Commons Sitting of 2 July 1924

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

PRIVATE BUSINESS.
London County Council (Money) Bill (by Order).
Consideration, as amended, deferred till Friday.
Southern Railway (Dock Charges) Bill [Lords] (by Order),
Consideration, not amended, deferred till To-morrow.
Ministry of Health Provisional Order Confirmation (Stratford - upon - Avon Extension) Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  BRITISH VESSELS (UNITED STATES).
  Sir WALTER de FRECEasked the Secretary of State for Foreign Affairs if he can state the number of seizures of vessels flying the British flag which have been made under the new Treaty with the United States extending the zone of right of search to 12 miles; and how many of these vessels were seized outside the three-mile limit?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ponsonby): As far as I am aware no vessels flying the British flag have been seized under the new Liquor Treaty with the United States.

  LEAGUE OF NATIONS.

    ARMENIAN REFUGEES.
    Mr. GRAHAM WHITEasked the Secretary of State for Foreign Affairs if he can now give any further information
    1294
    regarding the proposal to establish a national home for the Armenians in the territory of Erwan?
    Mr. PONSONBY: I presume that the hon. Member is alluding to the scheme which was recently brought to the notice of His Majesty's Government by the League of Nations for the settlement of a limited number of Armenian refugees on undeveloped land in the territory of the Armenian Republic of Erivan. The information which His Majesty's Government have received is not sufficient to enable them to judge whether the scheme is likely to prove workable in practice, but they can only view with sympathy any proposals aimed at affording even a partial solution of the Armenian problem.
    Mr. WHITE: Are the Government considering undertaking financial responsibility for this proposal on the same lines as the French Government?
    Mr. PONSONBY: I could not answer that question.
    Mr. W. GREENWOOD: Will the hon. Gentleman make representations to the Government of Turkey as to the advisability of allowing the Armenians to return to their homes in Constantinople? Can I have an answer to my question.
    Mr. PONSONBY: That is a question of policy which I cannot answer.

    BRITISH DELEGATES.
    Mr. P. OLIVERasked the Prime Minister whether, in appointing the delegates and vice-delegates to the next assembly of the League of Nations, he will take into consideration the possibility of giving some representation to the Conservative and Liberal parties?
    The PRIME MINISTER (Mr. J. Ramsay Macdonald): I would refer the hon. Member to the reply given on the 24th June by the Lord Privy Seal to the hon. Member For North Hackney.
    Major COLFOX: Does the right hon. Gentleman consider that the League of Nations is in any sense a party question?
    The PRIME MINISTER: No.

    ASSEMBLY (PRIME MINISTER'S ATTENDANCE).
    Mr. EDWARD WOODasked the Prime Minister whether he proposes to

    1295
    attend the Assembly of the League of Nations at Geneva in September next; and whether an opportunity will be given to the House of Commons during the present Session to discuss the policy of His Majesty's Government upon the various questions to be submitted to the Assembly?
    The PRIME MINISTER: I hope to be able to get to Geneva for the opening of the Assembly of the League of Nations in September. As regards the second part of the question, I propose to follow the usual practice and publish the Report as a White Paper.
    Mr. WOOD: Will the right hon. Gentleman be able to give an opportunity to the House to consider the matters that are to be brought before the Assembly of the League, in that respect following the example of all his predecessors?
    The PRIME MINISTER: My right hon. Friend, of course, knows the details more than I do, as he was in it. But I do not think the precedent established was as stated. If it has been established, I am quite willing to do my best to meet it again. I would remind the House that the Agenda for the Conference in September will not be ready before I hope we rise for our holiday, and consequently a discussion on it will be very much a discussion in the air. My information is that what happened before was that the delegates met and reported, and if any question arose the House would then find opportunities for discussion.
    Mr. WOOD: We are at cross purposes. What I asked was whether the right hon. Gentleman would give an opportunity to the House to have a general discussion on League of Nations matters, in the course of which discussion many matters that would be considered at the Assembly would be brought into our debate, and whether the right hon. Gentleman would give such an opportunity in the ordinary course of House of Commons business?
    The PRIME MINISTER: If that is what was in my right hon. Friend's mind opportunity is given in the ordinary course of House of Commons business, on Supply and the Appropriation Bill.
    Mr. R. McNEILL: Is the right hon. Gentleman going to Geneva to remain
    1296
    throughout the Session of the Assembly as the representative of this country, or is he going only for special business? Will there be any other representative besides himself?
    The PRIME MINISTER: Yes, there will be other representatives. I am afraid that it is impossible for me to stay at Geneva for three weeks and to take part in all the details of the discussions. I think it is very important that one or two Prime Ministers should go to Geneva. Exactly what our position will be there is at present a matter of consideration between ourselves.
    Mr. HUGH O'NEILL: Is the French Prime Minister also going to Geneva?
    The PRIME MINISTER: I am very glad to say that it is the intention of the French Prime Minister to go, and although I cannot announce anyone else, yet I hope that we two will not be the only ones.

    MOSUL.
    Lieut. - Colonel HOWARD-BURYasked the Prime Minister whether he has now come to an arrangement with the Turkish Government with regard to the methods and manner of referring the Mosul question to the League of Nations on 5th July?
    The PRIME MINISTER: No reply has as yet been received from the Turkish Government on the subject.
    Lieut.-Colonel HOWARD-BURY: Then no agreement has yet been reached with the Turkish Government for the matter to be brought before the League?
    The PRIME MINISTER: It is only the method of presentation that is matter of discussion.

    TREATY OF MUTUAL ASSISTANCE.
    Major-General SEELYasked the Prime Minister whether he is aware that the Treaty of Mutual Assistance has, by direction of the last Assembly of the League of Nations, been circulated to the States members of the League for information and comment; whether he can inform the House how many States have replied; what is the general nature of their observations; and whether he can state the decision at which His Majesty's Government has arrived in this matter?
    Mr. FOOT MITCHELLasked the Prime Minister if the Government has come to any decision as to its attitude with respect to the principles of the draft Treaty of the League of Nations; whether, in that case, he will state what its attitude is; and whether any opportunity will be afforded to the House before the Recess of discussing the subject?
    Mr. COSTELLOasked the Prime Minister whether he will state what are the intentions of the Government with regard to the draft Treaty of Mutual Assistance?
    The PRIME MINISTER: I shall answer these three questions together. The draft Treaty has been circulated to all States whether members of the League or not. So far as I am aware, only Esthonia, Latvia, Finland, Belgium, Bulgaria and the Union of Socialist Soviet Republics have replied to the request for their observations. Bulgaria and Latvia approve the draft, the Soviets condemn it, and I am not aware of the nature of the other replies. As regards the attitude of His Majesty's Government in this matter, it is not yet possible to make any statement, as, amongst other reasons, the matter is still forming the subject of consultation with the Dominions. If discussion on the subject is required, opportunities are provided by the ordinary course of business.
    Major-General SEELY: The right hon. Gentleman says that he cannot state the attitude of the Government on this question. Does he not agree that unless some step of this kind is taken, by some means of mutual disarmament, we are bound to go on arming, and is not the Government going to take any steps to prevent that catastrophe?
    The PRIME MINISTER: Yes, I quite agree, but I am not at all convinced that the effect of this method would not be to increase armaments. I have said that I am not at all convinced. That does not mean that I think it will be so. But that is a point of great importance about which I would like to have some more information than that which has so far reached me. It certainly looks to me as though that would be the effect. In any event, I am convinced that this method is not the only method, and I doubt whether it is the best method of approaching the question.
    Mr. A. CHAMBERLAIN: Is this one of the subjects which the right hon. Gentleman thinks is likely to be raised at the League of Nations meeting which he will attend; and, if so, will he undertake before leaving the country to make a statement to the House of Commons as to the general course he proposes to follow?
    The PRIME MINISTER: I assume this matter will be raised at the Assembly, because it has been referred to that body to deal with further, but, whether it is or not, I hope before the Assembly meets and before this House adjourns for its holiday, that a statement will be made by the Government on the subject.

    BRITISH PRE-WAR RECORDS.
    Mr. MORELasked the Under-Secretary of State for Foreign Affairs if His Majesty's Government have now considered the suggestion that some further publication of British pre-War records would be to the public advantage; and what steps he proposes to take in the matter?
    Mr. PONSONBY: Yes, Sir, my right hon. Friend the Prime Minister has decided that there shall be some such publication, and he is at present considering the plan on which it shall proceed.

    FOREIGN GOVERNMENTS (LOANS).
    Mr. MORELasked the Under-Secretary of State for Foreign Affairs if His Majesty's Government will use such influence as they may possess to prevent the proceeds of any private loans which the Yugo-Slavian or any other Government may raise in this country from being expended in the purchase of armaments?
    Mr. PONSONBY: It is for the lenders in the market to determine for what purposes they will make loans to foreign Governments, but in so far as His Majesty's Government have any influence in the matter, they would certainly not favour the raising of any loan in this country for the purchase of armaments by a foreign Government.

  ROYAL NAVY.

    CONSTRUCTION COST (CRUISERS AND BATTLESHIPS).
    Mr. BAKERasked the Parliamentary Secretary to the Admiralty whether he will state the approximate price per ton charged in 1913 by the British shipbuilding employers for the construction of cruisers and battleships for the British Government and the price per ton for the cruisers recently given out?
    The CIVIL LORD of the ADMIRALTY (Mr. Hodges): The cost in 1913 for building the hulls of warships was approximately £65 per ton. It is now approximately £90 per ton.

    SLAVE TRAFFIC, RED SEA.
    Mr. J. HARRISasked the Parliamentary Secretary to the Admiralty whether he will issue a report upon the operations of the Navy with regard to its successful efforts in coping with slave-trading in the Red Sea and in the Indian Ocean?
    Mr. HODGES: There is nothing of particular interest to report as regards these operations beyond the information already given in my reply to questions asked by the hon. Member for Erdington on the 13th December, 1922, and the late hon. Member for Derby on the 21st March, 1923, copies of which I am sending the hon. Member. The success achieved in checking the slave traffic in these waters is due to the traders being aware that patrols are carried out, and that their dhows may be stopped and searched at any time. This patrolling is a preventive measure which, though arduous, does not provide material for a report. In fact, details would only provide information of value to the slave trader.
    Mr. HARRIS: Is the hon. Gentleman aware that publicity in this matter is of the greatest assistance, and that the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) always issued reports in reference to these operations, and that these reports had a material effect in checking the traffic?
    Mr. HODGES: I quite appreciate the hon. Member's supplementary question, but, as at present advised, it does appear that the publicity which is sought for would at this moment give information which it would be undesirable to give.
    Captain Viscount CURZON: Can the hon. Gentleman give the House an assurance that should it be decided to resume these operations, destroyers will not be detailed for that purpose in view of the extreme unsuitability of the build of these vessels for working in very hot climates?
    Mr. HEALY: Will the hon. Gentleman call for a report from the Navy in Northern Ireland waters as to the condition of the Nationalist internees held for two years. Their lives should be as valuable surely as those of the slaves in the Indian Ocean.
    Viscount CURZON: Why do you not catch the Queenstown murderers?
    Mr. HEALY: Some people should have caught you on your recent visit to Northern Ireland.
    Mr. E. WOOD: Why does the hon. Gentleman appear to be more reluctant to give this information than his predecessor?
    Mr. HODGES: I am not at all reluctant to give information, but it is a matter for consideration whether such publicity would increase or decrease the value of what is being done.

    NAVAL REVIEW.
    Mr. J. HARRISasked the Parliamentary Secretary to the Admiralty whether it is proposed to entertain the guests on the "Enchantress" entirely at Government expense?
    Mr. HODGES: The arrangements in this respect will be the same in the case of the guests accommodated in the "Enchantress" as in the case of the guests accommodated in the other vessels.
    Mr. HARRISalso asked the Parliamentary Secretary to the Admiralty if he will state what is the total number of vessels other than the "Enchantress" which it is proposed to employ for the transit and entertainment of visitors to the naval review; and what is the total estimated cost to the taxpayer, including that of the "Enchantress," of entertaining the guests and visitors during the review?
    Mr. HODGES: In addition to the "Enchantress" it is proposed to employ four vessels for the transit and entertainment of visitors to the naval review, and

    1301
    the total estimated cost of their entertainment, including that on the "Enchantress," is £1,500. It is also proposed to permit a limited number of Admiralty and dockyard officials and their friends to view the assembed Fleet, at their own expense.
    Viscount CURZON: Would it not be possible for Members of Parliament and their friends to go on board these ships at their own expense?
    Mr. HODGES: Under the terms already indicated in the notice.
    Mr. HARRIS: Does the £1,500 include the cost of reconditioning the vessel?
    Mr. HODGES: No. That is £1,100. The figures represented here are for entertainment.
    Mr. SULLIVAN: Does not the hon. Gentleman consider that it is carrying economy to the point of meanness not to allow us to see these warships?
    Mr. HOGGE: Is there any reason why Members of this House at intervals of three years at a small cost like that should not visit and be interested in the Navy?
    Mr. HOGGEasked the Parliamentary Secretary to the Admiralty why accommodation for a limited number of Members only is to be provided for the purpose of witnessing the naval review; and whether, in view of the importance of the occasion and the desirability of all Members who so wish seeing the Fleet, he will provide facilities for this?
    Mr. HODGES: I regret that the number and size of the Admiralty vessels which are available and suitable for taking distinguished visitors to the review, and the restricted amount allowed for purposes of entertainment, do not make it possible to invite all Members of Parliament. To accommodate all Members, one or more passenger ships would have to be, specially chartered, as on the occasion of previous reviews—[HON. MEMBERS: "Why not?"]—and the cost involved would be greater than His Majesty's Government has felt justified in incurring.
    Mr. HOGGE: Is not every hon. Member of this House entitled, ipso facto, to attend this review, is it not a fact that he is asked to pay the covering expenses,
    1302
    is it not also a fact that on previous occasions every other Government has arranged a vessel of a sufficient size to accommodate all Members, and is it not finally a fact that Members who have been on these reviews on former occasions have come back much mare interested in and knowing a great deal more about the Navy than before?
    Mr. W. THORNE: Is the hon. Gentleman aware that at the last review the Government of that day adopted the Socialist principles of giving a free ride and free food?
    Mr. HODGES: We are aware of all the facts referred to. They are not disputed for one moment. No one would be more pleased to see all the Members of Parliament at this review than myself, but at the same time there are the financial limits imposed, which the Admiralty are called upon to observe.
    Mr. LOVERSEED: Will new Members receive priority? [HON. MEMBERS: "Oh!"]
    Sir HENRY COWAN: Are all the Members of the Government to have an opportunity of attending?
    Mr. HODGES: That matter has still to be decided.
    Colonel GRETTON: To what Vote will these expenses be charged? Will they come out of the Entertainment Fund?
    Mr. HODGES: In the main, yes.
    Viscount CURZON: In the event of it not being possible to detail a flotilla leader to get under weigh with Members of Parliament on board, will it be possible for Members of Parliament to go on board ships that are taking part in the review, travelling at their own expense?
    Mr. HODGES: That is a question which I will see is put in the proper quarter.
    Lieut.-Colonel HOWARD-BURY: Will those Members have priority who voted for the five cruisers?
    Mr. B. SMITH: In view of the anxiety of all Members to take part in the naval review, can the hon. Gentleman arrange that Members should travel at their own expense, so that they may have the advantage of visiting the Fleet?
    Sir H. BRITTAIN: Is it not a fact that the British Government——
    Mr. SPEAKER: Further questions must be put on the Paper.

    MILD STEEL (HIGH ELASTICITY LIMIT).
    Mr. G. WHITEasked the Parliamentary Secretary to the Admiralty if the suitability of the new high elasticity limit mild steel for naval construction has been investigated; and if its adoption would necessitate a revision of the armament limits determined at the Washington Conference?
    Mr. HODGES: The new high elasticity steel for shipbuilding has been evolved by the Admiralty and certain steel makers, and its properties have been fully investigated. The answer to the second part of the question is in the negative.

    WAR GRAVES (HEADSTONES).
    Mr. H. O'NEILasked the Parliamentary Secretary to the Admiralty whether it is the intention of his Department to erect permanent headstones in place of the wooden crosses put up to mark the place of burial of many of our sailors who lost their lives in the War round the coasts of the British Isles; and, if so, can he say how many of such headstones have been erected and how many wooden crosses still remain?
    Mr. HODGES: This duty is carried out by the Imperial War Graves Commission, who are erecting on the graves of sailors who lost their lives in the War the same form of headstones as on soldiers' graves. I am unable to give the figures for sailors as distinct from other branches of His Majesty's service, but there are estimated to be about 65,000 war graves in the United Kingdom in about 6,000 different cemeteries and churchyards. Some 10,000 of these already have memorials; the Imperial War Graves Commission have erected or contracted for 17,000 more; about 38,000 still remain to be completed. In considering these figures it should be borne in mind that the headstones for all theatres of war are made in this country, and the great bulk of the weekly output is, of course, sent abroad. In all, the Commission have erected or shipped for erection about 270,000 headstones.
    Mr. O'NEILL: Are the War Graves Commission taking care that in the case
    1304
    of the isolated graves scattered about our coasts the wooden crosses at present existing are not allowed to deteriorate pending the erection of the new headstones?
    Mr. HODGES: Yes. I think that the War Graves Commission are giving particular attention to my hon. Friend's point.

    SPANISH CRUISER "CATALUNA" (SALVAGE).
    Sir THOMAS BRAMSDONasked the Parliamentary Secretary to the Admiralty what action is being taken in reference to the payment of salvage money for the salvaging of the Spanish cruiser "Cataluna," on the 10th June, 1923, by the dockyard tugs at Portsmouth; has any acknowledgment been received from the Spanish Government for services rendered by such tugs; and what, if any, are the Regulations which govern the questions of salvage of foreign men-of war?
    Mr. HODGES: No action in regard to the payment of salvage money is being taken, for the reason that, as a matter of internationl courtesy, it is not the practice of one Power to make a claim on its own behalf, or to allow its servants to make a claim, for services rendered to a warship of another Power when in distress.

    OFFICERS (MARRIAGE ALLOWANCE).
    Mr. SAVERYasked the Parliamentary Secretary to the Admiralty whether, in view of the coming reduction in the pay of naval officers, such an addition may be made to their marriage allowance as will bring their remuneration more into line with that of officers in the Army and Air Force?
    Mr. HODGES: In considering the question of a married allowance for naval officers, regard must naturally be paid to the remuneration of officers of the other Services. This question is not, however, in any way connected with the automatic reduction in pay which came into force on the 1st July.

    HIS MAJESTY'S SHIP "COCKCHAFER" (WAN HSIEN).
    Mr. LANSBURYasked the Parliamentary Secretary to the Admiralty by whose authority the commander of the British gunboat "Cockchafer" compelled

    1305
    the leading authorities of Wan Hsien, under threat of bombardment of the city, to follow the funeral of Mr. Hamley, an American citizen, to the grave, and also demanded the execution of two men said to have murdered Mr. Hamley; and will he inform the House whether the two men were put on trial, by court martial or otherwise, and what period of time elapsed between the date the murder was committed and the executions?
    Mr. HODGES: His Majesty's Ship "Cockchafer" was the only war vessel present, and her commanding officer took the action which he considered necessary. An incomplete telegraphic report has been received, and a full written report from the British commander-in-chief is now awaited. I may add that the American commander-in-chief has thanked the British commander-in-chief for the action which was taken.
    Mr. LANSBURY: When the written report comes, will it be laid on the Table of the House?
    Mr. HODGES: I think the hon. Member will be entitled to put that question at the proper time.
    Mr. LANSBURY: Has the hon. Member any idea when that will be?
    Mr. HODGES: I do not think it will be unduly delayed.
    Major COLFOX: Did not the action of this officer materially assist in the saving of life on this occasion?
    Mr. HODGES: That is the information that we have in the incomplete report that we have received by telegraph.

    F. G. GARLAND, PORTSMOUTH.
    Mr. B. SMITHasked the Parliamentary Secretary to the Admiralty whether his attention has been drawn to the case of Mr. F. G. Garland, No. 200,891, Portsmouth, with two good conduct badges, who served 24 years and five months in the Royal Navy and Royal Fleet Reserve, including two years and five months boy's service, with character very good, except for the year 1891 when it is good with ability superior; whether he is aware that Mr. Garland was recommended for the long service and good conduct medal in 1920, and that Mr. Garland has been refused the medal and the Royal Fleet Reserve gratuity of £100 owing to an alleged participation in the
    1306
    collective refusal of duty on 29th April, 1921; and whether, seeing that Mr. Garland denies that he was guilty of refusal of duty and has never been before any officer or court of inquiry with respect to the alleged offence, he will arrange for an inquiry to be held so that Mr. Garland may receive the medal and gratuity that are apparently due to him?
    Mr. HODGES: It is clear that on the occasion in question this Royal Fleet Reserve rating did not obey the bugle ordering the men to turn out on parade, and for this disobedience all implicated have been punished. Garland was very exceptionally given leave to go home the morning after the offence on account of domestic affliction, and seems on his return to Portsmouth to have missed the interrogation of all concerned which took place. On the other hand, in various communications to the Admiralty he has never satisfactorily explained the fact of his failure to obey the bugle. I am afraid that it is not now possible to arrange for a special inquiry into this man's case.
    Mr. SMITH: Is the hon. Gentleman aware, having regard to his undoubted knowledge of naval discipline and naval methods, that when a bugle is sounded for an assembly, and it is not attended to, the blue jacket can be reported as a defaulter? No such report having been been made in this case, and leave having been given on the following day, which is evidence of no report, otherwise he could not have gone, leave having been granted because of affliction, no default being attributed to this man, but on some report he is denied a gratuity after 24 years and five months' service, I am asking whether, in the light of the statements that have been made to the Admiralty, an inquiry cannot now be afforded to this particular rating, so that, if he is right, he can be given what he is entitled to, and, if not, the objection can be maintained.
    Mr. HODGES: The hon. Member has repeated the substance of his question. This decision was arrived at in 1920 and has been the subject of two or three special investigations by the Board since that date. I have myself seen the papers, and, despite my limited experience of the Admiralty, I have been able to come to the conclusion, quite satisfactorily to myself, that I find it impossible to reopen the case.

    RETIRED OFFICERS (DISABILITY PENSIONS).
    Major Sir BERTRAM FALLEasked the Parliamentary Secretary to the Admiralty whether he is aware that disabled officers who retired under the special terms laid down in A.F.O. 1358/1922 are not considered by the Ministry of Pensions to be eligible for disablement pensions, on the ground that they have received special treatment by the Admiralty; and whether the 5½ per cent. reduction in retired pay will be applicable to these officers?
    Mr. HODGES: I am aware that the Ministry of Pensions does not regard officers retired upon the special terms granted in 1922 for the purpose of clearing the lists as eligible for disability retired pay under its Regulations. As regards the second part of the question, the special rates of retired pay sanctioned in 1922 are subject to the 5½ per cent. reduction, except in certain cases of young officers who were given the right to commute the whole of their retired pay.

    ROYAL DOCKYARDS (ACCIDENTS).
    Sir B. FALLEasked the Parliamentary Secretary to the Admiralty whether, in view of the accidents occurring daily in His Majesty's dockyards, both slight and serious, he will consider the training in first aid of specially selected volunteers from among the workmen in each shop in order that temporary relief from pain may be afforded to those workmen who are unfortunately injured?
    Mr. HODGES: So far as is known, the present arrangements for dealing with accidents are adequate, and no occasion has arisen for adopting the suggestion contained in the hon. Member's question.

    CADETS.
    Sir B. FALLEasked the Parliamentary Secretary to the Admiralty the number of applicants for entry as paymaster cadets and special entry cadets whose fathers were warrant officers or commissioned officers from warrant rank who were accepted by the Admiralty during the year 1923 and the number who were rejected?
    Mr. HODGES: For special entry as naval cadets during 1923, there were no applicants who were sons of naval warrant officers, or officers promoted there from. For entry as paymaster cadet in June,
    1308
    1923, there were also no applicants who were sons of naval warrant officers, or officers promoted there from, but the son of a pensioned chief petty officer was accepted. At the November, 1923, examination for paymaster cadets, there were seven applicants who were sons of naval warrant officers or officers promoted there from, and of these six were not accepted.
    Sir B. FALLE: May I ask if, therefore, there is any disqualification for the sons of these gentlemen?
    Mr. HODGES: No, there is no disqualification. They actually did not pass the examination.

    WIDOWS AND DEPENDANTS (CONTRIBUTORY) PENSIONS).
    Sir T. BRAMSDONasked the Parliamentary Secretary to the Admiralty what steps have been taken up to the present date with regard to the formulation of a contributory scheme for pensions to widows and dependants of naval ratings; and when it is expected that the men of the Fleet will have concrete proposals placed before them for their decision?
    Mr. HODGES: A contributory scheme of pensions for the widows and children of seamen and marines is under consideration by the Royal Naval Benevolent Trust. Certain tentative proposals have recently been referred to the Admiralty and are at present under consideration with a view to seeing what assistance can be given in their development. The Admiralty will, of course, be in no way responsible for the administration of any scheme that may be decided upon. I am not, in these circumstances, in a position to state when a scheme will be placed before the men of the Fleet, but a reply will be sent to the Royal Naval Benevolent Trust as soon as practicable.

  UNEMPLOYMENT.

    REGISTERED UNEMPLOYED.
    Sir KINGSLEY WOODasked the Minister of Labour whether, in view of the fact that the number of persons recorded on the registers of Employment Exchanges in Great Britain on 9th June were more numerous than those for the

    1309
    previous week, he can state the increase in the number of such unemployed; and what steps he is taking to provide them with employment?
    The MINISTER of LABOUR (Mr. Shaw): The number registered as unemployed on 9th June was 24,600 more than on 2nd June. There was a further increase of 25,000 on 16th June and a decrease of 39,000 on 23rd June. There is therefore no reason to conclude that the increases were other than temporary and in any event the steps taken by the Government to relieve unemployment cannot be related to the individuals thrown out of work in a particular week.
    Sir K. WOOD: Can the right hon. Gentleman give me a little more detailed reply to the last part of the question is he taking any further steps to provide for these unemployed people?
    Mr. SHAW: It is absolutely impossible to take steps to relieve unemployment in any particular week. The steps that the Government take must be to deal with the whop volume of unemployment, and not simply those who have been unemployed for a week.
    Mr. SEXTON: Will the Minister of Labour inform the House what steps the Government, of which the hon. Member opposite was a supporter, did under similar circumstances?
    Mr. P. HARRIS: In previous years has there not been a steady decrease in the number of unemployed in the midsummer months, June and July? What has caused the increase in June this year. [HON. MEMBERS: "McKenna Duties!"]
    Mr. SHAW: The increases are mainly due to the stoppage of certain factories in Lancashire, and another part of the increase is due to unemployment in the engineering trades in the Midlands [HON. MEMBERS: "McKenna Duties!"] As far as my information goes, of the 49,600 increase in the fortnight, 500 persons were registered as belonging to the motor industry.
    Major COLFOX: Has the right hon. Gentleman discovered any of the rabbits
    Mr. PRINGLE: Is not there a decrease this week?
    Mr. SHAW: Yes.
    Mr. TREVELYAN THOMSONasked the Minister of Labour if he will give particulars of the number of unemployed at the end of December, 1922, January, 1923, and May and June, 1923, and for corresponding periods December, 1923, January, 1924, and May and June, 1924?
    Mr. SHAW: As the reply contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The numbers of persons on the registers of Employment Exchanges in Great Britain at the end of the months mentioned were:

    December, 1922

    1,381,612

    January, 1923

    1,435,642

    May, 1923

    1,252,340

    June, 1923

    1,223,152

    December, 1923

    1,285,623

    January, 1924

    1,320,518

    May, 1924

    1,015,626

    23rd June, 1924

    1,013,500

    The figures for January, 1924, were affected by the railway dispute.

    DOCK WORKERS, NEWPORT.
    Mr. CLARRYasked the Minister of Labour what specific steps have been taken, or are under contemplation, for the relief of unemployment amongst dock workers at Newport, Monmouthshire?
    Mr. SHAW: Grants have been made towards the cost of approved schemes of relief work promoted by the Newport Town Council, including a scheme of about£20,000 value for the winter of 1923–4 approved by the Unemployment Grants Committee. The grant-making Departments will, of course, be ready to give consideration to further schemes put forward by the local authority.
    Mr. CLARRY: Are any special schemes in contemplation to relieve unemployment among dock workers?
    Mr. SHAW: I think the last part of my answer covers that. What applies to Newport applies to any part of the country.
    Mr. RONALD McNEILL: Can the right hon. Gentleman say whether any headway has been made with the reclamation of the Wash?
    Mr. SHAW: There is a special question on that subject.

    WASH (RECLAMATION WORKS).
    Viscount CURZONasked the Minister of Labour whether any work has yet commenced upon the reclamation works upon the Wash; whether it is intended to mark the initiation of this important scheme by any special function; and, if so, will an opportunity be afforded for Members to be present?
    Mr. PARKINSON (Comptroller of the Household): I have been asked to reply to this question on behalf of the Minister of Agriculture. With regard to the first part, work has not yet been commenced upon the proposed reclamation scheme on the Wash, and with regard to the second part of the question, it is not my right hon. Friend's intention to arrange any special function for its initiation. The last part of the question does not, therefore, arise.
    Lieut.-Colonel POWNALL: Can my hon. Friend say how many of the unemployed are to be employed upon this very important work?

    INSURANCE FUND DEFICIT (INTEREST).
    Mr. WHITEasked the Minister of Labour what is the present rate of interest charged on the deficit of the Unemployment Insurance Fund?
    Mr. SHAW: On the 1st July the debt on the Unemployment Fund was £7,130,000, carrying interest as to £2,340,000 at 5 per cent., and as to £4,790,000 at 4⅞ per cent.
    Mr. WHITE: Having regard to the rates at which the Government can borrow money, is the right hon. Gentleman satisfied that he is not being charged too much?
    Mr. SHAW: I am not satisfied, and I am willing to communicate with my right hon. Friend the Chancellor of the Exchequer.

    JUVENILES.
    Mr. HANNONasked the Minister of Labour whether the weekly returns of the numbers of unemployed on the live registers of the Employment Exchanges include all young persons between the ages of 14 and 16; whether their inclusion is dependent upon their having previously found employment; and if he can give any figures to show the present number of such young persons who have left school and are seeking employment?
    Mr. SHAW: The weekly statistics of the live registers of Employment Exchanges do not include all juveniles between the ages of 14 and 16, but only those who have registered at exchanges. Any unemployed juvenile over the age of 14 can register at an exchange irrespective of whether he has previously been in employment or not. No statistics are available showing the total number of juveniles who have left school and are seeking employment.
    Sir JOHN PENNEFATHERasked the Minister of Labour whether he has received any communication from the 13 experienced persons who have just published a series of suggestions in regard to juvenile unemployment and the insurance of young persons; and, if so, will he consider these suggestions?
    Mr. SHAW: I have not received a communication from the signatories to the letter recently published in the Press to which I assume the hon. Member refers. One of the suggestions made is that boys and girls should be insured against unemployment from the date of leaving school, and, as the hon. Member will recollect, a proposal recently made by me to this effect was not accepted by the House. The suggestions, other than that for an extension of insurance, appear to concern my right hon. Friend the President of the Board of Education.
    Viscountess ASTOR: Was not one of the suggestions the wising of the school age?
    Lord H. CAVENDISH-BENTINCK: Will the right hon. Gentleman exercise his influence with the President of the Board of Education to get him to do his duty?
    Mr. SHAW: In regard to the first question, the matter is one for the President of the Board of Education. As to the second question, I am satisfied that my right hon. Friend is doing his duty.
    Sir HARRY BRITTAIN: Is not this a most important matter?
    Mr. SHAW: That is what I think.

    BERWYN, QUARRIES DISPUTE.
    Mr. AYLESasked the Minister of Labour if he is aware that the manager

    1313
    of the Employment Exchange at Oswestry has been asked by Mr. Watson, of the Berwyn Quarries, where there is a dispute, to endeavour to secure him some work-people, and that the manager wrote to a man signing the register informing him that men were required at the quarries, and thus indirectly interfering with the dispute; whether this has been done with his approval; and, if not, what action is he prepared to take to prevent Employment Exchanges being used for such purposes?
    Mr. SHAW: Yes, Sir. Certain vacancies were notified to the Employment Exchange at Oswestry, as stated. The Employment Exchange manager, in bringing this employment to the notice of suitable workpeople, on the register, informed them that there was some matter in dispute at the quarries. The manager's action was in accordance with the Labour Exchanges Act, 1909, and the Regulations made under the Act

    TEXTILE TRADE DISPUTE, HOLLAND.
    Mr. WADDINGTONasked the Minister of Labour if he has yet received information as to the terms of settlement in the Dutch cotton textile trade dispute, and whether the terms include a reduction in wages as well as an increase in hours of labour; and, if so, as the British textile trade has voluntarily adopted the 48-hour week, will he negotiate with the Dutch Government to again reduce the working week in Holland to 48 hours?
    Mr. SHAW: In accordance with the promise given in my reply to the hon. Member on 28th May, inquiries were made as to the terms of settlement of this dispute. I was informed that no official data were available. A further inquiry has now been made and any particulars received as the result thereof will be communicated to the hon. Member.

