the same position as a company in the light of the Egyptian case. If they turn themselves into companies, I think there is a disadvantage in so doing, but I believe also the partners who were shareholders would not have to pay the tax. It would be very inconvenient, and I think it would in the end be a disadvantage, because you would be putting more and more the initiation and control at the other end of the world. I pointed out the other day that if you separate foreign companies from the parent institutions in this country, you always tend to the independence of the foreign companies or firms and to their doing business in any part of the world, and you do not get the trade to British houses as you do by maintaining the link. That is what I had in my mind when I gave notice of an Amendment on the subject. I did not know that the Chancellor of the

    2213
    Exchequer was putting down an Amendment. Really this is not a personal matter, because as a matter of fact it would not affect me very greatly. It affects my foreign partners greatly.
    Mr. BUTCHER: I would ask the Chancellor of the Exchequer to answer the question put by my hon. Friend (Mr. Worthington Evans). It should be remembered that there is Clause 5 in the Bill. If this new Clause stood alone it would be very much simpler, but Clause 5 does create a very serious difficulty, and certainly it would be satisfactory to many of us to hear what answer the right hon. Gentleman has to give.
    Mr. LLOYD GEORGE: I can assure the hon. Member for Colchester that if I did not answer his question it was through no discourtesy to lam. The matter has been explained better by my hon. Friend behind me (Sir A. Williamson). We discussed the whole of this point at very great length in a previous Debate, and the Attorney-General gave an answer. I do not think, seeing that we have got other very important Amendments on the Paper by hon. Members on the other side, I should go into the whole question again, because I know from experience what will happen. If I repeat the arguments which have been advanced before, the answers to these arguments will be repeated by half a dozen hon. Gentlemen on the other side with great rhetorical force.
    Mr. WORTHINGTON EVANS: The right hon. Gentleman misunderstands me. I do not wish to argue the whole thing again. I asked one specific question, and I hope the right hon. Gentleman will give me an answer.
    Mr. LLOYD GEORGE: It is perfectly true that you have to pay under Clause 5 whether the money is brought over to this country or not. There is much greater difficulty with regard to private partnerships than a company. The private partnerships do not declare dividends, and there is much greater difficulty if the money is not brought over to this country in tracing it. In the case of a company a shareholder would be paying in respect of the dividends received from that company. In the case of a private firm the partner pays on the profits.

    NEW CLAUSE.—(Provision to Allow Deductions in Respect of Inherently Wasting Assets.)
    For the purpose of enabling deductions from revenue receipts of expired capital outlay on inherently wasting assets to be allowed by the additional Commissioners' claims in respect of those deductions shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits and gains of any trade, manufacture, adventure, or concern, and where such a deduction from the revenue receipts is made, and has been made, from the commencement of the actual employment of the inherently wasting assets in seeking profits, or during a period of not less than three years to the end of the usual financial year of the particular trade, manufacture, adventure, or concern last prior to the year of assessment, and provided such deduction is so made as to prevent the same being available as profits, the additional Commissioners in assessing those profits and gains shall make such allowances in respect of those claims as they think just and reasonable. For the purpose of this Section the term "inherently wasting assets" means assets which necessarily waste in the process of seeking profits, provided always that such wasting assets are not the value of transferred rights to future profits or increase which would have been chargeable with Income Tax if no transfer of such rights had been made.
    Clause brought up, and read the first time.
    Mr. PETO: I beg to move, "That the Clause be read a second time."
    I wish the Committee to bear in mind the words which were used a few days ago by the Prime Minister in regard to the Income Tax law. He said it was in such a state of confusion that even lawyers found it very difficult to interpret the law. On the top of that, and by way of encouragement, two nights ago, referring to Clause 5 of the present Bill, the Attorney-General said that it was a ghastly thing to talk about. I feel somewhat appalled at bringing forward this new Clause, but as it deals with a subject which affects every business in the country, and a grievance which has been growing ever since the Income Tax was re-enacted in 1842—in proof of which I may mention that it met with some measure of recognition in 1878 by the granting of some sort of allowance—I think that it is not inappropriate that I should bring this

    2215
    Clause to the attention of the Committee. It is a Clause which has been drawn with the greatest care. It has received the attention of the most competent people among the chartered accountants and business men of the country, and it has stood fire on two occasions already in this House, end has met with some measure of faint approval, or at any rate, has been damned with faint praise by the Chancellor of the Exchequer. The Clause appears on the face of it to be perhaps a little intricate. My hon. and learned Friend the Member for Warwick, speaking on this Clause on the 2nd August, 1912, said:—
    "I also claim for this Clause that in principle, and on its face, it is a genuine Income Tax Clause for the reason that no person cannot possibly understand it at first sight."
    I cannot complain of that, but I think that that makes it necessary to explain to the Committee why this Clause is worded in this form. It is really divisible into five parts. The first few lines show what we claim the power of deducting in calculating the profits of an industry. It is not described as depreciation, or by any vague wording of that kind, but as the "expired capital outlay on inherently wasting assets." That phrase has been carefully thought out. I am sure that it is watertight and expresses exactly that in respect of which it is intended to give relief. In the next part of the Clause there are two conditions which attach, so that these deductions, made for that purpose, shall be regularly made. That is expressed at some length in the following passage—
    "And where such a deduction from the revenue receipts is made, and has been made, from the commencement of the actual employment of the inherently wasting assets in seeking profits, or during a period of not less than three years to the end of the usual financial year of the particular trade, manufacture, adventure, or concern last prior to the year of assessment."
    All that implies that the practice must not be spasmodic, but that it must be a regular practice of the company or person concerned to make this deduction in respect of inherently wasting assets The further condition comes in the next few lines:—
    "and provided such deduction is so made as to prevent the same being available as profits."
    That is of enormous importance in making this a Clause which the Treasury can
    2216
    accept. For this reason, everybody knows that in business it is very common to have, a reserve fund, and that that reserve fund is used for all kinds of purposes, very often for the equalising of dividends, and very often it is not clearly defined for what purpose that money is put to reserve. That sort of reserve fund would not under the Clause hold water at all. The deduction must be set aside in such a form as to prevent it being available as profit. The next important part of the Clause immediately follows. When all those conditions are fulfilled
    "the additional Commissioners in assessing those profits and claims shall make such allowances in respect of those claims as they think just and reasonable."
    Under this Clause we leave the discretion in the hands of additional Commissioners of Income Tax to say whether the claim is a genuine claim and to what extent it ought to be made, and whether it is just and reasonable; and we finish this up in a fifth provision, and say:—
    "Provided always that such wasting assets are not the value of transferred rights to future profits or increase which would be chargeable with Income Tax if no transfer of such rights had been made."
    That is of the very greatest importance, because it shuts out from this Clause a great many matters and things which we do not consider are proper subjects to be treated as inherently wasting assets. It shuts out at once all questions of the diminishing value of leaseholds, copyrights, patent rights, goodwill, and all such things. We shut out all such subjects as can be bought and sold, and as are frequently bought for a lump capital sum, as in the case of sales or purchases of patent rights, which is in effect a transfer of anticipated future profits, which future profits if they had never changed hands would have been subject to Income Tax. Therefore, by this last proviso we shut out all those cases against which a real case can be made. The granting of a lease does not impair the actual value of the premises demised, and the purchase for a lump sum of the right to future profits arising out of an author's or an inventor's work does not impair those profits. Therefore, we shut those out entirely. I admit that there are some things which are somewhere on the margin. It is almost impossible in a case of this kind not to have some element of

    2217
    doubt, and that is one of the reasons why we have left it to the additional Commissioners, in assessing these questions, complete discretion as to whether the claims are just and reasonable. I do not want to have it said in reply, "What about terminable annuities?" Those are not in the same category as leasehold, copyright or patents, and, on the other hand, they are not the same thing, though they are subject entirely to the same considerations as such definite matters as mineral deposits and machinery employed in manufacture, and things of that sort. Undoubtedly there is a very strong case to be made in respect of these. In the purchase of terminable annuities it seems a very hard thing not to have an allowance made.
    I will give an actual case stated in a letter received yesterday. A person who has been employer abroad, earning a small salary, has bought with the savings out of that salary, which has already been subject to tax when earned, an annuity in this case of £100 a year for twenty years, paying to a life insurance company, therefore, the sum of £1,260, and he is being taxed on the whole of that £100 every year during the twenty years, although the capital disappears at the end. It may be said that under the wording of this Clause that will not be covered, and I think that it would not be covered by the last words of the Clause, "which would have been chargeable with Income Tax if not such transfer had taken place." On the other hand, there is this view, that if a particular person instead of purchasing an annuity, held the capital in his own hands, obtaining the ordinary interest of 4 per cent, or 5 per cent., then that would have been charged with Income Tax on 4 per cent, or 5 per cent., in this case, £50 or £60 per year, instead of £100 a year the capital passing at death, would have been subject to the Death Duty. I do not want to go further into that. I am quite aware that there are very grave cases of hardship where people who buy these annuities, generally do it because they have such small means that it is absolutely necessary to them for the purpose of the education of their children or in order to live, or whatever it may be, to secure a larger income than their capital will ordinarily command. It does seem very hard, therefore, that they should be charged Income Tax on the whole of the capital they spend and the whole of the dividends that would in ordinary course have accrued, while other
    2218
    people, better off, pay annually Income Tax upon their actual profits or gains. In the case I have quoted it means, almost exactly doubling the rate of Income Tax; it means that the Income Tax on a very small income is 2s. 6d. in the £ of every £ forming this annuity, instead of 1s. 3d.
    I would like to tell the Committee quite plainly what are undoubtedly the things included in this Clause. It includes all mineral deposits—that is to say, the wasting annual value of all mineral deposits; it includes allowance for the wasting value of plant, machinery, building work, shaft sinking and analogous works of that kind, and trade fittings and fixtures. All those things are included; those are the special things to which I want to call the attention of the Committee and of the right lion. Gentleman. Before I go into the details of the case, however, I would like the Committee to consider what is the effect of the present method of raising our Income Tax. The present method of collecting the tax, without allowing any adequate allowance in calculating the profits, or any of those things which I have enumerated, produces several different results, which are all of them contrary to the interests of the trade of the country, and all of them contrary to the interests of the Treasury. They encourage unsound finance, and I do not think that is a good thing from any point of view. They undoubtedly obstruct enterprise and discourage ability; they discourage investments of capital in productive industry, and discourage the expenditure necessary to maintain and expand business; and, finally, this method ignores altogether the business maxim that "the scrap heap is. the best test of progressive management"—in a word, it is altogether contrary to the commercial interests of the country. As to the justification there is for it, it has often been put forward before, that though it is a crude method it is the best method of collecting the tax quickly and effectively, I would say, in regard to a temporary financial expedient, as the Income Tax used to be regarded, that it may be perfectly right that simplicity should be the guiding rule, but with regard to a permanent tax—and this is not only a permanent tax, but it is the main revenue-producing tax—there is no question whatever that it is the bounden duty of the Treasury to see that it is levied in such a way that equity and justice come first and expediency comes after.

    2219
    Our complaint is not with the Income Tax Act of 1842 at all. We do not complain of the definition at ail in the title of the Act or the definition in Schedule D. The title of the Act is, "An Act granting to Her Majesty duties arising from property, professions, and trades, et cetera." Schedule D applies to profits or earnings of any person residing in Great Britain and so forth. Where the trouble comes in is in the rules under Schedule D. In the third rule, among the things that are not to be allowed to be deducted in calculating profit. The words are, "nor on account of loss in trade, and any such trade, venture or concern, nor on account of any capital withdrawn therefrom." As this has been interpreted in the Law Courts, we claim—and it is the view held by chartered accountants throughout the country—that the decisions are really based upon a fundamental error when they talk about "the withdrawal of capital." Take the case of the wasting value of mineral deposits. If you place a proper sum aside annually to meet that, it is not a withdrawal of capital at all; you are merely maintaining the capital of your company year by year; but when a certain portion of that capital is transferred from the form of minerals which may be going to be worked to the form of a substantial cash balance, outside investment, or whatever it may be—but a reserve fund in any case—it is to meet the total loss of the mineral deposit at the end of the time when it is worked. Therefore, we say that with regard to the minerals that the whole of this grievance really arises from the idea that has been formed, that, in making this proper provision a withdrawal of capital from the business has taken place, whereas it is really a transfer of the capital from one form into another, and that is an entirely different matter from a withdrawal. In regard to the opposition to this Clause on previous occasions, I would like, first, to say this in general terms: It seems to me that no one, particularly no one connected with the Treasury, certainly no one in the position of the Chancellor of the Exchequer, can really be opposed to the principle underlying this Clause, unless prepared to justify the definition of the Income Tax which the Chancellor of the Exchequer has on several occasions put forward for consumption outside this House. I will just quote to the Committee what he said on the 20th of June at Denmark Hill, and, of course, if that is a proper presentation of the nature of
    2220
    the Income Tax laws, then I can understand the resistance to the principle of this Clause. The Chancellor of the Exchequer, comparing the present Budget with the one of 1909–10, said:—
    "These two Budgets are based on the recognition of the fact that whenever the State needs money, the men whose incomes run into thousands a year, can better spare hundreds than the men whose incomes range from 10s."—
    and so forth. He goes on:—
    "Why? If you tax the former, you are simply impinging on money that can only be spent on superfluities. If you tax the latter, you are interfering with something which is urgently necessary either for existence or comfortable existence."
    But this rules out the whole basis of Schedule D, that this is a tax on profits from the trade and industry of the country, and it assumes that in raising the amount of the Income Tax you are only taxing the people who have got more money than they know how to spend. That, is all very well on the public platform, but I ask the Committee to compare that quotation with one made by the Prime Minister from a speech of Mr. Gladstone. Mr. Gladstone said in 1853, speaking of the Income Tax:—
    "It is not adapted to he a permanent portion of your fiscal system unless you can, by reconstruction, remove its anomalies."
    That is in rather glaring contrast to what I have just quoted from the present Chancellor of the Exchequer, and I will quote this further: The Prime Minister said on that occasion, on introducing his Budget on the 18th April, 1907:—
    "The Income Tax is really a twofold tax—it is a tax on property and a tax upon earnings."
    As to its being merely a tax which impinges only on superfluities, I would further ask the Committee to contrast that with a statement which I find a few lines further down, a statement in 1907 by the Prime Minister, then Chancellor of the Exchequer, who said:—
    "Of the million of taxpayers, 800,000 to 850,000. or four-fifths of the whole, showing an income of £275,000,000 were under £700 a year."
    The anomaly the Prime Minister was dealing with at the time was the taxation of all incomes, whether earned or unearned, whatever their amount might be, provided they exceed £700 per year, at the same rate. I put it to the Committee it is a far greater anomaly than that to impose what is in large measure not taxation of income at all, but what amounts to making deductions from the capital employed in the industry. That I think is a greater anomaly even than the taxation of every class of income at the same rate. Under the present system what

    2221
    happens? Companies and private businesses have for the benefit of the Treasury and the rules under which Income Tax is levied positively to mutilate correct accounts in order to make them conform to the Income Tax as interpreted. I think that is an intolerable state of affairs. Let me deal with the actual objections put forward on the last occasion by the Chancellor of the Exchequer to this Clause the last time it was moved in the precise form in which I move it and when I took part in the Debate. That was on 2nd August, 1912. The Chancellor had two main objections on that occasion. He first of all said:—
    "I am only advised by those who are responsible for the collection of Income Tax that the principle laid down here would lead to a very considerable measure of loss in recovering all the Income Tax in the mineral fields in Great Britain, and their estimate is that the total loss on the foreign and British interests would come to something like two millions per year."
    Everything we ask, it seems would cost two millions per year. In another ease we were told it would cost £1,600,000 per year to give some other necessary adjustments in this tax. Let me consider this question of the two millions per year. I remember on that occasion the Chancellor consulted the Treasury officials, and came back to the House at once and gave us that reply dealing with the whole of this vast subject of mining interests abroad and in this country, including gold, coal, everything, and the calculation, if it was a calculation, was that it was going to cost two millions per year. Let me take the case of the South African gold-mining companies. The first consideration in the case of almost all those companies is that they are registered, controlled and directed outside of the United Kingdom. They are therefore exempt from taxation, from assessment to British Income Tax, except to the extent of dividends received by persons residing in the United Kingdom. If the Committee desires to know I will give a few examples, as this applies generally to the whole of the South African Transvaal mines, such as the Rose Deep, City and Suburban, Knights Deep, West Rand, Glynns, Lydenburg, Randt Mines, Village Deep, Crown Mines, and many others. A calculation and examination of the accounts of those mining companies shows that this class of company never makes any deduction from revenue receipts in respect of unexpired capital outlay on the purchase of mines, and it is their well-established custom to distribute as dividend all surplus receipts after paying working expenses. I have had quite a
    2222
    number of these mining accounts. I receive more of them than I care about, and every Member of the Committee will know who has had the misfortune to deal in any of those South African shares that one of the main things you always ask, and are being told what is the anticipated life of the mine, because when the life of the mine is done the mine is done. There is not a single one of them whose method of accounts, quite apart from the fact that they are registered out of this Kingdom, which would come within the carefully constructed words of this Clause which provides that the deduction shall be so made as to prevent the sum being available as profits, and that it has got to be in a separate account so that it could not possibly be employed as profit. We look to the British field where coal is the principal mining subject, and we find a similar state of affairs. I have had the accounts of three of the principal coal mining companies in this country examined. I take first Ebbw Vale Iron and Steel Company, and in the report for the year ended 31st March, 1914. I find it stated:—
    "The collieries worked full time with an output of close on two million tons. Prices improved, and, after making allowance for increased cost, consequent upon the recent coal mining legislation, have produced a reasonable profit."
    In the profit and loss account there is not even the vaguest reference to any sum being set aside to meet the wasting assets in the shape of the coal extracted. I find exactly the same thing in the case of the Rhymney Iron Company, and the Tredegar Iron and Coal Company, on which I notice the hon. Member for Mansfield is a director. If he were present it would be interesting to hear whether he approves of that-method of keeping accounts or not. I have had a careful examination made both with regard to coal and with regard to gold, and I cannot find a single mining company which complies with the terms of this Clause at present. How far that is caused by the present method of collection of Income Tax I cannot say. Let me quote what is said by Mr. P. D. Leake on this subject:—
    "Absence of this provision for expired capital outlay is, in my opinion, a most pernicious and objectionable feature in the accounts of such undertakings, which is directly encouraged by the persistent refusal of the Income Tax authorities to allow deduction on the depreciation of inherently wasting assets, necessarily destroyed or consumed in the process of seeking profits."
    From the Chancellor of the Exchequers point of view I think it is a great mistake to allow that to go on, because instead of discouraging the formation of a capital