    INDIA STORE DEPARTMENT, LAMBETH (DISPUTE).
    Mr. HOFFMANasked the Minister of Labour if he has yet been able to secure a settlement of the difference existing between the Government of India and its workers employed at the India Store
    1314
    Department in Belvedere Road, Lambeth; and, if not, if he can usefully make any statement in regard to the dispute?
    Mr. SHAW: I have not yet been able to secure a settlement of the difference existing between the Government of India and the National Amalgamated Union of Shop Assistants, Warehousemen and Clerks in respect of the workers employed at the India Store Department. As my hon. Friend is probably aware, my Department is still in communication with the parties, and I do not think that I can usefully make any statement on the matter.

  HOUSING.

    LAND PURCHASE.
    Mr. AYLESasked the Minister of Health whether he will take steps to modify the Regulations relating to the procedure to be followed by responsible local authorities in the purchase of land for housing purposes so that they can take immediate advantage of advantageous offers of land at low prices which come into the market from time to time, and take it also without divulging their identity, which so often leads to an enhancement of prices?
    The MINISTER of HEALTH (Mr. Wheatley): I am not aware that local authorities generally have experienced difficulties of the nature referred to in acquiring land for housing purposes. Local authorities already have power to acquire land for housing purposes, notwithstanding that the land is not immediately required for those purposes, and provision is made in the Housing Acts for the compulsory acquisition of land in cases where it is not possible to acquire it by agreement at a reasonable price.
    Mr. W. THORNE: Can the right hon. Gentleman state the number of years allowed to local authorities to pay the principal and interest for the purchase of land?
    Mr. SPEAKER: That does not arise out of the question.

    AGRICULTURAL AREAS.
    Mr. E. BROWNasked the Minister of Health whether the civil or ecclesiastical area is taken as defining an agricultural parish under the Housing (Financial Provisions) Bill?
    Mr. WHEATLEY: It is proposed that the civil parish should be taken as the area for this purpose.
    Mr. BROWNasked the Minister of Health whether any consultations with representatives of rural local authorities have taken place with regard to the subsidy of £12 10s. proposed in the Housing (Financial Provisions) Bill for the agricultural parishes?
    Mr. WHEATLEY: Yes, Sir. The question of the subsidy for agricultural areas was discussed at a conference with local authorities at which the rural authorities were fully represented.

    WANDSWORTH (EAST HILL SCHEME).
    Viscount CURZONasked the Minister of Health whether he has received any communication from the Wandsworth Ratepayers' Association on the subject of the East Hill housing scheme, indicating their objection to the erection of certain tenement buildings in the Wandsworth area; and whether he will request that body to discuss the matter with his Department before proceeding further with the matter?
    Mr. WHEATLEY: I have received, and considered, a communication in writing from the association setting out in detail their objections to this scheme, and the scheme leas been discussed between representatives of the borough council and the London County Council. After full examination of the questions raised, it was decided that the scheme could properly be approved, and I have accordingly indicated my approval.
    Viscount CURZON: Are we to understand from the right hon. Gentleman's answer that he has the concurrence of the Wandsworth Ratepayers' Association in the matter; and, if not, does he propose to disregard local wishes?
    Mr. P. HARRIS: Is this building being erected in order to help slum clearances in South-East London; and if a site is not obtained outside South-East London, is it possible to clear the people away from the slums?
    Mr. WHEATLEY: I am not sure that I have the approval of the Wandsworth Ratepayers' Association, but it is sometimes necessary to give approval even when all parties are not agreed.

    SUBSIDY.
    Mr. T. THOMSONasked the Minister of Health if he is aware that since the introduction of his Housing Bill the representatives of over 300 local authorities, representing the chief cities and towns in the country, assembled in conferences at Newcastle-on-Tyne, Manchester, Sheffield, London, Bristol, and Cardiff, have in all cases unanimously passed resolutions protesting against the subsidy being limited to the small type of houses named in his Bill; and, in view of this unanimous feeling in favour of a larger house, will he take powers which will enable him to grant the subsidy to houses of an additional 100 superficial feet on the recommendation of the local authorities concerned?
    Mr. WHEATLEY: I cannot accept the suggestion that local authorities are unanimously in favour of an extension of the subsidy to larger houses, and I do not propose to ask the House to review the decision which it has already taken in regard to the size of the houses.
    Mr. THOMSON: Is the right hon. Gentleman aware that a large number of local authorities desire to have the increased power and will be improve his scheme by giving them an opportunity to build larger houses, if they so desire?
    Mr. WHEATLEY: I am not aware of evidence that a large number of local authorities desire it.
    Mr. FERGUSON: Is the right hon. Gentleman aware that people are not able to pay rent for the houses they have, without making the hoses bigger?

    OVERCROWDING (SHOREDITCH).
    Mr. THURTLEasked the Minister of Health whether he is aware of the fact that there are dwelling houses in Essex Street, Shoreditch, in which the average number of occupants per room exceeds five; and if, in view of the moral and social consequences of such overcrowding, he is prepared to take power to acquire some of the large number of empty houses in the Sloane Square neighbourhood in order to provide better accommodation for the people?
    Mr. WHEATLEY: I am aware of the overcrowded conditions in Central London. Local authorities have power to acquire and adapt large empty houses,

    1317
    but experience has shown that this is not usually the most economical means of providing fresh accommodation. I am satisfied that the best remedy for overcrowding is the building of new houses.
    Mr. THURTLE: Is it not the fact that, in the crowded areas, there is no space for the building of new houses.
    Lord EUSTACE PERCY: Is it the case that many local authorities are in doubt as to the extent of the powers under Section 12 of the Act of 1919; and will the right hon. Gentleman take steps to inform them of what their powers are in the matter?
    Mr. WHEATLEY: Yes, if should be shown that there is any doubt about it, I will take the necessary steps to educate them on the subject.
    Sir K. WOOD: Is it not a fact that the right hon. Gentleman himself advocated the suggestion made in the question only a few months ago?
    Mr. WHEATLEY: No, I do not think the hon. Member will find any evidence in those old pamphlets for such a suggestion.

    SHORTAGE (URBAN AREAS).
    Mr. THURTLEasked the Minister of Health whether, in view of the serious shortage of housing accommodation already existing in the East End of London and other urban areas; and, having regard to the fact that this shortage cannot be remedied for some considerable time, is he prepared to take steps, by means of legislation if necessary, to prevent the shortage of accommodation being made more acute through the conversion of dwelling-houses into factories and workshops?
    Mr. WHEATLEY: I will give this matter my consideration, but I cannot undertake to introduce legislation dealing with it this Session.

    BRICKLAYING.
    Mr. HANNONasked the Minister of Health the average number of bricks which can be laid by a fully competent bricklayer, working piece-work or for himself, in a day of eight hours fine weather; the average number laid per man on Government housing schemes; to what he attributes the disparity, if any; and what steps he is taking to remove it?
    Mr. WHEATLEY: I am unable to say what number of bricks can be laid in a day by a bricklayer working piece-work. It will 'be appreciated that the number of bricks laid will vary considerably with the class of work upon which the bricklayer may be engaged. There are no records available which would enable me to give reliable figures as to average number of bricks laid per man upon Government housing schemes.
    Sir W. DAVISON: Does not the right hon. Gentleman know very well that in the work required in connection with the small Government houses it is only at the chimneys and the corners where there is any difficulty at all, and that it is perfectly plain sailing otherwise?
    Mr. WHEATLEY: I am also aware that there are some men who could not lay the bricks for these houses.
    Viscountess ASTOR: Is it not true that some bricklayers can lay more bricks than others, and is the Minister encouraging those who can lay more bricks or is he encouraging those who cannot?
    Sir H. BRITTAIN: Will the right hon. Gentleman consider the inauguration of bricklaying competitions such as are held in the United States?
    Mr. PENNY: And will the right hon. Gentleman take part?

    BUILDING GUILDS.
    Mr. WHITELEYasked the Minister of Health whether he is prepared to meet representatives of the building guilds, prior to the present Housing Bill becoming law, with a view to securing their cooperation in the building of working class houses?
    Mr. WHEATLEY: There has already been some discussion with representatives of the guilds and I have undertaken when the Housing Bill becomes law to consider the question of guild contracts in consultation with local authorities and the Industrial Committees which I propose to set up.
    Sir K. WOOD: Is the right hon. Gentleman aware that all building guilds which have hitherto embarked on housing schemes have gone into compulsory liquidation.
    Mr. WHEATLEY: I am not so familiar with their history as to enable me to agree with that statement. If that be so, it will be taken into account in the consideration of the matter.

    MONEY RESOLUTION.
    Mr. MASTERMANasked the Minister of Health (1) whether he is prepared to submit an additional Resolution in Committee which will enable the House, if it so desires, to give power to the local authorities to build cottages of larger floor space than that now restricted by the Housing Resolution during the next 15 years, if any of them so desire;
    (2) whether he is prepared to submit an additional Resolution in Committee which will enable the House, if it so desires, to provide the owner-occupier with similar assistance to that now proposed to be offered to the local authorities for houses limited for letting purposes?
    Mr. WHEATLEY: I have carefully considered these suggestions, and, in view of all the circumstances, can see no reason that would justify me in submitting another Money Resolution.
    Mr. MASTERMAN: Are we to understand from that answer that the Government have deliberately decided that this vital question shall not even be discussed in the House of Commons in Committee on the Housing Bill?
    Mr. WHEATLEY: I may remind the right hon. Gentleman that I am acting on the decision of the House. I have considered the matter carefully, and I was particularly influenced by the fact that the local authorities are not, in the great majority of cases, utilising their full powers.
    Mr. MASTERMAN: But is it not in the power of the Government and the right hon. Gentleman so to amend the Resolution as to allow the House of Commons, which, after all, counts for something, to discuss this question?
    Mr. WHEATLEY: Yes, but what the right hon. Gentleman is asking me to do is that, the House of Commons having come to a decision on a Money Resolution, I shall depart from that Resolution and introduce a fresh Resolution.
    Mr. PRINGLE: Could the right hon. Gentleman say whether it is not the case
    1320
    that the House could not modify this Resolution at all, and that the only course was to reject it?
    Sir K. WOOD: Was it not a fact that the Resolution was drawn in such a way that it could not be amended, notwithstanding the fact that, when my right hon. Friend brought in his Resolution last year, it was drafted in such a way that it could be amended, and has not the right hon. Gentleman himself on many occasions said that this increase in the size of houses ought to be accomplished?
    Mr. MASTERMAN: Have not the Government themselves, in response to the general wishes of the House of Commons, frequently produced new Money Resolutions in connection with these Bills, and cannot the right hon. Gentleman see his way to allow the House to discuss this most important question?
    Mr. WHEATLEY: I would say, in reply to the hon. Member for West Woolwich (Sir K. Wood), that since I criticised the size of these houses, the maximum size has been increased by 100 feet. I do not believe I could, with all due respect, enter into the supplementary question raised by the right hon. Member for Rusholme (Mr. Masterman).
    Sir W. JOYNSON-HICKS: May I ask whether the right hon. Gentleman is now satisfied that suggestions from below the Gangway will not be seriously pressed?
    Mr. WHEATLEY: I should say that the right hon. Gentleman who puts the question is more likely to ascertain in advance the probable decision of the House on his proposals than I am.

    FACTORIES, BETHNAL GREEN.
    Mr. P. HARRISasked the Minister of Health whether he is aware that in Bethnal Green owners of houses are getting possession of dwelling-houses, and, in spite of the housing shortage, are converting them into factories; and whether he will consider legislation to prevent this?
    Mr. WHEATLEY: I am aware that this has been done in certain cases, and I shall be glad to consider any detailed information which may be brought to my notice. I have no hope of being able to deal with this matter this Session.
    Mr. HARRIS: Is the right hon. Gentleman aware that owners of the houses get possession on the plea that they are going to occupy them for dwelling purposes, and that, having got possession for dwelling purposes, convert them into factories? Is that not contrary to the purpose of the Act?
    Mr. WHEATLEY: I do not know. I should like evidence of such cases, because I would like to think the Court would take a very serious view of any instance in which it has been misled by applicants in the matter.

    BRICKLAYERS' WALES (MANCHESTER).
    Mr. E. SIMONasked the Minister of Health whether he is aware that builders building subsidy houses in Manchester are paying up to 4d. an hour above the standard rate for bricklayers, with the result that the contractors who are building for the corporation and paying the standard rate are getting so few bricklayers that one important contract will at the present rate take over 20 years to complete; and whether he will introduce legislation to prevent exploitation of this kind?
    Mr. WHEATLEY: I am not aware of the rates of wages paid by the particular builders referred to, but if the scheme I have laid before the House is adopted, I believe that the industry will be able to make such arrangements as will ensure a sufficient supply of labour for the local authorities' housing schemes.
    Mr. SIMON: Can the right hon. Gentleman say, in the meantime, how we are to get labour for our big schemes when paying the full rates, if other people using the subsidy pay 4d. an hour more?
    Mr. WHEATLEY: It is because of these difficulties that I am asking the House to give me the powers contained in the Housing Bill.
    Mr. SIMON: Cannot the right hon. Gentleman take some steps to prevent non-federated employers paying that extra rate?
    Mr. WHEATLEY: If the hon. Gentleman can suggest any way in which I can help the Manchester Corporation to find the necessary labour, I shall be very pleased to co-operate.

    POOR LAW RELIEF (RENT).
    Mr. T. HENDERSONasked the Minister of Health whether he is aware that the Scottish Board of Health has recently advised the Scottish parish councils to earmark for rent part of the relief given by them and pay such rent direct to the owner or his factor that the Majority Report of 1009 stated (page 147) that in some unions in England there was an idea that it was illegal to give relief sufficiently adequate to pay for shelter; that the rule prohibiting guardians to pay rent direct has been one of the causes of inadequate out-relief and also gave rise to the above-mentioned idea; and that many complaints of the rule have been made to the Department; and will he repeal Article V of the Relief Regulation Order, 1911, prohibiting such direct payment or give his reasons for not repealing it?
    Mr. WHEATLEY: I do not think it desirable to rescind the Regulation referred to, but I have recently issued a circular letter on this subject and will send my hon. Friend a copy.

  RUSSIA.

    ANGLO-SOVIET CONFERENCE.
    Mr. BARCLAYasked the Prime Minister whether the delegates of the Soviet Government of Russia are laying claim to a sum of £15,000,000 to £16,000,000 sterling, which is said to be lying in this country, and is due to the late Imperial Government of Russia; and, if so, whether he can assure the House that the embargo on this money will not be raised until such time as the British Government have received from the delegates of the Soviet Government adequate guarantees that the just and legal claims of British subjects for outstanding debts in Russia will be satisfactorily settled?
    The PRIME MINISTER: According to my information the figure suggesed by the hon. Member is considerably in excess of the amount actually involved. In any event, its disposal is governed by Article 10 of the Trade Agreement, with regard to which I would refer the hon. Member to my reply to the hon. Member for Middleton and Prestwich on 30th June.

    DEATH OF CAPTAIN CROMIE.
    Commander LOCKER-LAMPSONasked the Prime Minister whether he has brought to the special attention of the Russian Delegation now in London the murder of the British Plenipotentiary, Captain Cromie, in Petrograd, with a view to securing compensation for Captain Cromie's widow, and an expression of regret?
    The PRIME MINISTER: I have nothing to add to the replies which I gave to the hon. and gallant Member on 14th February, and to the hon. and gallant Member for Dulwich (Sir F. Hall) on 2nd June.

    EX-PRISONERS OF WAR (CLAIM'S).
    Lord H. CAVENDISH-BENTINCKasked the Prime Minister whether, seeing that the Government have already received from Germany sums in excess of the total amount distributed in regard to ex-prisoners of war and others, he will, since the sums paid to claimants amount only to two-fifths of their assessments, cause a further distribution to be made to claimants up to their official assessments?
    The PRIME MINISTER: I would refer the Noble Lord to the reply given to the right hon. and learned Member for Cambridge University on the 23rd June.

    NAVY, ARMY AND AIR FORCE (CO-ORDINATION).
    Major-General Sir FREDERICK SYKESasked the Prime Minister whether the Government are considering the steps to be taken to secure greater co-ordination in the policy and administration of the three fighting services, with a view to obtaining greater economy and efficiency in the national system of defence as a whole?
    The PRIME MINISTER: The question of the co-ordination of the services was exhaustively inquired into last year by a Sub-Committee of the Committee of Imperial Defence under the Chairmanship of Lord Salisbury, and the Report has been presented to Parliament (Cmd. 2029). That Report has been put in operation, and before reopening the question it has been thought advisable to wait for further experience.

    MEXICO.
    Sir H. BRITTAINasked the Prime Minister whether he is able to give the House any official information with reference to the recent correspondence between His Britannic Majesty's Government and Mexico?
    The PRIME MINISTER: I hope to lay correspondence on this question before Parliament at an early date.

    EIGHT-HOURS DAY BILL.
    Lord H. CAVENDISH-BENTINCKasked the Prime Minister whether, in view of the expressed intention of M. Herriot, in regard to the Conventions of the International Labour Organisation, of ratifying the eight-hours day and others, the Government intends to introduce the Eight-hours Day Bill without further delay, in order to ensure speedy ratification by this country?
    The PRIME MINISTER: The Government propose to introduce a Bill dealing with the question in the near future; but having regard to the state of Parliamentary business it will not, I fear, be possible to secure its passage into law before the autumn.
    Mr. W. THORNE: Is my right hon. Friend aware that at the Geneva Conference the Labour delegates vigorously protested against the delay in the introduction of this Eight-hours Bill?
    Mr. B. TURNER: Is it not a fact that we have had for at least four months the statement from the Prime Minister and Minister of Labour that this Bill will be introduced shortly? When will "shortly" expire?
    Mr. W. GREENWOOD: Is it not a fact that the Minister of Labour stated this afternoon that some further mills have been stopped in Lancashire, causing more unemployment in the last month?
    The PRIME MINISTER: I am aware that some references were made to this subject at the recent meeting in Geneva. If legislation has not been introduced before now, I do not think it is our fault. It is being pressed forward. There are a good many details to be considered. The Bill is ready and is being considered by the parties concerned.

    GOVERNMENT HOSPITALITY.
    Viscount CURZONasked the Prime Minister whether the recent garden party at Hampton Court was an official function; and, if so, on what Vote is the charge borne?
    The FIRST COMMISSIONER of WORKS (Mr. Jowett): The answer to the first part of the question is in the affirmative, and the cost is borne on the Vote for Government Hospitality.
    Sir H. BRITTAIN: Is it not a fact that the Government Hospitality Committee has done a very great work for this country, and, incidentally, is it not true that Great Britain spends less on such hospitality than any other great Power?

    WASHINGTON CONFERENCE.
    Commander BELLAIRSasked the Prime Minister whether, in view of the mistaken impression generally current that the Root Resolutions at the Washington Conference were ratified by the Powers, and in view of the importance of these resolutions dealing with the use of poison gases and submarine warfare on commerce, he will now ascertain if the French Government intend to submit them for ratification to the French Parliament?
    The PRIME MINISTER: Inquiries are now being made.

    PRIME MINISTER OF EGYPT.
    Commander BELLAIRSasked the Prime Minister whether he has any information as to the visit of the Prime Minister of Egypt to communicate to the House?
    The PRIME MINISTER: At present I have nothing to add to my replies to the hon. and gallant Member for Hands-worth (Commander O. Locker-Lampson) on 8th May, and the hon. Member for York (Sir J. Marriott) on 23rd June.

    CHINA AND RUSSIA (AGREEMENT).
    Commander BELLAIRSasked the Prime Minister whether the full text of
    1326
    the agreement signed between China and Soviet Russia has been communicated to the British Government; and, if so, whether there are infringements of existing interests of other Powers, more especially in regard to the control of the Chinese Eastern Railway?
    The PRIME MINISTER: The full text of the agreement has been obtained and a summary telegraphed by His Majesty's Minister at Peking. Certain foreign interests appear to be affected by this agreement, but it is still too early to make any detailed statement on the subject.

    POPLAR GUARDIANS (AUDIT).
    Sir K. WOODasked the Minister of Health whether the district auditor has yet completed the audit, or any portion thereof, concerning the accounts of the Poplar Board of Guardians; whether the auditor has made any surcharges on the members of the board; and whether the Minister has taken any action in the matter?
    Mr. WHEATLEY: I am informed that the adjourned audits were resumed on Thursday last, when representations were made on behalf of the guardians with respect to certain proposed surcharges. As soon as these representations have been considered by the auditor he will decide as to any surcharges and close the audits.
    Sir K. WOOD: Does not the right hon. Gentleman think that we might have a little more expedition in this matter, and does he remember the speech which he made months ago when he said he would deal with this matter immediately and see that the law was carried out to the full?
    Mr. LANSBURY: Is the right hon. Gentleman aware that two-and-half-years' audits were completed long before he took office and that the right hon. Gentleman on the Opposition Front Bench never took any trouble about the matter whatever?
    Mr. WHEATLEY: Yes, I am not likely to forget those facts.
    Major COLFOX: Will the right hon. Gentleman undertake, if it can be shown that anybody in this connection has broken the law, to see that such cases are dealt with?

    FOOD ADULTERATION.
    Mr. LINFIELDasked the Minister of Health whether his attention has been called to the Report on Food Adulteration by Mr. A. E. Parkes, the borough analyst for Poplar; and whether he can hasten the Report of the Government Committee so that early action may be taken?
    Mr. WHEATLEY: Yes, Sir. My attention has been called to the Poplar Borough analyst's report. I understand that the Committee hope to present their Report in the near future.

    PATENT FOODS.
    Mr. SCRYMGEOURasked the Minister of Health whether, having remitted for investigation by his Department the matter of serious danger to infant life and welfare arising from the widespread sale of proprietary and patent foods, consisting principally of starch, he is now prepared to take steps enabling local authorities to exercise control over the sale of unsuitable and unwholesome preparations advertised as infants' food?
    Mr. WHEATLEY: The investigations are still proceeding, and I am not at present in a position to add anything to the reply which I gave to the hon. Member for Penrith (Mr. Dixey) on the 9th April last.
    Mr. SCRYMGEOUR: As the right hon. Gentleman had in April last the investigation then mentioned by him, has he since considered the decision as to what should be done? Is he not now prepared to take the necessary action?
    Mr. WHEATLEY: My Department has not yet completed its investigation, but, as soon as it has, I will consider what steps should be taken.

MEMBERS OF PARLIAMENT.
Major HORE-BELISHA: I beg to move,
"That leave be given to bring in a Bill to limit the giving of donations and subscriptions by Members of Parliament."
My aim is two-fold. In the first place, I wish to assure that the relationship which exists between a Member of Parliament and those who elect him shall be
1328
based upon mutual respect and esteem, and, in the second place, I desire to assure that anyone with the necessary qualifications shall be able to be elected to this House, irrespective of whether he be young or old, rich or poor. It will generally be conceded that the best qualification for a Member of this House is his capacity to do the work of the State energetically and honestly, and that capacity is not necessarily determined, or even evidenced by his affluence. I do not desire to suggest that every Member of this House who gives a gift, donation or subscription in his Parliamentary division is inspired by the corrupt motive of desiring to influence the recipients of his generosity to record their votes for him, but I do say in many instances these presents are given with the desire that votes previously obtained shall not be lost. Particularly is it the case that pressure is exerted upon a Member to give, if he lays himself open to the charge of meanness or of lack of sympathy with an object of a charitable character. I do not in any way desire to reflect upon the organisers or beneficiaries of the appeals which are made. They, naturally, believe that the objects which they have in view are the most exemplary in the world, and they are naturally willing and anxious to have them subsidised from any source which may be available. But this system which now prevails in this country puts Members of Parliament in a very invidious position, particularly, as I say, when they are laid open to the charge of lack of sympathy or lack of generosity.
The worst aspect, however, of this system is that it operates as a discouragement to many who would otherwise enter into public life, and the State is deprived of fresh and vigorous sources of assistance to which it has the right. It is commonly said in this age that we have careers open to the talents, but the talents ought not to be current coin of the realm: personality rather than purse should count! I have been much struck by an anomaly in our legislation. The Corrupt Practices Act makes the type of gift which I seek to penalise an offence if given during the period of an Election; but what possible distinction can there be in principle between giving a bun to a baby between the issue of the writ and the declaration of the poll, and giving a cot to a children's hospital either prior to

1329
or subsequent to the actual contest? That is the anomaly that I had in mind in drawing up this Bill, which I hope I will be given permission to introduce. I have sought to bring the subscriptions of Members of Parliament and their gifts and donations into the category of corrupt practices in exactly the same way as they would be if committed in the course of an Election. I have made certain exceptions which, I think, are sufficient to cover every legitimate enterprise. [An HON. MEMBER: "Why not the candidate?"] An hon. Friend near to me asks: "Why not the candidate?" I have excluded candidates for two reasons: because it is very difficult to define a candidate; and, secondly, so long as a constituency knows that a candidate who is in the habit of distinguishing himself by his munificence must cease to give from the moment that he is elected a Member of Parliament—that the source will be cut off—they will be disposed to keep him for ever as a candidate.
It may be argued that in this way I am penalising one of the finest human instincts—that charity which
"blesseth him that gives, and him that takes."
But there is another kind of charity which is degrading both to the donor and to the recipient. This Measure does not deprive any Member of Parliament of such solace as he may be able to give to his soul by charity, because he can give away as much as he likes in anybody else's constituency, and this must be a far greater discipline to his soul, as it must be a far greater satisfaction to him. This House has always been jealous of the integrity of its Ministers. It has provided by custom that upon accession to office a Minister must relinquish his directorships in public companies. I have no doubt that the business life of the community suffers from this subtraction of brains and ingenuity, but it is one of the penalties that the community pays for having Ministers, and I think that Members of Parliament ought equally to be free from the taint of the suspicion that they are deriving any advantage whatsoever from their wealth. It is because I have felt that this House would desire to remove every obstacle that stands in the way of youth and ability, and because it will be scrupulous of the honour, alike of its Members and of their constituents,
1330
that I feel sure—or at any rate I hope—that hon. Members will pass this Bill into law so that it may henceforth determine the habits of this land.
Mr. R. W. ALLEN: I cannot imagine that this House will very seriously consider the proposal which has just been made. I believe it is the practice of this House—so I have understood in the short time I have been here—that a First Reading should be given to Bills brought forward under this Rule with the idea that they should be printed. I do want, however, to submit, with the greatest possible respect, that the House will not enhance its reputation by giving its imprimatur to the First Reading of so fantastic a proposal as this. [HON. MEMBERS: "Why not?"] In the time at my disposal I will endeavour to say "why not," and why I think as I do. There may be many reasons advanced in opposition to this suggestion, and any one of them, I venture to submit, is conclusive in itself. As I listened to my hon. and gallant Friend, I was reminded of the story I heard when a small boy, and in relation to small boys. A boy and his elder brother were going to school one morning and, as they happened to be rather late, the younger suggested to his elder brother that they should kneel down by the roadside and pray that they might not be late. The elder, however, replied that it was better to hurry up, and get to school as quickly as possible. It occurred to me that the thought embodied in that story might be borne in mind here in regard to a good deal of the legislation that is brought forward in this House in these days. In my opinion there is an increasing tendency to ask Parliament to do what we can do for ourselves. I submit, with the greatest possible respect, that this matter of contributions is one of the things we can deal with ourselves. I do not want to include any present Member, and I think there are very few here who are in the habit of buying their constituencies. I would, however, venture to suggest, without entering into detail, that there is probably no Member, except those who refuse to give a brass farthing, who in the course of his Parliamentary experience has given less to his constituency than I have. It is true I have the honour to represent part of a city which was well trained by the present Prime Minister, and possibly

1331
it is not typical of the kind of constituency which the hon. and gallant Member for Devonport (Major Hore-Belisha) has the misfortune to represent. I have taken the line that while I considered it a high honour to represent the city of Leicester in Parliament I had no ambition whatever to be the relieving officer of that city. I believe, and I think it is the conviction of a large number of Members of this House, that if we take that line we do not sacrifice anything by doing so. I have spoken to hon. Members here who have distributed in the course of their Parliamentary experience large sums of money. I find that almost without exception they tell you that they have the greatest doubt whether it has been worth anything at all to them. One of the things that has surprised me here, speaking particularly of hon. Members who sit around me on these benches, is the large number that have told me that they have resolutely declined to subscribe anything, and yet they are here. There are hon. Members on these benches who last December captured seats which almost from time immemorial had been held by hon. Members who sit on the benches opposite, and they did it, not by reason of the generosity of their giving, but because they stood for principles which the electorate considered sound. Hon. Members above the Gangway will, I am sure, exculpate me from any wish to patronise them, but I would venture to suggest that every one of them is a living witness that a Bill of this character is absolutely unnecessary. They have done the right, thing, and hon. Members opposite and hon. Members on these benches can do the right thing in exactly the same way.
There is a further consideration. I would like to remind hon. Members who are disposed to support the Bill that when all is said and done this form of giving to charity is one of the crudest and most elementary forms, shall I say, of bribery, and it is one that is seen through at once. If the House is going to give its imprimatur to a Bill like this, there are other reforms which it seems to me would be necessary. What are we going to say of that bribery which takes the form of rash and hopelessly wild pledges? Certain hon. Members, apparently, are under the impression that I am referring to any one section of the House, and I hasten to add
1332
that all parties are equally blameworthy. [HON. MEMBERS: "No!"] Let me just remind hon. Members of certain pledges which are fresh in our memory. There are Members of this House who, I understand, were returned to Parliament because they promised they would reduce certain rents in a certain great city. How are you going to deal with promises like that, which, looked at from our standpoint, are absolutely indistinguishable from the particular form of bribery to which the hon. Member has just made reference? And what about the other rash promises made by hon. Members in all parts of the House, though less, I believe, by Members on these benches? If you start on this line, there is no knowing where you are going to end.
The hon. Member, as I understand him, exempts subscriptions to political organisations. He is as anxious as I am, and as we all are, that young men who are without means shall find their way into the House of Commons, but I would remind him that he leaves what is still the greatest obstacle. There are large numbers of constituencies in this country where a young man without means stands no chance, because he is unable to find the funds that are necessary in order to keep the organisation going from year to year. I am not suggesting that we should prohibit these things, but I say with confidence that you cannot draw the line between the one and the other. If your idea is to let in the young man who has not the means, then you must do what I understand, according to newspaper reports, the hon. Member wants to do. He wants ultimately to attain such a state of affairs that no man gives anything to any political or charitable organisation. It does seem to me that these considerations, being as they are, only point and emphasise what I said at the beginning, that it is impossible to deal with this sort of thing by legislation and that we only make ourselves foolish by trying to do so. We have already given ourselves our railway expenses, much to the consternation of many of our electors, and, if we go on with this procedure, ultimately the position of a Member will be that he gives nothing—when he goes down to a little church social he will not be allowed to pay half-a-crown for his tea—but that on the other hand he is a recipient raking it in all along the line.
Question put,
"That leave be given to bring in a Bill to limit the giving donations and subscriptions by Members of Parliament."
The House proceeded to a Division.
Major Hore-Belisha and Sir James Remnant were appointed Tellers for the "Ayes"; but, there being no Members willing to act as Tellers for the "Noes," Mr. SPEAKER declared that the "Ayes" had it.
Bill ordered to be brought in by Major Hore-Belisha, Sir Arthur Shirley Benn, Sir James Remnant, Duchess of Atholl, Rear-Admiral Sir Guy Gaunt, Mr. Kirk-wood, Mr. Mosley, Mr. Sexton, Mr. Arthur Henderson, jun. (Cardiff), Mr. Masterman, Mrs. Wintringham, and Mr. Ramsay Muir.

MEMBERS OF PARLIAMENT BILL,
"to limit the giving of donations and subscriptions by Members of Parliament," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 186.]

MONEYLENDERS (RESTRICTIONS).
Lieut.-Colonel POWNALL: I beg to move,
"That leave be given to bring in a Bill to prohibit advertising and circularising by registered moneylenders."
My reason for adapting this method instead of the more simple one of presenting the Bill at the Table of the House is that I may just give a few reasons why this Bill should not only receive a First Reading, but that it should also in the very near future receive a Second and the Third Reading. [HON. MEMBERS: "Agreed!"] It is very pleasant to hear that it receives such general approval. We are all of us swamped with circulars from moneylenders. [HON. MEMBERS: "Agreed!"] I see that the House is in general agreement with the Bill, and I will therefore only quote from one such circular. The circular is entitled:
"Why go to your hanker and suffer the indignity of a refusal?"
It goes on to say that the firm in question acts as a link between banker and money-lender. It further goes on to speak of the low rate of interest charged. This very firm within the last few weeks summoned a client for a rate of interest
1334
which worked out at over 1900 per cent. That shows how misleading these circulars are Unfortunately, many members of the public are not so wise in these matters as hon. Members opposite, who are agreed, and I do say that it is important that this measure of protection should be given to the public by the prohibition of moneylenders' circulars and their advertisements in the Press.
Mr. PETHICK-LAWRENCE: I rise to oppose the Bill. I am only going to make two or three very short observations in opposition to it. My reason for opposing it is not any tender, solicitude towards moneylenders as a class, but because, as I understand the Bill, it proposes to use the Post Office in order to deal partially with certain correspondence. I feel most strongly that the Post Office, as a national institution, ought not to show partial favours between correspondents, but ought to mete out its services equally to the just and the unjust. I may remind the House that in the United States there is a provision which enables the Postmaster to discriminate between different kinds of correspondence. That has led to very serious difficulties in the United States, because that power, given originally for some such purpose as this, has been used for quasi-political ends. It would be out of place for me here to comment adversely upon what has been done in the United States. It is sufficient to say that a very serious controversy has arisen from time to time in the United States owing to the powers which the Postmaster-General has used there. The present power of the Postmaster-General to open and interfere with correspondence is already too large, as I believe many Members will agree, and it would be a very serious thing to increase them in the way that this Bill proposes. For those reasons, I venture to oppose the Bill.
Question put, and agreed to.
Bill ordered to be brought in by Lieutenant-Colonel Pownall, Sir George McCrae, Mr. George Spencer, and, Lieutenant-Colonel Guinness.