    2223
    fund to meet these wasting assets he ought to collect his Income Tax so as to encourage it. It would mean the building up constantly of a sum in every business of a nature to replace the expired capital value and a capital sum which would be available for new enterprises, and which, in its turn, would start new enterprises, which again would become the subject of taxation. Therefore, it is only once more an illustration of killing the goose that lays the golden egg, and that I think is absolutely true of this method, even from the point of view of the Chancellor of the Exchequer.
    To come back to the £2,000,000. At the time the Chancellor of the Exchequer was speaking, Income Tax was 1s. 2d. in the £. £2,000,000 would represent claims to the extent of £35,000,000. I think it is only necessary to point out that in the fifty-sixth Report of the Commissioners of Inland Revenue for the year ending 31st March, 1913, the gross assessments of profits of coal and other mines in the United Kingdom for the year 1911–12 is given as £19,680,637. Where the Chancellor of the Exchequer derives his calculation of a loss of £2,000,000, which represents a profit of £35,000,000, when the total profits of coal mines in this country are assessed at £19,000,000, I cannot possibly imagine. I can only assume that it was not a calculation at all; "£2,000,000," like "Mesopotamia," is a blessed sort of word, and did just as well as any other sum to reel out to the Committee at that particular moment. Assuming the amount to be correct, it must mean that the Treasury are raising, under the guise of Income Tax, a sum of £2,000,000 a year which is a direct tax on capital and not on profits at all. Whether the amount is right or wrong that is equally unjustifiable. I ask the Committee to contrast this present system of raising Income Tax with the Government policy of exempting from rating improvements connected with the land. Take, for example, Clause 8 of the Rill under consideration. How can the Government possibly justify penalising improved methods of business and making it difficult and costly to put up suitable buildings and keep them in proper repair, to have the latest class of machinery and motive power for industrial purposes, while at the same time they recognise that it is of great importance by the remission of taxation to do everything they can to
    2224
    encourage the expenditure of capital in connection with the land? In regard to farm buildings and other buildings on, agricultural land, owners can now claim: complete remission of Income Tax on the cost of maintenance, and not merely a percentage. We have also to remember Clauses 13 and 14, having for their object the separate valuation of site and improvements, so as to relieve improvements from taxation.
    If that is the policy of the Government with regard to improvements connected with land, why they should penalise improvements connected with business I really cannot see. Land is used in connection with business, not to the same extent, but in an exactly analogous way, as it is used in connection with agriculture; and if it is a good thing to get all the buildings and machinery you can on land used for agriculture, it is a good thing to get all the buildings and machinery you can on land used in connection with business. Hon. Members opposite, like the hon. Member for New-castle-under-Lyme (Mr. Wedgwood) and the hon. Member for Hanley (Mr. Outh-waite) go further than that. They would like to exempt from rating altogether all improvements on land, and put the whole of the rates on the value of the land alone. How can hon. Members who take that view, or have any sort of sympathy with it, justify this penal tax upon capital invested in industry? The Chancellor of the Exchequer had only one other objection when this Clause was last debated. He said:—
    "The hon. Gentleman calls it scientific book-keeping. That costs a good deal of revenue, and I think scientific book-keeping is just the risk yon have to guard against in the acceptance of an Amendment of this kind, and unless I am mistaken, if we accepted this, it would be so scientific that there would lie no Income Tax left. Therefore you have to proceed upon a principle which may be a crude one, but which is the only principle which is possible of application in the case of a tax."
    That is a most unmerited aspersion on an honourable profession. It is not the business of chartered accountants in this country to try to swindle the Treasury or anyone else. They have only to make fair accounts which can be justified by prudent business men, or by boards of directors to their shareholders, or by private individuals to their fellow partners. As a matter of fact, at the present time in many businesses they are forced to produce two complete sets of accounts, one, the "crude" accounts to comply with the Chancellor of the Exchequer's methods of raising taxation, and the other an accurate

    2225
    and proper statement of the financial position of the business, which a prudent board of directors can put before its shareholders. The building trade has a special claim to consideration in a matter of this kind. In that trade machinery is exposed to very rough usage. If building is to be carried on not at a wholly prohibitive cost, it is essential to have every modern appliance that can be procured. Machinery must be introduced, but it tends to become obsolete faster than in any other business with which I am acquainted. The ordinary allowance of 5 per cent, on machinery, not on the original value, but on the depreciating annual value, and consequently never working the item down to nothing, is wholly inadequate to the actual amount of depreciation which has to be taken off year by year. At present this is a specially urgent matter. There is a veritable revolution in the motive power by which our manufacturing industries are being driven, and if we are to keep ahead of our competitors abroad we must put no impediment in the way of the adoption of the most economical form of motive power and its transmission. We must encourage and not discourage people to put down turbines, Diesel engines, or whatever may be the most efficient in every locality, to electrify their works, to do away with all kinds of risk for the people employed, to make the employment in business sweeter and better, and to do everything which cheapens production, which is the essential which we have to consider. This practice of giving an utterly inadequate allowance for depreciation on this class of machinery is a distinct discouragement of the adoption of modern methods.
    I hope my hon. and learned Friend (Mr. Pollock) will have something to say about the effect of the present method of collection in driving businesses abroad. He can doubtless quote, as I could, cases where firms which fully intended that their businesses should be registered, controlled, and centred in this country, have decided—because the business consisted of working very rapidly diminishing mineral deposts, such as nitrate deposits—in order to escape Income Tax working out at 4s. 6d. in the £, which they would have to pay if they registered here, to conduct their business abroad. This short-sighted policy, not only "crude" but improvident, on the part of the Treasury, means the loss of
    2226
    fees which they would otherwise get—¼ per cent, on share capital and 1 per cent, on debenture capital. On a single company with £800,000 ordinary capital, and £200,000 debentures, the Treasury throw away £4,000 in fees, without taking into account the stamps on the transfer of shares or the large proportion of Income Tax which they are also throwing away; because, as everyone knows when a company is registered in South America, the tendency is to have a larger number of foreign shareholders and a smaller number of English shareholders who pay Income Tax. The last thing I want to say is this: I want to anticipate what will probably be said from the Treasury Bench. We shall be told that there is a Royal Commission going to be set up to consider all these subjects. I want to meet that question straight away. I am aware that the Prime Minister said that it was time "for a further inquiry into the whole basis on which our Income Tax is levied." Of course, I quite agree with that, but I say that "what is sauce for the goose is sauce for the gander." It will not do for the Government to tell us on Clause 5, as they did two nights ago, that this is a question of throwing out the net—which seems to be one full of holes to catch the wastage of Income Tax, which may be now claimed from people who have invested their capital abroad. This is so urgent that it cannot wait, and it will be a very useful thing, as the Attorney-General said, to have the experience, if only for a short time. The hon. and learned Gentleman said:—
    "In the second place, this Committee which the Prime Minister has spoken of, will surely be a very large and valuable body, and its recommendation will be very much better worth attention, if they are able to speak in the light of even the briefest experience of the imposition of these taxes."
    I say this Clause will give them, at any rate, a brief experience of something like a reasonable, just, equitable, and prudent method of carrying out what was the original intention of these framers of the Income Tax Act, namely, the collection of this great tax upon the profits of industry and not upon the capital invested in it. Therefore, without going at once to decide precisely every single detail of what allowance shall be made, I say that the present system is so unjust, stupid, inequitable, and improvident that I am perfectly certain it will be most valuable to give this Commission the experience of a year or two, of, at any rate, an attempt to carry out a well-thought-out Clause—which this is—

    2227
    and then let them decide whether it ought to be enlarged or curtailed, what ought to be brought into it, and what ought to be shut outside of it. There is only one other argument that I wish to urge—that is, that those other Clauses—in no case as good a Clause as this—have been considered for a very considerable time in Committee of the Finance Bill. On 8th July, 1910, the right hon. Gentleman who is now Postmaster-General, said:—
    "I consider the matter very urgent. I agree that it is a subject that should be considered during the months which will intervene between now and the resumption of the Session in November. I can assure the hon. Member for Windsor that, so far as I am concerned, I will bring this question seriously to the notice of my right hon. Friend the Chancellor of the Exchequer."
    On the last occasion, in 1912, the Chancellor of the Exchequer commenced his speech by saying that—
    "In fact I go beyond that, and say that this is a real Case, and that it has got to be dealt with."
    It had to be dealt with in 1910; still more in 1912; and I say that now we have raised the Income Tax to 1s. 3d. in the £ it is a question that will not brook delay. We must not be satisfied at being told that it is one of the many subjects which will be considered by the Royal Commission.
    9.0 P.M.
    Sir A. WILLIAMSON: In supporting the new Clause proposed so ably, so exhaustively, with so much ability, and so much plainness by the hon. Member for Devizes (Mr. Peto), I shall not attempt to follow the hon Member in all the aspects of this somewhat difficult subject. It is desirable to take a broad view of this difficult subject, because there are so many concerns, businesses, and investments of all sorts which are the subject of a certain amount of wastage. But the Clause proposed to the Committee is one of a strictly limited character. It only turns on certain aspects of wasting assets. It may be that those who take the view I do on the subject will never arrive at the point where the deductions for wasting assets will be sufficient to cover all wasting assets. That may be, but, at any rate, I would like to give the Committee, as a practical business man, some views of how our particular system does affect particular concrete cases of trade at the present time. It is very much better if we can look at this from the point of view of practical examples. Then, perhaps, we can show to those who have charge of our Treasury affairs the fact that there is a distinct danger in continuing in the present course. The
    2228
    facts within my own knowledge relate in the first instance to a nitrate company which has been in existence since 1899. From that year to 1913 that company paid taxes to the British Exchequer on income amounting to £572,000. The sum that company paid to its shareholders as dividend during the same period was £373,000. Therefore, it paid taxes upon 53 per cent, more than the shareholders received. It may be at once said by the unthinking critic that large sums are put away unnecessarily, and that some day the shareholders will receive these sums. That, however, is not the case. Sums have been put away year by year in that company barely sufficient to replace the exhaustion of their grounds, and to some extent, also, for depreciation of their plant. But the British revenue officials allow no reduction from profits for money which is put aside to replace the exhausted lands, and only allow a very inadequate sum for that which is put aside for depreciation of plant and for replacement of that plant. That is a practical case.
    I will turn to another article of commerce which is important, and of increasing importance, to this country. It is new to this country—certainly new since the Income Tax was established—an entirely new trade, and a new article of industry. I refer to oil-fields. This country has, rightly or wrongly—I think rightly—taken a hand in the development of the oil-fields of the world. We look upon it as a very important thing that people with means should take part in that enterprise. It is not only perhaps, lucrative to those who take part in it, but also essential for the competition that we have to face with the rest of the world, and also for our Navy. There is a company which I know which has this year a taxable income of £128,000. All that is available for the shareholders is £60,000. The rest of the money—the difference between £128,000 and £60,000—has been put aside by the directors for depreciation, in part, of plant, but chiefly for the exhaustion of grounds. The directors would be very unwise and very unfair to their shareholders if they did not manage the business in that reasonable and proper way. It seems to me to be entirely unfair and unreasonable that the Revenue Department should take what is the gross income as the amount on which to levy these taxes, and it becomes more important now when the tax has been raised to so high a level.

    2229
    In this particular company to which I have referred, instead of the shareholders paying an Income Tax of 1s. 4d., they are paying an Income Tax double 1s. 4d. upon the amount they receive. What is the effect? It is of increased importance to study this at the present time, because these are new industries—I only refer to two because I have practical knowledge of them, and they are certainly comparatively new industries that sprung up at a date long after the institution of the Income Tax, and long after legislation was passed which covers our Income Tax, and it does not appear that industries such as these could have been contemplated by those framing our Income Tax law. It is important that these new industries should be domiciled in this country and that British subjects should take an interest in these new branches of industry. It rests with those interested in the promotion of these companies whether they should be promoted in foreign countries instead of this country. At the present moment there is a very large and important company being formed with a capital of between £2,000,000 and £3,000,000 sterling. It is connected with oil, and, as a matter of fact, it has been considered whether this company shall be situated in London or not. If the company were domiciled in London and registered in London, let me point out two or three things that would happen. First, there would be the Stamp Duty and the registration duties, and so forth, which the Government would get. There would be the employment of a secretary and clerks, and there would be fees for directors, and there would be employment for a good many people in this country through the ordering of goods which the company required. These orders amount to very large figures, and there would be freight for British ships carrying materials to the oil-field. But what is going to happen? Those interested in the promotion of this company are partly in this country and partly abroad, and they say, "we would not object to its being domiciled in London from many points of view. We would have a larger market for shares and more generous support by the public coming forward to subscribe, so that for many reasons we would prefer to have it domiciled in London. We would not object to pay the British Government a legitimate amount of Income Tax, but we object to paying Income Tax on what is not income at all." The consequence is we are going to lose this
    2230
    company. It is not going to be domiciled in London, and the whole of the work of that company will be outside Great Britain. The board of directors will be in some other country, and they will naturally say, and you cannot blame them for saying it, that "we will place the orders for our goods with those who are near us, whom we can see every day," and we in this country will lose that very large contract.
    I should like to point out to the Committee that this is a matter which not only affects Great Britain. Other countries have his problem also. Only recently we have had a law passed in the United States of America to impose an Income Tax on citizens located there and others. This question of wasting assets has been in the minds of those who framed the latest Income Tax laws in the world at the present time. How do they deal with this matter? They have dealt with it in this way. In arriving at net income for taxation purposes they have provided that certain deductions shall be made from the gross receipts. For example, expenses are charged and all serious, losses from bad debts and so forth, and
    "All losses actually sustained within the year and not compensated by insurance or otherwise, including a reasonable allowance for depreciation by use, wear and tear of property, if any; and in the case of mines a reasonable allowance for depletion of ores and all other natural deposits, not to exceed 5 per cent, of the gross value at the mine of the output for the year for which the computation is made."
    That 5 per cent, may be adequate or inadequate. Probably in some cases it is adequate and in others inadequate. But the point is, the principle is recognised in the latest Income Tax law, that it is unjust and unreasonable to tax capital, and that is what we are doing by taxing the money placed aside to replace wasting assets. A reform, of the law is, as I pointed out, not only required to remedy an injustice to the shareholders in existing concerns, but it is still more required to prevent the domiciling of new companies dealing with these enterprises in foreign countries. The matter is of increasing importance, and not diminishing importance, owing to our increased interest in those concerns that have depreciating or wasting assets. Of course, the difficulty we are met with is undoubtedly the money involved. That is the most sure rock of defence by the Government. But surely if it is once admitted that we are doing an injustice and an injury to British trade by the present system, then the House of Commons is not going to wait long to get that injustice removed and that impolicy

    2231
    changed into a satisfactory and reasonable policy. I suppose we shall be told that this is one of the matters that will go to this new Committee. Probably that is all the comfort we will get to-night, but I say it is not a subject that should be any longer shelved. I add my voice, with whatever weight it may have, to that of the hon. Member opposite who has spoken, and I call the attention of the House and the country to this as a subject of very grave and far-reaching importance.
    Sir J. SIMON: No one will complain because this important subject has been raised by the hon. Member who moved this new Clause. But the very fact that the subject is so important and the questions involved in it are so wide and far-reaching, makes it more necessary that we should realise that this is a topic which, if it is to be dealt with at all, can only be dealt with in connection with something like a general reconstruction of the Income Tax law. I do not wish to pre-judge in any way what would be the right view to take if such general reconstruction were attempted, for though I quite agree with my hon. Friend who has just spoken and with the hon. Member opposite that there is a great deal of force in some of the considerations they urge, and that there are cases which may be used as illustrations, and which suggest, as the law at present stands, a surprising contrast between the deductions which are allowed on the one hand, and the deductions not allowed on the other, the fact that you can show that such things happen does not justify the hasty adoption of an overwhelming change. Let me give the Committee one illustration. The hon. Member who moved, more particularly pointed to this state of things.
    A mining company which has purchased mining mineral deposits in order that in the course of years it may work those out is not entitled to deduct, when it makes its return of balance of profit and loss, any sum which may be regarded as going to some sinking fund to replace the capital expended in purchasing those deposits. The hon. Member says quite truly they may work out in fifty years, and year by year the company is required to pay Income Tax on a balance of profit and loss which does not include any instalment year by year set aside in order to create a Sinking Fund to recreate the capital which has been sunk in buying those mineral, deposits. That is quite true, but let us vary the facts and see how deeply
    2232
    you will cut into the principle of the Income Tax if you accept proposals of this kind. Suppose, instead of the mining company purchasing out and out the mineral deposits which it is going in the course of half a century to exhaust by working, they take a lease from an owner in the ordinary way involving a royalty and a dead rent. No doubt the annual remuneration which the owner will accept will be all the larger because the thing they are working on will not last for ever, and will have disappeared in the course of fifty years. That only means that he will exact year by year a larger rent than he might be disposed to do if he could afford to keep working away at his mineral property in the cheerful expectation that it would never get any less.
    It is indisputable under the Income Tax law, that, as a mining company pays the rent to the royalty owner, the mining company ought to deduct under Schedule A the portion of the Income Tax which is really and truly borne by the landlord. It is certain they will, when they make their return under Schedule D, be entitled to treat the rent as one of the expenses of carrying on the business. If you take Schedule A you will get a contribution out of the landlord, and Schedule D out of the colliery company's profit, and you have to put those two things together whether they be from the landowner or from the colliery company. Therefore, the State, under our present system, does get the same sum year by year in Income Tax as though this thing was going on for ever. If the hon. Member was really going to make a practical proposal here, he would have to take into account not only the sort of adjustment he has in mind, namely, an adjustment for the colliery company which has purchased the minerals and wants an allowance for a depreciating asset, but he would have to make an adjustment for the case of the landlord. Those complications have only to be pointed out to show what a very large and complicated subject we have to deal with. I do not say that the fact of it being complicated is any reason why it should not be thoroughly inquired into and examined. As a matter of fact there has been an examination of this very matter. There was a Departmental Committee presided over by the late Lord Ritchie which went into this Whole question of the allowance in respect of wasting assets, and not, I am sure, because the

    2233
    Members of that Committee were blind to the very important considerations which lion. Members have urged, but no doubt for reasons of a practical character, that Departmental Committee did not recommend in the result any substantial change in the existing system.
    The real truth is that while everybody would like, as far as they may, to pursue the dictates of abstract justice, we have to remember also that we live in a more or less practical world. The enormous difficulties involved in dealing with this thing on purely scientific lines can hardly be exaggerated. You must remember what the machinery is with which you have to work. You are not here solving in the abstract some economic problem where everybody is conspiring together to arrive at the exact truth. You are engaged in a controversy between the revenue authorities on the one hand, who, I quite admit, may sometimes be disposed to emphasise the side unfavourable to the taxpayer, and on the other hand you have to deal with the taxpayer himself who, in the same way, will be a little bit disposed, if the opportunity offers, not to assist unduly in his own taxation. As long as you demonstrate what the rent is you pay in the present year, you deduct it. If you demonstrate what are the ordinary working expenses, you can deduct them. So long as we are dealing with these questions they are matters of immediate record which can fairly easily be proved, established, or supported. But if you once begin to say, "I want to do something really scientific, I want the Revenue to accept my view of how many years these mineral deposits will last; and secondly, I want you to accept my view that they will last for so many years, and they will or they will not cease to be commercial assets before they have all been worked out; thirdly, I want you to accept a highly elaborate table of depreciation which has been worked out for me by this particular scientific accountant; and fourthly, I want you to agree to all this, although I am in possession of the facts, and you cannot possibly know them." If that is the way you are going to enter your deductions you may be very scientific but you are not in a very scientific atmosphere, because it is a controversy between the tax gatherer and the taxpayer, the former trying to emphasise the sum of money which you ought to pay, and the latter doing everything in his power to insist that the sum should be less than other people might suppose.
    2234
    It is that fact which has induced every Government in turn to say, with every desire to give a fair hearing to those who urge this change in the name of what is scientific and accurate, we must have some regard to the many considerations which apply when you are endeavouring to assist people in regard to the Income Tax. I would never stand up and say that the particular provisions in the third rule of the first case of Schedule D of the Income Tax Act of 1842 are so obviously and patently based upon abstract scientific principles that they lead to an exact and true conclusion in all variations, and that there are no anomalies. That is impossible. What has happened is in devising a scheme of Income Tax it has been found possible to allow certain deductions which are clearly and easily provable, which can be tested, and which can be demonstrated in your books as expenditure which you have incurred in a particular time, whereas it really is not practicable to go on and say, "And now I want you to give me a hypothetical deduction which is based upon this, that I think, or somebody else thinks, that the particular mining property I own will come to an end in so many years, and that consequently I ought to set aside such-and-such a sum of money at such a rate of interest to accumulate in order that I may be able to replace my capital at the end of so many years."
    Although I quite agree that a man who is paying Income Tax in connection with a business which is gradually wearing out-some of its assets by the very nature of the business carried on feels that he is being pinched as compared with the man who is not under that particular disability, on the other hand everybody who has examined this scheme minutely has found that there are enormous practical difficulties in adopting any other principle. Therefore, though a Debate of this sort is very proper, and though the arguments used are, no doubt, of great force and interest, we must not blind ourselves to the practical considerations which arise. The hon. Member who moved said that no doubt he would be referred to the Committee or Commission which it is the Intention of the Prime Minister to appoint to go into the whole question of Income tax anomalies. In spite of his anticipating that observation and a little deprecating it, I still make it. I should have thought that it would have been a very

    2235
    proper topic to be considered in this connection, and though it is quite impossible for the Government to accept the Clause, I am not myself entirely satisfied, if the matter is investigated, that it will be found these practical considerations do not override more abstract scientific reasoning. Therefore we really have no alternative but to do what has been done by many who have spoken on this subject before, in this and other Governments, and to say that it is not possible for us to contemplate the change of this law without there being a thorough and complete overhauling of the whole scheme and system of Income Tax which is embodied in our Statutes in order that one may see whether this thing is practicable, and what effect it would have upon other portions of our law examined in all its bearings. For these reasons, while we have listened with a great deal of interest and sympathy to what has been urged by my hon. Friend and other hon. Members, I feel obliged to resist the proposal that we should read this Clause a second time.
    Mr. POLLOCK: The right hon. Gentleman has taken some new ground in the response he has made to the Motion to read this Clause a second time. This is the fourth occasion on which I have taken part in a Debate on this matter. The Clause used to be moved by the hon. Member for King's Lynn, and in those days the objection taken to it was that the Clause was so bad in form and covered a great deal more than wasting assets that though the Government sympathised and thought that wasting assets ought to be excluded they could not do it. Thus said the present Postmaster-General (Mr. Hobhouse). He made a very sympathetic speech in July, 1910, and told us he was going to think it over carefully with his colleagues and let us know about it in November; but in consequence of the Clause being imperfect he could not do more than that. He gave us a sort of standard or test of a wasting asset, and expressed, I will not say his whole-hearted sympathy, but his warm-hearted sympathy with the proposal to give relief to wasting assets. When the question again arose of drawing up a Clause, some of us not un-familar with the jargon of Income Tax Acts were able to go to the sources from which these sorts of things are found, and we were able to draw up the Clause which is now before the Committee, and which came on in 1911. The Chancellor of the
    2236
    Exchequer then said, "This is a very dangerous Clause. It is perfect in form. We cannot take exception to it in form. It does distinguish what a real wasting asset is. You do not attempt to include leasehold and other forced wasting assets, and for that very reason"—as his words were to me on one occasion—"because it is in the particular form that it is, and does really deal with true wasting assets, it is all the more dangerous. We get at least £2,000,000 from it, and, although I cannot justify it, and although you have made out a case under which you ought to have relief, when it is a question of £2,000,000 or no £2,000,000, I am in favour of the £2,000,000, and the injustice rather than the justice of the case." He kept the £2,000,000. That was in August, and in November, after he had had an opportunity and I had had an opportunity of thinking about it, I asked him where he got the figure of £2,000,000. He consulted some of the people at the Inland Revenue Office, and he was then able to tell me:—
    "The figure of £2,000,000 was quoted in a discussion on an Amendment moved by the hon. and learned Member. There is not sufficient material on which to found a precise estimate, but I was informed that it would be unwise to assume that the principle embodied in the Amendment would entail any less loss than £2,000,000.'
    Until to-night we have never had any right hon. Gentleman who in recent years has had the pluck to stand up and say either that we had not got a good case in the nature of inherently wasting assets, or that we had not established that there was justice in the claim we made. The right hon. Gentleman, however, has now put forward that claim. I want to deal with this subject from several aspects. The hon. Member for Elgin and Nairn (Sir A. Williamson), from a business point of view, made a very strong speech indeed, proving that the Chancellor of the Exchequer is at present losing revenue. He was able to give very startling figures about a company the capital of which was £2,000,000, which will be lost to this country, with the consequent results which the hon. Member detailed. Last year the Chancellor of the Exchequer was good enough to see a deputation on this matter, and I was then able to give him, first hand, by one of the members of the deputation figures of companies not registered in this country. One was a company of £800,000, and the other a company of £1,500,000, all of which had gone outside the country because of their being afraid of this Income Tax. The revenue is

    2237
    therefore losing on the swings, and it declines to make a profit on the roundabouts. That is really what it is. It is simply because the Treasury will not take the trouble to try and find out what they are losing, or what is the danger of this Clause. The hon. Member for Devizes (Mr. Peto), in the admirable speech which he delivered on this subject, really gave a proof. The Chancellor of the Exchequer last year said that if you let out all the coal-mine companies and all these other companies, you would lose this huge figure, but when it is looked into what is the amount in respect of which a loss of £2,000,000 would accrue. It is something like £30,000,000 a year. What is the actual sum collected by way of Income Tax from all these companies? It is £19,000,000 a year. The Chancellor of the Exchequer might really ask somebody to go into this matter a little more closely and try to get within £11,000,000 of the sum per annum which he says is taxable, and would be let out or would receive relief under this Clause.
    The Solicitor-General says, "What is our present scheme? We live in a practical world." Do we? Let us see where we do live. On this question of wasting assets we live in the year 1842. This subject was established on its present basis before railways were even begun. The railway which is so ably directed by the hon. Baronet near me (Sir F. Banbury) was not opened till eight years later. The Great Western Railway had not started running in those days of the practical world in which we live. Turnpike trusts were the sort of things which had to pay Income Tax. Highwaymen lived in that practical world in which we live, because the sense of justice is not what is looked for now from the Treasury; but we have got back to the practical world of 1842 when right was right, and if something produced income revenue the cry was, "Stick to it," although every sense of justice demanded inquiry into it. Joint Stock enterprise was not started till a quarter of a century later. The standard system of accounts demanded by the Courts had not developed, and the companies are still being defrauded of this enormous amount in respect of Income Tax, which naturally makes them fly to other countries rather than continue to suffer it. Let me give an illustration of what the burden is. I will take a small company—a nitrate company. For the three years—1909, 1910, and 1911—
    2238
    its average profits were £3,013. In 1912 it paid as Income Tax £874. which is equivalent to 5s. 10d. in the £. I have not worked out what the amount would be to-day, but I think it would come to almost 7s. That is the Income Tax you are putting upon this country's industries at the present time and is it surprising financial matters are trending into foreign hands rather than, as they used to do in the practical days of 1842 and 1870, and so on, into English hands. One only wants to state the thing to reinforce the able arguments of the hon. Member for Devizes (Mr. Peto) and the hon. Member for Elgin and Nairn. That is the problem. It is a real problem which every business man feels, but which is not appreciated by the Department which probably has no real knowledge of these things.
    Then I come to the Attorney-General. He says, "Oh, yes, it is a very difficult subject, but I wonder if hon. Members are aware that a Departmental Committee sat and dealt with this thing." I wonder how far he knows what was that Departmental Committee's Report. I have read it often backwards and forwards, I keep it in my book in order to have it ready to hand, and I am not at all sure that the Attorney-General is quite familiar with what the Committee reported upon. It was appointed to report on the prevention of fraudulent evasion, on the treatment of incomes derived from copyrights, patent rights, and terminable annuities, and on allowances made in respect of depreciation of assets charged to the capital account. It was not appointed to report on wasting assets per se, but only on allowances made in respect of the depreciation of assets charged to capital account. I have often read the paragraphs which deal with that to see if they deal with the subject of wasting assets. They do not do so. The Attorney-General refers the Members of this Committee to the Report of a Committee which was presided over by Lord Ritchie, and which was a sort of locus classicus, or gospel of authority, but on examination we find in it nothing whatever referring to wasting assets. It begins by dealing with the Act of 1842, the allowances for trade expenses, and the actual cost of repairs of business premises. It then goes on to show, what we all know, regarding the gradual larger and larger allowances which were made in respect of these wasting assets, or, rather, the assets charged to capital account. It

    2239
    shows the larger sum granted in respect of repairs. It showed that a ship was given a life of twenty-five years, and it shows the allowance made in respect of that. It further showed that one-sixth deduction from rack rents of buildings, but the only way in which that Committee really dealt with any wasting assets was to point out how a leasehold was not a wasting asset. I think the Attorney-General, before referring this Committee to that Report, ought to have read these paragraphs. When he came to deal with the question of the difficulty of making allowances in respect of wasting assets, to which the Member for Devizes referred to, he gave us as an illustration a case which I regard as absolutely not a wasting asset at all. I should, with great respect to him, say he had been dealing with something analogous to a leasehold, which had nothing to do either with the Clause or with inherently wasting assets. If I were asked as to the problem the right hon. Gentleman put, I should answer that I thought the reply of any person really well versed in what is an inherently wasting asset would be that the suggestion of the Attorney-General was entirely beside the point that it was not within the Clause, and that it did not deal with an inherently wasting asset at all.
    Sir J. SIMON: I am anxious to be instructed about this, and I should like to know whether the hon. and learned Gentleman says minerals are not wasting assets.
    Mr. POLLOCK: I will deal with that matter a little more at length. The Attorney-General's case is this: Suppose an estate is purchased outright. You have a lease of minerals granted as between two British subjects. He suggests that in that case there ought to be no allowance, and with that I agree—for the purpose of an inherently wasting asset. If you take a case where there is a transference, either for a capital sum or by an out-and-out payment, of some estate which, for a period of years, is liable to Income Tax, that is not a wasting asset within the Clause, because all you have done is that you have handed over to one person for a payment, which may be a lump sum, or may perhaps be a sum distributed over a period of years, although that sum may be enhanced by reason of the property itself being exhausted at a rather higher rate of speed—in either case, one person transfers to the other a property which
    2240
    would have been liable year by year to Income Tax, and in respect of which no British subject could prevent himself from being liable to pay Income Tax, by reason of the fact of the transfer to another British subject, who also has to pay Income Tax. The Attorney-General is good enough to smile, and perhaps thinks that I have not made my point clear. Perhaps I have not. I do not pretend to have either his lucidity or his ability, but I do try to understand my opponent's argument and to make the best attempt to understand the problem on which we may differ. His point was this: You are taking this wasting asset between two British subjects, and in return for a payment made by the one to the other, you are trying to get rid of something which ought to be taxable over a period of years. If that is the case he puts, I say unhesitatingly that he has simply given the old case of leaseholds, which are not inherently wasting assets, and which are never rightly claimed to be inherently wasting assets.
    Let me tell the Committee the distinction I am endeavouring to draw. When you have coal or nitrates or gravel, or any other mineral which will be, and is, exhausted by working over a period of years, it is quite clear that some person—it is not the Government, and it ought to be the directors of the company, or other persons in control—as a careful business man will calculate the period of time during which these assets will last. In some cases it is very easy to make the calculation. In the case of nitrate fields and in the case of coal companies it is more difficult. The persons who make the calculation are not, as the Attorney-General seemed to think, the Government, but the persons who work and understand the business, and who have to make proper provision for the exhaustion of their assets. They are the persons who will have to determine what provision ought to be made, and if they do make a provision and put the money aside so that it can never be brought forward again for the purpose of dividends, then, and only then, will they be entitled to the exemption under this Clause. I should like to read the words of a very able and wise judge who has considered this point in a particular case. He put the antithesis between the practice of the Treasury and the practice of any prudent director, and said:—
    "Any prudent person who carries on a business or gets an income from something in which the capital is necessarily wasting by reason of the using of the material with which he is concerned as part of his