MONEYLENDERS (RESTRICTIONS) BILL,
"to prohibit advertising and circularising by registered moneylenders," presented accordingly, and read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 187.]
SELECTION (STANDING COMMITTEES).
  STANDING COMMITTEE C.
  Mr. WILLIAM NICHOLSON reported from the Committee of Selection; That they had discharged the following Member from Standing Committee C (added in respect of the Arbitration Clauses (Protocol) Bill [Lords]): Mr. Arthur Michael Samuel; and had appointed in substitution: Sir Arthur Churchman.

  STANDING COMMITTEE D.
  Mr. WILLIAM NICHOLSON further reported from the Committee; That they had discharged the following Members from Standing Committee D (added in respect of the Merchant Shipping (International Labour Conventions) Bill [Lords]): Mr. Shaw and Mr. Windsor; and had appointed in substitution: Mr. Walter Smith and Mr. Webb.
  Reports to lie upon the Table.

MESSAGE FROM THE LORDS.
That they have passed a Bill, intituled, "An Act to increase the borrowing powers of the Londonderry and Lough Swilly Railway Company; and for other purposes." [Londonderry and Lough Swilly Railway Bill [Lords.]
LONDONDERRY AND LOUGH SWILLY RAILWAY BILL [Lords]
Read the First time; and referred to the Examiners of Petitions for Private Bills.
ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee. [Progress, 30th June.]
  [Mr. ROBERT YOUNG in the Chair.]

  FINANCE BILL.

    CLAUSE 16.—(Income Tax and Super-tax for 1924–25.)
    Sir JOHN MARRIOTT: I beg to move, in page 10, line 4, to leave out the words "and sixpence."
    I move this Amendment for three main reasons: In the first place, because I have some hope, not a very lively one perhaps, of softening the heart of the Chancellor of the Exchequer regarding an exceedingly deserving and very hard-pressed class of taxpayer. I do so, in the second place, to protest against what I conceive to be the inequity and the unwisdom—the unwisdom no less than the inequity—of the proposals which the Chancellor of the Exchequer has made for certain revisions of taxation. Above all, I move this Amendment in order that I may have an opportunity, and that other Members of the House may have an opportunity, of entering their caveat against certain views as to the incidence of direct and indirect taxation respectively—views which prevail, as I understand it, in certain sections of the House, views which many of us feel to be profoundly erroneous. I will start with a general proposition which was enunciated by no less an authority than Mr. Winston Churchill—and I regard Mr. Churchill as a very great financial authority—when he was addressing a very honourable and responsible association—the Financial Reform Association—at Liverpool some years ago. The right hon. Gentleman then used these words, which I can hardly imagine any hon. Member of this House will object to. He said
    "Taxation, raise it how you may, is a gross and unredeemed evil."
    Does any hon. or right hon. Gentleman dissent from that proposition? I believe there are certain sections of opinion which still regard taxation from another point of view—which regard it as a convenient and legitimate instrument for equalising the distribution of wealth, or, as some people put it, for depriving the
    1360
    rich of their ill-gotten gains and ameliorating the condition of the poor. I quite admit that the latter half of that sentence does represent a very attractive ideal, but it remains a question, and will remain a question, how far that ideal can be attained by taxation. To deprive the rich of their gains, whether ill-gotten or well-gotten—is a task within the competence of very moderate ability, but, as to making the rich poorer, as I have constantly argued from this place, it is very far from certain that the impoverishment of the rich will alleviate in any way at all the burdens of the poor. But whether that suggestion is feasible or not, it does pre-suppose an entirely erroneous view of the object of taxation, May I quote further words by Mr. Winston Churchill?
    "Certain sections of opinion believe that taxes can be made of themselves a great vivifying and reproductive benefit. There is the view of those who like taxation for spite. I believe it is wrong and unjust to tax any person, however rich, with the object of making him poorer. An attempt was made to do that in every Oriental monarchy and the result in every case where it has been tried has been the same Elusive capital has floated away and no net which the Government can set up has been able to stop it. Scarcity of money has resulted to the State as a result of such taxation and infinite injury has been done to commerce and trade in the process."
    With that view I desire entirely to associate myself. But I must not now stay to emphasise or elaborate that statement. I will pass, if the Committee will allow me, to my main point which concerns the rate of Income Tax for the current financial year. The Chancellor of the Exchequer will, I am certain, admit that since the reduction of 6d. in last year's Budget, Income Tax payers have done exceedingly well by the revenue. I do not think the right hon. Gentleman will be at all disposed to deny the validity of that statement, although I do not see any sign of his assent which I should have liked to evoke. I repeat I think he will admit that since the reduction 12 months ago of 6d. in last year's Budget Income Tax payers have done exceedingly well by the revenue. The estimate of my right hon. Friend the Member for the Bewdley Division of Worcestershire (Mr. Baldwin), when he introduced his Budget 12 months ago, was that the Income Tax, including Super-tax, would produce a revenue during the last year of £319,000,000. As a matter of fact the

    1361
    present Chancellor of the Exchequer has collected £329,921,000, or £10,000,000 more than the estimate of my right hon. Friend a year ago. For the coming year at the same rate of Income Tax—and during the current year I need hardly remind the Committee the reduction of last year will have full effect, the present Chancellor of the Exchequer anticipates a revenue from this source of not less than £326,000,000, or, actually, £7,000,000 more than the estimate of my right hon. Friend 12 months ago, and in spite of the fact that the remission of last year will have its full effect during the current year. I venture to put this question: Do not these figures by themselves, and without any further argument or comment, supply a conclusive case for the further remission for which I am asking in my Amendment? They prove that the Income Tax in this country is remarkably resilient and that like animals it responds to kindness. Remission is followed by expansion, and you do more for your revenue by lightening the burden, you do more for employment which all parties are largely concerned about, you do more for trade by lightening taxation than by any other means you can possibly devise.
    There is another point I want to urge on the attention of the Committee and it is this. That the present rate of Income Tax is really inequitable as between individuals and as between different sections of the community. It is, I think, generally recognised that about one-fifth of the whole burden of indirect taxation is paid by those who are also direct taxpayers. If that estimate is approximately correct it follows that 80 per cent. of the whole fiscal burden in this country falls immediately—and I will ask the Committee to take note of my proviso—falls in the first instance on that small minority. The Committee is well aware that, although there are 5,000,000 persons assessed to Income Tax in this country, Income Tax is not paid by more than 2½ millions, and that some 88,000 of these are payers of Super-tax as well. I venture to submit that it is open to grave question whether on a broader view of national finance it is either politically or economically sound that so large a proportion as 80 per cent. of the whole fiscal burden should fall on a relatively very small class. A great many people are apt to imagine that the incidence of direct
    1362
    taxation is a very simple matter. They assume that it is paid—I mean ultimately paid—by the people who are assessed and that therefore, you are only dealing with the woes of the fortunate few.
    I am very far from admitting however that the real burden which is at present borne by the Income Tax payers falls only on 2½ millions of the relatively rich. I do not think that this fallacy is shared by the present Chancellor of the Ex-chequer, and I am quite sure it is not shared by the Financial Secretary to the Treasury, who served on the Commission which dealt with the Income Tax, and which reported three or four years ago. I do not believe that this fallacy is shared by anyone who has really made any serious study of fiscal science, but it is a fallacy widely prevalent that the beginning and the end of direct taxation, particularly the Income Tax, lies with the people who are actually assessed to and pay the tax. My own view is that the solution of the problem of the incidence of this and other similar taxes really depends on the source from which the tax is paid.
    Will the Committee allow me to explain what I mean by that rather cryptic sentence. Perhaps I can illustrate it best by quoting a sentence from a pamphlet published a good many years ago by one who was a very respected Member of this House—I mean the late Mr. Keir Hardie. He published a pamphlet called "A Labour Budget," and in the course of that pamphlet he expresesd the opinion that
    "A system of taxation which should secure that the rich should have less to hoard up or to squander on riotous living, whilst the poor should have more wherewith to purchase the ordinary necessaries of life was the ideal of taxation."
    [HON. MEMBERS: "Hear, hear"] I quite appreciate the meaning of those cheers. Everybody will agree that it is eminently desirable that the poor should have more money to spend upon the necessaries of life, and in so far as the Budget of this year puts it within their power to do that, there is no Member of this House who will challenge the provisions of the Budget. It will not, however, escape notice that Mr. Keir Hardie, and the exponents of the creed to which he there gives expression, appear to be indifferent whether the

    1363
    result of the taxation of the rich be to curtail their expenditure on riotous living or to diminish the amount of what he refers to as their hoard. Of course, if the direct taxes are paid out of revenue which would otherwise be spent on riotous living, no possible harm could accrue to the community, but if they are paid out of the hoard, that is out of actual or potential savings, then the payment must necessarily entail a very grievous loss to the community, and particularly that portion of it which is dependent upon weekly wages. If the State, by its fiscal system or in any other way, can curtail unproductive expenditure, whether of the rich or of the poor, if we can discourage and curtail such expenditure, if we can divert the money obtained from that source into productive channels, then the benefit is unquestionable, indeed it is two-fold.
    I will now return to the question of the proportions between direct and indirect taxation. I would like to point out that the present proportion is a matter of very recent fiscal history. It is not so very long ago—and one has to go no further back than the time when Sir Robert Peel was introducing his great Budget in 1841—when no less than 73 per cent. of the revenue was derived from indirect taxation and only 27 per cent. from direct. Ten years later the proportions were, modified, and indirect taxation was then contributing 67 per cent. and direct taxation 33 per cent. That was in the year 1851, just before Mr. Gladstone's great Budget. Ten years later than that, the proportion was 62 per cent. of indirect and 38 of direct taxation. In 1881, the proportion of indirect taxation was further reduced to 60 per cent. and direct was 40 per cent. In 1901 the two sides balanced pretty nearly, and by that time indirect taxation had been brought to 47·5 per cent. and direct to 52·5 per cent. In 1919, when excess profits were taxed, direct taxation went up to 82 per cent. of the whole, and in the present year the proportions are 71 per cent. of direct taxation, as against 29 per cent. of indirect taxation.
    What is the Chancellor of the Exchequer doing in the Budget of this year to correct this disproportion? He has had a surplus of £38,000,000. Out of that he has remitted to the payers of
    1364
    indirect taxation no less than £34,000,000 and he has remitted only £4,000,000 to the payers of direct taxation. Of course, we must be grateful to the Chancellor of the Exchequer for his repeal of the Corporation Profits Tax, which is a thoroughly bad tax. That will cost the right hon. Gentleman only £2,000,000 in the present year. It is a thoroughly bad tax, and, from certain points of view, so is the Income Tax itself. On this point I appeal to right hon. Gentlemen and hon. Members below the Gangway on the other side. I am going to appeal to the high authority of one whom I think they will acknowledge as the greatest of all Liberal financiers—I refer to Mr. Gladstone. I would remind hon. and right hon. Gentlemen below the Gangway that when the Income Tax was revived by Sir Robert Peel in 1842 members of their party spent eight nights in the discussion of the Income Tax proposals. I do not know whether the Chancellor of the Exchequer will be prepared to give us eight nights for the discussion of this Amendment, but that is the time which was occupied on that occasion in the discussion of Sir Robert Peel's proposal for a revised Income Tax. Mr. Gladstone was always strongly opposed to this tax, and when he introduced his first great Budget in 1853, while admitting that the tax was
    "an engine of gigantic power for great national purposes,"—
    he declared, with emphasis, that
    "there were circumstances attending its operation which made it difficult, perhaps impossible, or at any rate not desirable, to maintain it as a portion of the permanent and ordinary finance of the country."
    What was Mr. Gladstone's reason for objecting to the Income Tax? It was that, as long as you had this convenient device for raising money you would never have real economy in the administration of national finance, and we should never revert to the old spirit it of economy so long as we had the Income Tax. I am not hopeful that the Chancellor of Exchequer, or indeed any Chancellor of Exchequer, will ever part with what Mr. Gladstone called his "engine of gigantic power," the Income Tax, but I am going to appeal to the Chancellor of the Exchequer and the Committee to make the very small remission which in this Amendment I am proposing. What I am chiefly con-

    1365
    cerned with in moving this Amendment is not so much but far less the inequality between these taxpayers, but the fact that the Income Tax is so high. An Income Tax so high as it is at present is inflicting the gravest injury on the community, and it is acting as a deterrent to employment. You cannot enlarge the area of employment unless you promote commercial enterprise, and you will never be able to do that until you have relatively cheap and abundant capital. I know that in certain quarters the impression prevails that capital at present is abundant, and is relatively cheap. I suggest that you will soon find out whether capital is cheap or not when the municipalities have to go to the market to finance the housing scheme of the present Minister of Health. Is it there? Is it abundant? I know that in certain sections people are apt to look at the flotation of new companies, the early closing of subscription lists, and to the over subscriptions for new issues, and to say that these things prove a superabundance of capital.
    I suggest, however, that these are not indications of a superabundance of capital. This phenomenon is very gravely misunderstood and very often misinterpreted. What it points to is not an abundance of capital, but a paucity of employment and a slackness of trade. If trade were flourishing or prosperous, you would not have this over-subscription of companies on the Stock Exchange. My view is that trade will not show any substantial recovery, and employment will not show any substantial expansion until you make a tremendous effort to lighten the crushing burden of direct taxation.
    It is, therefore, not primarily or exclusively in the interests of the individual taxpayer that I am moving this Amendment, but it is in the interests of better employment and better trade. Above all, it is in the interests of all sections of society, and most of all—I know the Committee will believe in the sincerity of my convictions in this matter—it is in the interests of those who labour with their hands.
    The CHANCELLOR of the EXCHEQUER (Mr. Snowden): In view of the fact that we have 20 pages of Amendments, I do not think I should be justified in speaking on this Amendment
    1366
    at a length proportionate to the time which the hon. Member himself has occupied. I feel quite sure that he himself has no hope that it will be accepted——
    Sir J. MARRIOTT: I said I had not a very lively hope.
    Mr. SNOWDEN: Every Member of the Committee knows that its acceptance is quite impossible, and I feel that my proposal not to speak upon it at any length is justified by the fact that an Amendment to a similar effect was discussed in Committee of Ways and Means, and most of the arguments which the hon. Member has addressed to the Committee were then put forward, though, I admit, with not so much ability as that with which the hon. Member has presented them to-day. On that occasion I spoke at considerable length in reply, and I do not think it is necessary that I should say more to-day than that this Amendment, if accepted, would cost £28,000,000 in a full year, and £20,000,000 this year. That is a conclusive argument against its acceptance.
    Sir J. MARRIOTT: May I ask, does that take into account the natural expansion of revenue which would ensue in consequence of the reduction in taxation?
    Mr. SNOWDEN: Certainly. Of course, it is quite impossible that such an Amendment as this, involving such a large sacrifice of revenue, should be accepted. It would completely destroy the Budget.
    Mr. A. M. SAMUEL: I should like to say a few words in support of the Amendment which has been moved by my hon. Friend the Member for York (Sir J. Marriott), although I do not suppose for a moment that it can be accepted. In fact, I see the impossibility of accepting it. I think, however, that some discussion upon one aspect of it may be welcomed by the Chancellor of the Exchequer. I should like to call attention, not in any polemical or party spirit, to one point in my hon. Friend's argument, namely, the incidence and the radius of direct and indirect taxation. I admit at once, and I do not want hon. Members opposite to think that I am not fully aware of the fact, that the broader shoulders must bear the greater burden of taxation. I admit that, but I

    1367
    do not understand by what rule the Treasury makes the ratio of direct to indirect taxation 63 to 37. That may be right or it may not, but I think the Chancellor of the Exchequer may welcome the raising of this point, so that it may be discussed and afterwards, considered by his officials, and so that he and we may come to some decision as to what the proper ratio should be, and not rely, as I think the right hon. Gentleman the Member for Paisley (Mr. Asquith) said at an earlier stage of these proceedings was the practice, upon rule-of-thumb. If you are going to do that, to what limit are you going? Are you going to make it 99 per cent. direct and 1 per cent. indirect? It would, by the method we now make the ratio, be quite as logical to say that indirect taxation shall be I per cent and direct taxation 99 per cent., as to say 63 direct and 37 indirect. At present we have a haphazard way of getting at the ratio, and I want, therefore, to draw the attention of the Chancellor of the Exchequer to this ratio point. It is a philosophical and a moral rather than an economic point. There are 22,500,000 voters in this country, and my hon. Friend the Member for York said that only 2,500,000 of them pay direct or Income Tax. If he will permit me to say so, I think his figure is wrong. I should put it at 4,000,000. Very often an Income Tax payer is looked upon as one person. I am myself looked upon as one, but my income includes that of my wife, who also has a vote, so that we two are counted as one direct taxpayer. It may be said that there are only 2,500,000 people who pay Income Tax, but the figure is really nearer 4,000,000 than 2,500,000.
    Mr. SNOWDEN: The number is much larger.
    Mr. SAMUEL: Therefore, as I thought, it is not correct to say that the number is 2,500,000. Here we have 22,500,000 voters, of whom, say, 4,000,000 pay 75 per cent. of the total revenue of the country It is true that theirs are the broader shoulders, and I agree they ought to bear this heavier burden, but that is not the point I want to take. These 4,000,000 direct taxpayers, who pay 75 per cent. of the revenue as a whole—my hon. Friend put it at 80 per cent.—also pay indirect taxation, while 18½ million voters pay no
    1368
    direct taxation. Is it wise, is it prudent, in their own interests is it right—let the Chancellor of the Exchequer look upon this, not as a party matter, but as a moral matter, let him look upon it as a statesman—that, out of 22,500,000 voters who dominate the policy of this country with regard to expenditure, 18,500,000 should have no direct interest in the direct taxation which would be required to finance 75 per cent. of the cost of the schemes for which they may vote? Is it right to divorce to such a great extent financial responsibilities from political responsibilities? That is a matter which the Chancellor of the Exchequer ought to consider on philosophical lines. Is it for the good of the country, is it for the good of the poor themselves, that they should be excused from having to answer the eternal question which every man, woman and child in this country should ask themselves before they buy a penholder, before they buy a breakfast, before they embark upon any political or financial undertaking," What is it going to cost, and where is the money coming from?" If you put political power in the hands of 22,500,000 elections, and 18,500,000 of them are never called upon to ask themselves what the cost is going to be and where the money is to come from, you may put into their hands an instrument which will injure them and the very people we want most to help, namely, often the poorest of the poor.
    I wish to guard myself against anyone saying that I desire to put a greater burden on the shoulders of the, poor. I do not. It must not be thought that I wish to increase their taxation. I wish, however, that the radio or radius should be so arranged that the taxation, as it falls now, should be felt and seen by the indirect taxpayers, although it may involve a remission of their taxes on food and other necessaries, so that in the aggregate the indirect taxpayers may not pay a penny more than they are paying now. I think it is an unhealthy system under which from 2,500,000 in 4,000,000 people pay nearly the whole of the revenue of the country, while the other 18,500,000 do not know what cost their policies may involve. In the second place, I should like to ask, why does the right hon. Gentleman the Member for Paisley say that 50 per cent. of indirect taxation and 50 per cent. of direct taxation should have been thought the right thing; and

    1369
    why does the Chancellor of the Exchequer come along and say that in his opinion 63 per cent and 37 per cent. are the right proportions? These are quite arbitrary figures.
    Mr. SNOWDEN: I never said that.
    Mr. SAMUEL: The right hon. Gentleman has not said so; but he has given us a Budget in which these figures apply.
    Mr. SNOWDEN: I said it was not mine. Surely the hon. Member does not regard my Budget as being finality in regard to the proportion of taxation?
    Mr. SAMUEL: That is the point. What is finality? What is N-1 in this matter? It might be made more than 63 and 37. It might be brought up to 99 per cent. on the one side and 1 per cent. on the other. What is to be correct? Hon. Members opposite may take the point, with which I do not wish to deal, that the question is whether the rich or the poor should pay, but I want to look at it from the philosophical side, and consider whether it is really in the interest of the poor to have divorced from their knowledge what the schemes which may be put into operation by their votes are going to cost? If they do not study the cost and the effect of the cost, they may vote for attractive schemes which may do themselves more harm than good. We have to make up, our minds on the matter. If hon. Gentlemen opposite say that one section of the public ought to pay all the taxes and the other section ought to pay none at all, that is a matter, if I may say so without offence, of political spite. Let us get down to economic philosophy, and know what the proper healthy economic proportion and arrangement should be.
    Having asked the Chancellor of the Exchequer to give us some information on this particular point as to what should be, on economic grounds, a reasonable ratio—not by rule of thumb, but as a result of investigation by the proper officers—I should like to make one more observation.
    It is an observation that I ventured upon when the Budget was introduced. One cannot dismiss from one's mind the fact that is apparent, if one looks up the economic annals of the 19th century, that, as has already been admitted by the Chancellor of the Exchequer at an earlier stage, the curve of real value of wages
    1370
    slowly rose from 1824 to 1900. From 1900 to 1914 it remained stationary. It is no use people saying that the reason why the curve remained stationary, and a man's wages did not buy any more in 1914 than in 1900, was due to the effect of increased discoveries of gold. I do not believe that that is the case. I am taking into consideration the fact that more gold was mined and did come into use in those years, and might have put up the prices of food in some small degree, between 1900 and 1914. But I am not forgetting that much of the gold discovered in those years, which is supposed to be a factor in this real value of wages curve, went to India, that quicksand which has absorbed, and still absorbs, millions upon millions of gold ever since the time of the Roman Empire. There were complaints even then, in the time of Tiberius, that most of the gold in Europe went to India. India has absorbed much of the gold represented by the increased production from the various mines since 1900 When, therefore, it is said that the increased production of gold has put up the cost of living in Western Europe, I say that the argument of the absorption by India will almost entirely sterilise that argument. If it be still urged that I am wrong, I make this further point, that money became dearer from 1900.
    The CHAIRMAN: I am afraid that the hon. Gentleman is going very wide of the Amendment before the Committee.
    Mr. SAMUEL: I will get away from that and try to put myself in order by Saying that I want to prove that not increase of gold production, but direct taxation from the year 1900 was the cause of the curve upwards of the real value of wages remaining stationary between 1900 and 1914. I quite agree, Sir, that you are perfectly right in rebuking me, for I have got a little out of order in talking about the increased discovery of gold and its effect upon prices. I have given that point its full weight in my argument. When anyone asks me the cause of the curve of wages-value remaining flat, I say that the ratio of indirect to direct taxation has fallen, and that the fall is one of the chief causes injuring the wage-earner, and that, after the year 1900, when we first came to feel the effects of higher Income Tax, Super-tax and Death Duties, money became dearer as a result of this direct taxation, and the effect was then

    1371
    felt by the poor and the real value of wages remained stationary. I hope I have not wearied the Committee in putting these points, but I think my Friend's Amendment gives the opportunity of considering whether we are doing a wise thing in allowing the low ratio of indirect taxation to direct taxation to remain as it is at present and whether it ought not to be brought back to its earlier ratio.
    Sir GODFREY COLLINS: If I followed correctly the hon. Member for Farnham (Mr. A. M. Samuel), I understand that in his closing sentences he attributed the high prices that were prevalent in this country from the year 1900 onwards to high direct taxation imposed as a result of the War, which was continued some years after 1900. May I suggest to him, however, that there were other factors at work
    Mr. SAMUEL: I did not attribute it to that at all.
    Sir G. COLLINS: If I misunderstood the hon. Member, I am sorry. The two hon. Members who have addressed the Committee from the other side have pleaded that the Income Tax is too high, and have moved an Amendment to reduce it by 6d. in the £. May I remind them that, as I have mentioned once before during these Debates, the direct taxpayers, during the last three years, have received relief to the extent of about £92,000,000, while the indirect taxpayers, including the concessions granted by the present Chancellor of the Exchequer, have only received relief to the extent of £46,000,000?
    Sir J. MARRIOTT: Are you including the Excess Profits Duty?
    5.0 P.M.
    Sir G. COLLINS: The Excess Profits Duty I have not included. It was a separate War tax. On the taxes which were in vogue before the War falling on the direct and the indirect 5.0 P.M. taxpayer, the direct taxpayer has received a relief of £92,000,000, and the indirect taxpayer £46,000,000. During the last three years the policy of tax reduction has become possible by successive Chancellors of the Exchequer through a policy of reduced national expenditure. Therefore I am very glad the Chancellor of the Exchequer does not propose for a moment to accept
    1372
    the Amendment. The hon. Gentleman who moved the Amendment pointed out with some force that Income Tax at the present high rate tends to make prices dear, because the amount of liquid capital which people have to improve their business and for fresh investment is to-day, through no fault of their own, being diverted from productive industry to the needs of the State. But he did not suggest, as I think he should have done if he thinks the Amendment should be carried and the Income Tax should be 4s. in the £ during the current year, any alternative method of taxation, and yet, with the Estimates which have been presented and the large sums which are required, the money must be found. Therefore I hope the right hon. Gentleman will not, either to-day or in the future, reduce the level of direct taxation. May I remind him of the course of events in America? America will year by year become a more formidable competitor in the neutral markets of the world, and anything the Chancellor of the Exchequer can do during his tenure of office to lower the rate of interest on the National Debt or to lower the rate of direct taxation will materially help our industrial companies. According to the message of the President of the United States delivered a week or two ago, if the telegraphic reports are correct, the Income Tax in that country is only about 1s. 3d. in the £, while the Super-tax on an individual whose income is £3,000 is only £6 a year, and an individual whose income is £5,000 pays £44. If year by year the present high level of direct taxation is maintained, our industrial companies and the men who are in charge of them will find a greater difficulty in finding money to improve their business and for fresh investment. I know it is the wish of the Chancellor of the Exchequer to cut down certain items in our expenditure, which alone will enable him during the coming years to reduce the Income Tax, and the only regret I have is that the income Tax is so productive that it places year by year at the disposal of the Chancellor of the Exchequer such large sums of money that the spending Departments can point with force to the proceeds of the Income Tax rising yearly and be encouraged thereby to maintain their high rate of expenditure.

    1373
    I know hon. Members behind the Government stand for a different policy from hon. Members on these benches, but the State to-day is the largest shareholder in the industrial companies of the country. The State is taking 25 per cent. of the profits of every company. I know full well that hon. Members want to take the whole 100 per cent., but if you kill private enterprise you might kill the initiative and the enterprise which make it possible for the Chancellor of the Exchequer to collect these large sums of money, and I have little doubt that the common sense which has always distinguished this country will accept the present state of society and the principle of private enterprise and management and try to curb excesses, while, at the same time, allowing the Chancellor of the Exchequer to rope in for the benefit of the State the very large sums of money which the Income Tax levies to-day. It is extraordinary the large sums which the Income Tax always yields. The Treasury officials always appear to underestimate the amount the Income Tax will bring into the Exchequer, and even this year the right hon. Gentleman anticipates raising from Income, Tax and Super-tax £4,000,000 less than last year. But, according to the returns of the first three months, which I admit are not a very good guide, he has already received £4,500,000 more than last year, while he budgets to receive £4,000,000 less. Last year the amount was up £8,000,000. The most gratifying feature of the Income Tax Returns is not so much the increased yield but rather that arrears are dwindling. Two years ago the arrears of Income Tax and Super-tax amounted to £122,000,000. Income Tax payers during the last two years have not only paid the annual taxation levied during the year, but, according to the figures given by the Financial Secretary, the arrears this year amount to only £62,000,000. Twelve months ago they amounted to £94,000,000. Each year, therefore, our direct taxpayers are not only paying the taxation levied during the year, but are paying into the coffers of the State £30,000,000 of arrears. I make bold to say that there is no country in the world where direct taxation is so heavy, where it is paid with such consent, as it is in this country. According to a new law passed a few weeks ago in America not only have they reduced the
    1374
    rate of Income Tax, but they have given their Chancellor of the Exchequer powers of inquiry and of publicity. Our income Tax is paid because people believe that their secrets are not given away and because they feel that all classes of individuals are treated alike. In France they may have an Income Tax on the Statute Book, but it is not accepted by the people. There are many ways in which it is evaded. Although the Chancellor of the Exchequer is reaping the full reward of the labours of the individuals who make these large amounts possible I sincerely hope, though I am strongly in favour of his Budget, that in the coming year he will so bend his energies that not only the indirect but the direct taxpayer next year may receive the benefit.
    Mr. NEVILLE CHAMBERLAIN: The Amendment, even if my hon. Friend does not press it to a conclusion, will have served a valuable purpose, because we have had an extremely interesting Debate and the speeches from the benches behind me have been an interesting discussion of the problem he has raised. The last speaker spoke of the encouraging nature of the Returns in the first three months of the financial year. It would be a very rash thing to base any estimate of what may be the result at the end of the financial year upon what happens at the beginning, for it is in the last three months of the year and not the first three that the bulk of our revenue comes into the Treasury, and it is, therefore, not until quite late in the financial year that any really accurate forecast can be made of what is likely to be the surplus or otherwise. It is true, however, that in the last two years the result at the end of the year has been far more favourable than had been anticipated at the beginning, and although, no doubt, the Chancellor's advisers have made corrections of their estimate for the current year, in the light of this experience in the past, I am disposed to think myself that the right hon. Gentleman, if he still occupies his present office at the beginning of the next financial year, will again find himself in possession of a surplus, which has arisen not so much from the cutting down of expenditure as from the unexpectedly large payments of arrears and the way in which Income Tax and Super-tax have cone in. It strikes me as a very unsatisfactory state of things that we should in

    1375
    this way be over-taxing ourselves year after year and that we should unintentionally impose upon ourselves a rate of repayment of debt so much higher than we had calculated upon at the beginning of the year. I hope the Chancellor has given his personal attention to that matter and that in making his Estimates he has made full allowance for the probable recurrence of the same events as occurred in the last two years.
    The last speaker, whilst urging that there should be a further remission of Income Tax at the earliest possible moment, spoke of one way only in which that could be achieved, namely, by the reduction of expenditure. I quarrel with that statement. I protest against the idea that you cannot increase your income by stimulating the trade and commerce of the country and bring about the possibility of further reductions of Income Tax in that way as well as by a reduction of public expenditure. We have been reducing expenditure at a tremendous rate. The nearer you get to the bone the less meat there is still to cut off, and it does not seem to me that really substantial reductions of expenditure can be expected in the future without a very considerable change of policy. Mere economy in administration has got to the point that we shall not get, in the near future, remissions comparable to those we have been able to get in the past. If that is so, why not look to the other side of the account? Why not see whether we cannot, by encouraging and stimulating the action of trade and commerce, increase the income and divide the cost of the expenses of the country over a larger field. That is a course which I am afraid the actions of the Government up to now have not been calculated to encourage us to think they are pursuing. It is to that side of the account that we must look for further reductions of Income Tax, and I hope that this will be borne in mind.
    Mr. RATHBONE: A great deal has been said about direct taxation, but I feel that it ought to be so, and must be so for a long time. Surely the heaviness of our taxation must be due to the Great War. The direct taxpayer and indirect taxpayer suffered from the War. Can it be suggested that the direct taxpayer is
    1376
    practically starving? Is it not that the War has weighed heavily on the indirect taxpayer? I, for one, admire the Budget mainly for the reason that the Chancellor of the Exchequer has seen the necessity of removing as far as possible from the indirect taxpayer the necessity of paying anything upon the necessities of life. I welcome for that reason his removal of the taxes on certain commodities because they fall mainly on the indirect taxpayer or the taxpayer who has a small income. We ought to look upon payment of the Income Tax as a privilege. We teach far too little in our schools that the rich people ought to be jolly glad that they are able to contribute. It is a great deal better to pay for the upkeep of our State, if the State is properly managed, and if we see that we are not wasting our money in patching up the anomalies and miseries due to bad administration. It is better to have proper provisions such as old age pensions, etc., than to fill our hospitals and make people depend on charity. Although I dislike paying, I hope the Income Tax will be kept on by all Chancellors of the Exchequer.
    Viscountess ASTOR: I would like to make a few remarks on the speech just delivered by the hon. Gentleman. I do not think there is any large class of the country that wants to spare the rich man. Everybody feels he ought to pay all he can, but there is the question of industry, and that is what some of us are trying to fight for. Hon. Members on the opposite benches are talking such rot about the rich man that anybody would think that the rich man's money was at home or in his hand. Much nonsense is talked, but the fact is, that the rich man's money is generally invested in industries of some sort. It seems a simple thing to say, but you have to say simple things to make people understand. When I hear of the rich man being taxed, I should like to point out that we are interested also in the general welfare of the country. The hon. Gentleman has said other countries teach the joys and privilege of paying taxes, and yet he said at the end of his speech that he does not like to pay taxes. I think it is a very funny position.
    Mr. RATHBONE: Certainly I do not like to pay taxes, but I do it.
    Viscountess ASTOR: I go further. I like paying taxes. I do not mind a bit.