    2241
    capital, will provide for such a case by a sinking fund; but although it is a prudent course to adopt, any deduction in respect of it is not permitted by the Income Tax Acts."
    Let me amplify that. Although every shareholder and every auditor would require a provision to be made for necessarily wasting assets, and although no person ought to devote any sum to dividends until that provision is made, yet you find that the Treasury make no distinction at all, and take the part of the imprudent persons and not the prudent persons. If provision is made, what is the effect? It is not that you have withdrawn something and that you have in some way defeated the revenue. What you have done is this: It may be that for a period of years you find your assets will last longer, and therefore you have made too great a provision. That will enable you to have your capital back in your pocket at an earlier period, and when you get that capital back in your pocket it will again be, as it ought to be, subject to all the taxes the citizen has to pay, and you will have again capital which can fructify and implement and start new businesses in fresh fields where further enterprise and capital are required. I come to the last point with which I wish to deal. The Attorney-General said that we should leave it for the Royal Commission to inquire into, and that we must survey the whole field. With that I agree, I hope it will be surveyed. But supposing this Clause passes, would it make any difference, and would there be any real danger? The Clause only allows a deduction in respect of relief where provision is made for a period of years. It says:—
    "And where such a deduction from the revenue receipts is made, and has been made, from the commencement of the actual employment of the inherently wasting assets in seeking profits, or during a period of not less than three years to the end of the usual financial year of the particular trade,"
    Then, and then only, is the exemption to be allowed. What is the meaning of that? We do not seek under this Clause to give exemption where you have merely a pretence of providing against inherently wasting assets, but only where, as a part of the settled policy for a period of years from the inception of the company—if it be a company under the Articles of Association—or for a period of three years to show that it is the settled policy, the provision has actually been made. There can be no subtle juggling with the
    2242
    accounts in order to get the exemption in a particular year with the object, after the exemption has been obtained, of dividing that provision by way of dividends. The Clause is carefully drawn in order to deal with cases of settled policy, and not cases of juggling. So far as the present is concerned, all the relief that would be given is to those companies who at the present time have been for a period of three years taking prudent steps to conduct their business properly. That would not let out any of the coal companies or other companies whose systems do not provide for the depreciation of their assets. If the Clause were accepted now, there would be an opportunity for the Commission, in the course of their sittings and before making their Report, to learn what the effect is where true provision is made, while, on the other hand, there would be no danger at all of a rapid and wholesale exemption being granted with the loss of a great amount of revenue to the contry, because the Commission will have an opportunity of sitting and of reporting before further such exemptions could be granted, after a period of three years has elapsed, and where it has already become by reason of prudent policy a part of the objects that the directors would carry out.
    There is really no answer to this claim. The Chancellor of the Exchequer has told me that there is no answer in justice. There is only the tyrant's plea of necessity, and I suppose he adheres to the tyrant's plea. It is a very proper place to make the plea from the Treasury Bench. He knows that I hold strong opinions as to the class of persons who do sit on the Treasury Bench, but I think it is exactly the place where we do get the plea of the tyrant from. This Clause, if anyone has the patience to understand the Income Tax Acts, is not, perhaps, a more difficult Clause than any other, but it is designed to advance the interests of the business community in the practical world of to-day, in 1914, and it is designed to sweep away the old cobwebs of an age which has long since gone by and which lived in 1842. Let me ask the Chancellor of the Exchequer what he would say supposing this was some system of copyhold or land laws created in the year 1842. Would he not tell us that here was an old system of tyranny, an out-worn system long before people began to travel by railway and before we had any system of finance, and here we were stopping the

    2243
    clock of the world in order to have an outworn system. He would brush it away at once and would be one of the first to have more gibes than anybody else against those who cared to preserve an outworn and old-world system. But he is not so unwise as to put his claim on that ground. He does not put his claim on the same ground as the Attorney-General. He puts it on the simpler but forcible ground that it may be an injustice, but he wants revenue and he will have revenue whether he causes injustice or not.
    10.0 P.M.
    Mr. KING: I do not rise because I am a great authority on the Income Tax. I always pay my Income Tax at once. I do not rise because I am a great lawyer. I do not profess that I have studied all the intricacies of the Income Tax, but I rise because I believe I am about the only Member of the House who has listened throughout this whole discussion. I began by listening to the hon. Member (Mr. Peto), when I think there were only five other Members in the House and not one Member of his own party, and I plumed myself on thinking I was about the only man in the House who had not gone to Olympia for the evening. I will point out one argument which I am perfectly certain is absolutely fallacious, and has been used by every speaker who has addressed the Committee in favour of this Clause. It is that owing to our terrible way of imposing the Income Tax on wasting assets, trade and capital are leaving this country. Every conceivable reason has been given before why trade and capital are going abroad. At one time it is entirely because of our Free Trade system. At another time it is because we indulge in pseudo philanthropic legislation like the Insurance Act, Employer's Liability, and so forth, and then we have heard again and again that trade and capital are leaving this country simply because the present Chancellor of the Exchequer is Chancellor of the Exchequer, and is likely to be so for many years longer. But a new discovery has been now made, that because of an old provision of the Income Tax, which apparently Lord Ritchie thoroughly approved, and which no one ever attempted when the Conservatives were in power to sweep away, taxing wasting assets, trade is leaving the country, capital is going abroad, companies are being registered in foreign countries instead of here, our industries are vanishing, if
    2244
    not vanished already, and altogether because of this provision in the Income Tax our outlook is black indeed. I refuse to believe it, and I believe that, valuable as this discussion has been as a purely academic treatment of, no doubt, a very important economic subject, it has not been of real value in showing how to raise the money for the necessities of the country. I hope those who have not listened to the discussion will take my advice, for I have listened to it, and vote against this Clause.
    Sir F. BANBURY: I congratulate my hon. and learned Friend on the extremely able and excellent speech which he has made. My inherent modesty is so great that I really did not rise after his speech because I felt it was impossible to put the case nearly as well as he had put it, and I should not have risen if it had not been for the extraordinary statement of the hon. Member (Mr. King). It is quite true that I have not heard the whole of the Debate, but I have heard a very large portion of it. I heard the very excellent speech of the hon. Baronet (Sir A. Williamson), and I do not remember seeing the hon. Member (Mr. King) during that speech.
    Mr. KING: I was here through the whole of it.
    Sir F. BANBURY: I withdraw, but I am surprised that the hon. Member has not learned more wisdom if he listened to that speech. The hon. Baronet was the only person I have heard who said anything about the withdrawal of trade owing to this particular form of tax.
    Mr. KING: You did not listen to the Mover.
    Sir F. BANBURY: The hon. Baronet did not say that trade was leaving the country altogether, or that the general trade of the country was bad. What he said, absolutely correctly, was that there were certain industries, and one particular new industry, which was springing up, namely, the oil industry, and in that particular industry he did not say that trade was leaving the country, but that new developments, instead of coming here, were going to other places. I quite admit that this is no new question, and it is one on which, as far as I remember, the attitude of all Chancellors of the Exchequer, whichever side may happen to be in power, has always been the same. They have

    2245
    always said, "This tax may not be quite right, but it has brought in a considerable amount of money, and I cannot afford to give it up." That was not the attitude taken up by the Attorney-General, who apparently said that he could not give any countenance to this Clause because of the difficulty of administering it. I do not think there is anything in the administration of this Clause, because there is actually in the Clause itself provision to show how it can be administered. But when we have, as I have always understood, especially from the hon. Member (Mr. King) a collection of all the talents sitting on that bench, it is hardly right to say that because there are difficulties in administering a certain Clause, they cannot admit that Clause. Surely all the talents arrayed on that bench are capable of doing what the United States has done in making by-laws—they are very fond of making by-laws—giving power to the different Ministers in charge of Departments. Surely the combined talent of the Chancellor of the Exchequer and the Attorney-General is sufficiently great to make these by-laws! It is quite true that all Chancellors of the Exchequer have taken up the same attitude as is taken up by the right hon. Gentleman opposite, but since our party was in power there has been a great increase in the oil industry. That is a new industry, and it is one which is particularly concerned with this Clause. Oil is undoubtedly a wasting asset, and it is quite true, as the hon. Member opposite
    (Sir A. Williamson) said, that unless we are careful we shall drive away, not the trade we have already got, but trade we might have. It is impossible for anybody who is not in the Government to know what the actual loss to the Treasury would be if this Clause was accepted, but I think it must be remembered that, not only have you to think of the actual loss which would accrue if you were to make this alteration in the law, but also whether by not making the alteration you are not preventing from coming a certain amount of money which would make up for the loss. I think any man who is concerned in business will admit that that is the problem which ought to be considered. That is not the problem which the Attorney-General dealt with in any way. Personally, I am prepared to admit that just at this moment it would be rather difficult for the Chancellor of the Exchequer to accept the new Clause. Had the Attorney-General mat us in a conciliatory spirit I think it would have been a little difficult for us to divide on this Clause. He took up the negative attitude that it would be quite impossible to make arrangements by which the alteration could be administered, and, that being his attitude, I shall certainly, if my hon. Friend goes to a Division, vote with him.
    Question put, "That the Clause be read a second time."
    The Committee divided: Ayes, 113; Noes, 208.

    Division No. 178.]

    AYES.

    [10.8 P.m.

    Archer-Shee, Major M.

    Denison-Pender, J. C.

    Lewisham, Viscount

    Ashley, Wilfrid W.

    Dickson, Rt. Hon. C. Scott

    Lloyd, George Butler (Shrewsbury)

    Astor, Waldorf

    Duke, Henry Edward

    Locker-Lampson, O. (Ramsey)

    Baird, John Lawrence

    Du Pre, W. Baring

    Lockwood, Rt. Hon. Lt.-Colonel A. R.

    Baldwin, Stanley

    Eyres-Monsell, Bolton M.

    Lowe, Sir F. W. (Birm., Edgbaston)

    Banbury, Sir Frederick George

    Faber, Captain W. V. (Hants, W.)

    Mackinder, Halford J.

    Barlow, Montague (Salford, South)

    Falle, Bertram Godfray

    Macmaster, Donald

    Barnstoh, Harry

    Flannery, Sir J. Fortescue

    Mildmay, Francis Bingham

    Bathurst, Hon. A. B. (Glouc, E.)

    Fletcher, John Samuel

    Mount, William Arthur

    Bathurst, Charles (Wilts, Wilton)

    Ganzoni, Francis John C

    Newton, Harry Kottingham

    Benn, Ion Hamilton (Greenwich)

    Gardner, Ernest

    Nield, Herbert

    Bird, A.

    Gastrell, Major W. Houghton

    Orde-Powlett, Hon. W. G. A.

    Boyton, James

    Gilmour, Captain John

    Pease, Herbert Pike (Darlington)

    Bridgeman, William Clive

    Goldsmith, Frank

    Perkins, Walter Frank

    Bryce, J. Annan

    Guinness, Hon. Rupert (Essex, S.E.)

    Pretyman, Ernest George

    Burn, Colonel C. R.

    Gwynne, R. S. (Sussex, Eastbourne)

    Pryce-Jones, Colonel E.

    Butcher, John George

    Hamilton, C. G. C (Ches., Altrincham)

    Randles, Sir John S.

    Campion, W. R.

    Harris, Henry Percy

    Ratcliff, R. F.

    Carlile, Sir Edward Hildred

    Henderson, Major H. (Berkshire)

    Rawlinson, John Frederick Peel

    Cassel, Felix

    Henderson, Sir A. (St. Geo., Han. Sq.)

    Rees, Sir J. D.

    Cator, John

    Hewins, William Albert Samuel

    Ronaldshay, Earl of

    Cecil, Evelyn (Aston Manor)

    Hoare, S. J. G.

    Royds, Edmund

    Cecil, Lord Hugh (Oxford University)

    Hope, James Fitzalan (Sheffield)

    Rutherford, Watson (L'pool, W. Derby)

    Cecil, Lord R. (Herts, Hitchin)

    Hope, Major J. A. (Midlothian)

    Salter, Arthur Clavell

    Clyde, J. Avon

    Horne, E. (Surrey, Guildford)

    Sanders, Robert Arthur

    Coates, Major Sir Edward Feetham

    Horner, Andrew Long

    Sanderson, Lancelot

    Courthope, George Loyd

    Hunter, Sir Charles Rodk.

    Sandys, G. J.

    Craig, Norman (Kent, Thanet)

    Joynson-Hicks, William

    Sharman-crawford, Colonel R. G.

    Craik, Sir Henry

    Kinloch-Cooke, Sir Clement

    Spear, Sir John Ward

    Currle, George W.

    Lane-Fox, G. R.

    Stanier, Beville

    Staveley-Hill, Henry

    Walker, Colonel William Hall

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Stewart, Gershom

    Ward, A. S. (Herts, Watford)

    Wood, John (Stalybridge)

    Strauss, Arthur (Paddington, North)

    Watson, Hon. W.

    Worthington-Evans, L.

    Swift, Rigby

    Weigall, Captain A. G.

    Yate, Colonel C. E.

    Talbot, Lord Edmund

    Weston, Colonel J. W.

    Younger, Sir George

    Thomas-Stanford, Charles

    Wheler, Granville C. H.

    Thomson, W. Mitchell- (Down, N.)

    Williamson, Sir Archibald

    TELLERS FOR THE AYES.—

    Thynne, Lord Alexander

    Wilson, Captain Leslie O. (Reading)

    Mr. Peto and Mr. pollock.

    Touche, George Alexander

    Wolmer, Viscount

    NOES.

    Abraham, William (Dublin, Harbour)

    Hayden, John Patrick

    Palmer, Godfrey Mark

    Adamson, William

    Hayward, Evan

    Parker, James (Halifax)

    Addison, Dr. Christopher

    Henderson, Arthur (Durham)

    Parry, Thomas H.

    Allen, Arthur A. (Dumbartonshire)

    Henderson, J. M. (Aberdeen, W.)

    Pearce, Robert (Staffs, Leek)

    Arnold, Sydney

    Henry, Sir Charles

    Phillips, John (Longford, S.)

    Barnes, George N.

    Herbert, General Sir Ivor (Mon., S.)

    Pirie, Duncan V,

    Benn, W. W. (T. Hamlets, St. George)

    Higham, John Sharp

    Pratt, J. W.

    Boland, John Plus

    Hodge, John

    Price, C. E. (Edinburgh, Central)

    Booth, Frederick Handel

    Hogge, James Myles

    Pringle, William M. R.

    Bowerman, Charles W.

    Hudson, Walter

    Raffan, Peter Wilson

    Boyle, Daniel (Mayo, North)

    Hughes, Spencer Leigh

    Rea, Rt. Hon. Russell (South Shields)

    Brady, Patrick Joseph

    Jardine, Sir J. (Roxburgh)

    Reddy, Michael

    Brocklehurst, W. B.

    John, Edward Thomas

    Redmond, John E. (Waterford)

    Buckmaster, Sir Stanley O.

    Johnson, W.

    Redmond, William (Clare, E.)

    Burns, Rt. Hon. John

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Rendall, Athelstan

    Burt, Rt. Hon. Thomas

    Jones, Edgar (Merthyr Tydvil)

    Richardson, Albion (Peckham)

    Byles, Sir William Pollard

    Jones, H. Haydn (Merioneth)

    Richardson, Thomas (Whitehaven)

    Carr-Gomm, H. W.

    Jones, J. Towyn (Carmarthen, East)

    Roberts, Charles H. (Lincoln)

    Cawley, Sir Frederick (Prestwich)

    Jones, Leif (Notts, Rushcliffe)

    Roberts, G. H. (Norwich)

    Cawley, Harold T. (Lanes., Heywood)

    Jones, William (Carnarvonshire)

    Roberts, Sir J. H. (Denbighs)

    Chancellor, Henry George

    Jones, W. S. Glyn- (Stepney)

    Robertson, Sir G. Scott (Bradford)

    Chapple, Dr. William Allen

    Joyce, Michael

    Robertson, J. M. (Tyneside)

    Clancy, John Joseph

    Kellaway, Frederick George

    Robinson, Sidney

    Clough, William

    Kelly, Edward

    Roch, Walter F. (Pembroke)

    Clynes, John R.

    Kennedy, Vincent Paul

    Roche, Augustine (Louth)

    Collins, Sir Stephen (Lambeth)

    Kilbride, Denis

    Rowlands, James

    Compton-Rickett, Rt. Hon. Sir J.

    King, J.

    Runciman, Rt. Hon. Walter

    Cornwall, Sir Edwin A.

    Lambert, Rt. Hon. G. (Devon, S. Molton)

    Russell, Rt. Hon. Thomas W.

    Cowan, W. H.

    Lambert, Richard (Wilts, Cricklade)

    Samuel, J. (Stockton)

    Craig, Herbert J. (Tynemouth)

    Law, Hugh A. (Donegal, West)

    Scanlan, Thomas

    Crooks, William

    Lawson, Sir W. (Cumb'rld, Cockerm'th)

    Scott, A. MacCallum (Glas., Bridgeton)

    Crumley, Patrick

    Leach, Charles

    Sheehy, David

    Cullinan, John

    Lewis, Rt. Hon. John Herbert

    Sherwell, Arthur James

    Davies, Timothy (Lines., Louth)

    Low, Sir Frederick (Norwich)

    Simon, Rt. Hon. Sir J. Allsebrook

    Dawes, James Arthur

    Lundon, Thomas

    Smith, Albert (Lanes., Clitheroe)

    Delany, William

    Lynch, A. A.

    Smith, H. B. Lees (Northampton)

    Denman, Hon. Richard Douglas

    Macdonald, J. Ramsay (Leicester)

    Strauss, Edward A. (Southwark, West)

    Dickinson, Rt. Hon. Willoughby H.

    Macdonald, J. M. (Falkirk Burghs)

    Sutherland, John E.

    Dillon, John

    MacGhee, Richard

    Sutton, John E.

    Donelan, Captain A.

    MacNeill, J. G. Swift (Donegal, South)

    Taylor, Theodore C. (Radcliffe)

    Doris, William

    MacVeagh, Jeremiah

    Taylor, Thomas (Bolton)

    Duffy, William

    M'Curdy, C. A.

    Thomas, J. H.

    Duncan, c. (Barrow-in-Furness)

    McKenna, Rt. Hon. Reginald

    Thorne, G. R. (Wolverhampton)

    Edwards, Clement (Glamorgan, E.)

    Manfield, Harry

    Thorne, William (West Ham)

    Esmonde, Dr. John (Tipperary, N.)

    Marks, Sir George Croydon

    Toulmin, Sir George

    Esmonde, Sir Thomas (Wexford, N.)