    1377
    I am very glad to have the money to pay taxes. The only thing is that when other countries teach what they do about taxation I should like to remind hon. Members that in no country do the rich pay such taxes as in England. There is no other country in the world that pays such taxes, and it is a great credit for England. But you cannot tax beyond a certain level without hitting the poor. That is what we all feel. Tax the rich, as long as it does not ruin the poor. Some hon. Members have mentioned the question of private enterprise.
    The CHAIRMAN: I have not allowed other hon. Members to go into the question of private enterprise, and I cannot allow the Noble Lady to do so.
    Viscountess ASTOR: I thought that what was sauce for the goose was sauce for the gander. Let us all remember we do not want to protect the rich but to help the workers of the country. The best way to help them is to let, enterprise go on, to build up the trade of the country. I agree with the hon. Gentleman that the rich ought to be pleased to be taxed, but it may affect the poor as well as themselves, if you go too far, and the greatest suffering may be among the poor. I hope the Chancellor of the Exchequer will bear in mind when he is addressing this side of the Committee that many of us are just as interested, in the poor and feel the responsibility just as much as the Chancellor himself.
    Amendment negatived.
    The CHAIRMAN: The next two Amendments I am not calling.
    Mr. N. CHAMBERLAIN: On a point of Order. The next Amendment on the Paper is, I submit, necessary to save certain new Clauses, which appear on the Paper at a later stage. They are on page 759 and deal with the alteration in the basis of assessments under Schedule E and Schedule D. Unless this Amendment is here inserted, I think it will be contradictory to the particular Clauses.
    Sir G. COLLINS: On that point of Order. What part of the Finance Bill have we now reached? Are you calling the Amendment on page 753 on the Order Paper?
    The CHAIRMAN: I ruled out the next two Amendments. The third has not been
    1378
    called. I am very much obliged to the right hon. Gentleman for calling my attention to the Amendments on page 759. I do not, however, purpose taking these Amendments, because they would involve a charge; at least there is the difficulty that they may involve a charge. In regard to the Amendments at the foot of page 753 and the three Amendments on the top of page 754, following the example set by my predecessors, I have ruled that these should be put down as new Clauses.
    Clause ordered to stand part of the Bill.
    Clause 17 (Repeal of Inhabited House Duty) ordered to stand part of the Bill.

    CLAUSE 18—(Extension of s. 19 of Finance Act, 1920.)
    Sir HENRY BUCKINGHAM: I have an Amendment which was dependent on that of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon). The Amendment related to housekeepers.
    The CHAIRMAN: It is too late now.
    Sir H. BUCKINGHAM: In view of the Amendment not being moved my Amendment cannot stand.
    The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham): I beg to move, in page 11, line 15, at the end, to insert the words
    "and the following shall be added after proviso (b) to the said Sub-section; and (c) not more than one deduction of £45 shall be allowed to any claimant under this Section in any year."
    The Committee will recall that we provide, under this Clause, for an allowance for a housekeeper where there are children to look after. We also provide that exemption will be given or an allowance to the housekeeper where there are no children. The Amendment which we seek to move now is to make it perfectly plain that no taxpayer will be entitled to two allowances, and that only one allowance will be given. It is in order to put the matter beyond dispute, and I hope the Committee will agree to it.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 19.—(Right of appeal on questions of domicile, ordinary residences and residence.)
    Sir H. BUCKINGHAM: I beg to move, in page 11, line 23, to leave out the words

    1379
    "thirty days" and to insert instead thereof the words "three months."
    This is a matter in which I have taken considerable personal interest, and it refers to residents abroad. I think the Chancellor would be fair to accept the first Amendment. The Bill gives 30 days during which time anybody aggrieved by the decision of the Inland Revenue Commissioners has the right to make an appeal. My Amendment asks that the period be extended to three months. The reason I ask it is that people affected by this Clause are often resident abroad and live, perhaps, in distant parts of the Empire and the world generally. It is quite likely they may get the decision of the Commissioners of Inland Revenue, and feel aggrieved. To give them only 30 days to express their disapproval seems a short period, and I ask the Chancellor to give three months. It will not make any difference in the result to the revenue; it only gives a little longer time.
    Mr. SNOWDEN: I think the Amendment proposed by the hon. Member is quite reasonable, and I will be glad to accept it.
    Amendment agreed to.
    Sir H. BUCKINGHAM: I beg to move, in page 11, line 26, after the word "the" to insert the words "General Commissioners or."
    The right of appeal to the Special Commissioners should not only be given. There should be a right of appeal to the General Commissioners. The object of the Amendment is not in any way to disparage the Special Commissioners. They are people on whom we can rely for fair judgment, but at the same time we cannot forget that they are paid officials of the Inland Revenue, and therefore, in some people's mind, there is the fear that their judgments may not be quite so fair, shall I say, as if the appeal could also be made to the General Commissioners of Income Tax. I would remind the Committee that it is usual that Income Tax appeals from any assessment can be made either to the General or to the Special Commissioners, and what I am asking is an extension of this generally accepted principle to the Clause. I do not think the Chancellor of the Exchequer will have any objection to granting this concession. It should
    1380
    be made on all fours with other rights of appeal under Income Tax law.
    Mr. W. GRAHAM: I hope that the hon. Member will not press this Amendment. The position is that under this Clause of the Finance Bill we are making certain arrangements with reference to rights of appeal on questions of domicile or residence abroad. Due to the great increase of Income Tax and Super-tax in recent years, there has been a tendency to reside outside the country, and to obtain exemption from taxation. There have grown up intricate questions of domicile. What the hon. Member proposes in this Amendment is so to extend the Clause as to give that right of appeal to the General Commissioners. Our contention is that it is much better to confine it to the Special Commissioners, and I hope the Committee will agree with us. It is plain, first of all, that many difficult problems must arise, and I should imagine that most hon. Members familiar with Income Tax questions will realise that it is important that such technical and legal points should go to a body of commissioners specially qualified to deal with them. That is the first consideration I advance in support of the attitude which the Chancellor of the Exchequer is adopting towards the Clause.
    In the second place, there is another argument of peculiar force. If an appellant wished to bring an appeal it would be difficult to say to what body of General Commissioners that appeal should be addressed. I fail to understand how, for example, an appeal of that kind from a place abroad would be addressed to, say, the General Commissioners at Bristol, or elsewhere. There is a question of administration presenting difficulties, and we have come to the conclusion that this would be an inappropriate Amendment. I would remind the hon. Member that he himself, a year ago, moved an Amendment of a somewhat analogous nature. It dealt with the rights of people who had made errors in their assessment, and he did not specify the General Commissioners at all, but confined his Amendment exclusively to Special Commissioners. Much the same argument applies to this case, because of innumerable legal and technical difficulties. I venture to express the hope that he will not press the Amendment.
    Sir H. BUCKINGHAM: I am obliged, in justice to myself, to tell the hon. Gentleman that the Amendment moved last year was not worded by me. My Amendment was certainly an appeal to the General Commissioners, but the Amendment, as it appeared before the House, was the result of policy, I was advised, and for that same reason I quite agree that there are difficulties in the way of granting the appeal to the General Commissioners. At the same time, I must say that, if for instance, a resident abroad had an agent in Bristol who is doing business in the neighbourhood of Bristol, and who had a knowledge of his affairs, he would be able to appeal to the General Commissioners at Bristol through his agent there. But I do not wish to press the point and I therefore withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 20—(Income Tax on war bonus, etc.)
    Mr. KEENS: I beg to move, in page 12, lines 19 and 20, to leave out the words "or has not become final and conclusive before."
    In moving the Amendment, may I call attention to the wording, as it will be necessary to read with it the Amendment which stands in the name of the hon. Member for Moseley (Mr. Hannon)—in page 12, line 27, to leave out the words "and shall be deemed always to have been." It is necessary that the Amendments should be taken together, because the object of the Amendment is to do away with the retrospective character of the Clause. I would appeal to the Chancellor of the Exchequer to withdraw this Clause, because, although it purports to do something for the future, in that case it is redundant. Its only real effect is its retrospective character with respect to that very large class of the community whose earnings are dependent partly on salary and partly on bonus which is variable with the cost of living. There are something like a quarter of a million of these individuals, and up to the year 1922 they were entitled to be assessed on the average of three years or on the preceding year, at their option. The 1922 Finance Act made the basis of the assessment within the year of assessment, but
    1382
    it did nothing to make it retrospective, so, therefore, this large class of the community are entitled to make claims for repayment, presuming that they came within a certain category, in respect if the years 1920–21 and 1921–22. This is based upon a decision of the House of Lords, in the case of McDonald v. Shand. The question as to whether these cases do come within that decision is a point which might be more properly decided by the Courts than by the House of Commons, but at the present time the position is this. These people claim, and they advance very strong reasons, that they do come within this decision. If they do come within it, then they have at this moment certain rights and will have them if Clause 20 be not carried into effect. They are content to test the question in the Courts of Law, but the position of the Government, according to a letter, is "We are advised by our Law Officers that you are not so entitled, but if you are so entitled, we are going to take care that you do not get any benefit out of it." That is contained in a letter—[An HON. MEMBER: "Read the letter."] I will read the letter. It is dated 28th April, and is addressed from Treasury Chambers, Whitehall, to Mr. A. C. Winyard, of the Civil Service Joint Committee. The letter reads:
    "With further reference to your letter of the 25th April, in regard to the question of the assessment of bonus For Income Tax purposes, arising from the recent judgment in the House of Lords in the case of McDonald v. Shand, I am desired by the Chancellor of the Exchequer to enclose for your information copies of the answers recently given by the Financial Secretary to the Treasury in Parliament. It will be observed that the Government are advised that the judgment of the House of Lords in the case of McDonald v. Smith does not, involve the treatment of an emolument of the character of war bonus, whether determined by reference to the cost of living or not, as a perquisite within the meaning of the Rules of Schedule E of the Income Tax Act, 1918. But it will be seen further that if this view were not accepted by the Courts and the Courts endorsed some such view as that which is taken by the counsel who have advised your Joint Committee, there would then arise so great a disparity between the rights of different taxpayers whose cases were upon merits identical as still to call for the intervention of Parliament to place the matter upon a proper footing. In these circumstances, the Chancellor sees no adequate reason to modify his intention to propose to Parliament declaratory legislation such as will set at rest at the present stage the doubt which has arisen in this matter."

    1383
    I venture to suggest that what I gave as a summary was a very fair summary of this letter. I would be sorry to misrepresent it in any way. What was the position in the case of McDonald versus Shand? Shand was the manager of Nobel's explosives, and he was paid by salary and by a fluctuating bonus, dependent on profits. The revenue claim was that he was liable to assessment on his earnings during the year of assessment. It was impossible for him to declare his income before he knew what his earnings were to be. He claimed that this variable bonus was a perquisite within the meaning of the Finance Act of 1918, and that he had the alternative of choosing as his basis the year of assessment or the average of three years. It went to the Scottish Courts and ultimately to the House of Lords, and McDonald won his case. Then we got the Act of 1922 which was not retrospective, and many claims have been made and relief has been granted in a number of cases. The persons principally affected are municipal, Government and railway servants who are paid upon the cost-of-living bonus. I may remind hon. Members that the cost-of-living bonus was subject to a variation every four months in the first 12 months and every six months in the second year, and it varies according to the cost of living so many points according to the increase or the decrease in the cost of living. It is, therefore, a variable thing and nobody knows or can know from time to time what amount of money he will actually receive. If we pass this Clause as it is, it will be seen that everybody is to be barred in respect of these years, because the words to be inserted are
    "shall be, and shall be deemed always to have been, chargeable to tax as fixed salary remuneration," etc.
    Therefore, the insertion of these words takes away the right that has been given by this decision. It takes away from everybody who is in the position of Shand, and from others, the rights which they clearly have under the House of Lords' decision. We believe that it takes away the rights of a very large number of people who are paid by salary and variable bonus. Another case has happened since this matter was before the House on the Financial Resolution. Only last month, in an appeal, the Commis-
    1384
    sioners of Income Tax for the Kensington Division found, following the case of McDonald v. Shand, that a cost-of-living bonus variable with the cost-of-living index was assessable as a perquisite within the meaning of Rule 4 of Schedule E; and they discharged an additional assessment made on the basis of the actual year. The Revenue Department expressed dissatisfaction in order to preserve their right to demand a case for appeal to the High Court, which is being held over pending the decision of Parliament on this Clause.
    The Financial Secretary to the Treasury, on the last occasion, made very great play with the fact that the Government could not give way on this case because while it would remedy some inequalities it would create greater inequalities. Let me examine that position. I have gone very carefully into the question since then. All employés assessable under Schedule D, that is to say, all except employés of public companies, corporations, and local authorities and the State, had the benefit of the three years' average under the Rules of the Income Tax Act. As regards employés assessable under Schedule E, that is to say, employés of companies, corporations, and local authorities, it was the general practice of the District Commissioners, with the assent of the Inland Revenue Department, to allow as a concession the benefit of the three years' average, in all cases except the holders of distinctive office, that is to say, directors, managers and secretaries, in accordance with the Report of the Royal Commission on the Income Tax, 1920. In the case of employés to whom this concession was not granted, it was the general practice of the District Commissioners, also with the assent of the Inland Revenue Department, to permit the assessment of any fluctuating or varying part of the emoluments upon the basis of the preceding year, and this practice is still continued. Reference to the speech made by the Financial Secretary to the Treasury in the debate on the Finance Bill of 1922, will show that an undertaking was given that there would be no variation or departure from the practice which then existed. The speech is of importance, and I beg leave to quote the relevant part of it. It was delivered on the 29th May, 1922.

    1385
    "It has been the practice hitherto of all Local Commissioners who are closely concerned with such taxpayers to make this arrangement, that the variable portion of the income, or of the whole income if it is variable, should be assessed upon the preceding year. There is no intention of interfering with that administrative arrangement, so that it will still be possible for the Commissioners to assess any variable part of the income, such as commission, etc., upon the preceding year instead of upon the actual year."—[OFFICIAL REPORT, 29th May, 1922, cols. 1853–4, Vol. 174.]
    It is clear, therefore, that the abandonment of the Clause, so far from creating inequalities, would diminish the existing inequalities and wipe them off. What the people who are mainly affected say is this: "We are quite willing to take the verdict of the Courts as to whether this judgment does or does not apply, but do not take away our right to go to the Courts." What the Government are proposing to do is to say, "Whether you have rights or not, these words—
    "and shall be deemed always to have been"—
    will take away that right. That will always be pleaded against any attempt to test the question as to whether or not these people have these rights. I appeal to the Chancellor of the Exchequer seriously to consider whether he cannot see his way to withdraw Clause 20. He does not require the Clause for the future, because the provisions of Clause 20 are already covered by the Finance Act of two years ago.
    The Financial Secretary to the Treasury said, on the last occasion, that if our point were conceded it would cost £3,000,000. Surely, if that be so, that must be taken as an admission by the Financial Secretary that these people are entitled to the money, and that they have been taxed in excess. Obviously, if they are not entitled to it—and he still persists in that view, for, in an answer which he gave to me a few days ago, he said that they were advised that these people were not so entitled—the cost to the country would be nothing, except the cost of the action to determine which of the parties is right. I strongly appeal to the Chancellor of the Exchequer to withdraw the Clause and to leave the aggrieved persons to have full recourse to the Courts to see whether or not their contention that they should be given the advantage of this decision can be sustained in law.
    Sir KINGSLEY WOOD: I should like to join in the appeal which has been made so powerfully by my hon. Friend. The proposal which the Chancellor of the Exchequer is making in this Clause is thoroughly undesirable. It is another attempt, one of many which unfortunately have been made in this House during the last two or three years to bar subjects of the Crown from going to the Courts of this country and obtaining their rights there. There has already been a legal decision on this matter carried to the highest Court, and, in the judgment of the people who are affected, they are advised by eminent King's Counsel that they will have the benefit of that decision. The right hon. Gentleman says, "Whether you are advised or not, I am going to prevent you from getting the advantage of the House of Lords decision." He said so in a most peculiar way, because he says," I am advised by the Law Officers of the Crown that this does not apply to you, but if it does, I am not going to allow you to have your legal rights."
    It is a most undesirable and unfair suggestion to make to a body of people whom we ought to look after. They are not wealthy people. There are about a quarter of a million of them, and they are what we might call small employed taxpayers. If the Government wants to start a new series of retrospective suggestions of this kind, these are the last people against whom we ought to be asked to legislate. Yesterday, in another place, a Bill was rejected mainly on the ground that it endeavoured to close the Courts of this country to its citizens, and it also endeavoured to upset a decision which had been obtained in the very highest Court. This Clause is a repetition of that principle, and it ought to be resisted in the same way that hon. Members resisted the suggestions in the War Charges (Validity) Bill. This is in no sense resistance against this particular Government. Many of my hon. Friends took exactly the same line when a proposal was made by a Government which, on general grounds, we always supported. I hope my hon. Friend will divide the Committee on this proposal, because it is a thoroughly bad one on the question of principle alone. I have received a communication from the Civil Servants' Joint Committee, in which they say:
    "The point at issue is a comparatively simple one. The legal right of the employed

    1387
    taxpayer to average for Income Tax purposes over three years that portion of his emoluments which is of a fluctuating character has been established by a decision of the House of Lords in the recent case of McDonald v. Shand. In the opinion of eminent King's Counsel who have been consulted on the question there is no doubt that the decision in that case applies to the bonus which varies by reference to the cost of living. Under that decision a very large number of small income Tax payers, estimated at about one quarter of a million, who either have had no opportunity to appeal, or having given notice of intention to appeal have not yet had their appeals heard, have the right to adjustment and repayment for the years 1920–21 and 1921–22. The Government propose by retrospective legislation to deprive these taxpayers of their rights."
    I think that is a very fair summary of the suggestions which the right hon. Gentleman is making——
    6.0 P.M.
    "The opinion of counsel has been conveyed to the Chancellor of the Exchequer and to the Financial Secretary to the Treasury, and the course of the Debate indicates quite clearly that the Government is conscious of the fact that but for the introduction of retrospective legislation the taxpayers concerned would probably make good their claim. My Committee urge very strongly that what the Government is proposing constitutes a grave breach of equity and respectfully requests that during the Debate these rights may be preserved to the people from whom they have been taken."
    I say to the Chancellor of the Exchequer that that is a very moderate statement of the case. My own belief is that, whatever the sum of money involved, it is unwise and undesirable to take away people's rights in this way. I remember very well that when the Bill in connection with rents was introduced by the last Government, when a very small measure of retrospective legislation was suggested, which many of us on this side opposed, no one was more insistent in objecting than the present Prime Minister. I remember his getting up and making a speech, which I suppose his supporters would say was powerful, objecting roost strongly to legislation of this character. Yet to-day we have a Chancellor of the Exchequer bringing in retrospective legislation and hitting a class of the community which ought to receive the protection of the House and particularly of this Committee. I, therefore, hope that my hon. Friend who moved the Amendment, if he does not get satisfaction this afternoon,
    1388
    will register in the Lobby his conviction that this is not a proper or just or equitable way of dealing with a very large body of deserving people.
    Mr. ASQUITH: I would like to say a few words on this matter, which is one of very considerable importance, although it is highly technical in some of its aspects. The Chancellor of the Exchequer will not suppose that I am viewing with any favour any raid on the Treasury. On the contrary, I sympathise to the fullest possible extent with him in his vigilant guardianship of the interests of the general taxpayer against any particular section of the community. From that point of view—I do not know the precise sum that may be involved—my sympathies would be prima facie in favour of the Treasury. But I think that this is a rather serious and a very exceptional case. There are two classes of people involved. First of all, there are those who fall within the actual decision of the House of Lords in what is called the Shand case. I do not presume to pronounce an opinion, or even to suggest an opinion, as to whether the judgment of the House of Lords in that case was right or wrong. Here we are bound to defer to the decision of our supreme legal authority, and we must presume that the decision was right. In fact, there was no dissentient voice in any of the Courts before which the case came, or in the House of Lords itself. The result, therefore, is that we must take it that the law which was there laid down applies to people who are affected by this Clause, that is to say, to persons who, in addition to salary, receive a bonus, the amount of which is dependent on the profit of the year. I do not know haw many people are affected, but that right may he taken away by the Clause. It is a vested right, given to them by the decision of the highest tribunal in the land. I do not know whether the amount is small or great. I think it would be a bad example if that right were taken away by legislation, as is proposed in this Clause.
    The other class of persons includes employés—we are told largely civil servants and many of them in the employment of local authorities and other bodies—whose eases may or may not be covered by the decision of the House of Lords. My law is far too rusty and out of date

    1389
    for me to presume to express even a hypothetical opinion on that point. It is an arguable point, and there is no lawyer in this House who will not say that it is an arguable point. The effect of this Clause, if passed as it stands, would be that these people would be precluded from asserting in the courts of law what may be an ill-founded but may be a well-founded claim in respect of the past. In other words, they have not been paid their full salaries; they have been paid salaries, less a deduction, the legality of which is open to question and dispute. I do not express any opinion as to what the possibilities of failure or success may be, but I suggest to the. Chancellor of the Exchequer, particularly in a case of this kind, with the persons concerned highly meritorious people and for the most part of small means, that it would leave in their minds a biting sense of hardship and that it would be a very bad precedent for this House to shut the door, not for the future, but to shut the door on what may be a well-founded claim based upon past services. I have no disposition or desire to embarrass the Government in the matter. On the contrary, I am giving them the best advice I can in the general interest. There is no question whatever about that, and the Chancellor of the Exchequer knows it perfectly well. I think it is not worth while to press a point which is open to so many objections, whatever may be the precise pecuniary advantages or disadvantages. I therefore appeal to my right hon. Friend not to press the Clause, but to allow the law to be settled in the Law Courts, and to allow all these vested rights, decided already by the judgment of the House of Lords, not to be interfered with.
    Mr. W. GRAHAM: I am afraid that I must ask for the indulgence of the Committee while I deal with a question which, as has been stated, is highly technical. I think I am justified in making that request in view of the importance of the principle at stake and the very large sum of money which is involved. The whole House will agree that no Government, whatever its political complexion, would have introduced a Clause of this kind in a Finance Bill unless there had been some very strong and commanding case. The question is whether, in all the circumstances, there is such a strong and powerful case as to justify the undeniably
    1390
    retrospective element of this proposal. We can best understand what the position is by going back to the exact facts of the employment of Shand. I make no apology for asking the attention of hon. Members to these details, because they go to the very root of the controversy before the Committee. Shand was employed by Nobel's Explosives under an agreement which amounted in popular form to this—that he got a salary of about £1,500, plus a fluctuating bonus, based on the profits of the concern from year to year, subject to a condition that under no circumstances would he get less in all than £4,000 a year. Originally, he was assessed in terms of the Act of 1918, which was a mere consolidation Act relating to previous legislation. He was assessed on the basis of his salary, plus the three years' average of his perquisite or fluctuating sum. Afterwards the Inland Revenue authorities sought to place the fluctuating element alongside the salary as a whole, and to assess the lot on the year of assessment. In other words, he was to be substantially in the position occupied by all people under Schedule E. Against that Shand brought an action in the Court of Session in Edinburgh, and the case afterwards went through the usual channels until the final decision in the House of Lords in 1923. In any case the Court of Session in Edinburgh and the House of Lords decided that that was a perquisite within the meaning of the rule embodied in the Act of 1918 or in earlier legislation, and therefore entitled, as distinct from the salary in Shand's case, to be placed on the basis of three years' average.
    Let us be perfectly clear on the simple issue—that the salary was on the one year and this fluctuating perquisite or bonus ultimately on the three years' basis. Before any hon. Member jumps to the conclusion that there is any strict connection between what happened in Shand's case and the case of the War bonus in the Civil Service, I ask him to direct his attention to the comments of the learned Judge the Lord President of the Court of Session. There is not the slightest doubt that he founded his decision upon the fluctuating character of this bonus, something which emerged only after the profits had been ascertained, and what was in fact very largely the child of chance so far as this business was con-

    1391
    cerned. Can any hon. Member establish a close connection, or any kind of connection, between that fluctuating perquisite in a commercial concern and the War bonus of civil servants—that is what is mainly at stake—based on the rise and fall in the cost of living, but, at all events, something determined as to scale in advance.
    Sir K. WOOD: If that be so, then these people will fail in the proceedings that they bring. Therefore, this is a re argument of the case.
    Mr. GRAHAM: May I make an appeal to the Committee? I shall be delighted later to reply to any questions, but it would help if hon. Members would bear with me during our statement of the case. In my judgment, there is no connection between the fluctuating bonus in this commercial undertaking in Shand's case and the War bonus of civil servants. Hon. Members may say, "If that he true, why do you introduce legislation which will make it impossible for these people to take the judgment of any Court in this country, and determine whether, in fact, their War bonus is on all fours with the decision in McDonald v. Shand." Everybody knows, first of all, that there is always an element of chance. I do not dispute it, and any Chancellor of the Exchequer at this Box would be compelled to tell the Committee that, if he was satisfied no real injustice was being done and that no anomaly of the kind I will afterwards mention would occur, it was his duty to protect the revenue against a chance decision on a technicality arising from certain circumstances affecting Income Tax within the Civil Service itself. That is the first point which I desire to put in making our case for the introduction of this retrospective Clause, and I hope to show in a few minutes that, in point of fact, if our opponents in this case succeeded to-night, it would introduce a new element into Income Tax administration as applied to the Civil Service and other classes of professional occupations in the community.
    Before saying anything about that matter, I wish to take up one point made by the right hon. Gentleman the Member for Paisley (Mr. Asquith), because it is a point of real importance in connection with this Clause. The right hon. Gentle-
    1392
    man appeared to be under the impression that all people in the commercial world in the position of Shand, would be adversely affected by this retrospective proposal. May I make it perfectly plain that nothing of the kind is the case. This Clause has no reference whatever to the commercial world. This Clause, as it stands, is confined to War bonus in respect of the rise or fall in the cost of living. That is the beginning and the end of the Clause and to that extent the right hon. Gentleman's objection fails. What are the circumstances within the Civil Service? Here I must trespass on the patience of hon. Members in describing a situation which is from some points of view simple, but from others complicated. The Committee will recall that there was introduced in the Finance Bill of 1922 a Clause which deprived anybody, after that date, of this right to average fluctuating sums or perquisites instead of taking the actual remuneration of the year. So there is no difference of opinion on the fact that after 1922 no one had any case at all in this respect. As regards the state of affairs before 1922, nobody has any case at all whose assessment was final and conclusive at any time prior to that date. It is accented by all ex-Chancellors of the Exchequer, and I should suppose by every Member of this Committee, that if it were possible under any legal decision given in the Courts of this country, to go back and re-open assessments which were final and conclusive, the position of any Government, financially, and of any Chancellor of the Exchequer would be intolerable. A Chancellor of the Exchequer must have certainty as regards these final and conclusive assessments, and, therefore, the whole problem before us—and I do press this very strongly upon the Committee—is the simple problem, lying in the main within the Civil Service, as to how certain classes of assessments, not final and conclusive, are affected by this Clause.
    May I remind hon. Members that the Income Tax system in this country as applied to the Civil Service, is materially different from the Income Tax system elsewhere in force. The Income Tax law has grown up in stages, with all kinds of anomalies and exemptions remedied from time to time as the result of Reports of Committees and Commissions and undoubtedly containing for the energetic and ingenious taxpayer a great many

    1393
    loopholes, which everybody knows can be discovered in a Court of Law. But the system within the Civil Service itself, has been described as archaic if not obsolete because it is a system of departmental assessment. It is common ground that under that system of departmental assessment, it is difficult to say when the assessments are final and conclusive. In so far as they are final and conclusive within the Civil Service to-night, no civil servant has any claim. In so far as they are not final and conclusive it is conceivable—although we are advised they have no claim in law—that civil servants might succeed. I have already reminded the House, as other Members have done, that they have not yet succeeded in a Court of Law, and I think therefore from that point of view the retrospective element is weakened. The assessments I am told turn very largely upon the initials of certain superior officials in particular offices and, if our opponents succeeded in defeating this Clause, a perfectly impossible state of affairs would arise within the Civil Service. We would come to this point, that in certain Departments in which the assessments were final and conclusive, they would have no claim whatever and in other Departments where the assessments are not final and conclusive—making the large assumption that they succeeded in a Court of Law—they might get repayment of certain sums of Income Tax in respect of an average of that bonus as opposed to the amount for the year of assessment.
    I do not think that any hon. Member will dispute that it would be a perfectly impossible state of affairs and moreover—and I wish to press this point very strongly—it would be a state of affairs utterly inconsistent with the whole Income Tax practice in the Civil Service during recent times, at any rate, and I should think, for many years past. Be it remembered, it never occurred to any civil servant to prepare this claim until attention was directed to the decision in McDonald v. Shand in an entirely different sphere and because of certain circumstances in the Civil Service, into which I need not enter to-night, it was thought that this was a means of getting something from the revenue by asking for an average on a bonus determined by the rise or fall of the cost of living. There cannot be a shadow of a doubt or
    1394
    dispute about that general contention. You would, if this Clause were defeated, introduce something new, something that no civil servant had ever expected and something which would be, in my judgment, disastrous to the highest interests of the Civil Service and costly to the State. The hon. Member for Aylesbury (Mr. Keens) who promoted this Amendment, said if it was true that the cost would be £3,000,000 within the Civil Service, that was a measure of the injustice which had been done to civil servants. I think not. There has been no injustice to civil servants at all, because the civil servant who is mainly affected never made any claim for an average of this kind, and, as I have just said, never expected it until McDonald v. Shand crossed the horizon.
    The whole importance of the financial prospect before us to-night lies first in the undoubted difficulty which would arise in administration, and secondly in the very large cost to other taxpayers, if a small section within the Civil Service get the benefit of this technical anomaly. I have ventured to take up the time of the Committee by arguing certain of these points, because there has been a campaign outside these walls, which we can all understand, but which I am afraid in large measure has been very far removed from the facts. A word or two about the cost and the possibilities of this Amendment if it were carried. We are reliably informed it would probably cost £3,000,000 for the section of civil servants involved. But the question would at once confront Parliament as to what we were to do to place all civil servants on a basis of uniformity. No, doubt, some hon. Members would argue that if uniformity were to be achieved, the only proper course would be to extend the benefit—up to 1922 at all events—to other classes of the Civil Service as well, and that would cost anything from £5,000,000 to £6,000,000 or more, apart altogether from the fact that it would be a departure from Income Tax practice in the Civil Service. There are also certain people outside, notably those employed by municipal authorities and others, who fall undeniably within Schedule E, and probably, in so far as their assessments were not final and conclusive, they could prefer a somewhat similar claim.

    1395
    What the cost of that unexpected windfall to these taxpayers would be I am not in a position to-night to estimate. That it would be costly to the State there is not the least shadow of doubt, so that in all from £4,000,000 or £5,000,000 to £6,000,000 or £8,000,000, in round figures, is at stake, and I venture to suggest neither on the merits of the people affected, nor in the light of McDonald v. Shand, nor in the light of what is desirable in the Civil Service and what is desirable in Income Tax administration, can this Clause be successfully resisted. At all times, it is difficult for any Government to propose retrospective legislation. I fall back upon the question which I asked at the beginning of this speech—whether the circumstances of the case justify this course? I submit they do, and, moreover, I submit that no one is penalised in the commercial world—it does not touch them at all—and it merely maintains for civil servants and public officials the exact state of affairs which they had accepted all along until McDonald v. Shand appeared on the scene. That being so, I respectfully ask the Committee to reject the Amendment.
    Mr. N. CHAMBERLAIN: I am sure the Committee will not quarrel with the hon. Member for going at some length into the facts connected with this Clause and the questions raised, which I, personally, have found somewhat complicated and difficult to understand in all their bearings. That it is a question of great importance is emphasised by the presence of the right hon. Gentleman the Member for Paisley (Mr. Asquith), who has come down this afternoon to give us the benefit of his great weight, experience and authority upon a matter in which we may take it he has a special interest as an ex-Chancellor of the Exchequer. I, too, though only for a very brief period, was connected with the Treasury, and I feel it is one of those questions where one must take into consideration, as an important factor in the case, what is going to be the cost to the taxpayer for the benefit of only a section of the community.
    That is only one fact, and it is not the one, I think, which any of us desire to emphasise as the most important, because if by this Clause we are really doing an injustice to a number of people, if we
    1396
    are really depriving them of something to which they have a just right and title, then I do not think we ought to be deterred from doing them justice by the cost to the Treasury, even if it rose to a much higher sum than the figure named by the hon. Gentleman opposite. But I would like to say a few words upon the equities of the case, as I have been able to understand it from the inquiries I have made, and from the speeches to which we have listened. The right hon. Member for Paisley, in his review of the circumstances, divided the cases which would be affected into two classes, first, those which were exactly on all fours with the case of McDonald v. Shand, and, secondly, those of the civil servants and others who have been in receipt of a War bonus.
    I think the hon. Member opposite has disposed of the first of those two classes of cases, and has shown, as I myself have understood, that this Clause does not take away from them anything they have gained by the decision of the House of Lords, and applies only to the strictly limited class of cases connected with War bonus. As to whether those cases are likely to be covered by the House of Lords decision, of course it is not for a layman to express an opinion. I remember that the right hon. Gentleman did hold out to us a suggestion, in an earlier discussion on the subject, that we might have the benefit to-night of a statement from one or other of the Law Officers of the Crown. I do not see either of them here—[An HON. MEMBER: "There is only one"]—and I have some reason to suppose we are not likely to see more than half the number in any case. But I rather hope that, in view of the suggestion made by the hon. Gentleman himself upon an earlier occasion, it will be possible for us to hear the Attorney-General, and to know what is the view he takes on this particular matter.
    But I think the real importance of the matter that we are discussing is that it raises again the question of retrospective legislation, and the House, very properly, will desire always to examine, with the greatest possible care, any appearance of anything in the nature of retrospective legislation. Before we consider whether this particular case is one which would justify legislation of that character, we might, perhaps, ask ourselves why we do object so strongly to retrospective legislation. I think it is because if a man has

    1397
    done something which is perfectly legal, which is in accordance with the law of the land, which he would not have done if the law had been different, and if, subsequently to his performing that action, the law is altered retrospectively, then he is made to have done something illegal which he would not have done had he been in possession of the coming change. Let me illustrate it by a very simple example. Suppose I buy a piece of land under which I know there are minerals. I pay a price for the land which includes the value, or the reputed value, of the minerals which are supposed to lie under it. If after that a law is passed of a retrospective character providing that as and from a certain date previous to the date at which I had completed my purchase the value of any minerals which lie under the surface shall not accrue to the owner, but shall accrue to the State, that is retrospective legislation of the worst possible kind, and it is entirely unfair and repugnant to our sense of justice.
    In considering the particular case before us, I have tried to put to myself whether there is anything in it which is analogous to the sort of case that I have just illustrated. The only period which is covered is the period of the years 1920–21 and 1921–22. Nothing before 1920–21 or after 1922 can possibly be the subject of claims which might be made under the House of Lords decision. When did civil servants—because it affects civil servants for the most part—first become aware of the possibility of their getting anything back in respect of assessment made in those earlier years? Not till March, 1923, and, therefore, it is quite clear that even if such speculative and hypothetical rights as they may have, on the supposition that the case McDonald v. Shand may also cover the case of war bonus, were taken away from them, it cannot be said they are in the position of a man who has either done something or omitted to have done something in consequence of his believing the law of the land would remain the law of the land Nothing has been done or undone by those civil servants which they would not have done or undone if the law had been quite clear and altered in the sense of this Clause before 1923. Therefore, it seems to me, looking at the matter from the point of view of retrospective legislation, that if we consider the real reason why
    1398
    we object to retrospective legislation, that reason does not exist in this particular case, and the only objection, therefore, we have to legislation of that kind does not really, or ought not really, in this case to have any weight with us.
    There is another question, and that is the question of the inequalities which might occur. Incidentally, I might, perhaps, put this point, which I do not think has been mentioned up to now. There was another celebrated case in the Courts which will be familiar to many hon. Members, namely, that known as the Sutton case. In the Sutton case, again, the question arose as to whether War bonus was, or was not, part of the full civil pay, but in that case the Civil Service contended that it was part of the full civil pay. They won their case, and I think it has cost, and may cost, the Treasury a considerable amount of money. Surely, they cannot have it both ways as part of the civil pay, and as a perquisite, and not part of the civil pay. I do suggest, therefore, that hon. Members who are taking it for granted that their contention must be right in this particular case, ought to bear in mind what happened in the Sutton case, because it is perfectly obvious that if the decision in the Sutton case be applied to this case, then the so-called perquisites must be reckoned as part of the regular pay of the civil servant.
    There remains this further point. Whatever you do in this case, you cannot get equal justice for everybody. Certain individuals would come into a favoured position as compared with other individuals, not because of any extra right or justice on their side, not because they themselves were more deserving than the others, but simply by the accident that, through some laxness, or archaic procedure in certain Departments, their forms of assessment were not legally valid, and, consequently were not final and conclusive, and I cannot see any possibility of arguing that you should give this privilege which did not exist even in theory, until March, 1923, to these particular individuals, and deny it to all the others who happened to have been employed in a Department where the forms were properly complied with. I should think, for instance, in the Post Office, that the forms would be all final and conclusive, and that none of the officials in that Department, therefore, could come in for

    1399
    any of the possible benefits under the House of Lords decision. Then, I think, it has been suggested that certain municipal officials might also be deprived of their rights under this Clause. There, again, in the majority of cases where War bonus was given to municipal officials, their assessments have been closed once and for all, but you will get here and there certain individuals who slipped through, without it being known at the time that they were liable to Income Tax, and whose assessments, therefore, are not yet final and conclusive, and they alone would be the ones to benefit, if it were possible for them to claim under the House of Lords decision.
    I have given careful thought and consideration to this question. My first impression was against this proposal, because I thought it was retrospective legislation, and I had a general dislike, as so many of us have, to that particular form of legislation, but further investigation of the facts, and further consideration of their bearings upon the whole situation, brought me finally to the conclusion that this Clause will not do injustice to anyone, but that if it were withdrawn, or if it were rejected, there would be an injustice, not merely to particular individuals, but to the general body of taxpayers.
    Sir JOHN SIMON: I think everybody who has listened to this Debate will agree that it is a very interesting discussion, and it has this great merit, that though the actual matter which comes to be reviewed is a very technical matter, it can be debated, and it is in this discussion being debated, on grounds of general public policy. I care nothing at all about the mere technical aspects of the matter, but I think everybody feels that all of us here, Members of the House of Commons, have a really difficult duty to discharge, because we have to reconcile in our action to-day two very important responsibilities under which we live. One is the responsibility, not by any means limited, if I may say so, to the Chancellor of the Exchequer or the Government, but the responsibility of every Member of the House, to remember that we are guardians of the public purse in the vote we give, and I am not at all disposed, for my part, to encourage Members of the House, merely because they are not Ministers of the Crown, to
    1400
    regard themselves at liberty to vote away unlimited sums of public money without any regard to the taxpayers.
    There is the second responsibility, which is very difficult to discharge. We have a great responsibility to see that if we are going to embark on that most dangerous and exceptional device, the device of deliberate, retrospective legislation, we do not do substantial injustice to a number of people who are entitled to call for fair treatment here. There is a sense in which people here are specially involved, people who are mostly, I believe, civil servants, and who believe they have got a special right to claim in this connection. It was not mentioned by the right hon. Gentleman opposite—I have no doubt he knows it, because of his experience at the Treasury—but the House may not always remember that a civil servant is in this very unusual position: he not only gets no notice of what the assessment of Income Tax affecting him is, he is not tendered any account, record, or statement which shows why it is deducted and how it is deducted, until very recently he had really no means of finding out.
    That is to say, if a civil servant is in a position where his salary is £300 a year, he does not get the payment, month by month, or quarter by quarter, which that £300 represents, and is left himself to pay the Income Tax: what he gets is a smaller sum, pounds, shillings and pence, and the difference between the two is supposed to represent the just deduction according to the law made by the Department which he serves. Nobody doubts that those in the Department do it as well as they can, but it is quite obvious, if that is the position of the civil servant, if the fact is that a wrong deduction has been made, a deduction which leaves him with a less net salary than he ought to have, it is no light matter for the House of Commons to say: "If we leave things as they are you will get your correct salary; therefore, we will enact retrospective provision which will secure that you will have to be content with the salary which you get, which is less than that to which you are entitled."
    While we have to reconcile these two things as fairly as we can for the civil servant—the civil servant has got into a position of tutelage where he has nothing to do with reckoning his own Income Tax, the thing is done by a high

    1401
    authority, which tenders him less than what is his due—where he has no means of knowing exactly what is right or wrong. I do say it is a strong order that these are the circumstances in which retrospective legislation can be passed. There is another circumstance to which I was rather surprised that the right hon. Gentleman did not refer. It is true it had reference to a colleague, the right hon. Gentleman the Member for Hillhead (Sir R. Horne) who was, I think, Chancellor in the year 1922, but the right hon. Gentleman opposite spoke again and again as if this suggested remedy to civil servants was something which first arose in the House of Commons in March or April, 1923. That is quite a mistake. That is the date of the decision in the House of Lords—the decision of the final Court. We are aware of the fact that there were people who were alleging that what was called Rule 4 under Schedule E really applied to taxation that was based upon the average of three years, and not the year of charge, before April, 1923, and indeed the right hon. Gentleman the Member for Hill head who was Chancellor of the Exchequer in 1922 introduced into the Finance Act of 1922 a provision which repealed the right of people to rely upon this Rule 4 which permitted the three years' average, and insisted for the future that if they were persons coming under Schedule E at all they must be taxed on the year of charge.
    This very point, which is now presented as a difficulty of revenue, ought to have been present to the mind of the Chancellor of the Exchequer in 1922. He did what was perfectly right and proper. He came to the House of Commons, and said, I want you to agree to put into the Finance Act of 1922 that for the future this shall not happen, to put it, if you like, in the Schedule of repeal of provisions in the Finance Act of 1922—it will be found there—hon. Members will find that this House of Commons, in 1922, at the request of the then Chancellor of the Exchequer, a member of the Conservative party did what? We did not repeal retrospectively Rule 4! We said from 1922 onwards that if we were to have retrospective legislation that that was the time to do it. It really surprises me to hear the right hon. Gentleman opposite the Member for Ladywood (Mr. Chamberlain), an ex-Chancellor of the Exchequer saying in 1924, "I think the decision was
    1402
    quite right, we should, as before 1922, treat people who want to rely upon Rule 4 as if Rule 4 had never been on the Statute Book at all." In other words, in 1922 Parliament having so acted, we in 1924 are asked to legislate that everyone is to be treated as they had not been treated in 1920 and 1921.
    Mr. CHAMBERLAIN: Does not the right hon. Gentleman consider that what he says indicates that my right hon. Friend the Member for Hill head had no doubt in his own mind whatever at that time that there was therefore not any question of coming to any decision on the matter, that he was then merely legislating for the year 1922; and that, also, no civil servant at the time had the slightest idea that this question would probably arise later?
    Sir J. SIMON: It is not a matter for heat; and we are trying to find out how this was; but I do think it is important to observe that what we are being asked to do in 1924 in regard to Rule 4, which has been cut out of the Statute Book since 1922. The question now comes, what is the right way to treat this thing? May I say, with very great respect, that though, of course, I have not officially the information—and I. make no claim whatever to understand this thing from the legal point of view—I am very greatly mystified by the language used by the Financial Secretary to the Treasury. The right hon. Gentleman suggests that if we leave things as they are we are perpetuating a gross inequality. I cannot understand that at all. I apprehend that the way in which civil servants, or the servants of a municipality, or the servant of anybody else, should raise this question would be quite simple. It would be by saying to his employer: "You have not paid me my proper salary, therefore pay me a little more." The idea that litigation would be litigation with the revenue is, I venture to think, quite a mistake. The issue is perfectly simple. I am, say, employed at the salary of £300 a year, and from that my employer has deducted, before he pays it to me, a certain sum which he states to be the right amount for Income Tax. I have only got the balance. I cannot understand how it can be said that it is necessary to pass this retrospective legislation in order to prevent fraud arising, and to prevent inequality as between one

    1403
    civil servant and another. It is the common experience of ordinary life that sometimes people can and sometimes people cannot enforce what you may call a stale claim—a claim as regards the past. If things are left as they are—if, indeed, these people have got any claim—about which I say nothing—then those who have a claim and make it any time will get the money due to them. Here we are being asked to legislate so that these people shall not get money due to them as salary.
    On a Resolution during the early hours of the morning, a speech was made by the hon. and learned Gentleman the Member for Central Bristol (Sir T. Inskip), who was Solicitor-General in a previous administration. I would commend to hon. Members who may not have read it, the speech that the hon. and learned Gentleman then made. The hon. and learned Gentleman pointed out that you really would, by this retrospective legislation, be depriving people of their rights; otherwise, it was said, you would lose a lot of money. That is a most subversive proposition to lay down, certainly at this moment. The hon. and learned Gentleman pointed out—however, let me read his words——
    "What makes the case a little worse is that these are small men."
    My hon. and learned Friend was speaking in this way early in the morning——
    "I would rather see the Super-tax increased by a shilling or two shillings than that retrospective legislation should be imposed on the small men who can ill afford to bear this loss."
    I think the House of Commons will wish to realise how the matter stands. The hon. and learned Gentleman went on to say:
    "The men who are affected are just the people who are touched by a difference of £3, £4 and £5 a year. They are men not of £700 a year, but of £300 or £400 a year with children to bring up. Feeling as I do upon this general principle of retrospective legislation my objection to this particular resolution is reinforced by the unpleasant feeling that we are taking action against the small man in whose defence I think any Member might desire to be eloquent and persistent."—[OFFICIAL REPORT, 12th May, 1924; col. 1096, Vol. 173.]
    Mr. GRAHAM: Will the right hon. and learned Gentleman permit me to say that in this matter the civil servant has lost
    1404
    nothing at all. The members of the Service now concerned have all he paid on the basis which is current now throughout the whole Civil Service. If this Clause were taken out of the Bill these civil servants might get something which they never expected to get.
    7.0. P.M.
    Sir J. SIMON: Surely, the hon. Gentleman will see that that argument is an argument for any sort of retrospective legislation! The point is, where you think, or fear, or suspect that the law, as we now understand it, may confer a benefit on the taxpayer, the Government of the day has to review the decision of the supreme tribunal, if the decision is one which leaves the Government surprised or uncomfortable, then, if they think well, they may come with retrospective legislation and take advantage of it! Surely, nobody can seriously lay that down. What makes the matter worse and not better here is that the hon. Gentleman the Financial Secretary has told us that he is, in his own mind, quite confident that there is, in fact, no resemblance at all between the case of these civil servants and the case of Shand. He adopted my Amendment on the Money Resolution to postpone the matter because he wanted to consult the Law Officers. I understand, therefore, that the Law Officers have been consulted. I am glad to see the, Attorney-General present. No doubt he will tell us whether he has not advised the Government that, as a matter of fact, the civil servant cannot take advantage of this. Supposing that is so—it is probably the case that the Attorney-General is right—what are we doing then? We are putting on the Statute Book, perfectly gratuitously, a gross piece of retrospective legislation which is certainly going to give a very large number of people to think that you have dealt with them harshly, unfairly—and all for nothing! I am bound in all candour to say, because I wish to serve the House as well as I can, that I myself do not think that all the arguments that have been suggested against the civil servants' case are quite as strong as could be supposed. For instance, the right hon. Gentleman opposite referred to the case of Sutton. I feel pretty confident that the case of Sutton has little to do with it. The question there was whether a Post Office servant who, early in the War

    1405
    volunteered for active service under a promise from the Post Office that he would get his civil as well as his military pay, was not entitled to say that his military pay should be added to the civil rewards for the time being made to people who were continuing in the Post Office at St. Martins-le-Grand. If I may say so without offence, I am certain no lawyer would imagine that the interpretation of a document which turned on the meaning of the word "pay" has much to do with the proper construction of Rule 4 of the Income Tax Act.
    The conclusion, however, of the whole matter is this. I earnestly desire to do everything I can to help to protect the revenue in every proper case. I do not rule out the possibility of retrospective legislation in every or any circumstances. I do not think the right hon. Gentleman who has just spoken has been successful in drawing this distinction. You are here dealing with a number of people who are apparently advised, rightly or wrongly, that they have a certain right. Their right is going to be the right of saying to different Government Departments, "In 1920 and 1921 you paid me £5 or £10 too little." I have no doubt that is very annoying to the Departments. It means a great deal of inquiry and is extremely disturbing. I am afraid I take these estimates of prodigious losses as highly speculative estimates. No doubt they are the best figures available. I do not see my way to say we ought to authorise the Labour Government in these circumstances to pass what is a perfectly clear piece of retrospective legislation which has no effect whatever unless it is the effect of depriving a number of people, and mostly small people, of a right they conceive that they have.
    I would beg hon. Gentlemen in all quarters of the House to consider what is going to be the nature of this precedent. We ought to limit retrospective legislation to the smallest dimensions. If it turns out, as it very well may, that these people have no right under the decision at all, no harm is done; whereas, if we do this in the House of Commons to-day, what answer have we if, on some other occasion, when some other class of the community is believed to have established its rights in a Court of Law, and others try to do the same, the Govern-
    1406
    ment say, "We do not care anything about the Courts of Law; we propose to mould and mould retrospectively the law of this country, so that it shall fit in with our views." It was said that this is nothing more than a technicality. The civil servant has no means of finding out whether the deduction is right or wrong. It was not until 1922 that he was given any right to appeal like any other taxpayer. We are bound here to have regard to the claims of these men who, as I should hope people in all parts of the House will think, cannot really be got rid of by saying, "This is a piece of good fortune which retrospectively we should take away."
    The ATTORNEY - GENERAL (Sir Patrick Hastings): I only interpose to say one word more or less in answer to questions put by my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon). The case on this Clause has been put by the Financial Secretary and the right hon. Gentleman the Member for Ladywood (Mr. N. Chamberlain), and I think it would be wasting time if I were to add anything in support of their arguments. I understand my right hon. and learned Friend has asked whether I am in a position to say that those civil servants have no claim in law under McDonald v. Shand. My answer to that, and I think it is the only one I could give, is that no legal man could ever say that. It is exactly the same question as was put before this House when we were discussing the War Charges (Validity) Bill, when the question arose as to whether those cases were barred by the indemnity. There has been a decision that they were. One hon. Member who was a lawyer expressed the view that that decision was right. I remember I was asked the same question whether it was right or wrong, and the answer was bound to be that nobody could tell until the decision of the highest Court. I do not believe anybody can undertake to say with any degree of certainty whether these civil servants have a claim or have not.
    One further word on a matter which seems to me, quite apart from the matter of the law, merely dealing with the fundamental principle underlying it. The position is this. As all Members will realise, in almost every case of a person who is assessed to Income Tax there

    1407
    comes a moment when he does not appeal against it, and the assessment becomes final and conclusive. There is with regard to some of the civil servants a hiatus. There is a very intricate method of calculating their Income Tax assessment, and in some cases we are advised that the assessment is not technically in proper form. It has not been signed in the right place. Some rule has not been complied with. It is only in respect of those cases that any claim can arise.
    Arguments about retrospective legislation are very familiar. Everyone objects, in theory and practice, to retrospective legislation, but by the time we know there are cases where it must be, as in the War Charges Validity Bill. Here, in this case, the only object of this Clause is to prevent a real injustice which would be an injustice to all others who would be liable to make good this deficiency, and injustice to them and in favour of whom? Of people who never had anything but merely technical rights. They were in exactly the same position as every one of their fellows. What would happen if this Clause were not passed is this. On one side you would have members of the Civil Service who did not claim at all, whether this Clause be passed or not, and alongside, others who, owing to this technical defect, might conceivably have a claim; and the claim is one of which they were not only completely ignorant but which no one ever intended or thought or desired should arise. Anyone who has anything to do with it knows that in every Income Tax Act innumerable technical difficulties arise, because there may be one irregularity which may conceivably affect a very small proportion. I do with some confidence ask the Committee to accept the argument of my right hon. Friend the Member for Ladywood and the Financial Secretary and say that it is a case in which far greater injustice would be done by not passing this Clause than by passing it.
    Mr. LEIF JONES: I cannot understand the last argument put forward by the Attorney-General. I understood from the speech of the Financial Secretary to the Treasury that very large sums were involved, running up to £8,000,000. Now the Attorney-General has explained that the only cases which can arise are cases where there is some sort of irregularity
    1408
    which must apply only to a small number of civil servants, and I submit that the sum involved cannot be very large. I think the House is entitled to know before it is asked to embark on this retrospective legislation whether the sums are large or whether there are only a few cases. I am very much opposed to retrospective legislation, and it will take a great deal of argument to convince me that we should go in for it.
    Mr. DENNIS HERBERT: In spite of the very clear and convincing way in which the Financial Secretary to the Treasury put his case, and the support from my right hon. Friend the Member for Ladywood (Mr. N. Chamberlain), I am still unconverted. I regard this as a matter in which I have the greatest sympathy with the Government's case, and I do not think it is a case which any of us should treat from the party point of view. The seriousness of it is in the precedent that we shall establish if we pass this Clause. May I point out one thing which may be apt to mislead the House. As the right hon. and learned Gentleman the Member for Spen Valley (Sir J Simon) has pointed out, this case has not yet been decided by the Court, and the Government are proposing, before the case ever comes before the Courts, to put an interpretation on law in the past and debar the Courts from giving to the subject the right which he has under the law. I do urge hon. Members that, however much this might cost, there is a principle at stake which this House should not let go whatever the cost may be. It is not merely a question of retrospective legislation in the ordinary sense of the term but it is a question of whether Parliament is going to be setting a precedent for overriding the Courts of Law, and constituting Parliament—which is by no means constituted by lawyers, thank Heaven for that—a supreme tribunal, not merely for the making of laws, but for the interpretation of laws under which the subjects of this country have been living in the past. Therefore, in spite of the very convincing case put by the Financial Secretary to the Treasury, I cannot do otherwise than Support the Amendment, or oppose the Clause as it stands, and I hope the bulk of my friends will take that line,
    Mr. PRINGLE: May I put one consideration before the Committee? It seems to me that the Committee is to-day

    1409
    discharging a function for which it is not qualified. It is, in fact, trying a case in regard to civil servants when it is not determined whether that case comes within "McDonald v. Shand." We have had legal arguments on one side and the other. The Financial Secretary to the Treasury put a strong legal argument before the Committee indicating that It was his opinion that civil servants are not entitled to benefit by this judgment On the other hand, the Attorney-General has not spoken with equal confidence, and the right hon. Gentleman the Member for Ladywood (Mr. N. Chamberlain) has gone with great care into the issue involved. Let me make this clear, that this is a point upon which this Committee is not fitted to pronounce judgment, and, if this Bill is passed, we shall be taking away rights which certain people possess. I suggest that we are not in a position to
    do anything of the kind. Either these people have a sound cause of action, or they have not. If they have, it is not for us to pronounce judgment. Let them go to the Courts. If, as the Financial Secretary suggests, they have a bad case, they will lose in the Courts, and the Treasury will lose nothing. If, on the other hand, they have a sound cause of action, if they have been wrongly charged with Income Tax, they are surely entitled to a return on their money. Then if any injustice arises as between different classes of civil servants, it will be for the House of Commons to intervene. Under the circumstances, I think it is our duty to reject the Clause.
    Question put, "That the words proposed be left out stand part of the Clause."
    The Committee divided: Ayes, 242; Noes, 185.

    Division No. 127.]

    AYES

    [7.20 p.m.

    Adamson, Rt. Hon. William

    Davidson, Major-General Sir J. H.

    Hennessy, Major J. R. G.

    Adamson, W. M. (Staff., Cannock)

    Davies, Evan (Ebbw Vale)

    Hillary, A. E.

    Alden, Percy

    Davison, J. E. (Smethwick)

    Hirst, G. H.

    Alexander, A. V. (Sheffield, Hillsbro')

    Dickson, T.

    Hodge. Lieut.-Col. J. P. (Preston)

    Alexander, Brg.-Gen. Sir W. (Glas. C.)

    Dukes, C.

    Hodges, Frank

    Alstead, R.

    Duncan, C.

    Hoffman, P. C.

    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

    Dunnico, H.

    Hogg, Rt. Hon. Sir D. (St. Marylebone)

    Astor, Maj. Hn. John J. (Kent, Dover)

    Edwards, C. (Monmouth, Bedwellty)

    Hope, Rt. Hon. J. F. (Sheffield, C.)

    Astor, Viscountess

    Edwards, G. (Norfolk, Southern)

    Howard, Hn. D. (Cumberland, Northrn.)

    Attlee, Major Clement R.

    Egan, W. H.

    Howard-Bury, Lieut.-Col. C. K.

    Ayles, W. H.

    Elliot, Walter E.

    Hudson, J. H.

    Baker, Walter

    Erskine, James Malcolm Monteith

    Hughes, Collingwood

    Baldwin, Rt. Hon. Stanley

    Finney, V. H.

    Jackson, Lieut.-Colonel Hon. F. S.

    Barker, G. (Monmouth, Abertillery)

    Forestier-Walker, L.

    Jackson, R. F. (Ipswich)

    Barnes, A.

    Gardner, B. W. (West Ham, Upton)

    Jenkins, W. (Glamorgan, Neath)

    Barnston, Major Sir Harry

    Gardner, J P. (Hammersmith, North)

    Jephcott, A. R.

    Batey, Joseph

    Gavan-Duffy, Thomas

    Jewson, Dorothea

    Beckett, Sir Gervase

    Gibbins, Joseph

    John, William (Rhondda, West)

    Bellairs, Commander Carlyon W.

    Gibbs, Col. Rt. Hon. George Abraham

    Johnston, Thomas (Stirling)

    Betterton, Henry B.

    Gillett, George M.

    Jones, Morgan (Caerphilly)

    Bondfield, Margaret

    Gilmour, Colonel Rt. Hon. Sir John

    Jones, T. I. Mardy (Pontypridd)

    Bowerman, Rt. Hon. Charles W.

    Gosling, Harry

    Jewett. Rt. Hon. F. W. (Bradford, E.)

    Brassey, Sir Leonard

    Gould, Frederick (Somerset, Frome)

    Kennedy, T.

    Bridgeman, Rt. Hon. William Clive

    Graham, D. M. (Lanark, Hamilton)

    Kenyon, Barnet

    Broad, F. A.

    Graham, W. (Edinburgh, Central)

    King, Captain Henry Douglas

    Bromfield, William

    Greenall, T.

    Kirkwood, D.

    Brunner, Sir J.

    Grenfell, D. R. (Glamorgan)

    Lambert, Rt. Hon. George

    Buchanan, G.

    Grenfell, Edward C. (City of London)

    Lane-Fox, Lieut.-Colonel G. R.

    Buckle, J.

    Griffiths, T. (Monmouth, Pontypool)

    Lansbury, George

    Bull. Rt. Hon. Sir William James

    Groves, T.

    Law, A.

    Bullock, Captain M.

    Grundy, T. W.

    Lawrence, Susan (East Ham, North)

    Burman, J. B.

    Guest, J. (York, W. R., Hemsworth)

    Lawson, John lames

    Cape, Thomas

    Guinness, Lieut.-Col. Hon. W. E.

    Leach, W.

    Cayzer, Sir C. (Chester, City)

    Hacking, Captain Douglas H.

    Lee, F.

    Chamberlain, Rt. Hn. J. A. (Birm. W.)

    Hall, F. (York, W. R., Normanton)

    Lloyd-Greame, Rt. Hon. Sir Philip

    Chamberlain, Rt. Hon. N. (Ladywood)

    Hall, G. H. (Merthyr Tydvil)

    Locker-Lampson, G. (Wood Green)

    Charleton, H. C.

    Hardle, George D.

    Loverseed, J. F.

    Church, Major A. G.

    Harland, A.

    Lowth, T.

    Clarke, A.

    Harmsworth, Hon. E. C. (Kent)

    Lunn, William

    Clayton, G. C.

    Hartshorn, Rt. Hon. Vernon

    Mackinder, W.

    Climie. R.

    Hastings, Sir Patrick

    Maclean, Nell (Glasgow, Govan)

    Clynes, Rt. Hon. John R.

    Hastings, Somerville (Reading)

    Macnaghten, Hon. Sir Malcolm

    Colfox, Major Wm. Phillips

    Haycock, A. W.

    Maitland, Sir Arthur D. Steel-

    Conway, Sir W Martin

    Healy, Cahir

    McNeill, Rt. Hon. Ronald John

    Cope. Major William

    Hemmerde, E. G

    March, S.

    Costello, L. W. J.

    Henderson, Rt. Hon. A. (Burnley)

    Martin, W. H. (Dumbarton)

    Cove, W. G.

    Henderson, T. (Glasgow)

    Maxton, James

    Crittall, V. G.

    Henderson, W. W. (Middlesex, Enfld)

    Middleton, G.

    Crooke, J. Smedley (Derltend)

    Honn, Sir Sydney H.

    Mills, J. E.

    Milne, J. S. Wardlaw

    Roundell, Colonel R. F.

    Varley, Frank B.

    Mitchell, W. F. (Saffron Walden)

    Samuel, A. M. (Surrey, Farnham)

    Viant, S. P.

    Montague, Frederick

    Samuel, H. Walter (Swansea, West)

    Vivian, H.

    Morel, E. D.

    Scott, Sir Leslie (Liverp'l, Exchange)

    Wallhead, Richard C.

    Morrison, Herbert (Hackney, South)

    Scrymgeour, E.

    Ward, Col. L. (Kingston-upon-Hull)

    Mosley, Oswald

    Scurr, John

    Warne, G. H.

    Muir, John W.

    Sexton, James

    Watson, W. M. (Dunfermline)

    Murray, Robert

    Shaw, Rt. Hon. Thomas (Preston)

    Watts-Morgan, Lt.-Col. D. (Rhondda)

    Naylor, T. E.

    Sherwood, George Henry

    Webb, Rt. Hon. Sidney

    Newman, Sir R. H. S. D. L. (Exeter)

    Shinwell, Emanuel

    Wedgwood, Col. Rt. Hon. Josiah C.

    Nichol, Robert

    Simms, Dr. John M. (Co. Down)

    Welsh, J. C.

    Nixon, H.

    Smillie, Robert

    Westwood, J.

    O'Grady, Captain James

    Smith, Ben (Bermondsey, Rotherhithe)

    Wheatley, Rt. Hon. J.

    O'Neill, Rt. Hon. Hugh

    Smith, T. (Pontefract)

    Whiteley, W.

    Paling, W.

    Snell, Harry

    Wignall, James

    Palmer, E. T.

    Snowden, Rt. Hon. Philip

    Williams, David (Swansea, E)

    Parkinson, John Allen (Wlgan)

    Somerville, Daniel (Barrow-in-Furn'ss)

    Williams, Dr. J. H. (Llanelly)

    Pease, William Edwin

    Spence, R.

    Williams, Lt.-Col. T. S. B. (Kennington)

    Penny, Frederick George

    Spender-Clay, Lieut.-Colonel H. H.

    Williams, Maj. A. S. (Kent, Sevenoaks)

    Percy, Lord Eustace (Hastings)

    Stamford, T. W. Stephen, Campbell

    Williams, T. (York, Don Valley)

    Perry, S. F.

    Stewart, J. (St. Rollox)

    Wilson, C. H. (Sheffield, Attercliffe)

    Pethick-Lawrence, F. W.

    Sutton, J. E.

    Wilson, Col. M. J. (Richmond)

    Pilditch, Sir Philip

    Sykes, Major-Gen. Sir Frederick H.

    Wilson, R. J (Jarrow)

    Ponsonby, Arthur

    Thomas, Rt. Hon. James H. (Derby)

    Windsor, Walter

    Potts, John S.

    Thompson, Piers G. (Torquay)

    Winterton, Rt. Hon. Earl

    Pownall, Lieut.-Colonel Assheton

    Thorne, W. (West. Ham, Plalstow)

    Wolmer, Viscount

    Raffety, F. W.

    Thurtle, E.

    Wright, W.

    Raynes, W. R.

    Tinker, John Joseph

    Yate, Colonel Sir Charles Edward

    Richards, R.

    Tout, W. J.

    Young, Andrew (Glasgow, Partick)

    Richardson, R. (Houghton-le-Spring.

    Trevelyan, Rt. Hon. C. P.

    Ritson, J.

    Turner, Ben

    TELLERS FOR THE AYES.—

    Romeril, H. G.

    Turner-Samuels, M.

    Mr. Spoor and Mr. John Robertson.

    Rose, Frank H.

    NOES

    Acland, Rt. Hon. Francis Dyke

    Edmondson, Major A. J.

    Linfield, F. C.

    Agg-Gardner, Rt. Hon. Sir James T.

    Ednam, Viscount

    Lorimer, H. D.

    Ainsworth, Captain Charles

    Edwards, John H. (Accrington)

    Lowe, Sir Francis William

    Allen, R. Wilberforce (Leicester, S.)

    Emlyn-Jones, J. E. (Dorset, N.)

    Lumley, L. R.

    Aske, Sir Robert William

    England, Colonel A.

    Lyle. Sir Leonard

    Balfour, George (Hampstead)

    Falconer, J.

    McCrae, Sir George

    Barclay, R. Noton

    Falle, Major Sir Bertram Godfray

    MacDonald, R.

    Barrie, Sir Charles Coupar (Banff)

    Ferguson, H.

    Macfadyen, E.

    Blrchall, Major J. Dearman

    Fletcher, Lieut.-Com. R. T. H.

    McLean. Major A.

    Black, J. W.

    Foot, Isaac

    Macpherson, Rt. Hon. James I.

    Blades, Sir George Rowland

    Frece, Sir Walter de

    Makins, Brigadier-General E.

    Bonwick, A.

    Fremantle, Lieut.-Colonel Francis E.

    Mansel, Sir Courtenay

    Bourne, Robert Croft

    Galbraith, J. F. W.

    Marriott, Sir J. A. R.

    Bowater, Sir T. Vanslttart

    Gates, Percy

    Martin, F. (Aberd'n & Kinc'dine, E.)

    Bowyer, Capt. G. E. W.

    Gilbert, James Daniel

    Mason, Lieut.-Col. Glyn K.

    Bramsdon, Sir Thomas

    Gretton, Colonel John

    Masterman, Rt. Hon. C. F. G.

    Brass, Captain W.

    Grigg, Lieut.-Col, Sir Edward W. M.

    Millar, J. D.

    Briant, Frank

    Hamilton, Sir R. (Orkney & Shetland)

    Moles, Thomas

    Briscoe, Captain Richard George

    Hannon, Patrick Joseph Henry

    Mond, H.