    Marshall, Arthur Harold

    Trevelyan, Charles Philips

    Esslemont. George Birnie

    Meagher, Michael

    Verney, Sir Harry

    Farrell, James Patrick

    Meehan, Francis E. (Leitrim, N.)

    Walsh, Stephen (Lanes., Ince)

    Fenwick, Rt. Hon. Charles

    Meehan, Patrick J. (Queen's Co., Leix)

    Ward, John (Stoke-upon-Trent)

    Ffrench, Peter

    Millar, James Duncan

    Wason, Rt. Hon. E. (Clackmannan)

    Field, William

    Molloy Michael

    Wason, John Cathcart (Orkney)

    Fitzgibbon, John

    Molteno, Percy Alport

    White, J. Dundas (Glasgow, Tradeston)

    Flavin, Michael Joseph

    Montagu, Hon. E. S.

    White, Patrick (Meath, North)

    Gelder, Sir W. A.

    Morgan, George Hay

    Whitehouse, John Howard

    George, Rt. Hon. D. Lloyd

    Morison, Hector

    Whyte, Alexander F. (Perth)

    Ginnell, Laurence

    Muldoon, John

    Wiles, Thomas

    Gladstone, W. G. C.

    Munro, Rt. Hon. Robert

    Wilkie, Alexander

    Glanville, H. J.

    Murray, Captain Hon. Arthur C.

    Williams, Aneurin (Durham, N.W.)

    Goddard, Sir Daniel Ford

    Neilson, Francis

    Williams, Penry (Middlesbrough)

    Goldstone, Frank

    Nolan, Joseph

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Gwynn, Stephen Lucius (Galway)

    Nugent, Sir Walter Richard

    Wilson, W. T. (Westhoughton)

    Hackett, John

    O'Brien, Patrick (Kilkenny)

    Winfrey, Sir Richard

    Hall, Frederick (Normanton)

    O'Connor, T. P. (Liverpool)

    Wing, Thomas Edward

    Hancock, J. G.

    O'Doherty, Phillip

    Yeo, Alfred William

    Harcourt. Rt. Hon. Lewis (Rossendale)

    O'Dowd, John

    Young, William (Perthshire, East)

    Harcourt, Robert V. (Montrose)

    O'Kelly, Edward P. (Wicklow, W.)

    Yoxail, Sir James Henry

    Hardie, J. Keir

    O'Malley, William

    Harmsworth, Cecil (Luton, Beds)

    O'Neill, Dr. Charles (Armagh, S.)

    Harvey, A. G. C. (Rochdale)

    O'Shaughnessy, P. J.

    TELLERS FOR THE NOES.—

    Harvey, T. E. (Leeds, West)

    O'Sullivan, Timothy

    Mr. Gulland and Mr. Webb.

    Haslam, Lewis (Monmouth)

    Outhwaite, R. L.

    NEW CLAUSE.—(Exemption and Abatement when Interest or Dividends Paid Free of Income Tax.)
    If it shall be proved to the satisfaction of the Commissioners that the holder of any debentures, stocks, shares, securities, or obligations of any company, corporation, municipality, State, or Government which stipulate for the payment of interest or dividends free of Income Tax is a person entitled to exemption or abatement from Income Tax, he shall have repaid to him the amount which has been paid as Income Tax by the company, corporation, municipality, State, or Government, liable to pay such interest or dividends in respect of the debentures, stocks, shares, securities, or obligations which he holds."
    Clause brought up, and read the first time.
    Mr. CASSEL: I beg to move, "That the Clause be read the second time."
    There is just time enough before the guillotine falls to enable the right hon. Gentleman to remedy what is really a curious anomaly in the Income Tax law, which affects small investors, and which will cost him hardly any revenue. Under the law as it stands, if interest on debentures is paid free of Income Tax, that is to say, if the company pays the Income Tax before the interest is paid to the debenture holder, though he is a man with a total income under £160, he cannot get the abatement. I may give an illustration. Take Income Tax at Is. in the £. If a company pays 5¼ per cent, and deducts the Income Tax from it, the debenture holder in that case gets 5 per cent. net. He does get his abatement paid back if he has under £160. But if, on the other hand, the company pays him 5 per cent, free of tax, that is to say, if the company itself pays the ¼ per cent., he does not get the exemption. The revenue gets precisely the same amount of Income Tax in both cases. The debenture holder gets precisely the same amount of interest in both cases, and yet, for some reason that I cannot understand, in one case he gets repayment of his Income Tax and in the other case he does not. The hon. Member for Kingwinsford asked a question on the 2nd July, 1913:—
    "Whether it is the practice of the Board of Inland Revenue to refuse repayment of Income Tax to the holders of debentures which stipulate for the payment of interest free of Income Tax, although the holder is entitled to exemption from Income Tax?"
    2250
    The right hon. Gentleman in reply said:—
    "The answer to the question is in the affirmative. The Income Tax Acts only authorise the repayment to an exempt person of tax which he has paid or has actually suffered by deduction from rent or interest."
    In substance he suffers a deduction if the company has paid it before it pays him. He is in precisely the same position whether the company pays 5¼ per cent, subject to Income Tax or deducts it before it pays him, and pays him 5 per cent, free of Income Tax. In those companies the small investor is really without any justification placed in a worse position. I cannot see the slightest ground for any differentiation. The company's position is this, that the Inland Revenue adopt this practice in the case of interest on debentures, but they do not adopt the same practice in the case of dividends on preference shares. If it is a case of dividends on preference shares, they do allow the small investor to have the rebate. What can be the grounds of the distinction I cannot imagine. They put forward the ground that no Income Tax has been actually deducted from the interest to which the debenture holder is entitled. Nominally that is so, but in fact it is not so. If they logically carry out their theory to its proper conclusion, the debenture holder who receives the interest on those debentures ought to pay Income Tax. If you treat it as interest which has not yet been paid on those debentures, then the debenture holder, when he receives his interest, ought to pay the tax. The Inland Revenue authorities do not carry it out logically; they do not ask him to pay. When he is a small man, they do not allow him the deduction. I cannot see what possible grounds of justification there can be for it. There are a number of companies which have contracted to pay their interest free of taxes. They cannot get out of their obligation. I have a list of companies here. There is a large number of very small investors in those companies who are quite unjustly placed at a disadvantage in comparison with investors in other companies. Really there is no justification for this, and I hope that the right hon. Gentleman will see his way to remedy this grievance, which, though it is small, is felt to be very real by those who hold debentures in those companies, and as to which I really think there can be no logical answer whatever.
    Mr. THEODORE C. TAYLOR: I wish to say a word in support of the hon. and

    2251
    learned Gentleman. I have never been able to understand the distinction between loans and debentures at a fixed rate of interest and interest on shares on which the company have already paid Income Tax. This is not exactly the same case as the Lancashire case which the right hon. Gentleman had before him a year or so ago, because in that case it was loaned money, and really the interest might not have been paid. It seems to me that there is no difference between income from shares and income from debentures, and if the beneficiary receives an allowance in the one case it should be given in the other.
    The SOLICITOR-GENERAL (Sir Stanley Buckmaster): I think a very little consideration will show that this Amendment is not a very reasonable one. It is directed to the case where a man holds debentures or some loan security in the company, and the company has contracted to pay him a fixed rate of interest irrespective of Income Tax. Let me assume that it is a payment of 4 per cent, or 5 per cent, free of Income Tax. The lender, then, gets every year his fixed 4 per cent, or 5 per cent., and the company undertake to pay the tax. How far it is a lawful bargain may well be doubted, having regard to Section 103 of the Act of 1842, which on the face of it certainly suggests that any such bargain should be utterly void. The words are:—
    "All contracts, covenants, and agreements made or entered into for the payment of interest, rent, or other annual payment in full, without allowing deduction, shall be utterly void."
    Let us assume it is not void, and that it is a perfectly lawful bargain, the result of this Amendment, if it were carried, would be to produce this astounding result, that the higher the rate of Income Tax the larger the sum the man would receive, because if he gets 4 or 5 per cent, free of tax when the tax is a shilling, and is entitled to recover that shilling in addition to the 4 or 5 per cent., it follows that if the Income Tax becomes 1s. 2d. or 1s. 3d. he recovers, in addition to the 4 or 5 per cent., 1s. 2d. or 1s. 3d.; and he would represent one of the only fortunate class in this country who would be able to rejoice as the Income Tax proceeded to rise. Really there is no ground whatever, I submit to the Committee, for accepting this Amendment, and I ask the Committee to reject it.
    Sir F. BANBURY: I hope my hon. and learned Friend will not feel aggrieved if on this occasion I say that I think the arguments of the Solicitor-General are unanswerable. Suppose a certain person holds, say, 5,000 Three Per Cent. Debenture Stock producing £150 per year, free of Income Tax, and that that is all the income he has, then he is entitled to the deduction of Income Tax upon that income. He gets the £150, and he is not aggrieved in any kind of way. He does not pay Income Tax. I cannot see why, because the company has chosen to make that kind of bargain he should, in addition to the £150, also receive a bonus of 1s. 2d. or 1s. 3d. to which he is in no way entitled. Take the case of a company which declares its dividend on its ordinary stock free of Income Tax, there a man receives £150 free of Income Tax. In that case it is quite true if the company did not pay the Income Tax upon the £150 there would be a certain amount over which the company really ought not to have paid—that is to say, the Exchequer has got something which it would not have got if the company did not pay the Income Tax, because it would not have got that on the £150. But that has got to be divided amongst the whole shareholders. It is not the property of this particular person, and the result would be so infinitesimal that I really do not think it would be worth while troubling about it. In the latter case it is within the power of the shareholders to pass a resolution at any annual general meeting that they should in future not deduct the Income Tax, but that the individual shareholders should pay it. That was done in the case of a company of which I am a director. Therefore, though as a rule I sit, with great advantage to myself, at the feet of my hon. and learned Friend, in this particular case I think he has made a mistake, and if he goes to a Division I am afraid I shall have to find myself in the same Lobby as the hon. Gentlemen opposite.
    Mr. H. T. CAWLEY: (who was indistinctly heard): If this matter goes to a Division, I am sorry I shall not have the unusual privilege of voting in the same Lobby as the hon. Baronet. This grievance is felt by a large number of people. There are in Lancashire mills alone 27,000 small loan holders who usually receive their interest free of Income Tax. Until a short time ago the money was paid to the Inland Revenue, and it was then repaid to these people, so that they have a definite

    2253
    grievance now that the Inland Revenue are awake to the position. On the merits of the case, it seems to me that it is really Income Tax deducted on incomes below £160. It is no good saying that the individuals have no particular right to it. At any rate, the State has no right to it. The money is paid on behalf of Income Tax payers, and it is received by the State in respect of people who are not liable to Income Tax. For that reason I think the State ought not to try to drive too hard a bargain. The hon. Baronet opposite says it is quite easy for the company to change its system, and instead of paying 4 per cent, free of Income Tax to pay 4¼ per cent. The two things are practically the same, but the State says, "Although the two things are the same, in one case we collar the money to which we are not entitled, and in the other case we do not." It is not always easy to make the change. It is not good for the credit of a mill, where they have been able to borrow at 4 per cent., to raise the rate to 4¼ per cent. On the merits I think these people have a very good claim, and I hope the Government will allow the Clause to be passed.
    Sir GEORGE YOUNGER: I do not quite understand whether this question of granting a rebate in this case goes as far as the hon. Baronet thought. As I understand, there is a rule in the case of debentures where a specific contract has been made by the company to pay the interest free of Income Tax. But I did not gather from the Solicitor-General whether the same practice exists in regard to ordinary or preference shares.
    Sir S. BUCKMASTER: It is a different thing altogether.
    Sir G. YOUNGER: Very few companies which in the past have been in the habit of paying their dividends free of Income Tax are likely to do so much longer. There are two reasons why they should not. The first is that Income Tax is now so high that it is most desirable that taxpayers should know exactly what they are paying. The second is that it is likely to go higher still. As we know from a recent speech of the Attorney-General, we are going to have not only a Super-tax but a super-Super-tax. Heaven only knows where it is going to end! No company with any sense at all will continue to pay its dividends free of Income Tax. Scottish banks which were in the habit of paying interest free of Income Tax have recently, largely at my
    2254
    suggestion, changed their practice, and they have been extremely glad since that they did so. I do not suppose that there will be very many cases of this kind. The Chancellor of the Exchequer is very careful when he charges his Super-tax to take care that those who get their dividends free of Income Tax should have the tax added and be Super-taxed upon it. He is very careful to look after his own interests in this respect, but I am not so sure whether he will be equally careful to see to this particular concession. What is sauce for the goose is also sauce for the gander, and there is a good deal to be said from what my hon. Friend has put forward.
    Mr. CASSEL: Although I very much regret that the hon. Baronet does not support me on this occasion, and in face of his threat of being against me in the Lobby I shall not be prevented going to a Division if I can get anybody to tell with me. I feel that this is so monstrously unjust upon small people. Why should any man whose income is less than £160 pay Income Tax—and he does pay Income Tax. As for the differentiation which the Solicitor-General attempted to draw between the case of ordinary shares and debentures, that does not apply in the case of preference shares. I have got here a letter from the Inland Revenue to say that in the case of preference shares a man may be entitled to 5 per cent, without being allowed an exemption. I can understand him attempting to draw a distinction between taxing shares where there is no limit, but in the case of preference shares, which are limited just the same as debentures, it is made perfectly clear that really the subject ought to be entitled to that exemption. As for the other argument of the Solicitor-General that the higher the Income Tax the more benefit the man gets if he is not liable to Income tax, that is so in every case where he is relieved. In every case where the Income is under £160 the higher the Income Tax the more the man benefits, because the more he gets let off. It is a mere question of which way you put it; whether, say it is 4¼ per cent, subject to Income Tax, or 4 per cent, free of Income Tax. There is no reason for refusing to repay to the man, who by law is free of Income Tax, that to which he is entitled. I feel myself so much on the subject that notwithstanding the opposition of the hon. Baronet, I shall press this matter to a Division.
    Question put, "That the Clause be read a second time."
    The Committee divided: Ayes, 119; Noes, 219.

    Division No. 179.]

    AYES.

    [10.38 P.m.

    Agg-Gardner, James Tynte

    Goldsmith, Frank

    Randles, Sir John S.

    Ashley, Wilfrid W.

    Guinness, Hon. Rupert (Essex, S.E.)

    Ratcliff, R. F.

    Astor, Waldorf

    Gwynne, R. S. (Sussex, Eastbourne)

    Rawlinson, John Frederick Peel

    Baird, John Lawrence

    Hamilton, C. G. C. (Ches., Altrincham)

    Rees, Sir J. D.

    Baldwin, Stanley

    Hardy, Rt. Hon. Laurence

    Ronaldshay, Earl of

    Barlow, Montague (Salford, South)

    Harris, Henry Percy

    Royds, Edmund

    Barnston, Harry

    Harvey. T. E. (Leeds, West)

    Rutherford, Watson (L'pool, W. Derby)

    Bathurst, Hon. A. B. (Glouc., E.)

    Henderson, Major H. (Berks, Abingdon)

    Salter, Arthur Clavell

    Benn, Ion Hamilton (Grenwich)

    Henderson, Sir A. (St. Geo., Han. Sq.)

    Sanders, Robert Arthur

    Bird, Alfred

    Hewins, William Albert Samuel

    Sanderson, Lancelot

    Brassey, H. Leonard Campbell

    Hoare, S. J. G.

    Sandys, G. J.

    Bridgeman, William Clive

    Hohler, Gerald Fitzroy

    Spear, Sir John Ward

    Burn, Colonel C. R.

    Hope, Major J. A. (Midlothian)

    Stanier, Beville

    Campion, W. R.

    Horne E.

    Stanley, Hon. Arthur (Ormskirk)

    Carlile, Sir Edward Hildred

    Horner, Andrew Long

    Starkey, John Ralph

    Cator, John

    Hunter, Sir Charles Rodk.

    Saveley-Hill, Henry

    Cawley, Sir Frederick (Prestwich)

    Ingleby, Holcombe

    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 R. (Herts, Hitchin)

    Kinloch-Cooke, Sir Clement

    Talbot, Lord Edmund

    Clyde, J. Avon

    Lane-Fox, G. R.

    Terrell, Henry (Gloucester)

    Coates, Major Sir Edward Feetham

    Lawson, Hon. H. (T. H'mts., Mile End)

    Thomas-Stanford, Charles

    Courthope, George Loyd

    Lewisham, Viscount

    Thomson, W. Mitchell- (Down, North)

    Craig, Norman (Kent, Thanet)

    Locker-Lampson, O. (Ramsey)

    Thynne, Lord Alexander

    Craik, Sir Henry

    Lockwood, Rt. Hon. Lt.-Colonel A. R.

    Touche, George Alexander

    Croft, H. P.

    Lowe, Sir F. W. (Birm., Edgbaston)

    Ward, A. S. (Herts, Watford)

    Currie, George W.

    Lyttelton, Hon. J. C.

    Watson, Hon. W.

    Denison-Pender, J. C.

    Mackinder, Halford J.

    Weigall, Captain A. G.

    Dixon, C. H.

    Macmaster, Donald

    Weston, Colonel J. W.

    Duke, Henry Edward

    Mallaby-Deeley, Harry

    Wheler, Granville C. H.

    Du Pre, W. Baring

    Mildmay, Francis Bingham

    Wilson, Captain Leslie O. (Reading)

    Eyres-Monsell, Bo'ton M.