    Buckingham, Sir H.

    Harbord, Arthur

    Morris, R. H.

    Burnie, Major J.(Bootle)

    Harney, E. A.

    Morse, W. E.

    Butt, Sir Alfred

    Hartington, Marquess of

    Muir, Ramsay (Rochdale)

    Cassels, J. D.

    Harvey, T. E. (Dewsbury)

    Nesbitt, Robert C.

    Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)

    Herbert, Dennis (Hertford, Watford)

    Nicholson, O. (Westminster)

    Chadwick, Sir Robert Burton

    Hill-Wood, Major Sir Samuel

    Nicholson, William G. (Petersfield)

    Chapman, Sir S.

    Hindle. F.

    Nield, Rt. Hon. Sir Herbert

    Chapple, Dr. William A.

    Hobhouse, A. L.

    Oliver, P. M. (Manchester, Blackley)

    Churchman, Sir Arthur C.

    Hogbin, Henry Calrns

    Oman, Sir Charles William C.

    Clarry, Reginald George

    Hohler, Sir Gerald Fitzroy

    Owen, Major G.

    Cobb, Sir Cyril

    Hood, Sir Joseph

    Pattinson, S. (Horncastle)

    Collins, Sir Godfrey (Greenock)

    Hopkinson, A. (Lancaster, Mossley)

    Pennefather, Sir John

    Collins, Patrick (Walsall)

    Hore-Bellsha, Major Leslie

    Perring, William George

    Cory, Sir Clifford

    Howard, Hon. G. (Bedford, Luton)

    Phillipps, Vivian

    Cowan, D. M. (Scottish Universities)

    Hume-Williams, Sir W. Ellis

    Pilkington, R, R.

    Cowan, Sir Wm. Henry (Islingtn. N.)

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Pringle, W. M. R.

    Croft, Brigadier-General Sir H.

    Huntingfield, Lord

    Raffan, P. W.

    Cunliffe. Joseph Herbert

    James, Lieut.-Colonel Hon. Cuthbert

    Rathbone, Hugh R.

    Davies, Ellis (Denbigh, Denbigh)

    Jenkins, W. A. (Brecon and Radnor)

    Rea, W. Russell

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Johnstone, Harcourt (Willesden, East)

    Rees, Sir Beddoe

    Davies, Sir Thomas (Clrencester)

    Jones, C. Sydney (Liverpool, W. Derby)

    Rees, Capt. J. T. (Devon, Barnstaple)

    Dawson, Sir Philip

    Jones, Henry Haydn (Merioneth)

    Remnant, Sir James

    Deans, Richard Storry

    Jones, Rt. Hon. Leif (Camborne)

    Rhys, Hon. C. A. U.

    Dickie, Captain J. P.

    Jowitt, W. A. (The Hartlepools)

    Richardson, Lt.-Col. Sir P. (Chertsey)

    Dixey, A. C.

    Kay, Sir R. Newbald

    Roberts, Samuel (Hereford, Hereford)

    Dixon, Herbert

    Kedward, R. M.

    Robertson, T. A.

    Dodds, S. R.

    Kindersley, Major G. M.

    Robinson, Sir T. (Lancs., Stretford)

    Duckworth, John

    Laverack, F. J.

    Robinson, W. E. (Burslem)

    Dudgeon, Major C. R.

    Leasing, E.

    Ropner, Major L.

    1412

    1413

    Russell, Alexander West (Tynemouth)

    Stuart, Hon. J. (Moray and Nalrn)

    Wheler, Lieut.-Col. Granville C. H.

    Russell-Wells, Sir S. (London Univ.)

    Sturrock, J. Leng

    White, H. G. (Birkenhead, E.)

    Samuel, Samuel (W'dsworth, Putney)

    Sunlight, J.

    Williams, A. (York, W. R., Sowerby)

    Sandeman, A. Stewart

    Sutherland, Rt. Hon. Sir William

    Willison, H.

    Savery, S. S.

    Tattersall, J. L.

    Wilson, Sir C. H. (Leeds, Central)

    Seely, H. M. (Norfolk, Eastern)

    Terrington, Lady

    Windsor-Clive, Lieut.-Colonel George

    Simon, E. D. (Manchester, Withington)

    Thompson, Luke (Sunderland)

    Winfrey, Sir Richard

    Simon, Rt. Hon. Sir John

    Thomson, Trevelyan (Middlesbro. W.)

    Wintringham, Margaret

    Sinclair, Major Sir A. (Calthness)

    Thornton, Maxwell R.

    Wise, Sir Fredric

    Smith-Carington, Neville W.

    Vaughan-Morgan, Col. K. P.

    Yerburgh, Major Robert D. T.

    Somerville, A. A. (Windsor)

    Warrender, Sir Victor

    Spencer, H. H. (Bradford, S.)

    Watson, Sir (Pudsey and Otley)

    TELLERS FOR THE NOES.—

    Spero, Dr. G. E.

    Webb, Lieut.-Col. Sir H. (Cardiff, E.)

    Mr. T. Keens and Sir Kingsley

    Stanley, Lord

    Wells, S. R.

    Wood.

    Starmer, Sir Charles

    Weston, John Wakefield

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

    The DEPUTY-CHAIRMAN (Mr. Entwistle): I do not propose to take any further Amendments on this Clause.
    Clause ordered to stand part of the Bill.

    CLAUSE 21.—(Rate of tax at which repayments in respect of deduction or allowance under Part II of Finance Act, 1920, are to be made.)
    Mr. D. G. SOMERVILLE: I beg to move in page 13, line 9, at the end to add the words
    "Provided that any repayment made to any person who has taxable income shall not be lees by more than the standard rate of tax upon his taxable income than the amount that would have been repayable to him if he had no taxable income."
    I am endeavouring to correct a very apparent anomaly which I will endeavour briefly to explain. This Clause is introduced into the present Bill to give statutory authority to a method that has been in practice a considerable time by the Income Tax authorities in making repayments due to taxpayers arising out of earned personal and other reliefs due to them, or in other words the reliefs due to them as allowed under Sections 18 to 22 of the Finance Act, 1920. It will be observed that where a partial repayment of Income Tax takes place it is proposed only to repay at either the standard rate for that year, or at half the standard rate as the case may be, whereas it any person shows that he is not liable to Income Tax for the year a total repayment of Income Tax is allowed to him. Although on the face of it this may appear to be correct, it is possible that a taxpayer may have suffered on his dividends a small amount of tax at a rate exceeding the standard rate for the year, and this would give rise to an anomaly which may best be shown by a simple illustration as follows: Supposing "A" is married and has four children.
    Mr. W. THOMAS: Is the hon. Member entitled to read his speech?
    Mr. SOMERVILLE: This is a highly technical argument giving statistics, and I am obliged to read it. In this case the earned income during the year of assessment is £160. The unearned income received during the year of assessment is £200, upon which he has suffered tax by deduction amounting to £48.
    The DEPUTY-CHAIRMAN: There is a Rule of the House that hon. Members may refresh their memory by a reference to notes, but not to read speeches.
    Mr. PRINGLE: Then are we to understand that whenever a Minister reads a speech he is out of order?
    Mr. D. HERBERT: Is it not the case that in the past an hon. Member has been allowed in the course of his speech to read certain portions of it containing details and intricate questions involving figures? Under these circumstances, may I submit that the hon. Member for Harrow-in-Furness (Mr. Somerville) has a right to read passages in explanation of his Amendment?
    The DEPUTY-CHAIRMAN: The hon. Member is perfectly right. I was indicating that the hon. Member could use his notes for purpose of giving figures to the House.
    Mr. SOMERVILLE: I am sorry to trouble the Committee with these figures, but I must refresh my memory by reading them. "A" lodges a claim for repayment of Income Tax, and his for that year is as follows: The total income is £360. The earned allowance of one-tenth of £160 is £16, and the personal allowance £225. For four children the allowance is £117, making a total of £358, leaving a balance It will be seen that "A" is liable far tax upon £2 at 2s. 3d. in the £, namely,

    1415
    4s. 6d., and he would possibly assume that he was entitled to a repayment of the difference between this sum and what he had suffered, namely, £48, or a net repayment of £47 15s. 6d. What he actually receives, under this Section, is not £47 15s. 6d. but the amount of £44 15s. 6d. arrived at as follows: Total allowance due to him, £358; less untaxed income set against these allowances, £160; leaving a difference of £198. There will then be repaid to him £198 at 4s. 6d. (which is the standard rate), £44 11s., and £2 at 2s. 3d. (which is half the standard rate), that is, 4s. 6d. making a total of £44 15s. 6d. It will be seen from these figures that he has now received his repayment calculated upon the standard rate, or half the standard rate, "as the case may be."
    Now take the case of another man with identically the same allowances due to him but earning just £2 less. There would be no Income Tax payable, and this gentleman would be able to claim back the whole of the Income Tax he suffered—in the present case £48—and it will be seen that, merely because his income is £2 less, he saves Income Tax amounting to £4s. 6d. as against the other man, who could only reclaim £44 15s. 6d. I admit that I do not think any actual alteration of the principle of the Section is feasible, but it may be possible to introduce a marginal relief Clause to provide that persons on the border of this Section—that is to say, with only a very small amount of Income Tax to pay—should not suffer as compared with persons who just escape taxation altogether, and that is why I move the Amendment.
    Mr. GRAHAM: I hope that the hon. Member will not press this Amendment on the Committee. After the technical Debate we have just had it would ill-become me to give the Committee a detailed discussion of this Clause, which, as hon. Members know, deals with the rate of tax at which repayment in respect of deduction or allowance under Part II of the, Finance Act, 1920, are to be made. If effect were to be given to this Amendment it would involve an elaborate calculation in terms of two-fifths of a penny in the—or something like that. While it is true that perhaps this proposal might give relief to the extent of a few
    1416
    shillings or pence in a year in which the rate of the tax is reduced it is true that in practice they get a benefit in the years when the Income Tax is increased. This benefit the taxpayers obtained during the time when the Income Tax hounded up from 1s. 6d. to 6. in the £ That being so, it can hardly be contended that there is any substantial injustice now, if there is an anomally of a few shillings or pence while the tax is being reduced.
    The real objection to the Amendment is that it would be altogether unworkable as an administrative proposal. It would involve a review of all kinds of assessments for no good purpose whatever, because in the overwhelming majority of cases, only a few pence or one or two shillings one way or the other would be at stake. Although there might be some kind of marginal relief under this Amendment there would be disadvantages which I will not take up the time of the Committee explaining. If the officials of the Department were to be saddled with all these administrative details it would seriously delay the repayment of Income Tax due. I have no hesitation in assuring my hon. Friend that the taxpayers will benefit under our proposals, and I am afraid they would be hindered under this Amendment. I do not think I need to give any further explanation, and I ask the hon. Gentleman not to press his Amendment.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir THOMAS INSKIP: I understand that this Clause merely perpetuates what has long been the practice of the Inland Revenue Department, but undoubtedly in these days of large variations in the Income Tax, especially when it is on the downward scale, it works hardship in many individual cases. I have a correspondent in Bristol who says he owns £100 worth of shares in the General Electric Company, which declares a dividend once a year in June. The dividend has been deducted at the rate of say, 6s., and in the last year at 5s., but repayment is only made to him on the 5s. or the 4s. 6d. rate. The result is that although this taxpayer is entitled to relief under the Income Tax Acts, it is more convenient to the Inland Revenue to have one uniform rate of repayment. I think that is an injustice, and

    1417
    I am surprised to hear that it has been the practice of the Inland Revenue Department.
    I called the attention of the Financial Secretary to the Treasury to this matter, and he replied that he had no doubt the subject would be fully discussed in the Debates on the Finance Bill. I am afraid I am not sanguine enough to expect that this matter is considered to be sufficiently serious to vote against the Government, but, not with standing that, I greatly regret that this is the practice of the Inland Revenue Department. The Financial Secretary spoke about a few pence or a few shillings being involved. I am afraid that the Treasury are so accustomed to dealing with millions that, in their view, a few shillings and pence do not matter, but to people with incomes varying from £220 to £150 these small amounts are of some importance. The income of this particular correspondent of mine has never exceeded £250, and he is taxed more than he ought to be because the system adopted is more convenient for the Inland Revenue, although Parliament intended that he should be exempt. I say that is an injustice, and this Clause ought not to be allowed to pass in its present form.
    Mr. GRAHAM: I take it that my hon. and learned Friend would not expect me to pronounce upon an individual case from Bristol without looking through all the facts of the case.
    Sir T. INSKIP: If I may interrupt the hon. Gentleman, I gave him an opportunity, because I sent him the letter some time ago, and, after a delay—of which I do not complain in the least—of nearly four weeks, he replied, sending back the letter, with no other comment than this, that the matter would no doubt be fully discussed during the course of the Debates on the Finance Bill, and not remarking upon either the justice or injustice of the practice.
    Mr. GRAHAM: I must say quite frankly that I do not recall the details of the case, because I receive, as the Committee knows, very large numbers of cases every week. Everything, however, depends upon the sources of the income, and also upon the times during which that income is earned, together with certain grounds of relief. No doubt, that
    1418
    applies in this case, and, if my hon. and learned Friend cares to send me the case again, I could now give him a definite ruling upon it in the light of the Clause which we now propose to insert in the Bill.
    Sir T. INSKIP: I have no doubt at all what the definite ruling will be. If this Clause is passed, the hon. Gentleman will reply to me that Clause 21 of the Finance Bill, which it is hoped will be passed into law when the Royal Assent is given, has made this practice of the Inland Revenue Department not only the customary practice of the Inland Revenue Department, but the law; and this gentleman will be taxed at the rate of 6d. for every of £1 dividend which he receives from this company. I have no doubt about the legal position if this Clause is passed. What I want to bring to the attention of the Committee is that it is an injustice that people should be taxed merely for the convenience—and, no doubt, it is a convenience to them—of the Inland Revenue officials.
    Viscount WOLMER: May I ask whether the Government cannot consider this matter between now and Report, and see whether some addition to the Clause could not be made to meet the case which my hon. and learned Friend has brought forward? His case cannot be an isolated one; there must be hundreds of other men in the same position; and, although none of my constituents happen to have written to me on the subject, I do not think it is a matter which should be dismissed in quite the airy way in which it has been dismissed by the Government. I think the Committee would appreciate it if the Chancellor of the Exchequer would say that he will look into the matter between now and Report and see whether he cannot do something, to remedy cases of this kind.
    Mr. SNOWDEN: The Noble Lord surely does not expect me to say that I, on the spur of the moment, can deal with the details of a particular case; but without giving any definite promise to the Committee. I certainly will look into the matter, and I shall be glad if the hon. and learned Member for Central Bristol (Sir T. Inskip) will submit to me the case which he has mentioned, in order that I may see whether it is a typical case.
    Mr. D. HERBERT: We are very grateful to the Chancellor of the Exchequer for what he has just said, and, in the circumstances, I do not wish to press, as I was going to do, my opposition to this Clause; but I do hope that, if the right hon. Gentleman brings forward on Report this Clause in an amended form, he will be prepared thoroughly to justify it to the House, because, if I may respectfully say so, it seems to be a wrong principle altogether that, Where a man's income is taxed at 6s., and he is entitled to have his tax back, he should only get the tax back at the rate of 5s. I do not think that the convenience of administration in the Inland Revenue Department is a sufficient justification for that.

    CLAUSE 22.—(Power to recover summarily small amounts of Income Tax.)
    Sir H. BUCKINGHAM: On a point of Order. I have two Amendments down to this Clause, the one to leave out the Clause altogether, and the other to insert certain words. It seems to me that I should be rather putting the cart before the horse in moving the Amendment and then moving that the Clause be deleted. Should I be in order in moving first to leave out the Clause?
    The CHAIRMAN: No. The hon. Member should move his Amendment first, and then he can speak against the Clause standing part of the Rill.
    Sir H. BUCKINGHAM: I beg to move, in page 13, line 26, at end, to add
    "(3) Proceedings under this Section for recovery of Income Tax summarily as a civil debt shall not be taken unless application has first been made to the General Commissioners and their approval obtained and unless the collector shall have produced to such Commissioners the names of the taxpayers against whom he wishes to take proceedings."
    My reason for moving this Amendment is that this Clause, which is framed for the purpose of giving the revenue authorities entirely new and much larger powers than they now possess, states, in Sub-section (2), that
    "Proceedings under this Section shall be commenced in the name of a collector of taxes."
    I presume I am right in believing that any proceedings would not only be taken
    1420
    in the name of the collector of taxes, but at the discretion of the collector of taxes, and I beg to suggest to the Committee that to allow a collector of taxes to use arbitrarily, at his own discretion, the very great powers which this Clause would confer upon him, is really insulting the taxpayer. Already powers are given to the collector by the Commissioners of Taxes to go as far as distraining upon a person who does not pay his tax, but these much greater powers will enable him, entirely on his own authority, to take an inoffensive person to the nearest police court, hale him before the magistrates, and subject him to all the unpleasantness of proceedings in a police court, with the stigma which does attach to such proceedings. It will be possible for that to be done entirely on the discretion of the collector of taxes. If I may speak afterwards on the general effect of the Clause, I will limit my remarks now to what I have said, and ask the Chancellor to accept a much more reasonable suggestion, namely, that these proceedings, if the Clause is ultimately passed, shall only be taken after application has first been made to the General Commissioners and their approval has been obtained. That is what happens now when a collector is empowered to distrain upon the taxpayer. Before a collector can distrain, he has to receive the authority of the General Commissioners to do so, and I suggest that in this case also, if these powers are given to the Revenue Authorities, the collectors, who are appointed by the Commissioners, should receive the very natural approval of those Commissioners before taking action.
    Mr. GRAHAM: I feel sure that, after the explanation which I hope to be able to give to the Committee, the hon. Member will not find it necessary to proceed with this Amendment. The Committee will be aware that, very largely because of the increase in the Income Tax within recent years, there is, and has been for a long time, a large problem of arrears, and, of course, it is the duty of the Inland Revenue Department, in justice to other taxpayers who have done their duty, to see that the arrears are recovered, more particularly when the people involved are able to pay.
    Sir H. BUCKINGHAM: On a point of Order. I have purposely, Mr. Young, on your instructions, confined my remarks

    1421
    to the Amendment; but the Financial Secretary, if I may say so, is suggesting that the Clause itself is justified. If he is going to take that point of view, I suggest that I might be allowed to speak on the merits of the Clause itself.
    The CHAIRMAN: I think the Financial Secretary will confine himself to the Amendment as far as possible.
    Mr. GRAHAM: I am quite sure that, if the hon. Member had borne with me for a minute, he would have seen that I should have got quickly to the point. In any case, he will be aware that in Committee he is entitled to speak as often as he can catch the eye of the Chair. I have described the problem of arrears, and, in addition to that, as regards weekly wage-earners in this country, there is a power of summary recovery as a civil debt. That, however, is not the position as regards other classes in the community. In their case there is a power of recovery by distraint, and also a power of recovery by reference to the High Court. In many cases recovery by distraint is obviously quite inappropriate, and in many cases it produces nothing, so that there remains only the very costly procedure of the High Court, and all that it involves.
    We propose in this Clause—and I find it necessary to say something about the Clause in order to make my reply clear—to put weekly wage-earners and all other classes of the community, up to an amount of £50, on the same footing, and to make it possible to recover by summary jurisdiction. The hon. Member's suggestion is that that should only be done after reference to the General Commissioners, but may I remind him of the power of recovery which is granted by the General Commissioners, and also of the fact that they themselves fix the assessment? It seems to me, therefore, to be altogether unnecessary, in the light of these facts, that the collector should have to go and say to them, at meetings which must be specially summoned for the purpose, "A.B., C.D., E.F., and so on, are in arrear with their Income Tax; will you give me permission to proceed by this method of summary recovery?" I cannot believe that the. General Commissioners of Income Tax in this country, busy men as they are, are going to thank any one of us in the House of Commons if we impose upon them a duty which is perfectly unnecessary, because they could
    1422
    only say to the collector who had laid the facts before them, and who, moreover, has to show that the party in arrears is able to pay: "Proceed with your method of recovery by summary jurisdiction." That is all that they could say. I venture to suggest that, in the circumstances, there can be no injustice to the individual, and no bureaucratic danger such as the hon. Member has suggested. On that account the Amendment is unnecessary, and I hope it will not he pressed.
    Sir HERBERT NIELD: Surely, the Financial Secretary has forgotten—perhaps because he is a Scotsman—that in this country it is customary for rate collectors to have the authority of their finance committee to take proceedings? Lists of defaulting ratepayers are submitted to the Committee, and they authorise by their signature that the men referred to in those lists shall form the subject of an application for summons. The lists are brought before the Petty Sessional benches, and the magistrates, acting upon those lists, grant the summonses. The summonses take a long time to make out, and they are sometimes even prepared by the rate collectors themselves and presented to the magistrates for signature. Why should not what is desired here, and what has been the practice for a great number of years in regard to local rates—and now that the poor rate is merged in the district rate it is all the more satisfactory—why should not that apply equally to the collection of arrears of Income Tax? I quite agree that there should be a summary method, but that is not the point. The point is that the names should be quoted in a list, and there should be specific authority, from the persons entitled to give it, to apply for summonses, in order that the procedure may be put into proper form. It seems to me that that, is not unreasonable, and it would prevent any isolated act on the part of the tax collector, who might he actuated by other than the ordinary official motives.
    8.0 P.M.
    Lieut.-Colonel GUINNESS: The difficulty I see about the Amendment is that the Commissioners would surely be in no position to judge the merits of the case except on the report of the collector. Therefore I do trot think the Amendment would

    1423
    really get us out of the danger which my right hon. Friend has just mentioned. The collector might bring up cases from improper motives where it would be undesirable to take action. I think really that is an argument against the whole Clause.
    Sir H. NIELD: It works extremely well in the other cases.
    Lieut.-Colonel GUINNESS: The other cases are cases that were examined by the Committee that authorised the action to be taken. I think it would be very difficult for the Commissioners to have sufficient knowledge of the cases and I should have thought the hon. Gentleman's argument really was against the Clause as a whole, and that if there is this danger his proper course is to oppose the Clause.
    Mr. SNOWDEN: The effect of the Clause is to apply the practice which is in operation now in regard to the other cases. The right hon. Gentleman below the Gangway has described most accurately the present method of procedure in regard to the recovery of Income Tax arrears.
    Sir H. BUCKINGHAM: The Financial Secretary made reference to quarterly assessments and placed the powers for the new form of collection upon the same basis. But he knows perfectly well that if he wants to make a mistake from the point of view of the collection of Income Tax he will increase the method of the quarterly assessments. It is well known that the result of the quarterly assessments is hardly any more than the expense caused in collecting them. He has weakened his case very much by saying he is anxious to establish a still greater series of collections on the same basis as that on which the quarterly assessments are now collected. My right hon. Friend is perfectly correct in saying that they can only be collected in this way subject to the consent of the superior body, and I cannot imagine that this House of Commons will consent to a Collector of taxes having the supreme and only power to drag a man into the police court for payment of debt. It is hardly conceivable that some sort of restraint should not be put upon such a person. The collector of taxes, a very desirable and necessary person, is appointed by the Commissioners of Taxes. The suggestion of this Clause is that such a person should
    1424
    have supreme power to take summary action against any number of individuals for non-payment of Income Tax, and I can hardly believe it possible that this Committee will refuse to grant some control over him. I intend to take the Amendment to a Division because it is to me so obvious that some sort of control, if not that which I have suggested, must be imposed upon anyone who has such very great powers as this Clause would give.
    Mr. D. HERBERT: As far as I can see, it is not very likely that the Chancellor of the Exchequer has a very rooted objection to the Amendment, and I should like to say a word in support of it. One argument put forward was that the General Commissioners would do nothing but receive the lists from the collector and sign them, and would not know anything about the details. Speaking as a Commissioner myself with considerable experience in that capacity, I do not think that is an argument which can fairly be put against the Amendment. The Commissioners know their tax collectors, and they will know in many cases whether the collector is one whose list they can reasonably accept There are certain tax collectors who have one kind of reputation and others who have another kind, and if and so far as it may be necessary for the Commissioners to go into individual cases, they have a very efficient assistant in the person of the clerk to the Commissioners. I imagine that what the Commissioners would do would be not really to take the collector's list and say, "Is this all right" but to say to him, "You must submit your list to our clerk." They would instruct the clerk to go through it and they would take his advice in the first instance as to whether the authority should be given or not. Unless there is some very much stronger objection to the Amendment than I have heard yet, I hope the Government may be inclined to accept it.
    Mr. SNOWDEN: This, after all, is not a very important matter, and I do not want to stand on the strict letter of the Clause. I will give further consideration to the question between now and Report.
    Sir G. COLLINS: I understand the Clause itself gives the collector of taxes certain powers which apply to-day only to the weekly wage earner. I rise to ask whether the concession, if it be one, or the

    1425
    advantage, if it be an advantage, to the other type of Income Tax payer will also be granted to the weekly wage earners so that they and the other classes may receive the same treatment from the collectors of taxes in different districts.
    Sir ELLIS HUME-WILLIAMS: Did I understand the right hon. Gentleman to say that the Income Tax Commissioners are going to consider in all these cases whether the person in default could pay and had not paid or that proceedings will be taken because of the mere fact that the man is in arrear. I understood him to say the procedure would be that the person taking the proceedings would have to be satisfied that the defaulter could pay although he had not so done.
    Mr. GRAHAM: I should not imagine the General Commissioners could go into a question of that kind. I should imagine that if the Amendment were carried the collector could only give a list of people who were in arrear. I think we had better leave it at the promise my right hon. Friend has made further to consider the Clause. As regards the proposal made by the hon. Member for Greenock (Sir C. Collins), I have no hesitation in saying that I hardly think we should be called upon in any circumstances to interfere with the existing arrangement as regards weekly wage earners, because the whole purpose of the Clause is to put other classes of the community on the same cheap and economical basis. I cannot hold out any hope in the direction of a change there. It is the other and the wider point which will be considered between now and Report.
    Mr. GREAVES-LORD: As the Clause stands, suppose there was a man whose Income Tax came to considerably more than £50, but owing to difficulties he was not able to pay the whole at once, though he had reduced by considerable payments, the amount owing to less than £50. It would be open to the tax collector under this Clause, the very day after the taxpayer had reduced the amount due and payable to under £50, to commence proceedings in a Court of Summary Jurisdiction for the remainder. I cannot help thinking if the collector put a list before the Commissioners they might very well say, "This man has apparently had some difficulty. When did he last make a payment?" and if the
    1426
    collector said, "Only two days ago he made a payment of £100," the Commissioners would at once say, "This is obviously oppressive. The man is doing his best to pay, and under the circumstances it is quite improper to issue a summons. "There may be a number of instances of that kind. The Commissioners might ask who and what the man was and what his position in life was reputed to be, and might take a general consideration of the matter. I cannot think any collector of taxes under these circumstances would give incorrect answers or false in formation, but what you would obtain would be the judgment of someone who was not directly interested in the collection upon the question whether the time had come for summary proceedings to be taken. I think that is an extremely valuable matter, and I hope the Chancellor will seriously take it into account.
    Mr. MACKINDER: May I ask the Financial Secretary to the Treasury if the tenour of his reply is that summary action can be taken against a weekly wage earner, while in the case of those whom the new Clause is intended to cover, their names will be sent to the Commissioners, who will decide on the ability or otherwise to pay, while in the case of the weekly wage earner the decision will be taken by the collector?
    Sir H. BUCKINGHAM: We do not want any increase of these quarterly assessment methods. I thank the Chancellor very much for the way he has met me in this matter, but may I utter one word of warning? Obviously the suggestions which will be put before the House on Report will come from the Inland Revenue Authorities, of course, subject to the Chancellor's decision. I should like to warn him that obviously the attitude of the Revenue Authorities to the Amendment will probably not be of a very friendly nature, because I am sorry to say undoubtedly there is a tendency—and Somerset House would be the first to admit it—to encroach upon the privileges and responsibilities of the General Commissioners. When the Chancellor puts this matter before Somerset House authorities I hope he will point out to them that this is not a matter in which the House desires anything but the continuation of the authority of the General Commissioners. With that in my mind I

    1427
    shall only be too happy to accept the Chancellor's offer. I may take it that on the Report stage the same Clause will appear with some Amendment proposed by the Government.
    Mr. SNOWDEN: No, I think that the hon. Member is assuming rather too much. I gave no definite promise that I would put down an Amendment. What I did say was that between now and the Report stage I would take into consideration what had been said in the course of the Debate, and that if I think that some Amendment is desirable and practicable then we will deal with it.
    Sir H. BUCKINGHAM: There will be an opportunity for raising the matter?
    Mr. SNOWDEN: I would suggest that the hon. Member himself might put down his Amendment.
    Sir H. BUCKINGHAM: I quite understand, and ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir H. BUCKINGHAM: This Clause gives greatly increased powers to the Inland Revenue authorities. It is aimed exclusively at the smaller Income Tax payer. As the hon. and learned Gentleman reminded us just now, it might apply to some persons who are paying on large assessments, but, broadly speaking, I think that it is aimed at screwing up the collection of tax from the smaller taxpayer. If that be so, then, in my opinion, such powers are unnecessary. I consider that the small taxpayer, the man with from £500 a year up to £1,000 a year, is the man who has suffered more than any other from the great increase in income tax. As a body, people of that class, I believe, are anxious to pay, and that they should be whipped up like this is rather a scandal, when we know that an enormous amount of Income Tax and Super-tax is outstanding, which the Government have brought forward no measures to collect. If they had brought forward measures for speeding up the collection from the large Income Tax payer, and still more if they had brought forward measures for the collection of Income Tax from those who are at present
    1428
    evading the payment of Income Tax, we should all of us have supported it, but here, curiously enough from the Socialist benches, we have these stinging proposals for still further screwing up the small Income Tax payer, who at present is put to it very hardly to pay any taxes at all.
    For that reason I think that these powers are entirely unnecessary. I do not know whether the Chancellor will be able to say that the arrears of Income Tax among persons of this class are very large or are not. My own impression, from what I have heard, is that the great arrears of income Tax are not from these smaller taxpayers at all, but from the large taxpayer, and I fail to see why the Government should make this demand for fresh powers. That is from the point of view of the taxpayer, but I want also to urge that the Clause should be deleted for an entirely different reason. From the point of view of the revenue itself I consider that the Inland Revenue authorities are making a great mistake in bringing forward this suggestion at all, for this reason. As I pointed out just now, tax collectors, under authority from the Commissioners, can distrain and collect the money due. Under these new proposals the tax collectors might take those who are in arrears to the Police Court and collect the money in that way. We all know how merciful most magistrates are in matters of payment of debt, and it seems to me that if the Inland Revenue authorities are not very careful they are going to make themselves very ridiculous in this matter. A man owing £50 Income Tax will be hailed before a magistrate. He will put forward a very plausible story to the effect that he is very hard up and cannot pay. The magistrate very likely will make an order for £1 a week. As that will happen in numberless cases the position of the Inland Revenue authorities will be ridiculous.
    Instead of collecting the money they will have an enormous number of cases brought before these Courts, and probably an enormous number of judgments will be given for small weekly payments which will make the collection of Income Tax impossible and ridiculous. Not only that, but it will also make the work of the collectors collecting those taxes impossible. At the present time, I can assure the Committee from a great deal of experience, the collectors of taxes are

    1429
    very much overworked—I do not say everywhere, but certainly in London and in the larger centres—and if you are going to place upon the shoulders of these men not only the responsibility, which we have already been discussing, in this matter, but also the work of continuing to keep after large numbers of taxpayers who are in arrear with their taxation in the way which they have to adopt in the case of the quarterly assessments I am very much afraid that this whole system of collecting taxes in many districts will break down entirely. Therefore I suggest, not only from the point of view of the treatment of the small taxpayer, but also from the point of view of general benefit to the revenue that the Government will be well advised to withdraw this Clause.
    Mr. GRAHAM: May I offer a word or two in reply to the criticism of this Clause by the hon. Member for Guildford (Sir H. Buckingham). I think that on consideration he would hardly press some of the arguments which he has just employed, because the whole object of this Clause is first of all to protect taxpayers as a whole against people who are evading payment but who, because of the peculiar position of the legislation at the present time, go on for very long periods without paying at all. May I explain, as regards the weekly wage-earner, that there is this power of recovery by summary proceeding, and all we are doing under this Clause, which was one of the definite recommendations of the Royal Commission on Income Tax, is to extend that summary procedure up to amounts of £50 in order to get rid of difficulties which arise in the method that is now followed.
    I would like to make clear to the Committee that the two remedies at our disposal in the case of large numbers of professional and other people, who do not form the wage-earning class, are, first, distraint, and, if that cannot be employed, there is always the remedy of taking the case to the High Court, with the expense and the other complications that are necessarily involved. As far as we can work the system of distraint, that is the method adopted, but many of these people change from address to address, and they have nothing against which a distraint can be levied with any practical effect. That being so, the only protection for the great mass of the other taxpayers who have done their duty is to resort to
    1430
    the High Court, which entails obviously expense to the Inland Revenue on the one hand, and to these small people when they are called upon to make payment of costs on the other. In point of fact, under our Clause this is a substantial benefit to, people who are in arrears, but at the same time it is a protection for the community as a whole. I do not think the Inland Revenue authorities in this country can be charged with hounding down people who are in temporary difficulties, when I remind the hon. Member that this action can only be brought into being after very considerable delay has already taken place, a delay with which the taxpayers are familiar. They have the protection of that delay at the present time, and in any case they would still have the protection of a refusal by the Justices to take action of this kind unless the authorities were satisfied that they were in fact able to pay. The hon. Member who advanced this Amendment made reference to the evasion of Income Tax and to the arrears of Income Tax, and on both subjects, of course, many of us have taken a strong line in this House in the past, but surely, if we are going to deal with evasion of Income Tax, we want to be perfectly just in the remedies which we introduce, and we must say to the small taxpayer who can pay equally as to the large taxpayer who can pay. "You are called upon to do your duty under the law." I am sure that in operation this Clause, by putting the smaller taxpayers on a uniform basis, will operate for their benefit, and certainly for the benefit of the national revenue as a whole.
    Mr. LAVERACK: There is something to say from the standpoint of the collectors of taxes themselves. They are an estimable body of gentlemen who do their duties splendidly. They are thoroughly underpaid, but that is another matter. It seems to me that this particular matter should be viewed, not merely from the standpoint of the hon. Gentleman who moved the Amendment, but from that of the collectors of taxes themselves. These gentlemen are not permanent officials, to begin with. They are not permanent members of the Civil Service, but they are appointed from year to year, and they have very varied duties to perform. They are not only collectors of taxes, but in some cases, particularly in country

    1431
    districts, many of them have four, five, or six other duties to fulfil. Under such circumstances, the suggestion that these gentlemen should have additional responsibility put upon them, the very grave responsibility of instituting proceedings against people who have not paid their Income Tax, and particularly the poorer people who have not been able to fulfil their obligations, is a very serious one. It would be better, in my opinion, if, instead of putting the screw, not only on the people who owe the Income Tax, but upon the collectors of taxes themselves, we were rather to relax, so far as the collectors are concerned, than otherwise.
    It has been hinted that to some extent there is a temptation in these matters. Some of these collectors receive very poor remuneration indeed, and I heard of one only the other week who was in receipt of the magnificent remuneration of something like £12 a year. It is perfectly true that in many cases they would not dream of instituting proceedings, but, on the other hand, we have all heard of cases in our own constituencies where, for one reason or another, certain people have incurred a little bit of odium, it may be, so far as rate and tax collectors are concerned, and in those cases it is quite possible that a tax collector might he strongly tempted, instead of going to further trouble, immediately to issue summary proceedings. That is a matter that never ought to be put into the hands of a collector of taxes, especially under present conditions. At any rate, he ought to be a permanent civil servant, and he ought also to be in receipt of reasonable remuneration for the tremendous responsibility that he incurs. Taking one thing with another, it seems to me that the whole question is one that ought to be viewed with a great deal of anxious care, and I for one, consider that any departure from the present satisfactory procedure should be viewed with grave misgiving.
    Clauses 23 (Extension of s. 18 of Finance Act, 1923) and 24 (Continuation of 21 of Finance Act, 1923) ordered to stand part of the Bill.

    CLAUSE 25.—(Termination of Corporation Profits Tax.)
    Mr. D. G. SOMERVILLE: I beg to move, in page 14, line 7, at beginning, to insert the words
    "Subject to the right of corporations to submit accounts made up to the thirtieth day of June, nineteen hundred and twenty-four."
    I do not think this Amendment is at all controversial, and I hope the Chancellor of the Exchequer will be able to accept it. I simply want to make sure that there is no doubt in this matter and that business affairs shall have fair treatment.
    Mr. SNOWDEN: The object which the hon. Member wishes to secure by this Amendment is one of which I completely approve, but the hon. Member is evidently not aware that that object can be attained under the existing law. Section 54 of the original Act, the Finance Act, 1920, provides that where the accounts have been made up for a greater or smaller period than 12 months
    "the accounting period shall be such period not exceeding twelve mouths as the Commissioners of Inland Revenue may determine."
    Of course, under that provision, where the accounts are made up to the 30th June, 1924, to determine the accounting period ending on that date, it is the intention of the Commissioners that the date in question should be accepted. I think the hon. Member may take my assurance that his object will be attained under the present law.
    Mr. SOMERVILLE: I ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.
    CLAUSE 26 (Exemption from Stamp Duty on receipts for salaries, wages, and superannuation end other like allowances) ordered to stand part of the Bill.
    CLAUSE 27.—(Exemption from Stamp Duty of securities issued under Treaty with Turkey.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir F. WISE: I wish to eliminate this Clause, which is the exemption from Stamp Duty of securities

    1433
    issued under the Treaty of Lausanne. I fully realise the position of this Clause, and it is only with one object that I and my hon. Friends have put down an Amendment to eliminate it. Perhaps for the guidance of the Committee I might state what is contained in Article 49 of the Treaty of Lausanne. It is as follows:
    "If Turkey shall decide to create new seen securities in respect of her share, the distribution of the capital of the Ottoman Public Debt shall be made in the first instance as it affects Turkey by a Committee consisting of the representative of the Turkish Government, the representative of the Council of the Ottoman Public Debt, and the representative of the debt other than the Unified Debt and the Lots Tures. The new securities shall be delivered to the Commission, which shall ensure their delivery to the bondholders upon such terms as will provide for the release of Turkey from liability and the rights of the bond holders towards time other States which are liable for a share of the Ottoman Public Debt. The securities issued in respect of the share of each State in the Ottoman Public Debt shall be exempt in the territory of the High Contracting Parties from all stamp duties or other taxes which would be involved by such issue."
    It is because I realise that these Stamp Duties may not be chargeable that I hope the Chancellor of Exchequer will not agree to this Clause until he is satisfied with the position of the bondholders, and also in regard to the Decree of Muharrem. I have put several questions to the Prime Minister in regard to this Decree, and I feel that British investors have not been protected sufficiently in regard to the Decree. This Decree in the old clays was really the sheet anchor of Turkish credit, and it has been bought at big price by investors in these Turkish securities. Therefore, I feel that the Decree belongs to the security of these Turkish bondholders. I have no personal interest in Turkish securities, and I have not been asked to move this Amendment. I move it in the hope of protecting British investors in foreign securities.
    This Decree has been in existence since 1875. It was reorganised in 1881, and the bondholder had to accept a lower denomination for their bonds. They were given this Decree as a bargain, and I do feel that before we pass this Clause into law—although if the Treaty of Lausanne is ratified it will be necessary that it should go through—we should have
    1434
    something definite in regard to the position of the Decree of Muharrem and the investors in these Turkish securities. We are so apt, and it has been the case in the past, to ignore British investors in foreign securities. Therefore, I press the Chancellor of the Exchequer as far as he can to protect these investors in foreign securities, especially when a security has been taken away in the existence of which the bondholders have a right as part of their security. This question was raised in another place, and a certain amount of satisfaction was given in regard to this Decree. Turkey has foolishly defaulted in regard to these bonds.
    The CHAIRMAN: I am not quite sure that the hon. Member is in order. The Clause says:
    "Stamp Duty shall not be chargeable op any securities, etc."
    I think he must deal with that point.
    Sir F. WISE: That was the point with which I was endeavouring to deal. I was endeavouring to show that under Clause 49 of the Treaty with Turkey Stamp Duty would not be charged on the new bonds, and I was hoping to protect the investors by suggesting that this Clause should not become law until there was something definite with regard to the security of these bondholders.
    The CHAIRMAN: I do not see how the hon. Member can secure that in this Finance Bill.
    Mr. A. M. SAMUEL: My hon. Friend is objecting to this Clause, and I think rightly so. You rule that he is out of order. My hon. Friend has given reasons why no relief should be given to Turkey, and I submit that he is in order in trying to show that no relief should be given to Turkey, and that, therefore, this Clause should not stand.
    The CHAIRMAN: The hon. Member is arguing that there should be no relief given in regard to Stamp Duty to Turkey. Under the Clause he is in order in discussing that, but he is not entitled to discuss the Decree to which he is referring.
    Mr. SAMUEL: He is advancing reasons why this relief should not be given to Turkey, and in stating his reasons he is drawing an illustration from the Decree of Muharrem.
    The CHAIRMAN: I think the hon. Member is travelling rather wide.
    Sir F. WISE: The decree of Muharrem belongs to the bondholders. By the Treaty of Lausanne we have given up that security for nothing. The bondholders are not even recognised now. The bonds, according to this Clause, are to lose the Stamp Duty. I suggest that this Clause should not become law until the security of the bondholders is specified by the Chancellor of the Exchequer.
    Mr. SAMUEL: It appears that Turkey has been excused her obligations by the operation of the Treaty of Lausanne. What my hon. Friend is trying to do—and I think he is right and I shall support him—is to draw public attention to the fact that the British Government, somehow, usually fails to give any sympathetic support to British investors who have been induced to lend their money abroad, and whose confidence has been abused and their money taken from them. Nevertheless, the Treasury comes along, and says that these people who have robbed British investors should have the advantage of not having to pay any stamp duty on their new bonds, which are to be substituted for the old bonds under the Decree of Muharrem. The Chancellor of the Exchequer will tell me that the more money we invest abroad the more likelihood there is of obtaining employment for our people.
    Mr. BATEY: The less money there for whom?
    Mr. SAMUEL: That is—I hope the hon. Member will not resent what I am about to say—almost a childish observation. We want to increase our export trade. The way in which we can increase our export trade is to give credit to foreign countries, who can take that credit in the form of manufactured goods, and help us. That is just as much an axiom as the law of gravity is an axiom. The payment does not go out in the form of Treasury notes or coin tied up in sacks with string——
    The CHAIRMAN: I think we have had all that before in discussions on other subjects.
    Mr. SAMUEL: I think the Treasury shows very little appreciation of the difficulty of the British investor when it comes along and makes a proposal like
    1436
    this to excuse these people abroad. Their efforts ought to be directed towards helping British capital abroad. It is in order to make a protest against the action of the Treasury in excusing these people from the payment of stamp duties that we move this Amendment. We ask the Chancellor of the Exchequer, what is his view? Why should he give this advantage to these Turkish people, seeing that they have taken our capital and abused it? I have no personal interest whatever in Turkish securities.
    Major KINDERSLEY: I raised a similar point on the Treaty of Lausanne as to the treatment that some of our people have received. Therefore, I support my hon. Friends in regard to the deletion of this Clause. I do not see why Turkey should escape these stamp duties until justice has been done to the bondholders.
    Mr. W. GRAHAM: I cannot help feeling that there is some misunderstanding on this subject. This question arises from the division of territory following the Balkan Wars and following the Lausanne Peace Treaty. It simply amounts in practice to a provision in respect of the division of the pre-War Ottoman Debt. It is believed that under the redistribution of territory it may be necessary to split up, say, £100 of pre-War Ottoman Debt, into some smaller portions making up that sum. The Commission took the view that it would be inequitable to impose Stamp Duty upon the mere replacement of the original bonds. That is all that is at stake so far as this Clause is concerned. Of course the practical difficulty with us to-night is that this is merely carrying out one of the Clauses of the Treaty of Lausanne, to which, I am afraid, we are bound. If I argued for a week I am not aware that I could give additional information. That is a simple explanation of what we have to do. The House will realise that I could not possibly go into the Decree of Muharrem, which was discussed indirectly while the Lausanne Treaty was before the House. In any event, those are largely matters for the Foreign Office rather than for us. Our position is confined to implementing our bargain under the Treaty of Lausanne by exempting the pre-War stock.
    Mr. SAMUEL: Is it provided in the Treaty that they are to pay no Stamp Duty?
    Mr. GRAHAM: Perhaps I had better read the precise words of Article 49—
    "The securities issued in respect of the share of each State in the Ottoman Public Debt shall be exempt in the territory of the High Contracting Parties from all stamp duties or other taxes which would be involved by such issue."
    Mr. SAMUEL: The Foreign Office has simply sacrificed the British taxpayer's interest; it has shown a blind eye to the position of British investors.
    Clauses 28 (Provision for quarterly payments of savings bank annuities), 29 (Continuance during current financial year of s. 58 of 10 and 11 Geo. 5, c. 18) and 30 (Construction, short title, application and repeal) ordered to stand part of the Bill.

    NEW CLAUSE.—(Extension of s. 14 of 63 and 64 Vict., c. 7, to all members of His Majesty's land, sea and air forces killed on service.)
    (1) The provisions of Section fourteen of the Finance Act, 1900, under which, as amended by subsequent enactments, relief is given in respect of the death duties payable on property passing on the death of certain persons killed in the War of 1914–18, shall, subject to the provisions of this Section, have effect in the case of persons, being persons to whom this Section applies, who, in the case of soldiers on the recommendation of the Secretary of State for War, in the case of sailors on the recommendation of the Admiralty, and in the case of airmen of the Secretary of State for Air, are certified as having died from entices directly attributable to service conditions as they have effect in the case of persons killed as aforesaid.
    (2) The persons to whom this Section applies are the members of His Majesty's land, sea, and air forces.
    (3) This Section shall apply in the case of any persons dying from any such causes as aforesaid arising at any time after the eleventh day of November, nineteen hundred and eighteen, and before such date as His Majesty may by Order in Council fix.—[Sir John Marriott.]
    Brought up, and read the First time.
    Sir J. MARRIOTT: I beg to move, "That the Clause be now read a Second time."
    I hope there is reason to suppose that the Clause will meet with the sympathetic consideration of the Chancellor of the Exchequer. I am sorry not to see in his place the Secretary of State for War, but
    1438
    I hope that he has had an opportunity of conferring with the Chancellor of the Exchequer in regard to this Clause. Our object is to remove what I believe the whole House will regard as a very grave injustice, not to say a gross anomaly. What we desire to do is to extend the provisions of Section 14 of the Finance Act of 1900 to all members of His Majesty's Forces, whether soldiers or sailors or airmen, who are killed on active service. The purpose of Section 14 of the Finance Act of 1900 was to give certain relief to the widows and the lineal descendants of officers and men killed in the Boer War. As far as I can remember, that was the first Statute relating to death duties on the estates of soldiers who were killed on active service. In the Finance Act of 1900 that relief related only to estates which were under £5,000 in value. Many hon. Members will remember that the procedure which was laid down by the-Act in order to obtain the remission of duties, was for the Secretary of State to give a recommendation to the Treasury that the soldier was killed on active service. The Treasury could then remit the duty. This Section of the Act applied to all wars, not only to the Boer War. Another important point is that the Clause was made retrospective to 11th October 1899, which was the day on which the Boer War legally commenced.
    That was the position down to the outbreak of the Great War in 1914. Early in the Great War what was known as the Killed in War Act was passed. That Act extended the relief in respect of persons who fell in the Great War, not only to the widows and lineal descendants, but to the lineal ancestors of those who fell in the War. It also made the Act of 1900 applicable to all estates of whatever amount. But that extension referred only to the cases of soldiers who were actually killed in the Great War. We had further legislation on the subject in the Finance Act of 1915, Section 46 of which extended ate relief to Legacy and Successive Duty as well as to Estate Duty. Then a further remission was granted by the Finance Act of 1919. By Section 31 of that, Act the period which was referred to as 12 months previously was extended to three years. Still further relief was given by the Finance Act of 1918 by Section 44, of which the relief was extended to brothers and sisters, as well as descendants of

    1439
    brothers and sisters of any soldier killed in the Great War. I come now to the legislation of three years ago, which is important for the case I am putting to the Committee. Section 43, Sub-section (1) of the Finance Act, 1921, runs as follows:
    "The provisions of Section fourteen of the Finance Act, 1900, under which, as amended by subsequent enactments, relief is given in respect of the death duties payable on property passing on the death of certain persons killed in the present War, shall, subject to the provisions of this Section, have effect in the case of persons being persons to whom this Section applies, who die from causes arising directly out of the present state of disorder in Ireland as they have effect in the case of the persons killed as aforesaid."
    9.0 P.M.
    Sub-section (4) of that Section made the provision retrospective to the 31st December, 1918. It will be observed that in these Acts no reference whatever is made to India. There was a reference to the Boer War, which extended relief of this kind to persons who died in all wars; then there was the Great War of 1914 and the succession of Acts passed in reference there to, and, finally, in 1921 we find this relief extended to those who died in the disorders in Ireland. I want to bring to the notice of the Committee a case which occurred on the Indian Frontier last year. It is the case of two very gallant officers, Major F. Anderson, D.S.O., M.C., and Major Norman Orr, D.S.O., both of the 2nd Seaforth Highlanders, who were killed on the frontier of India in the early part of last year. After the deaths of those two gallant officers an application was made to the War Office in the usual form by the representatives of the respective estates asking the War Office to make the appropriate recommendation to the Treasury in order that the duties might in the case of these estates be remitted. That action was taken, and these two particular cases were referred by the War Office to the India Office and the India Office, in their turn, passed the matter on to the Government of India to have the question decided as to whether Major Anderson and Major Orr were or were not killed in action. I desire to be as brief as possible. [HON. MEMBERS: "Hear, hear!"] It is a matter which, I am sure, must command the sympathy of every Member of the Committee, but of course I will endeavour to meet the convenience of the Committee as far as
    1440
    I can, though I thought I was summarising my statement of the facts almost too severely for the understanding of some hon. Members. I must make clear what happened in this case. The India Office certified to the War Office that these officers had been killed in action and, in consequence of this decision, an application was made to the Treasury for remission of the Death Duties in these cases—as the Estate Duty had already been paid—and on 18th January, 1924, this reply was sent by the Treasury to the representatives of the deceased officers:
    "Gentlemen,—With reference to your letter of the 18th ultimo the notification received from the War Office is to the effect that this case is one which does not conic within the operation of Section 14 of the Finance Act, 1900. As the death of the deceased did not occur during operations connected with the Great War it appears that the various enactments extending the operation of that Section are not applicable in this case and as the property passing on the death of the deceased exceeds £5,000, and the beneficiaries are not the widows or lineal descendants, the conditions of Section 14 of the Finance Act, 1900, are not fulfilled and so no remission of duty is available."
    It would be a gross impertinence if I were to question the law as stated in that letter. What I am trying to do by this new Clause is to amend the law. It will be quite clear to the Committee from the letter which I have just quoted that no remission of duty could be made in these cases because they were not covered by any of the statutes which I have quoted to-night, and it is on that account that I am submitting that the law should be altered. We are not contending that the representatives of these officers have been improperly treated under the law as it stands, but we suggest to the Committee that if the facts were known the Committee would insist on an alteration. I ask the Committee to remember that legislation has been passed with the general approval of all parties in order to include within the benefit of the remission of duties the eases of soldiers and others killed in Ireland owing to the disturbed state of that country in 1921. When that legislation was passed, it was made retrospective to the 31st December, 1918.
    The whole point I want to submit to the Committee to-night is that, if it was possible for this House—no one has questioned the propriety—to extend relief in

    1441
    these cases to those who fell in Ireland, identical relief ought certainly to be extended to those who have died on the North-West Frontier of India, and all ether places within the confines of the British Empire. Therefore, what we are suggesting by the new Clause is that the Sections of the Finance Act of 1900, and subsequent enactments on the question of remission of Death Duties, should be extended to all cases where soldiers die from wounds which are inflicted, or accidents which occur, or disease which is directly contracted while on active service. The effect of the new Clause would be, in my submission, to include any cases where the War Office in the case of soldiers, or the Admiralty in the case of sailors, or the Air Ministry in the case of airmen, certify or recommend to the Treasury the soldier, sailor or airman, as the case may be, has been killed on active service, and that this legislation should be made retrospective to the 11th November, 1918, which, as the Committee will remember, was the date of the Armistice.
    I have tried to put the legal case, and the facts on which I am basing this new Clause, as briefly as possible. I have not raised any question of sympathetic treatment of these officers, but the circumstances under which they met their deaths are well known to a large number, at any rate, of the Service Members of this House, and, I expect, are well known to many other Members of this House. Here is a case where two gallant officers—not in the operations of war, for no war was declared—in the execution of their duties on the borders, met their deaths by the action of those hostile tribes who infest the North-West Frontier of India. With an Empire such as ours, with its wide-flung borders—borders which have to be protected, in the case of the North-West Frontier of India, against disorderly and frequently hostile tribes—we must make some provision such as this suggested in the new Clause for those members in His Majesty's service, be they airmen, sailors or soldiers, who die abroad in the execution of their duty.
    Lieut.-General Sir AYLMER HUNTER-WESTON: I associate myself entirely with what has been said by my hon. Friend who has moved this Clause. He has dealt with it in the general and also in the particular. I want to confine myself, very shortly, to the general case
    1442
    In advocating this new Clause, it will have been observed from what my hon. Friend has said, that we do not advocate any new principle. We merely desire to prevent the cancellation of a measure of justice already accorded to those of our men who fought in the last Great War The principle that it is wrong that the State should benefit financially by ordering one of its armed defenders to undertake a duty which leads to his death, has, I think, been recognised by everybody, and certainly was recognised in the Statute of 1900, which my hon. Friend has quoted. The small measure of relief which was then given to the dependants of those who lost their lives for their country, has since been made more just by various Acts that have been passed in 1914, 1915, 1918 and 1919. All these Acts relate only to those who were killed in the late War. They are not of universal application, as they ought to be, and it is this defect that our Clause will remedy. As already pointed out, in 1921 this principle, the justice of which is universal, was recognised, and was applied in the case of those who, to quote the words of the Act, "died from causes arising directly out of the state of disorder in Ireland." Our Clause, which follows closely the wording of that Act of 1921, would make this just principle applicable, not only to those who died in Ireland, and to those who died in the Great War, but would apply to all members of His Majesty's land, air and sea forces who are killed or die in any country, in any war, at any time, because the principle and the justice of this is universal. It is very simple, it is very just, and it has the immense advantage, from the point of view of the Chancellor of the Exchequer, to whatever party he belongs, that it costs very little.
    The only argument I have heard put forward against it is that soldiers are paid to be killed. That, I think, is not an argument which will appeal to anybody in any part of the House. Our soldiers, sailors, and airmen are all very ready to lay down their lives for their country, if duty calls. They are quite ready to risk their own lives, but they think it unjust that, if they lose their lives in the service of their country, their dependants should be mulcted in the way they are, and the State should benefit financially by their death. You are having difficulty in getting recruits for

    1443
    the defensive forces of the Crown. One reason of that is that members of the profession to which I have the honour to belong, and of all the other defensive forces of the Crown, feel that they are not being fairly treated either by this House or the country at large.
    "For it's Tommy this, and Tommy that, and Tommy go away. But it's 'Thank you, Mr. Atkins' when the band begins to play."
    There is a very genuine feeling, I can answer for among men of all the three Services, that they are being unjustly treated in many ways, and in this especially. To remedy this injustice will cost very little, and I appeal very confidently to the Chancellor of the Exchequer to remove this genuine grievance, and this great injustice, and at the same time at very litle cost.
    Lieut.-Colonel GUINNESS: I would like to add a word in support of His appeal of my hon. Friends, because I think it is merely by an accident that officers who are killed to-day in frontier disturbances, or in the small wars to which our Empire is always subject, lose this benefit, which has been given in the case of the South African War, and extended in the case of the Great War. This remission from estate, legacy and succession duty would be inevitable in the case of any considerable war in the future. It is admitted that the distinction between a large war, where you have to have conscription, and a small war, where you depend upon volunteers, has been swept away by the extension of the principle in the case of the Irish disturbances, where it was given recently in its fullest form to our volunteer army. I think it is very unjust that the family of an officer who gives up his life in this way should suffer by his early demise.
    I would remind the Committee of a point that has not been mentioned, I think, that in cases of estates of the value of £5,000 the law has never given complete relief to anyone killed in war. Under the Killed in War Act., 1914, only partial relief in these larger estates is given, based on the actuarial expectation of life. I think the House will agree that it is wrong that the State should make a profit out of the death on duty of any officer. This amendment of the law would not deprive, on the average, the State of any Death Duties which it
    1444
    would have got, apart from these deaths on duty, because, owing to the actuarial calculations laid down in Section 1 of the Killed in War Act, 1914, they will only be remitted the difference of the Death Duties which would have become payable on a normal expectation of life, and that incurred in the earlier period from death on duty. I appeal to the right hon. Gentleman to make this amendment in the law, because it will go a little towards removing an inequality which is felt very strongly by those who have served.
    Sir BEDDOE REES: I would just reinforce the appeal that has been made by the hon. Members who have spoken so far. I feel sure that we are all in agreement in suggesting that the Chancellor should adopt the Amendment, for it is one which will appeal to the sympathetic nature of the Chancellor himself. For once the matter of cost need not come into consideration, for the Amendment will involve only a very small cost, I think I express the opinion of those who sit on the benches beside me in adding to the appeal of the Chancellor to at least accept this Amendment, if no other.
    Mr. SNOWDEN: The hon. Gentleman the Member for York (Sir J. Marriott), who moved the Amendment, made no appeal on the ground of sentiment. The hon. and gallant Gentleman the Member for Ayr and Bute (Sir A. Hunter-Weston) said that an argument had been used, or might be drawn from this proposal, to the effect that the soldier was paid to be killed. That would be an extremely brutal way of putting an argument in which there is a certain clement of truth. What I mean by that is this—and I am quite sure the Committee will not misunderstand me as minimising the dangers in the life of the soldier—but these various matters are taken into consideration in fixing the soldier's emolument [HON. MEMBERS: "No, no!"]
    Major-General Sir J. DAVIDSON: Has that always been the case? Is it not only since the Great War' Is the right hon. Gentleman referring to the pre-War rates of pay?
    Rear-Admiral SUETER: Does what the right hon. Gentleman is saying apply to sailors as well?
    Mr. SNOWDEN: There is no doubt that these various matters are taken into con-

    1445
    consideration, and there is also taken into consideration, in the case of the Army officer, or the Naval officer, the fact of the pay given to corresponding positions in civil life——
    Rear-Admiral SUETER: These men get less than anybody else outside. The statement of the Chancellor of the Exchequer is not accurate.
    Mr. SNOWDEN: I am suggesting a certain correspondence not only with the salaries; for there are other compensating advantages, or attractions, for the officer, such as the social position involved, and so on. Nobody, however, would, I hope, subscribe to the brutal form of the argument quoted by the hon. and gallant Gentleman opposite, if it was meant to imply that in fixing the remuneration of any kind of service that the risks are not taken into consideration.
    I have, everybody will have, a certain amount of sympathy with the objects aimed at in this Amendment. The exemption urged is already included in many Acts of the Legislature to which hon. Members responsible for the Amendment have already referred. Disregarding, however, altogether the point I made just now, I would certainly not advance any argument in opposition to the special consideration of the matter of the death duties upon the estate of the soldier killed on active service. But the hon. Members who are responsible for this Amendment have changed its terms since it was originally put upon the Paper, and it goes much further than the concessions to which reference has been made in the speeches in which they have supported the Amendment. The Amendment certainly goes a great deal further than suggested by the right hon. Gentleman who spoke last. May I direct the attention of members of the Committee to Sub-section (1) of the Amendment and the last lines? The whole of the contention of those who put forward the Amendment was that these should be men who were killed upon active service. Yet they state in the Amendment
    "in the case of soldiers on the recommendation of the Secretary of State for War, in the case of sailors on the recommendation of the Admiralty, and in the case of airmen of the Secretary of State for Air, are certified as having died from muses directly attributable to service conditions."
    Sir A. HUNTER-WESTON: This is actually copied from the Act of 1921,
    1446
    which is the law of the land—directly attributable to the disorders in Ireland.
    Mr. SNOWDEN: Quite so; but the circumstances of that Act were very exceptional.
    Sir A. HUNTER-WESTON: No more than the case which has been quoted by my hon. Friend, and where on the Indian frontier, Anderson and Orr were shot on actual service. Under present conditions they cannot be brought within the scope of the provision which speaks of them as being killed while in performance of their duty—therefore their death being "directly attributable to service conditions."
    Mr. SNOWDEN: This was what I was going to say, "Attributable to service conditions'' may mean a great deal. It may mean the case of a man who has died from the effects of wounds or of an ordinary disease. The question would be bound to arise whether that disease was or was not attributable to his Army service. I am only mentioning this to show the difficulties which will arise in disposing of the Clause in the form submitted by the hon. Member. The hon. Member may think I am unsympathetic.
    Sir A. HUNTER-WESTON: No, no.
    Mr. SNOWDEN: I am prepared to concede what hon. Members want, but I could not accept the form in which this Clause is drafted. If they will be willing to withdraw it, I will have a consultation with them before the Report stage is reached to see if we can agree.
    Sir A. HUNTER-WESTON: May I say that the question of the form of words is one which has given me considerable anxiety? I need hardly say we will be only too glad to accept what the Chancellor has said, and withdraw the Clause on the understanding that we have some form of words which we will all desire.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE,—(Provisions as to bequests to hospitals.)
    Legacy and Succession Duty shall not be leviable on testamentary bequests made to hospitals carried on in the public interest.—[Captain Viscount Ednam.]
    Brought up, and read the First time.
    Viscount EDNAM: I beg to move, "That the Clause be read a Second time."