    Mount, William Arthur

    Wolmer, Viscount

    Faber, Captain W. V. (Hants, W.)

    Newton, Harry Kottingham

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Falle, Bertram Godfray

    Nicholson, William G. (Petersfield)

    Wood, John (Stalybridge)

    Fell, Arthur

    Nield, Herbert

    Worthington Evans, L.

    Flannery, Sir J. Fortescue

    Orde-Powlett, Hon. W. G. A.

    Yate, Colonel C. E.

    Fletcher, John Samuel

    Pease, Herbert Pike (Darlington)

    Younger, Sir George

    Ganzoni, Francis John C.

    Perkins, Walter Frank

    Gardner, Ernest

    Peto, Basil Edward

    TELLERS FOR THE AYES.—

    Gastrell, Major W. Houghton

    Pollock, Ernest Murray

    Mr. Cassel and Mr. Cawley.

    Gilmour, Captain John

    Pryce-Jones, Colonel E.

    NOES.

    Abraham, William (Dublin, Harbour)

    Cowan, W. H.

    Goldstone, Frank

    Adamson, William

    Craig, Herbert J. (Tynemouth)

    Griffith, Rt. Hon. Ellis Jones

    Addison, Dr. Christopher

    Crooks, William

    Gwynn, Stephen Lucius (Galway)

    Ainsworth, John Stirling

    Crumley, Patrick

    Hackett, John

    Allen, Arthur A. (Dumbartonshire)

    Cullinan, John

    Hall, Frederick (Yorks, Normanton)

    Allen, Rt. Hon. Charles P. (Stroud)

    Davies, Timothy (Lines., Louth)

    Hancock, John George

    Arnold, Sydney

    Dawes, James Arthur

    Harcourt, Rt. Hon. H. L. (Rossendale)

    Baker, Harold T. (Accrington)

    Delany, William

    Harcourt, Robert V. (Montrose)

    Banbury, Sir Frederick George

    Denman, Hon. Richard Douglas

    Hardie, J. Keir

    Barnes, George N.

    Dickinson, Rt. Hon. Willoughby H.

    Harmsworth, Cecil (Luton, Beds)

    Barran, Sir John N. (Hawick Burghs)

    Dillon, John

    Harvey, A. G. C. (Rochdale)

    Benn, W. W. (T. Hamlets, St. George)

    Donelan, Captain A.

    Haslam, Lewis (Monmouth)

    Boland, John Pius

    Doris, William

    Hayden, John Patrick

    Booth, Frederick Handel

    Duffy, William J.

    Hayward, Evan

    Bowerman, Charles W.

    Duncan, C. (Barrow-in-Furness)

    Henderson, Arthur (Durham)

    Boyle, Daniel (Mayo, North)

    Duncan, Sir J. Hastings (Yorks, Otley)

    Henderson, J. M. (Aberdeen, W.)

    Boyton, James

    Edwards, John Hugh (Glamorgan, Mid)

    Henry, Sir Charles

    Brady, Patrick Joseph

    Esmonde, Dr. John (Tipperary, N.)

    Herbert, General Sir Ivor (Mon., S.)

    Brocklehurst, W. B.

    Esmonde, Sir Thomas (Wexford, N.)

    Higham, John Sharp

    Bryce, J. Annan

    Esslemont, George Birnie

    Hobhouse, Rt. Hon. Charles E. H.

    Buckmaster, Sir Stanley O.

    Falconer, James

    Hodge, John

    Burns, Rt. Hon. John

    Farrell, James Patrick

    Hogge, James Myles

    Burt, Rt. Hon. Thomas

    Fenwick, Rt. Hon. Charles

    Hope, John Deans (Haddington)

    Byles, Sir William Pollard

    Ffrench, Peter

    Hudson, Walter

    Carr-Gomm, H. W.

    Field, William

    Hughes, Spencer Leigh

    Chancellor, Henry George

    Fitzgibbon, John

    Jardine, Sir J. (Roxburgh)

    Chapple, Dr. William Allen

    Flavin, Michael Joseph

    John, Edward Thomas

    Clancy, John Joseph

    Gelder, Sir W. A

    Johnson, W.

    Clough, William

    George, Rt. Hon. D. Lloyd

    Jones, Rt. Hon. Sir D.Brynmor (Swansea)

    Clynes, John R.

    Ginnell, Laurence

    Jones, Edgar (Merthyr Tydvil)

    Collins, Sir Stephen (Lambeth)

    Gladstone, W. G. C.

    Jones, H. Haydn (Merioneth)

    Compton-Rickett, Rt. Hon. Sir J.

    Glanville, Harold James

    Jones, J. Towyn (Carmarthen, East)

    Cornwall, Sir Edwin A.

    Goddard, Sir Daniel Ford

    Jones, Leif (Notts, Rushcliffe)

    Jones, William (Carnarvonshire)

    O'Brien, Patrick (Kilkenny)

    Scanlan, Thomas

    Jones, William S. Glyn- (Stepney)

    O'Connor, T. P. (Liverpool)

    Scott, A. MacCallum (Glas., Bridgeton)

    Joyce, Michael

    O'Doherty, Philip

    Sheehy, David

    Kellaway, Frederick George

    O'Donnell, Thomas

    Sherwell, Arthur James

    Kelly, Edward

    O'Dowd, John

    Simon, Rt. Hon. Sir John Allsebrook

    Kennedy, Vincent Paul

    O'Kelly, Edward P. (Wicklow, W.)

    Smith, Albert (Lancs., Clitheroe)

    Kilbride, Denis

    O'Malley, William

    Smith, H. B. Lees (Northampton)

    King, Joseph

    O'Neill, Dr. Charles (Armagh, S.)

    Strauss, Edward A. (Southwark, West)

    Lambert, Rt. Hon G. (Devon, S. Molton)

    O'Shaughnessy, P. J.

    Sutherland, John E.

    Lambert, Richard (Wilts, Cricklade)

    O'Sullivan, Timothy

    Sutton, John E.

    Law, Hugh A. (Donegal, West)

    Outhwaite, R. L.

    Taylor, Thomas (Bolton)

    Leach, Charles

    Palmer, Godfrey Mark

    Thomas, J. H.

    Lewis, Rt. Hon. John Herbert

    Parker, James (Halifax)

    Thorne, G. R. (Wolverhampton)

    Low, Sir Frederick (Norwich)

    Parry, Thomas H.

    Thorne, William (West Ham)

    Lundon, Thomas

    Pearce, Robert (Staffs, Leek)

    Toulmin, Sir George

    Lynch, Arthur Alfred

    Phillips, John (Longford, S.)

    Trevelyan, Charles Philips

    Macdonald, J. Ramsay (Leicester)

    Pirie, Duncan V.

    Verney, Sir Harry

    Macdonald, J. M. (Falkirk Burghs)

    Ponsonby, Arthur A. W. H.

    Walsh, Stephen (Lancs., Ince)

    McGhee, Richard

    Pratt, J. W.

    Ward, John (Stoke-upon-Trent)

    MacNeill, J. G. Swift (Donegal, South)

    Price, C. E. (Edinburgh, Central)

    Wardle, George J.

    MacVeagh, Jeremiah

    Pringle, William M. R.

    Wason, Rt. Hon. E. (Clackmannan)

    M'Curdy, C. A.

    Raffan, Peter Wilson

    Wason, John Calhcart (Orkney)

    McKenna, Rt. Hon. Reginald

    Rea, Rt. Hon. Russell (South Shields)

    White, J. Dundas (Glasgow, Tradeston)

    M'Micking, Major Gilbert

    Reddy, Michael

    White, Patrick (Meath, North)

    Manfield, Harry

    Redmond, John E. (Waterford)

    Whitehouse, John Howard

    Marks, Sir George Croydon

    Redmond, William (Clare, E.)

    Whyte, Alexander F. (Perth)

    Marshall, Arthur Harold

    Rendall, Athelstan

    Wiles, Thomas

    Meagher, Michael

    Richardson, Albion (Peckham)

    Wilkie, Alexander

    Meehan, Francis E. (Leitrim, N,)

    Richardson, Thomas (Whitehaven)

    Williams, Aneurin (Durham, N.W.)

    Meehan, Patrick J. (Queen's Co., Leix)

    Roberts, Charles H. (Lincoln)

    Williams, Penry (Middlesbrough)

    Millar, James Duncan

    Roberts, George H. (Norwich)

    Williamson, Sir Archibald

    Molloy, Michael

    Roberts, Sir J. H. (Denbighs)

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Montagu, Hon. E. S.

    Robertson, Sir G. Scott (Bradford)

    Wilson, W. T. (Westhoughton)

    Morgan, George Hay

    Robertson, John M. (Tyneside)

    Winfrey, Sir Richard

    Morison, Hector

    Robinson, Sidney

    Wing, Thomas Edward

    Muldoon, John

    Roche, Walter F. (Pembroke)

    Yeo, Alfred William

    Munro, Rt. Hon. Robert

    Roche, Augustine (Louth)

    Young, William (Perthshire, East)

    Murray, Captain Hon. Arthur C.

    Rowlands, James

    Yoxall, Sir James Henry

    Neilson, Francis

    Runciman, Rt. Hon. Walter

    Nolan, Joseph

    Russell, Rt. Hon. Thomas W.

    TELLERS FOR THE NOES.—Mr.

    Nugent, Sir Walter Richard

    Samuel, J. (Stockton-on-Tees)

    Gulland and Mr. Webb.

    The CHAIRMAN: The new Clause standing in the name of the hon. Member for South Northampton (Mr. Fitzroy), is outside the scope of the Bill. The new Clauses standing in the name of the hon. Member for Enfield (Mr. Newman) and the hon. Member for Rutland (Mr. Gretton), are not in order.

    NEW CLAUSE.—(Relief from Income Tax in Respect of Repairs to House Property.)
    The limit of allowance in respect of repairs under Section 35 (b) of The Finance Act, 1894, shall be increased from one-sixth to one-fourth part of the annual value referred to in that Section.
    Clause brought up, and read the first time.
    Mr. PRETYMAN: On behalf of my hon. Friend (Mr. Peto) I beg to move, "That the Clause be read a second time." The matter dealt with has been referred to before when the Chancellor of the Exchequer intimated his willingness to do something to meet this case. The allowance at present given for repairs and maintenance of agricultural property is one which under Clause 8 is now unchanged, and it enables the owner to deduct any amount properly spent on re-
    2258
    pairs and maintenance in the assessment for Income Tax. The limit of the value of a house which can be included under that assessment is £8. That limit is too low, because of the increased cost of building and other reasons which are present to the mind of every hon. Member of the Committee. Houses are more costly to build than they were. The basis of rating is not what a house is let on, but what it might reasonably be expected to let at from year to year. Therefore we have suggested that the limit should be extended. There is also a grievance in the case of small property in towns. What we suggest for the consideration of the Chancellor of the Exchequer is that the £8 limit should be increased to £12, which would affect practically only agricultural property, although there is no express limitation to define the difference between rural and urban property. There is also a very considerable hardship in the case of small urban property if the deduction is still limited to the sixth, because now the requirements of sanitary authorities are much higher than they used to be. The cost of repairs, owing to the increased cost of labour and material, has also very largely increased, and the allowance of one-sixth is in no sense

    2259
    equivalent to the necessary expenditure of the owner of small-class property in an urban district who really does his duty in the matter of repairs and maintenance. We all desire to encourage the owners of small property in towns as well as in rural areas to keep their property in proper repair, and there is a very strong case urged outside the House for that allowance to be increased. I suggest that it should be increased from one-sixth to one-fourth. I have here figures which I could give showing that in specific cases owners of small house property in towns are paying 2s., 3s., and even 3s. 6d. Income Tax upon their real receipts, because their necessary expenditure upon maintenance and repairs is very greatly in excess of the allowance of one-sixth that is given. I make that suggestion, and I hope that the Chancellor of the Exchequer will see his way to meet it.
    Mr. LLOYD GEORGE: On the actual terms of the Amendment I cannot see that it would be justifiable to increase the flat rate from one-sixth to one-fourth, because it would not discriminate between the property which is kept in good repair and the property upon which money is not being spent to keep it in decent and good condition. Therefore, I do not think that would be the proper way of dealing with the problem, which has been discussed once before in the course of this Debate. The same considerations were urged upon me last year, when I agreed with the hon. Gentleman, having regard to the cost of cottages, that £8 was inadequate and promised him that I would consider the possibility of raising the limit. We have come to the conclusion that it will be desirable to raise the limit from £8 to £12. That would certainly cover most cottages in the rural districts. [An HON. MEMBEB: "All!"] I am not yet so sure about that, but it would cover most of them. The question whether it would be desirable to draw a distinction between the limit in the town and the limit in the country is one which I should like further to consider. We propose, at any rate, on the Report stage, to put down an Amendment that will raise the limit of the flat rate for cottages from £8 to £12. That will undoubtedly be an improvement upon the present position, and it will be to that extent an encouragement to the owners of small property. That is our proposal, and I would suggest that the right hon.
    2260
    Gentleman should withdraw his Amendment, and the matter could be discussed on the Amendment the Government propose to put down upon the Report stage.
    Mr. PRETYMAN: I shall be happy to assent to that. I am much obliged to the right hon. Gentleman for the concession of £12. Of course, it will apply to town as well as country?
    Mr. LLOYD GEORGE: Yes.
    Mr. PRETYMAN: I quite see the force of the right hon. Gentleman's argument, that if you increase the flat rate unduly, you are really giving no advantage to the man who does spend the money. I should be better satisfied if the £12 could be increased a little further without a flat rate. Perhaps the right hon. Gentleman will consider that before Report. I suggest we should put down on Report a Clause in which the £12 limit may be increased to £20. [A laugh.] Hon. Members who laugh cannot understand what it really means. It means that both in town and country for house property of less than £20 the owner shall be able to deduct from Income Tax assessment any sum which he is able to show had been necessarily and properly spent in maintenance, repairs and management. We do not ask for it above £20, because we do not think it necessary, and when you get to houses of higher value the one-sixth is probably a pretty fair allowance. £20 is the point where you begin the Inhabited House Duty. When you consider the very large increase that there is in the cost of labour and material and in the requirements of sanitary authorities, and the improved standard insisted upon for small property up and down the country, I think it will be obvious that the suggestion to extend it to £20 without a flat rate is not unreasonable.
    Mr. BOOTH: I had hoped that the suggestion made by the Chancellor of the Exchequer would not have been treated in this way, although I quite acknowledge that the hon. Member for Chelmsford received it in a proper spirit. The increase from £8 to £12 is a substantial concession, but to raise it from £12 to £20 would certainly, in country districts, carry it beyond the limits of cottages occupied by the working classes to those inhabited by the middle classes, and when you come to urban houses you cannot have a dividing line.
    Mr. PRETYMAN: There is no suggestion that we should. The increase would cover town and country alike.
    Mr. BOOTH: I was replying to an interruption by an hon. Friend near me. I think this proposal requires a little more consideration. If you stop at £12 you are still within the limits of working-class cottages, but when you go up to £20 you undoubtedly get to the middle-class houses. There is no doubt about that.
    It being Eleven of the clock, the CHAIRMAN proceeded, pursuant to the Order of

    FIRST SCHEDULE.

    Scale of Rates of Estate Duty.

    Where the Principal Value of the Estate

    Estate Duty shall be Payable at the Rate per Cent, of

    £

    £

    Exceeds

    100 and does not exceed

    500

    …

    …

    …

    …

    1

    Exceeds

    500 and does not exceed

    1,000

    …

    …

    …

    …

    2

    Exceeds

    1,000 and does not exceed

    5,000

    …

    …

    …

    …

    3

    Exceeds

    5,000 and does not exceed

    10,000

    …

    …

    …

    …

    4

    Exceeds

    10,000 and does not exceed

    20,000

    …

    …

    …

    …

    5

    Exceeds

    20,000 and does not exceed

    40,000

    …

    …

    …

    …

    6

    Exceeds

    40,000 and does not exceed

    60,000

    …

    …

    …

    …

    7

    Exceeds

    60,000 and does not exceed

    80,000

    …

    …

    …

    …

    8

    Exceeds

    80,000 and does not exceed

    100,000

    …

    …

    …

    …

    9

    Exceeds

    100,000 and does not exceed

    150,000

    …

    …

    …

    …

    10

    Exceeds

    150,000 and does not exceed

    200,000

    …

    …

    …

    …

    11

    Exceeds

    200,000 and does not exceed

    250,000

    …

    …

    …

    …

    12

    Exceeds

    250,000 and does not exceed

    300,000

    …

    …

    …

    …

    13

    Exceeds

    800,000 and does not exceed

    350,000

    …

    …

    …

    …

    14

    Exceeds

    350,000 and does not exceed

    400,000

    …

    …

    …

    …

    15

    Exceeds

    400,000 and does not exceed

    500,000

    …

    …

    …

    …

    16

    Exceeds

    500,000 and does not exceed

    600,000

    …

    …

    …

    …

    17

    Exceeds

    600,000 and does not exceed

    800,000

    …

    …

    …

    …

    18

    Exceeds

    800,000 and does not exceed

    1,000,000

    …

    …

    …

    …

    19

    Exceeds

    1,000,000

    …

    …

    …

    …

    20

    Question put, "That this be the First Schedule of the Bill."
    the House of the 8th July, to put forthwith the Question already proposed from the Chair.
    Question, "That the Clause be read a second time," put, and negatived.
    The CHAIRMAN then proceeded, successively to put forthwith the Questions on any Amendments moved by the Government, of which notice had been given, and the Questions necessary to dispose of the business to be concluded at Eleven of the clock at this day's sitting.
    The Committee divided: Ayes, 236; Noes,142.

    Division No. 180.]

    AYES.

    [11.0 p.m.

    Abraham, William (Dublin, Harbour)

    Booth, Frederick Handel

    Chancellor, H. G.

    Adamson, William

    Bowerman, Charles W.

    Clancy, John Joseph

    Addison, Dr. C.

    Boyle, Daniel (Mayo, North)

    Clough, William

    Ainsworth, John Stirling

    Brady, Patrick Joseph

    Clynes, John R.

    Alden, Percy

    Brocklehurst, William B.

    Collins, Sir Stephen (Lambeth)

    Allen, Arthur Acland (Dumbartonshire)

    Bryce, J. Annan

    Compton-Rickett, Rt. Hon. Sir J.

    Allen, Rt. Hon. Charles P. (Stroud)

    Buckmaster, Sir Stanley O.

    Cornwall, Sir Edwin A.

    Arnold, Sydney

    Burns, Rt. Hon. John

    Cowan, W. H.

    Baker, Harold T. (Accrington)

    Burt, Rt. Hon. Thomas

    Craig, H. J. (Tynemouth)

    Baker, Joseph Allen (Finsbury, E.)

    Buxton, Noel (Norfolk, North)

    Crooks, William

    Barnes, George N.

    Byles, Sir William Pollard

    Crumley, Patrick

    Barran, Sir John N. (Hawick Burghs)

    Carr-Gomm, H. W.

    Cullinan, John

    Benn, W. W. (T. Hamlets, St. George)

    Cawley, Sir Frederick (Prestwich)

    Davies, Timothy (Lincs., Louth)

    Boland, John Plus

    Cawley, H. T. (Lancs, Heywood)

    Dawes, James Arthur

    Delany, William

    Kennedy, Vincent Paul

    Redmond, William (Clare, E.)

    Denman, Hon. Richard Douglas

    Kenyon, Barnet

    Redmond, William Archer (Tyrone, E.)

    Dickinson, Rt. Hon. Willoughby H.

    Kilbride, Denis

    Rendall, Athelstan

    Dillon, John

    King, J.

    Richardson, Albion (Peckham)

    Donelan, Captain A.

    Lambert, Rt. Hon. G. (Devon,S.Molton)

    Richardson, Thomas (Whitehaven)

    Doris, William

    Lambert, Richard (Wilts, Cricklade)

    Roberts, Charles H. (Lincoln)

    Duffy William J

    Law, Hugh A. (Donegal, West)

    Roberts, G. H. (Norwich)

    Duncan, C. (Barrow-in-Furness)

    Leach, Charles

    Roberts, Sir J. H. (Denbighs)

    Duncan, Sir J. Hastings (Yorks, Otley)

    Lewis, Rt. Hon. John Herbert

    Robertson, Sir G. Scott (Bradford)

    Edwards, John Hugh (Glamorgan, Mid)

    Low, Sir Frederick (Norwich)

    Robertson, John M. (Tyneside)

    Esmonde, Dr. John (Tipperary, N.)

    Lundon, Thomas

    Robinson, Sidney

    Esmonde, Sir Thomas (Wexford, N.)

    Lynch, Arthur Alfred

    Roch, Walter F. (Pembroke)

    Esslemont, George Birnie

    Macdonald, J. Ramsay (Leicester)

    Roche, Augustine (Louth)

    Falconer, James

    Macdonald, J. M. (Falkirk Burghs)

    Roe, Sir Thomas

    Farrell, James Patrick

    McGhee, Richard

    Rowlands, James

    Fenwick, Rt. Hon. Charles

    Maclean, Donald

    Runciman, Rt. Hon. Sir Walter

    Ffrench, Peter

    MacNeill, J. G. Swift (Donegal, South)

    Russell, Rt. Hon. Thomas W.

    Field, William

    MacVeagh, Jeremiah

    Samuel, J. (Stockton-on-Tees)

    Fitzgibbon, John

    M'Curdy, C. A.

    Scanlan, Thomas

    Flavin, Michael Joseph

    McKenna, Rt. Hon. Reginald

    Scott, A. MacCallum (Glas., Bridgeton)

    Gelder, Sir W. A.

    M'Micking, Major Gilbert

    Sheehy, David

    George, Rt. Hon. D. Lloyd

    Manfield, Harry

    Sherwell, Arthur James

    Ginnell, Laurence

    Markham, Sir Arthur Basil

    Simon, Rt. Hon. Sir John Allsebrook

    Gladstone, W. G. C.

    Marks, Sir George Croydon

    Smith, Albert (Lancs., Clitheroe)

    Glanville, Harold James

    Marshall, Arthur Harold

    Smith, H. B. Lees (Northampton)

    Goddard, Sir Daniel Ford

    Meagher, Michael

    Spicer, Rt. Hon. Sir Albert

    Goldstone, Frank

    Meehan, Francis E. (Leitrim, N.)

    Strauss, Edward A. (Southwark, West)

    Grey, Rt. Hon. Sir Edward

    Meehan, Patrick J. (Queen's Co., Leix)

    Sutherland, John E.

    Griffith, Rt. Hon. Ellis Jones

    Millar, James Duncan

    Sutton, John E.

    Gwynn, Stephen Lucius (Galway)

    Molloy, Michael

    Taylor, Theodore C. (Radcliffe)

    Hackett, John

    Montagu, Hon. E. S.

    Taylor, Thomas (Bolton)

    Hall, F. (Yorks, Normanton)

    Morgan, George Hay

    Thomas, J, H.

    Hancock, John George

    Morison, Hector

    Thorne, G. R. (Wolverhampton)

    Harcourt, Rt. Hon. L. (Rossendale)

    Muldoon, John

    Thorne, William (West Ham)

    Harcourt, Robert V. (Montrose)

    Munro, Rt. Hon. Robert

    Toulmin, Sir George

    Hardie, J. Keir

    Murray, Captain Hon. Arthur C.

    Trevelyan, Charles Philips

    Harmsworth, Cecil (Luton, Beds)

    Neilson, Francis

    Verney, Sir Harry

    Harvey, A. G. C. (Rochdale)

    Nolan, Joseph

    Ward, John (Stoke-upon-Trent)

    Harvey, T. E. (Leeds, West)

    Nugent, Sir Walter Richard

    Ward, W. Dudley (Southampton)

    Haslam, Lewis (Monmouth)

    Nuttall, Harry

    Wardle, G. J.

    Hayden, John Patrick

    O'Brien, Patrick (Kilkenny)

    Waring, Walter

    Hayward, Evan

    O'Connor, T. P. (Liverpool)

    Wason, Rt. Hon. E. (Clackmannan)

    Henderson, Arthur (Durham)

    O'Doherty, Philip

    Wason, John Cathcart (Orkney)

    Henderson, J. M. (Aberdeen, W.)

    O'Donnell, Thomas

    Webb, H.

    Henry, Sir Charles

    O'Dowd, John

    White, J. Dundas (Glasgow, Tradeston)

    Herbert, General Sir Ivor (Mon., S.)

    O'Kelly, Edward P. (Wicklow, W.)

    White, Patrick (Meath, North)

    Higham, John Sharp

    O'Malley, William

    Whitehouse, John Howard

    Hobhouse, Rt. Hon. Charles E. H.

    O'Neill, Dr. Charles (Armagh, S.)

    Whittaker, Rt. Hon. Sir Thomas P.

    Hodge, John

    O'Shaughnessy, P. J.

    Whyte, Alexander F. (Perth)

    Hoggs, James Myles

    O'Sullivan, Timothy

    Wiles, Thomas

    Hope, John Deans (Haddington)

    Outhwaite, R. L.

    Wilkie, Alexander

    Hudson, Walter

    Palmer, Godfrey Mark

    Williams, Aneurin (Durham, N.W.)

    Hughes, Spencer Leigh

    Parker, James (Halifax)

    Williams. Penry (Middlesbrough)

    Illingworth, Percy H.

    Parry, Thomas H.

    Williamson, Sir Archibald

    Jardine, Sir J. (Roxburgh)

    Pearce, Robert (Staffs, Leek)

    Wilson, Rt. Hon. J. W. (Worcs, N.)

    John, Edward Thomas

    Phillips, John (Longford, S.)

    Wilson, W. T. (Westhoughton)

    Johnson, W.

    Pirie, Duncan Vernon

    Winfrey, Sir Richard

    Jones, Rt. Hon. Sir D. Brynmor (Sw'nsea)

    Ponsonby, Arthur A. W. H.

    Wing, Thomas Edward

    Jones, Edgar (Merthyr Tydvil)

    Pratt, J. W.

    Yeo, Alfred William

    Jones, Henry Haydn (Merioneth)

    Price, C. E. (Edinburgh, Central)

    Young, W. (Perthshire, East)

    Jones, J. Towyn (Carmarthen, East)

    Pringle, William M. R.

    Yoxall, Sir James Henry

    Jones, Leif (Notts, Rushcliffe)

    Raffan, Peter Wilson

    Jones, William S. Glyn- (Stepney)

    Rea, Rt. Hon. Russell (South Shields)

    Joyce, Michael

    Rea, Walter Russell (Scarborough)

    TELLERS FOR THE AYES.—

    Kellaway, Frederick George

    Reddy, Michael

    Mr. Gulland and Mr. W. Jones.

    Kelly, Edward

    Redmond, John E. (Waterford)

    NOES.

    Agg-Gardner, James Tynte

    Benn, Arthur Shirley (Plymouth)

    Cecil, Lord Hugh (Oxford Univ.)

    Amery, L. C. M. S.

    Benn, Ion Hamilton (Greenwich)

    Cecil, Lord R. (Herts, Hitchin)

    Archer-Shee, Major M.

    Boyton, James

    Clay, Captain H. H. Spender

    Ashley, W. W.

    Brassey, H. Leonard Campbell

    Coates, Major Sir Edward Feetham

    Astor, Waldorf

    Bridgeman, William Clive

    Courthope, George Loyd

    Baird, John Lawrence

    Burn, Colonel C. R.

    Craig, Norman (Kent, Thanet)

    Baker, Sir Randolt L. (Dorset, N.)

    Butcher, John George

    Craik, Sir Henry

    Baldwin, Stanley

    Campion, W. R.

    Croft, H. P.

    Banbury, Sir Fredrick George

    Carlile, Sir Edward Hildred

    Currie, George W.

    Barlow, Montague (Salford, South)

    Cassel, Felix

    Denison-Pender, J. C.

    Barnston, Harry

    Cator, John

    Dixon, C. H.

    Bathurst, Hon. A. B. (Glouc., E.)

    Cecil, Evelyn (Aston Manor)

    Duke, Henry Edward

    2264

    2265

    Du Pre, W. Baring

    Law, Rt. Hon. A. Bonar (Bootle)

    Scott, Sir S. (Marylebone, W.)

    Eyres-Monsell, Bolton M.

    Lawson Hon. H. (T. H'mts., Mile End)

    Spear, Sir John Ward

    Faber, Capt. W. V. (Hants, W.)

    Lewisham, Viscount

    Stanier, Beville

    Falle, Bertram Godfray

    Lloyd, George Butler (Shrewsbury)

    Stanley, Hon. Arthur (Ormskirk)

    Fell, Arthur

    Locker-Lampson, O. (Ramsey)

    Starkey, John Ralph

    Fisher, Rt. Hon. W. Hayes

    Lockwood, Rt. Hon. Lieut.-Col. A. R.

    Staveley-Hill, Henry

    Flannery, Sir J. Fortescue

    Lowe, Sir F. W. (Birm., Edgbaston)

    Stewart, Gershom

    Fletcher, John Samuel

    Lyttelton, Hon. J. c.

    Strauss, Arthur (Paddington)

    Forster, Henry William

    Mackinder, Halford J.

    Swift, Rigby

    Ganzoni, Francis John C.

    Macmaster, Donald

    Sykes, Alan John (Ches., Knutsford)

    Gardner, Ernest

    Malcolm, Ian

    Talbot, Lord Edmund

    Gilmour, Captain J.

    Mallaby-Deeley, Harry

    Terrell, G. (Wilts, N.W.)

    Goldman, C. S.

    Mildmay, Francis Bingham

    Terrell, Henry (Gloucester)

    Goldsmith, Frank

    Mount, William Arthur

    Thomas-Stanford, Charles

    Grant, J. A.

    Neville, Reginald J. N.

    Thomson, W. Mitchell- (Down, N.)

    Greene, Walter Raymond

    Newton, Harry Kottingham

    Thynne, Lord Alexander

    Gretton, John

    Nicholson, William G. (Petersfield)

    Touche, George Alexander

    Guinness, Hon. Rupert (Essex, S.E.)

    Nield, Herbert

    Walrond, Hon. Lionel

    Gwynne, R. S. (Sussex, Eastbourne)

    Orde-Powlett, Hon. W. G. A.

    Ward, A. S. (Herts, Watford)

    Hall, Frederick (Dulwich)

    Pease, Herbert Pike (Darlington)

    Watson, Hon. W.

    Hamilton, C. G. C. (Ches., Altrincham)

    Peel, lieut.-Colonel R. F.

    Weigall, Capt. A. G.

    Harris, Henry Percy

    Perkins, Walter Frank

    Weston, Colonel J. W.

    Henderson, Major H. (Berks, Abingdon)

    Peto, Basil Edward

    Wheler, Granville C. H.

    Henderson, Sir A. (St. Geo., Han. Sq.)

    Pollock, Ernest Murray

    White, Major G. D. (Lancs., Southport)

    Hills, John Waller

    Pretyman, Ernest George

    Wilson, Captain Leslie O. (Reading)

    Hoare, S. J. G.

    Pryce-Jones, Colonel E.

    Wilson, Maj. Sir M. (Bethnal Green, S. W.)

    Hohler, Gerald Fitzroy

    Randles, Sir John S.

    Wolmer Viscount

    Hope, Major J. A. (Midlothian)

    Ratcliff, R. F.

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Horne, Edgar (Surrey, Guildford)

    Rawlinson, John Frederick Peel

    Wood, John (Stalybridge)

    Horner, Andrew Long

    Rees, Sir J. D.

    Worthington Evans, L.

    Hunt, Rowland

    Ronaldshay, Earl of

    Yate, Colonel C. E.

    Hunter, Sir Charles Rodk.

    Royds, Edmund

    Younger, Sir George

    Ingleby, Holcombe

    Rutherford, Watson (L'pool, W. Derby)

    Jessel, Captain H. M.

    Salter, Arthur Clavell

    Joynson-Hicks, William

    Sanders, Robert Arthur

    TELLERS FOR THE NOES.—

    Kinloch-Cooke, Sir Clement

    Sandys, G. J.

    Mr. Bird and Mr. Hewins.

    Lane-Fox, G. R.

    Sassoon, Sir Philip

    Bill read a second time and committed.

    Question, "That Schedules 2, 3 and 4 be Schedules to the Bill," put, and negatived.

    FIFTH SCHEDULE.

    Enactments repealed.

    Session and Chapter.

    Short Title.

    Statutes Repealed.

    39 & 40 Vict. c. 79.

    The Elementary Education Act, 1876.

    Section nineteen so far as unrepealed.

    51 & 52 Vict. c. 41.

    The Local Government Act, 1888.

    Subsections (1) and (2) of section twenty; sections twenty-one to twenty-seven

    In section thirty-four the words from "and in particular shall" to "such payments applicable," and from "including those" to "police of the county," and paragraph (e) of subsection (1); paragraph (a) of subsection (1) of section forty-three.

    52 & 53 Vict, c. 50.

    The Local Government (Scotland) Act, 1889.

    Sections twenty to twenty-four.

    53 Vict. c. 8

    The Customs and Inland Revenue Act, 1890.

    Section seven.

    53 & 54 Vict. c. 22.

    The Education Code (1890) Act, 1890.

    The whole Act, so far as unrepealed.

    53 & 54 Vict. c. 45.

    The Police Act, 1890

    Section seventeen.

    53 & 54 Vict. c. 60.

    The Local Taxation (Customs and Excise) Act, 1890.

    The whole Act.

    Session and Chapter.

    Short Title.

    Statutes Repealed.

    53 & 54 Vict. c. 67.

    The Police (Scotland) Act, 1890.

    Section seventeen.

    54 & 55 Vict. c. 56.

    The Elementary Education Act, 1891.

    The whole Act so far as unrepealed.

    54 & 55 Vict. c. 76.

    The Public Health (London) Act, 1891.

    Subsection (1) of section one hundred and eight from "and one half" to the end of the subsection.

    57 & 58 Vict. c. 30.

    The Finance Act, 1894

    Subsections (1) and (4) of section five; section nineteen; subsection (4) of section twenty-one.

    57 & 58 Vict, c. 57.

    The Diseases of Animals Act, 1894.

    In section eighteen the words "not "exceeding one hundred and "forty thousand pounds in any "one year," and the proviso to subsection (1).

    59 & 60 Vict. c. 16.

    The Agricultural Rates Act, 1896.

    Sections two, four, and seven.

    59 & 60 Vict. c. 36.

    The Locomotives on Highways Act, 1896.

    Subsection (2) of section eight from "and shall in England" to the end of the subsection.

    59 & 60 Vict. c. 37.

    The Agricultural Rates, Congested Districts, and Burgh Land Tax Relief (Scotland) Act, 1896.

    Sections two, three, and four.

    60 Vict. c. 5.

    The Voluntary Schools Act, 1897.

    Section two.

    63 & 64 Vict. C. 53.

    The Elementary Education Act, 1900.

    Section one.

    2 Edw. 7. c. 42.

    The Education Act, 1902

    Section ten and paragraph (1) of the Third Schedule from "and except that" to the end of the paragraph.

    7 Edw. 7. c 13.

    The Finance Act, 1907

    Section seventeen.

    8 Edw. 7. c. 67.

    The Children Act, 1908

    Section seventy-three and subsection (2) of section one hundred and ten.

    10 Edw. 7. c. 8.

    The Finance (1909–10) Act, 1910.

    Section fifty-four and the Second Schedule as respects persons dying after the fifteenth day of August, one thousand nine hundred and fourteen; section sixty-seven; in subsection (1) of section sixty-nine the words "not exceeding in "the case of land one-eighth and "in the case of houses one-twelfth "part of the duty of an amount "equal to the annual value."

    1 Geo. 5. c. 2.

    The Revenue Act, 1911

    Section seventeen.

    1 & 2 Geo. 5. c. 49.

    1 The Small Landholders (Scotland) Act, 1911.

    Paragraph (a) of section five.

    2 Geo. 5. c. 4.

    The Metropolitan Police Act, 1912.

    Proviso (a) of section one.

    3 & 4 Geo. 5. c. 19.

    The Local Government (Adjustments) Act, 1913.

    Paragraph (a) of subsection (1) of section one and Part I. of the schedule.

    3 & 4 Geo. 5. c. 28.

    The Mental Deficiency Act, 1913.

    Section forty-seven.

    3 & 4 Geo. 5. c. 38.

    The Mental Deficiency and Lunacy (Scotland) Act, 1913.

    Section thirty-seven.

    Session and Chapter.

    Short Title.

    Statutes Repealed.

    Government Amendments made: Leave out:—

    39 & 40 Vict. c. 79

    The Elementary Education Act, 1876.

    Section nineteen so far as unrepealed.

    51 & 52 Vict, c. 41.

    The Local Government Act, 1888.

    Subsections (1) and (2) of section twenty; sections twenty-one to twenty-seven.

    In section thirty-four the words from "and in particular shall" to "such payments applicable," and from "including those" to "police of the county," and paragraph (e) of subsection (1); paragraph (a) of subsection (1) of section forty-three.

    52 & 53 Vict. c. 50

    The Local Government (Scotland) Act, 1889.

    Sections twenty to twenty-four.

    53 Vict. c. 8

    The Customs and Inland Revenue Act, 1890.

    Section seven.

    53 & 54 Vict. c. 22

    The Education Code (1890) Act, 1890.

    The whole Act, so far as unrepealed.

    53 & 54 Vict. c. 45

    The Police Act, 1890 …

    Section seventeen.

    53 & 54 Vict. c. 60

    The Local Taxation (Customs and Excise) Act, 1890.

    The whole Act.

    53 & 54 Vict. c. 67

    The Police (Scotland) Act, 1890.

    Section seventeen.

    54 & 55 Vict. c. 56

    The Elementary Education Act, 1891.

    The whole Act so far as unrepealed.

    54 & 55 Vict. c. 76

    The Public Health (London) Act, 1891.

    Subsection (1) of section one hundred and eight from "and one half" to the end of the subsection.

    Leave out the words "section nine-teen" ["The Finance Act, 1894, Sub-sec-
    Leave out—

    57 & 58 Vict. c. 57

    The Diseases of Animals Act, 1894.

    In section eighteen the words "not" exceeding one hundred and "forty thousand pounds in any "one year," and the proviso to subsection (1).

    59 & 60 Vict. c. 16

    The Agricultural Rates Act, 1896.

    Sections two, four, and seven.

    59 & 60 Vict. c. 36

    The Locomotives on Highways Act, 1896.

    Subsection (2) of section eight from "and shall in England" to the end of the subsection.

    59 &60 Vict. c. 37

    The Agricultural Rates, Congested Districts, and Burgh Land Tax Relief (Scotland) Act, 1896.

    Sections two, three, and four.

    60 Vict. c. 5

    The Voluntary Schools Act, 1897.

    Section two.

    63 & 64 Vict. c. 53

    The Elementary Education Act, 1900.

    Section one.

    tion (1) and (4) of Section five; Section nineteen."]

    Session and Chapter.

    Short Title.

    Statutes Repealed.

    2 Edw. 7. c. 42

    The Education Act, 1902

    Section ten and paragraph (1) of the Third Schedule from "and except that" to the end of the paragraph.

    7 Edw. 7. c. 13

    The Finance Act, 1907

    Section seventeen.

    S Edw. 7. c. 67

    The Children Act, 1908

    Section seventy-three and subsection (2) of section one hundred and ten.

    Leave out the word "seventeen" ["The Revenue Act, 1911, Section seventeen"],
    Leave out&—

    1 & 2 Geo. 5. c. 49.

    The Small Landholders (Scotland) Act, 1911.

    Paragraph (a) of section five.

    2 Geo. 5. c. 4

    The Metropolitan Police Act, 1912,

    Proviso (a) of section one.

    3 & 4 Geo. 5. c. 19.

    The Local Government (Adjustments Act, 1913,

    Paragraph (a) of subsection (1) of section one and Part I. of the schedule.

    3 & 4 Geo. 5. c. 28.

    The Mental Deficiency Act, 1913.

    Section forty-seven.

    3 & 4 Geo. 5. c. 38.

    The Mental Deficiency and Lunacy (Scotland) Act, 1913.

    Section thirty-seven.

    Title.
    "A Bill to continue the duty of Customs on Tea, to reimpose Income Tax and Super-tax, with amendments and modifications, and to amend the Law relating to Death Duties, the National Debt, and Grants for local purposes, and for purposes incidental thereto."
    Amendments made:
    After the word "Duties" insert the word "and."
    Leave out the words "and Grants for Local purposes."
    Bill reported [with an amended Title]; as amended, to be considered upon Monday next, 20th July, and to be printed. [Bill 333.]

PRIVATE BUSINESS.

  SWINDON CORPORATION (WILTS AND BERKS CANAL ABANDONMENT) BILL [Lords]. (By Order.)
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a second time."
  Mr. GRETTON: I beg to move to leave out the word "now," and at the end of
  2272
  and insert instead thereof the word "eleven."
  the Question to add the words "upon this day three months."
  The objections I have to urge against the Bill are quite apart from any local considerations. I believe it is alleged that the canal constitutes a nuisance to various persons in respect of its condition. I am not going to attempt to discuss any consideration of that kind. For the purpose of my argument it may be admitted that the condition of the canal is far from what it should be from the point of view of the inhabitants, and that some attempt should be made to do away with the nuisance which at present exists. The point I wish to raise is a very serious question of principle. The canal gives communication with important parts of Berkshire and Wiltshire, and it gives access to a large portion of the south and west of England. At present foreign countries are developing their waterways to the great benefit of the traders and inhabitants. There is a great and powerful movement which is attempting to arouse public interest in the development of the waterways of this country as they have been developed abroad. There is great reason why that should be done because rates and charges are constantly increasing and there is a tendency

  2273
  which cannot in my opinion be checked for railway companies to come more and more into combinations to the disadvantage of the trader who has to deal with one or other of those groups and has not access to other competing lines.
  Canals and waterways are eminently suitable for cheap carriage of heavy goods and other classes of goods for which it is not necessary to obtain rapid transit. Those who have studied this question agree that a great mistake was made in this country when canals were hurriedly abandoned on the construction of railways. I would ask the House seriously to consider whether some alternative scheme might not be undertaken to relieve the local difficulties which may exist without destroying what has been a great waterway and ought to be developed as an important part of the waterways system of this country. The Bill proposes to hand over to the Corporation of Swindon all that part of the canal which is within the boundaries of the borough, and it is evidently intended that the canal should be filled up and streets built and the space utilised in this way. If the House does agree to give the Bill a Second Reading I trust that the Committee will give the most serious consideration to the great principle which is involved and endeavour to discover whether a local grievance may not be remedied without involving the destruction of this canal.
  Mr. PETO: I beg to second the Amendment of the hon. Member for Rutland. I desire to point out that the part of Wiltshire through which this canal travels is served effectively by only one railway for a distance of seventy miles through which this canal travels and in which it used to work effectively. It is a very serious thing to contemplate the abandonment of any canal. Whether it is now derelict or not does not now affect my argument. [HON. MEMBERS: "It does."] I hear hon. Members say that if it is derelict it does affect the argument. On that point I should say that the worse the present condition of the canal the stronger the argument for never having allowed it to get into that condition, and undoubtedly whether it is bad or good there is the trace of a canal—[Laughter.] When hon. Members are done laughing they will see something more in the point. As long as you have got a line seventy miles long running through a county with all
  2274
  its bridges and everything in connection with the canal still operative you have got the site for the canal. The construction of the canal cost nearly a million sterling, for which it is now proposed to get the magnificent sum of £8,800. If it were for nothing else but the Preamble, and some of the Clauses which the Bill contains, I should oppose it. One paragraph of the Preamble is:—
  "And whereas owing to the construction of the Great Western Railway and other causes, no traffic has for some years past been carried upon the said canals, and the canals are now unnecessary, and for want of sufficient funds to maintain them the banks and locks thereof have fallen into a state of dilapidation, and the canals have become, derelict."
  That might be said of almost every canal in the country at the present time, for it proceeds on the basis that wherever you get a railway coming into a district then the canal becomes unnecessary, and a Bill which proceeds on such an assumption as that ought not to receive the Second Reading in this House. It is argued by those who support the Bill that everybody is satisfied. I see that there are special Clauses for the protection of nearly everybody who can be named by name. The class left out altogether are the general public, who cannot be named by name, who cannot have a special Clause inserted in the Bill to see that they are satisfied. I see that Mr. F. P. Goddard is to be paid £250 in cash and payments of £8 and £12 a year. Mr. Goddard is satisfied. A little later there is a special Clause for the protection of Lord Lansdowne. [HON. MEMBERS: "Hear, hear."] In order that hon. Members may cheer impartially I may mention that there is protection for Lord Crewe. [HON. MEMBERS: "Hear, hear."] And other illustrious persons are named, but I find no Clause for the protection of a great number whom we are bound to uphold in this House before we abandon the last remains of the efforts of the early part of last century to provide a reasonable inland waterway communication. I wish to ask why nothing has been done with regard to the Report of the very expensive and very authoritative Commission which sat in 1906 and only reported in 1909.
  There are Members still in this House who were on that Commission, and I

  2275
  believe the hon. Member for Blackburn and the hon. Member for Holborn were members of the Commission, which decided by a majority of 16 to 3 in favour of the Report, although two or three differed on certain details. They examined 266 witnesses, and the Commission recommended that there should be immediately set up the formation of a Central Waterway Board to consider the great mass of facts which they had collected. The Commission recommended what is known as a cross watercourse from north to south and east to west, and with regard to that and the feeders of it, I think it is worth noting that it was calculated that if this great waterway they said ought to be made effective in this country had on the whole of it only one-fourth the traffic which travels down the Rhine, it would be a paying concern, and would justify every penny spent in making it effective. This very canal we are dealing with here to-night is one of the feeders of that cross-section of canals which was the subject of the particular recommendation of that Report. Therefore I maintain as long as we have no Waterways Board, and while the Report and proceedings of this expensive Commission which sat for some years are brushed aside, and the Government refuse to deal with the subject, and we have a Bill presented to the House which provides that because a railway enters a certain district the canal is consequently unnecessary, I think no better reasons could be given for rejecting this Bill or any Bill for the abandonment of any waterway in this country or the remains of any waterway until this House decides some practical steps to put us somewhere more nearly level than at present with those great industrial competitors of ours who realises the value of inland water traffic. I beg to second.
  Mr. RICHARD LAMBERT: I desire to support the Second Reading of this Bill. We have heard from the Mover and Seconder of the rejection that the canal is in a delapidated and practically derelict conditon. It is so dilapidate and so derelict that portions of it are dry land, and no boat has gone along the canal since 1900, or could. The canal is a source of danger to the health of the people of Swindon, and is in a stagnant and filthy condition. Six years ago the people of Swindon spent some £600 in
  2276
  trying to clean the portion which passes through their town, and the condition of the canal is as bad as it was before that money was spent. There is absolutely no through communication along the canal. It is not a feeder. It is true it did once connect the Kennet and Avon with the Thames at Abingdon, but the connection has long been broken off. The Berkshire County Council have run a road right through part of the canal and across it. The bridges have fallen down at Stanley. There is an aqueduct which has entirely broken down and under no conceivable circumstances could this narrow gauge canal ever be made fit for use again without the expenditure of an altogether disproportionate amount of money. We have heard something about the desirability of preserving the waterways of the country. I entirely agree. But where you have alternative routes—the Kennet and Avon Canal, which links up the West of England with London, and the Gloucester and Severn Canal, which also connects the West of England with the Thames at Oxford—it is altogether absurd for this House to take the view that it is necessary to retain a derelict and abandoned canal against the interests and the health of the people of Swindon.
  There is another reason why I would urge the Second Reading of this Bill. Under the Consolidating Act of 1821, Section 162, it is provided that if this canal at any time should be derelict for a period of fourteen years, the landowners shall have the right to resume possession of the land of the site on payment of the sum originally paid to their predecessors in title. The Corporation of Swindon maintain that the fourteen years have already elapsed, but there is some little dispute with the Canal Company as to whether the period has quite elapsed or not. It is agreed, I believe, that twelve and a half out of the fourteen years have elapsed; so that in one and a half years automatically the landowners will have the right to resume possession. When the canal was originally built Swindon did not exist. At the present moment the canal passes through a densely populated part of Swindon. The land on which the slimy mess which goes by the name of canal is situated is urgently required for the purposes of making a thoroughfare and improving the conditions of Swindon itself. Surely under these circumstances it is not too much to ask the House of Commons to

  2277
  grant a Second Reading to this Bill, and at all events send it upstairs where its merits can be inquired into. The hon. Member for Devizes (Mr. Peto) who has expatiated on the money which is going to be paid to certain large landowners, and has declared that the interests of the people have been neglected, might have considered the interests of the thousands of working men and women who live in Swindon and who are daily being poisoned by the stench which arises from this canal. I earnestly hope the Bill will receive a Second Reading.
  Mr. H. TERRELL: I desire to support the Amendment for the rejection of the Bill. We have already been told that a Royal Commission has recommended that certain canals should be enlarged, improved, and amalgamated under a Board, and that these smaller canals should be maintained as feeders for the great canal system when it has been brought into working order. If we begin by destroying the small canals and feeders it will be like destroying the branch lines of a railway which are intended to feed the main line when constructed. A canal can be declared derelict and abandoned by proceedings under the Railway and Canal Act. The Company did proceed in 1899 under that Act to get a warrant from the Board of Trade. The Board of Trade directed an inquiry. [HON. MEMBERS: "Divide!"] That Was stopped. [HON. MEMBERS: "Agreed."] They can if they choose proceed with that inquiry. If they proceed with that inquiry everybody that has a right can be heard in opposition to the abandonment of the canal. Instead of proceeding with that inquiry they choose to proceed by Bill whereby anyone who cannot establish under the rules of the House a locus standi has no voice in opposing the Bill. To proceed before the Board of Trade is a far cheaper, far quicker, and far more efficacious way. They did not do that, because they did not want the Opposition to be heard.
  The hon. Member who supported the Bill repeated what was said in a statement circulated to Members of the House, and received yesterday or this morning, and which is absolutely contrary to fact. Why should the promoters of the Bill circulate to the House that statement which is untrue? [HON. MEMBERS: "Oh, oh!"] Yes, I say so. Some hon. Members here know
  2278
  the facts. What the promoters say in reference to the Thames and Severn Canal and the Kennet and Avon Canal is not true. The Thames and Severn Canal is not working, and has not worked for a long time. No boats have been through it for a long time. Why do hon. Members make statements which are not facts? That shows the drawbacks of proceeding in this way when statements can be made, and seeing that they are not given in evidence, cannot be properly dealt with. The House accepts these statements, whilst opponents are given no opportunity to be heard, and of bringing the real facts before the House. The proper course to adopt, and that provided by the Legislature, is to proceed under the Act, get a warrant from the Board of Trade to authorise the abandonment of the canal. Proper opposition could then be offered if it was thought proper. If that is the desire of hon. Members it could be achieved far more cheaply, and far more expeditiously, and those who oppose the abandonment on public grounds would be entitled to be heard.
  Mr. C. BATHURST: I blocked this Bill and I remove the block. From the purely national point of view these waterways ought to be preserved: in that event a Water Works Board would have to be set up at once and a national system of waterways would have to be carried out without delay. That is quite impossible. This particular canal, in my opinion, would not fit into a national scheme. In the meantime it is a serious source of ill-health and is a serious obstruction to county traffic. Last night the boroughs were against the counties. In this respect the only county borough is Wiltshire, and the county council are unanimous in desiring that this Bill should be passed, and for my part I cannot oppose it.

POLICE (WEEKLY REST-DAY) (SCOTLAND) BILL.
As amended (in the Standing Committee), considered; read the third time, and passed.

EXPORTATION OF HORSES BILL.
As amended (in the Standing Committee), considered; read the third time, and passed.
The remaining Orders were read and postponed.
It being after half-past Eleven of the clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Sixteen minutes before Twelve o'clock.