    1447
    I wish to express the sincere hope that the Chancellor of the Exchequer will see his way this year to make this comparatively small but, so far as the voluntary hospitals are concerned, very reasonable concession. I know the right hon. Gentleman is in favour of this concession, as is also the Prime Minister, and the Financial Secretary, because I think they voted for it when I moved this Clause last year. The British Hospitals Association have asked me to put forward their claim again this year, and I would like to remind the right hon. Gentleman of the wide sympathy with which this Clause was received on all sides of the House last year. The financial position of the voluntary hospitals of Great Britain still refermains extremely critical. The total debt of the voluntary hospitals last year amounted to £700,000; that in the London area alone amounted to £171,000. I have been informed by the King Edward Hospital Fund, which controls the finances of the hospitals in the London district, and also by the British Bed Cross Society, which controls the hospitals outside the London district, that although they have been unable yet to arrive at the total figures for this last financial year, they can say now that the total indebtedness has not been reduced since last year. You can still see that the whole position of the voluntary hospitals of this country still hangs in the balance. The whole vexed question of voluntary versus State controlled hospitals is entirely germane to this Debate, but I am not going to raise it. To my mind the first consideration is that our sick and suffering should be properly cared for and have adequate accommodation. The second consideration is whether they should be cared for under a voluntary or a State controlled system. I would like to read the statement which was made in the Report of the Cave Commission on Voluntary Hospitals, which was set up in 1920, and of which the present Postmaster-General was a member. They said:
    "Is the voluntary system worth saving? We are convinced that it is. If that system falls to the ground hospitals must be provided by the public and the expense of so providing them would be enormous. They must then be carried on without the aid of voluntary subscriptions and donations estimated at not less than £3,000,000 a rear and presumably without £1,000,000
    1448
    from endowments which are given to support voluntary hospitals only."
    Personally I agree with that recommendation. If it fails, the whole burden of upkeep of these hospitals will be thrown on to the shoulders of the small rate and tax payers who can at present ill afford to bear it. What is more important still, to my mind, we shall lose the whole of the medical, research, administrative, scientific and organising services which are at present given entirely voluntarily to our hospitals. I am of opinion that at the present time everyone in this country does subscribe to the full capacity of their powers to the voluntary hospitals. That is borne out by the fact that in spite of the increased cost of living and increased taxation donations to the voluntary hospitals have risen since the War by 67 per cent. The Committee may remember that another recommendation of the Cave Commission was an extraordinary grant of £1,000,000 in mitigation of the then total debt which amounted to 1½ millions, and Parliament at that time did in fact sanction a grant of half a million pounds in mitigation of that debt. The Cave Commission did not recommend any form of regular State grant. This is what they said:
    "It has been suggested by some, but by a very small minority of the witnesses, that liability for the hospitals should be taken over by the State or thrown upon the rates or at least that a regular yearly grant-in-aid should be made from one of those sources. In our view the proposal would be fatal to the voluntary system. If it is once admitted that there is an obligation either on the State or the local authorities to make good deficits, hospitals will have lost their incentive to collect and subscribers their inducement to contribute."
    It is obvious that that statement is perfectly true. It may be argued that this concession for which I am asking is in fact a regular grant. Well, it is a regular grant, but it is a regular grant which does not discourage directly the voluntary system. It is a concession which directly encourages the voluntary system. Of course as most of the Committee know it was one of the recommendations of this Commission. They made 13 recommendations most of which have now been carried out. The recommendation in respect of death duties reads as follows:
    "The request is put forward that testamentary gifts to hospitals should be exempt from the 10 per cent. Legacy Duty, We understand that such an exemption is

    1449
    allowed in the United States and is believed to have a marked effect in encouraging bequests to hospitals. There appears to be no good reason why the State should intercept at the source one-tenth of all sums bequeathed for the benefit of the sick and we recommend that these gifts be free from duty. This recommendation applies to Legacy and Succession Duty; but not to Estate Duty."
    The Committee will see that this concession which I am asking for was one of the main recommendations of the Cave Commission. It is, I think, fairly obvious to anyone with experience of the voluntary hospital system that the best way of ensuring the welfare of our hospitals is by encouraging bequests and legacies to them, because dividends upon such bequests and legacies represent the only regular source of income on which they can rely. At the present time those who have the largest debt are the young hospitals which have not yet had time to accumulate such a large amount of bequests and legacies as the old ones. I am on the Board of Management of a large hospital in the North of London—the Royal Northern—which has to cater for the needs of a large and rapidly growing population in North London. We are only a young hospital. We have not yet had time to accumulate those bequests upon which other hospitals rely for their income. Our expenditure during the last two years has amounted to about £80,000 per year. We have an assured annual income of only £2,000, and so £78,000 bas to be raised every year in voluntary subscriptions. We have at the present time a debt of £50,000, and last year we had to close down 80 beds. That means that to-day—and this is literally true, as other hon. Members who represent North London constituencies will testify—there are hundreds and hundreds of patients suffering from disease who require urgent attention and are waiting for admission to the hospital and cannot get it. That is not a right thing.
    I know the right hon. Gentleman will realise and sympathise with the constant anxiety that is caused by a debt of this magnitude and the way in which it is bound to cut at the very roots of the efficiency of the hospital. I am also on the Board of Management of a large hospital in the Midlands and exactly the same condition of affairs exists there. It is a young hospital which has to cater for a large and growing district. It has not accrued sufficient bequests and it has
    1450
    consequently a debt of £10,000. These debts are not the fault of the hospitals, they are entirely due to increasing costs during and since the War.
    I want to touch on the cost of this concession. I have been carefully into the figures with the British Hospitals Association, the Red Cross Society, and King Edward's Hospital Fund, and, as far as we can see, the concession will cost between £80,000 and £130,000 per annum. For that sum you will ensure the welfare of the sick and suffering; you will insure that there shall be adequate accommodation which does not exist for them at present; you will also ensure the life of the voluntary hospital system; you will ensure against throwing this enormous burden on the shoulders of the ratepayers and taxpayers who will have to bear it if the voluntary system fails. We ask for this concession only for a certain period—until such time as the hospitals have again found their feet. These had times are only clue to the War and to the high costs, but soon the hospitals will be able to start, again, it is hoped, with a clean sheet free from debt. It is a wise concession well worth making.
    There is one final argument which I have no doubt the right hon. Gentleman will put forward, and that is that if he grants this concession to voluntary hospitals he must also extend it, to other charities. It seems obvious to me that the hospitals are not on the same footing as other charities. They are our first consideration. A precedent distinguishing them from other charities already exists in the special grant which was made in 1920 by Parliament on the recommendations of the Cave Commission of £500,000. Of course, if our voluntary hospital system broke down through financial difficulties, it would be a tragedy of the first water; it would increase suffering and it would increase expense. If, say, a society for providing homes for stray cats or some similar purpose broke down it would be a tragedy, no doubt, for the cats, but it could not be put on the same footing as our hospitals. I should like to appeal to hon. Members in all parts of the House, and especially to those below the Gangway, many of whom supported me last year, to support the British Hospitals Association and the voluntary hospitals of Great Britain in this claim, which seems to be wise, just and reasonable.
    Lieut.-Colonel FREMANTLE: I do not want to spend a long time in advocating this Clause, because I think it is fairly obvious that it appeals to the heart of everyone in every quarter of the Committee, and even to those on the Treasury Bench, if they have hearts left. I know, however, that Chancellors of the Exchequer have to leave their hearts with their hats in the outer Lobby when they come into the Committee to discuss the Finance Bill. I want to suggest one definite argument why we should give this relief to hospitals which is not given to other forms of charity. I cannot help thinking it will be generally agreed that the hospitals are an absolute necessity of our modern civilisation. If charitable efforts were to fail there is not the least question that there would be an overwhelming demand for the hospitals to be supported and maintained and extended out of the rates and taxes—partly out of one and partly out of the other. That is not the case with other charities. They will come or go according to the amount of goodwill there is behind them, but the hospitals make such a tremendously increasing demand on the charitable public that if voluntary efforts were not forthcoming there is no question the same amount would have to be obtained from the rates and taxes, and, therefore, you will see that the charitable contributions to hospitals are not on the same footing as the rates would be if they were devoted to the same purpose. There is no doubt about it that ninny contributions out of the rates by Poor Law authorities towards the hospital funds are made at the present time, and they do not pay any tax, and the money is contributed straight out of the rates. Therefore it seems to me that there is a case for the money given from voluntary sources for the support of hospitals being free from taxation. I hope the argument has been made quite clear. There is no question that it means one of two alternatives.
    Recently there was a conference on the voluntary hospital system summoned by the Labour party to which Members of all parties were invited, and at that conference, which lasted three or four days, a definite statement was drawn up by the Labour party in which they declared that although they believed that the system of hospital provision should be through the municipality or the State, at the present
    1452
    moment they considered voluntary hospitals were indispensable, for nowhere could you get anything to replace them at the present time or in the near future. Therefore you are bound to fall back upon the present system. The voluntary system is essential and speaking for the medical profession, almost without exception, between the two alternatives, so long as you can keep up the voluntary system you must have it, because it is preferable to any other system. If the Labour or the Socialist party believe it is essential to keep up the voluntary hospital system, surely the Government might stretch a point to encourage voluntary efforts in order to keep up the voluntary system.
    Sir CHARLES BARRIE: I should like to support the views which have been expressed on this question, and I wish to assure the Chancellor of the Exchequer that those views are generally held by those who sit on these benches. I happen to be a past chairman of one of the largest hospitals in Scotland, and I can confirm all that has been said by the hon. and gallant Gentleman who has just sat down with regard to feeling about voluntary hospitals. It would be lamentable if this country was to allow its hospitals to be put on the rates, or that the money for supporting them should have to be provided by the State. I have taken the opportunity when abroad to see other hospitals which I have heard very much about, and where I was told that the State system was the best. I am not a doctor, but very often a layman can find good reasons against views which are held by medical men, and what I have heard from medical men on the Continent in favour of the State system, is not borne out by the practice in this country.
    Again I have found patients using the hospital in this country much prefer that they should be on the voluntary rather than a State system. I have found that view expressed by all sections of the community. In the hospital of which I was the chairman we used to have many private patients, and they all spoke magnificently of the way the work was carried out under the voluntary system. I think it would be a thousand pities if the charitable feelings of those members of the community who can afford to support hospitals were shut up, Large

    1453
    sums are given every year by people and by organisations for the upkeep of our hospitals. Not only this, but in many towns where there are large mills and factories they have a system whereby each worker pays 1d. or 2d. a week in support of hospitals, and they all feel that these hospitals are really their own because they contribute towards their upkeep, and thus make provision for the day when they may require treatment themselves. I hope all sections of the House will support the views which have been expressed in this debate, and press the Chancellor of the Exchequer to make this very small concession. I am told that only something like £120,000 is involved. [HON. MEMBERS: "It is more."] Even if it is more than that sum, if you have to put the hospitals on State funds it will cost far more. I hope this proposal will receive support from all quarters of the House and will be carried.
    Lieut.-Colonel SPENDER-CLAY: I wish to say a few words in support of what has been said by the hon. Member who has just sat down. The Treasury, quite apart from any other consideration, should give this concession, because nothing could be more expensive than placing the whole of the hospitals on the State. No Government could remain in power if the hospitals were closed down for want of funds. There is nothing more remarkable than the extraordinary desire which exists amongst charitable people to help each other, and the hospitals are a very fine example of British charity. Anybody who has had anything to do with our hospitals must realise the extent to which men and women will voluntarily give up their time to further the interests of the hospitals in their locality.
    This also has a remarkable psychological effect upon the character of our people, because they are willing to make a great effort for what they deem to be a great cause, and if they had the encouragement which would be given by this apparently small concession we should find that the hospitals of this country would still he maintained by the voluntary system. This concession would very much benefit the people who use those hospitals, and it would not cost the Treasury a very large sum. We have had no answer from the Treasury Bench up to now, and no indication as to how they regard this
    1454
    Amendment, but I cannot help thinking that, not only in the interests of the Treasury itself, but also in the interests of the people of the country as a whole, the Chancellor of the Exchequer would be well advised to accept this Amendment.
    Mr. SNOWDEN: I would remind hon. Members that we are not now discussing the question of a voluntary system or a State system for the hospitals. Apart from the Mover of this Amendment, no subsequent speaker has approached the question which is now before the Committee. The question is whether these hospitals should be freed from legacy duty. That is the only question before us, and I will confine my few observations to that point. I am quite sure there is no hon. Member who is not in agreement with every word which has been uttered in the course of this Debate in regard to the claims of these admirable, beneficial and necessary institutions. The question which has been introduced by the noble Lord the Member for Hornsey (Viscount Edman) is becoming something of a hardy annual. [An HON. MEMBER: "It is a good one, too!"] I remember the Debate which took place last year and I remember the eloquent speeches on this subject which were made on that occasion. I do not remember that one of the hon. Members who have spoken from that side of the Committee to-night, except the Noble Lord who moved this Clause, spoke upon that occasion. The hon. Member for Ilford (Sir F. Wise) has been quite vociferous to-night. He applauded statements by Members who have spoken in support of this Clause, but the hon. Member for Ilford was very silent 12 months ago. The only evidence he gave of his views on this question is to be found in the records of the Division Lobby. Another hon. Member who has spoken in this Debate, and who made a powerful appeal on behalf of the voluntary hospitals, voted, I find, against the Clause which the Noble Lord put forward in terms identical with those of the one which he has just moved. I find that all the hon. Members, except a very few who were absent from the Division, who are now pressing me to make this concession, went into the Lobby 12 months ago and voted against the proposal that it should be made by their Government. I exempt the Noble Lord. He has been consistent in his advocacy of this pro-

    1455
    posal. But the Noble Lord made a most interesting contribution, in a very few sentences, at the close of the Debate 12 months ago. He said:
    "The hospital authorities for whom I speak do not want to divide against the Government; they would not divide against any Government,"—[OFFICIAL REPORT, 2nd July, 1923; col. 183, Vol. 166.]
    Viscount EDNAM: The right hon. Gentleman rather presumes on my sense of honour. I have never said that I am going to divide against this Government. A Division was called last year, but not by me; and if a Division is called this year it will not be called by me.
    Mr. SNOWDEN: The Noble Lord is quite consistent, and I was going to say I was quite certain that he will take the same honourable course on this occasion. This Amendment was opposed last year by the Financial Secretary in the Conservative Government. You, Mr. Entwistle, ruled a little while ago that speeches could not be read in this Committee. Otherwise, I might be tempted to read the whole of the speech that was made in the Debate 12 months ago by the then Financial Secretary. He put the case against this Amendment very forcibly. May I at this point say this—or rather, may I put it in the form of an appeal to the Committee? I know that this Clause would appeal to the sympathy and sentiment of every Member of the House. If we were to discuss it simply as a sentimental or sympathetic matter, we should all agree. But we ought not to allow our sympathies and our sentiments to blind us to reasonable arguments.
    10.0 P.M.
    What is the case here? In effect, the proposal is that the State should subsidise voluntary hospitals—that we should hand over to them public money without any control whatever over their expenditure. In other words, this proposal for the remission of taxation on gifts to hospitals is a concealed subsidy to hospitals. The Noble Lord who is in charge of this Clause estimated the cost to the State at anything from £100,000 to £130,000 a year. I do not agree with the Noble Lord that if this concession were given it would be possible to confine it to hospitals. Let the Committee remember what happened two nights ago, when a sudden defeat of the Government
    1456
    took place. That was upon an Amendment which combined hospitals and philanthropic and other educational associations, and I need hardly say—it is perfectly clear to everyone—that if this were conceded in the case of hospitals, the case would be irresistible for its extension to every other kind of philanthropic institution.
    Viscount EDNAM: I should like again to say what I said in my speech when I moved the Clause, namely, that this distinction was made in 1920, when the Government made a grant to voluntary hospitals, as absolutely distinct from other charities.
    Mr. SNOWDEN: The Noble Lord has anticipated the point I was going to make. I am not going to say now that it is inadvisable that the State should make some contribution to hospitals. What I am objecting to at the moment, and what I am pointing out to the Committee, is that, if it were considered desirable to give this subsidy, this is not the right way in which to give it. Let it be done in an open and straightforward way. Let us come to the House, and say that it is necessary, for the relief of suffering in this country, that these voluntary hospitals should be kept alive, and that their financial anxieties should be lessened or relieved. Let a claim like that be put forward, and I am quite sure the House of Commons will give it sympathetic consideration. But what is this going to do? The Noble Lord followed his statement that this would cost from £80,000 to £130,000 a year by a statement—I am sure he did not mean it—to the effect that this was needed to save the voluntary hospitals of the country. It would be, on the Noble Lord's figure of £80,000 or £100,000, a mere pittance when distributed over the thousand hospitals in the country. It would be something like £80 to £100 each. Does he tell the Committee that the voluntary hospitals depend for their existence upon receiving a subsidy of £80 to £100 each? Not at all.
    There is this further point, which I do not think the Noble Lord touched upon. I do not think the hospitals themselves would gain very much. They would gain next to nothing if this Amendment were carried, but the State would lose a considerable sum, because legacies to hos-

    1457
    pitals are mainly left free of legacy duty. [HON. MEMBERS: "No!"] That is the case. It is no use denying what is common knowledge. A man instructs his lawyer to make provision for the disposal of his property, and says he wants to leave, say, £1,000 to such-and-such a hospital. The lawyer says, "Free of legacy duty?" and he says, "Oh yes, I want the hospital to have £1,000." He wants them to have a certain round sum, and people will continue to leave round sums. The net result would be that the hospitals would gain very little and the State would suffer great deal. The State would lose its £200,000 a year, because that would be the cost even if we could prevent its extension to other institutions, and the voluntary hospitals would gain very little. For two days now appeals have been made to me to concede this and to concede that. The amounts in some cases have been small it is true, but there is an old Scotch proverb to the effect that many a mickle makes a mickle. I might be able to afford one or two Amendments where no very large sum is involved, but I cannot go on doing that. If I do I shall destroy the whole basis of the Budget. To hon. Members on this side of the Committee I make this appeal. I ask them to understand my position. I have not been refusing a number of Amendments in the past two days because I was entirely out of sympathy with them. I want them to understand that I have in this Budget made bigger concessions than have ever been made in any Budget in the past. There are a hundred things I should like to do. There are innumerable, alterations in the incidence of the Income Tax that I should like to make, but they all cost money and we cannot make them all at once. The Amendment I am now asked to concede is a very substantial one. I am compelled to resist it for the reasons I have given—not from any want of sympathy with the hospitals but because I do not believe this is the right way of doing it. It would cost the State a very considerable amount of money without relieving the hospitals to any considerable extent.
    Viscount EDNAM: The right hon. Gentleman has ridiculed this concession and said it would not save the hospitals. Of course, it is not going to be an enormous source of income to the hospitals, but the British Hospitals
    1458
    Association have told me that if it is granted, it is going to give a tremendous fillip to the voluntary hospital system. It will mean the turning point, as to whether the voluntary system will be saved or will not. It means so much to them in that it directly encourages bequests and it encourages people to leave more money than they have done in the past. He also said the Government would be giving away money over the spending of which they would have no control. I think he shows by that that he cannot know very much about hospital administration, because any semi-public money is carefully spent, and if every halfpenny is carefully weighed in any form of administration, I do not suppose it is more carefully spent and controlled than by the voluntary hospitals. Every halfpenny has to be accounted for either to the British Red Cross Society or to the King Edward's Hospital Fund, who have their expert staff of accountants and control every halfpenny of the money. The right hon. Gentleman also said it would be of very little advantage to the hospitals and a very large disadvantage to the State, because people who leave their legacies duty free at present would not leave them duty free in future. I am informed by these associations that there are, in fact, very few legacies at present which are left duty free. When people are making their wills they put aside a certain amount of money for these hospitals, and if they are duty free at present they will still go on leaving the same sums of money, so that not only will the hospitals benefit in that way but we hope it will increase the number of legacies. Then the right hon. Gentleman said: "It is not a good thing to do it in a roundabout way. If you are going to help the hospitals, help them by a direct grant." I have already pointed out that if you help them by a direct grant you are directly discouraging the voluntary system. By this means you are directly encouraging the voluntary system and encouraging these bequests which are essential to the hospitals.
    Mr. MASTER MAN: I only intervene because a speech has already been made from this bench by one of its adornments which I do not think represents the opinion of the majority of the party. I think I may be excused from any

    1459
    accusation of not voting against the Government on what I think has been right on the Finance Bill. This afternoon we tried to get what we thought right and we were defeated by a Conservative-Labour Coalition. [An HON. MEMBER: "Impatient oxen!"] Impatient oxen of the most dismal description. I should surely be unfaithful to every tradition of Liberalism if by whomever such an Amendment was proposed I voted for it. The Chancellor of the Exchequer has said this is a hardy annual, and he mentioned votes of two or three years ago. I have been rather shocked, being of a simple character, by the realisation during the last few days of how many hon. Members voted this side now who voted that side a year ago, and how many Members who voted this side a year ago are voting that side at present. Very reluctantly I find myself driven to the conclusion that the Liberal party appear to be the only honest party. This is not a question of the passing inconsistencies of minds which change during a few months. More than 40 years ago, in one of the historic speeches delivered in this House, Mr. Gladstone himself swept away, by arguments which are as real to-day as they were then, and which I think will be as real as long as any Budget is produced, the demand which was pressed upon him for the exemption of certain limited charitable institutions from the normal taxation of the country, and, of course, he swept it away with the argument, so admirably put by my right hon. Friend. First of all, if you begin with hospitals—and there is no definition given in this Amendment——
    Viscount EDNAM indicated dissent.
    Mr. MASTERMAN: If there is, let me submit to the noble Lord that he must immediately come on to a long series of institutions which are every bit as deserving as hospitals, and are in effect hospitals, child welfare societies and all the others, and this would apply to everything practically which is left to any charitable institution at all. We have a right to say to men who wish to leave their money to these institutions that legacy and succession duties are not levied on any sum under £1,000, and if anyone wishes to obtain interest either in this
    1460
    world or in the next by leaving his money to these institutions he will find that it is perfectly practicable to leave the money free from legacy and succession duties. But it is not right that any institution should be subsidised out of State Funds by the money first of all being due as other moneys are due to the State, from the supply of the general taxation of the country, and then by these particular institutions being exempted from that supply.
    The noble Lord knows as well as I do that we have been talking largely outside this special subject, which he has brought forward with such eloquence and earnestness. We have been talking of voluntary hospitals altogether. He knows that we are as much in sympathy with them as anybody else in this House, but he knows also that it would require a very small proportion of money even of the Super tax payers in this country to supplement the present subscriptions to the hospitals altogether to double or treble the money which he hopes to receive by this, and let him rather apply to the charitable public than to try to produce an amount, which must, of necessity, be placed on some of the other taxpayers of the country, and possibly on the poorer taxpayers of the country. I think that my right hon. Friend has the right to appeal, as certainly, when I was Secretary to the Treasury and assisting in Budgets we did appeal, to the Committee as a whole in connection with the Budget which has been accepted as a whole. We pressed forward—and if we did not press forward, I do not see what reason we should have to be in the House—certain things of which we desire an amelioration in connection with taxation, and in some cases we carried them against the Government, and I cannot see why the Government should consider themselves humiliated by having these things carried against them, or why on the other hand, there should be any particular sense of Parliamentary triumph.
    When my right hon. Friend introduced his Budget, and when I had the privilege both of praising and of criticising it, and when he first definitely announced to the House the minimum amount of his surplus, we criticised it then, and we were supported by eloquent speeches from the bench opposite, on the ground that he had not left himself enough surplus to meet all the claims. Therefore it seems

    1461
    to me that, having made that criticism, we are not in a position to continue to press him to whittle away the surplus of which we said he had not left himself enough If we did that then we ought also to take on ourselves the responsibility of increasing the tea and sugar duties which he is reducing. Because on this question, if you are going to subsidise hospitals from the State you must also demand certain obligations to the State in return for them, and because I think that the right hon. Gentleman has a right to oppose a thing which may lose him £200,000, without any guarantee that the hospitals will get anything like a quarter of that sum, I invite my hon. Friends to support him on this occasion.
    Sir DOUGLAS HOGG: We have just heard from the right hon. Member for Rusholme (Mr. Masterman) that the Liberal party is the only consistent party in this House—[HON. MEMBERS: "Honest!"]—the only honest party too. We shall hope to see presently how far that consistency will carry them to-night. The right hon. Gentleman has told us that this Amendment is contrary to all the sacred principles of Liberalism. I have had the curiosity to look at the Division List for the Division on this particular Amendment at this time last year, and I find, so far as I am able to ascertain from a somewhat cursory inspection, that, not one Liberal voted against the Amendment, and that every Liberal who voted at all voted in favour of it. I find among these dishonest representatives of Liberalism the right hon. and learned Member for Spen Valley (Sir J. Simon), the hon. and gallant Member for Leith (Captain W. Benn), the present Senior Whip for the Liberal party, the hon. Member for West Edinburgh (Mr. Phillipps), and the right hon. Gentleman who was once Minister for Labour (Dr. Macnamara), and, in fact, I think I am right in saying that everybody who calls himself a Liberal voted in favour of the Amendment which the right hon. Gentleman now tells us the only honest party regards as being contrary to the principles of Liberalism. I think the Committee can leave the Liberal party to reconcile its one in consistencies.
    The right hon. Gentleman the Chancellor of the Exchequer, when he was quoting, what is quite true, that several people who are, I hope, going to vote in
    1462
    favour of this Amendment presently voted against it last year, was careful to assure us that he was presently going to tell us how he voted, but unfortunately he forgot to do it. May I supplement the deficiency? Both the Chancellor of the Exchequer and the Financial Secretary to the Treasury voted in favour of the Amendment, but the right hon. Gentleman tells us now that really this is a most ill-advised Amendment, because the hospitals would not benefit. Why did he think they would benefit last year? Surely their position has not changed so much for the better, nor have the munificent habits of would-be testators altered during the last 12 months. If it be true that the hospitals benefited sufficiently last year to make it worth while supporting the Amendment then, why not this year? The fact is that the hospitals, after all, are perhaps the best able to judge whether or not this Amendment would benefit them, and I do not think the right hon. Gentleman can mention any hospital or any governing body of any hospital which shares his view as to this Amendment being of no use. I represent a constituency which, I am proud to say, has a number of hospitals within its confines, and I have had letters and representations from the governors of more than one of them pressing me to support this Amendment because of the great benefit which the hospitals would enjoy from it.
    Mr. T. JOHNSTON: How did you vote last year?
    Sir D. HOGG: I will tell you with pleasure. I voted against the Amendment last year. [HON. MEMBERS: "Come over here!"] If the Committee will allow me, I will tell them why I voted against it. Last year the resistance to this Amendment was in support of a Budget which had been carefully framed and which had given the maximum of concessions which could possibly he given.
    Mr. MASTERMAN: A Budget which left a surplus of £40,000,000
    Sir D. HOGG: I thought the right hon. Gentleman was going to correct something. This year we have a Budget framed by a Chancellor of the Exchequer who is so profligate that he throws away things like the McKenna Duties. The Chancellor of the Exchequer told us that this was a

    1463
    proposal to subsidise hospitals out of public money without taking public control. With great respect to the Chancellor of the Exchequer, I entirely differ from that view. It is not a proposal to subsidise hospitals out of public money. It is a proposal to take a little less of the money of the hospitals for the public Exchequer.
    The position is, as the Committee knows, that when a legacy is left to any institution or any person, the legatee is the person responsible to the Exchequer for the duty. If you leave your money to a lineal descendant, that person has to pay legacy duty of 1 per cent., and the legacy duty rises according to the distance from the testator in blood that the recipient of the legacy may be. In the case of hospitals, the maximum duty of 10 per cent is charged. The real truth is that whereas the State recognising, as the Chancellor of the Exchequer has told us they do, the invaluable work which voluntary hospitals are doing for the public good, says to the hospitals: "You must get money to carry on your work from private benefactions, but if you do get money from private benefactions we are going to tax you to the extent of one-tenth of it." That is a wholly indefensible principle. Nothing but the most urgent public necessity should postpone the need for this reform, and I think that in a year when the Chancellor of the Exchequer has the means which he professes to have this year it will be only fair and right that to these hospitals this very modest concession should be given, in order that they may be helped and relieved to same extent from the difficulties under which they carry on their work.
    Marquess of HARTINGTON: Before this matter goes to the vote I should like to ask the Chancellor of the Exchequer one or two questions. On what did he base his estimate that this concession would cost the country £200,000 per annum. His information is, no doubt, later than mine, but according to the figures which I have been able to get, which are for 1922, the total of legacies for all the hospitals in that year was £772,000. In all probability there were increases last year, but I hesitate to believe that the increase has been so great as to make up the difference and to justify the Chancellor of the Exchequer in saying
    1464
    that the cost of the concession will be £200,000. On what did he base his statement that legacies are generally left to hospitals duty free? It is quite true that in many cases they are. Up to a few years ago it was very much more the practice than it is to-day to do that. The duty is now very much heavier than it was, and in the case of very considerable estates, landed estates especially, it is a heavy charge, and people hesitate more and more to burden their estates with heavy legacies duty free. A person who intended to leave a legacy to a hospital, on going to his lawyer and finding that the hospital would get only a part of the legacy, changed his mind. Thus the State lost revenue. I am interested in a certain number of hospitals, and I have received to-day telegrams urging me to support this Amendment. I shall have no hesitation whatever in going into the Lobby against the Chancellor of the Exchequer unless he makes this very wholesome concession.
    Sir B. REES: I must correct the statement of my right hon. Friend the Member for Rusholme (Mr. Masterman). He certainly does not speak for the whole of the Liberal party. We, who do not agree with him on this question, are perfectly consistent. A large number of us supported the proposal of this Amendment last year, and I shall support it to-night. It is not in the least in conflict with Liberal principles. I hope that Labour Members will be as consistent as we are by voting for the Amendment. I am one of the governors of a very large hospital in the provinces. I can assure hon. Members that the voluntary hospitals deserve all the support that they can get, and if this measure of justice will help them, the House ought to make the concession, which, I believe, the Chancellor of the Exchequer can afford.
    Mr. RATHBONE: The hospitals and other institutions have the benefit of a very considerable concession granted by a previous Chancellor of the Exchequer. I think it was three years ago that the Chancellor of the Exchequer made a provision in his Finance Bill that anyone who liked to bind himself to pay a subscription to a hospital or educational body or religious body, might pay the subscription less the tax. There is a concession there of

    1465
    4s. 6d. in the pound. Furthermore, if he were fortunate or unfortunate enough to be a Super-tax payer, he might, when he made out his Super-tax statement, but in, as a set-off, the gross amount of his subscription. Therefore, if the tax was 5s. in the pound, instead of paying £100 he could pay £75. When he came to make up his Super-tax return he could set off £100 against his Super-tax. I know that hon. Gentlemen will say that this is all very well as far as large subscriptions are concerned but that it will not work for the benefit of the hospitals. I claim that it will. It is perfectly easy in a large town to select a body like the Charity Organisation Society or any other body which is free from duty, pay the guineas to that body and instruct that body to pay the money to the hospitals. Therefore, there is already a very large concession available in this respect which is not generally used, and I think the Chancellor of the Exchequer might employ the argument that until that concession is availed of, he cannot give any more.
    Dr. CHAPPLE: As I am voting to-night on this Amendment in a way different from that in which I voted last year, I hope the Committee will permit me to give an explanation of my attitude. The issues in this House change from moment to moment, and when an Amendment of this kind is likely to undermine the Budget then the issue is not the Amendment but the Budget. You may kill a Budget by means of a battering ram or by nibbling away its foundations, and this is one of many methods by which the foundations may be nibbled away. As this is a Liberal Budget, we Liberals have supported it from its inception. It is Liberal in its origin and in its structure and it will be Liberal in its results. It would be quite possible to support a large number of apparently minor Amendments which yet tend to damage the structure of the Budget—and would ultimately destroy it altogether. A Budget is a structure—sometimes it is a very handsome structure and sometimes a very hideous structure, like the Budget of last year. I am supporting the Budget to-night in voting against the Amendment. I have every sympathy with the Noble Lord the Member for Hornsey (Viscount Ednam), who made such an eloquent and earnest speech, and I congratulate him on the work he does year
    1466
    in and year out on behalf of this cause. Last year he went against his own party on this matter and I supported him then because I was opposing that Budget, but I am supporting this Budget and I am voting on the issue of Budget or no Budget, and I am going to be no party to undermining the Budget.
    Lieut.-Commander BURNEY: I pro-post to vote against the Amendment. It seems to me that the Committee is taking an extraordinary course. To-day we are governed under a minority system, and hon. Gentlemen above the Gangway opposite happen to be in office. Before very long, no doubt, one of the other parties will be in office, and it also may be—probably will be—a minority Government. If it is going to be the practice of each party to endeavour to take political advantage by sniping at minor budgetary estimates, it seems to me we shall arrive at an extraordinarily difficult position. [Interruption.] If other parties do something which is not good for the Government of the country there is no reason why this party should do so. My Noble Friend says it has nothing to do with party politics. If so, why is it that a large number on this side of the House voted against a similar Amendment last year, and a large number on the other side, who are voting against this Amendment to-night, supported it last year? It is for that reason that I propose to vote against this Amendment, because I believe that if this practice continues, we are going to arrive at a most extraordinarily difficult situation so far as the Government of this country is concerned.
    Viscount EDNAM: I want to be allowed to ask the hon. and gallant Member whether he is in favour of the Amendment or not, because he has been arguing entirely against the Amendment. If in favour of the Amendment he ought to vote for it. [Interruption.]
    Lieut. - Commander BURNEY: Last year, so far as my memory serves me, I voted against this Amendment. This year I propose to do the same. The reason voted against the Amendment last year was because I was influenced, perhaps, by the right hon. Members of my party sitting on the Front Bench. I have not changed my view. I believe that if persons wish to leave money to hospitals,

    1467
    they themselves make up their own minds as to the amount they are going to leave. If they wish to leave that amount of money free of duty, they can do so. If, on the other hand, hospitals are to be subsidised, it is, to my mind, idle to suggest that relief of this sort is not a subsidy to hospitals. If they are to be subsidised, the whole matter should be put on a proper systematic basis. If this House makes up its mind that hospitals should be subsidised, that is a perfectly wear point of view, and we can then vote upon it, but this method of pseudo-subsidy, which, at the same time, if it is to continue, may make future government in this country somewhat difficult, is one which is to be deprecated.
    Major COLFOX: I suggest the reason why certain of us voted last year against this Amendment was because the Government of the day told us, and we believed them, that the money was not forthcoming to provide for this remission. This year the Chancellor of the Exchequer tells us also that the money is not forthcoming, but, perhaps, the House has not forgotten that two days ago he resisted an Amendment, which, in his own words, would, if it had been passed, have provided a sum of £1,000,000 annually for the Treasury. Therefore, his argument this time that the money is not forthcoming, obviously, is not well founded, as was the argument of last year's Chancellor. The hon.
    Gentleman the Member for Rusholme (Mr. Masterman) told us that he intended to oppose the Amendment, and that he did not think it right for the House to reduce the amount of revenue available unless in some other direction it was prepared to increase the revenue on some other account. [HON. MEMBERS: "Divide!"] I know that neither he nor his colleagues supported that Amendment which would have that effect, nor did they support another Amendment the effect of which would have been the same—[Interruption.] He knows as well as anyone else—[Interruption]—that, Income Tax is to-day remitted to charitable institutions. Therefore, his argument would have carried some weight to-night if he had been consistent, and if the only honest party had moved an Amendment the effect which would have been to cancel this remission as well as that proposed by the present Amendment. All the arguments against remission of legacy duties are equally applicable against remission of Income Tax. The only two hon. Members of this House who have put forward any arguments against this proposal—the Chancellor of the Exchequer and the hon. Member for Rusholme—are, therefore convicted out of their own mouths[Interruption].
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 148; Noes, 251.

    Division No. 128,]

    AYES.

    [10.48 p.m.

    Agg-Gardner, Rt. Hon. Sir James T.

    Churchman, Sir Arthur C.

    Fremantle, Lieut.-Colonel Francis E.

    Ainsworth, Captain Charles

    Clarry, Reginald George

    Galbraith, J. F. W.

    Alexander. Brg.-Cen. Sir W. (Glas. C.)

    Clayton, G. C.

    Gretton, Colonel John

    Apsley, Lord.

    Colfox, Major Wm. Phillips

    Hacking, Captain Douglas H.

    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

    Collins, Patrick (Walsall)

    Hannon, Patrick Joseph Henry

    Astor, Maj. Hn. John J. (Kent, Dover)

    Cope, Major William

    Harbord, Arthur

    Balfour, George (Hampstead)

    Craig, Captain C. C. (Antrim, South)

    Harland, A.

    Barrie, Sir Charles Coupar (Banff)

    Crooke, J. Smedley (Deritend)

    Harmsworth, Hon. E. C. (Kent)

    Beckett, Sir Gervase

    Cunliffe, Joseph Herbert

    Hartington, Marquess of

    Bellairs, Commander Carlyon W.

    Davidson, Major-General Sir J. H.

    Henn, Sir Sydney H.

    Birchall, Major J. Dearman

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Herbert, Dennis (Hertford, Watford)

    Blades, Sir George Rowland

    Davies, Sir Thomas (Cirencester)

    Hogbin, Henry Cairns

    Bourne, Robert Croft

    Davison, Sir W. H. (Kensington, S.)

    Hogg, Rt. Hon. Sir D. (St. Marylebone)

    Bowater, Sir T. Vansittart

    Dawson, Sir Philip

    Hohler, Sir Gerald Fitzroy

    Bowerman, Rt. Hon. Charles W.

    Deans, Richard Starry

    Hood, Sir Joseph

    Bowyer, Capt. G. E. W.

    Dixey, A. C.

    Howard, Hn. D. (Cumberland, North)

    Brass, Captain W.

    Dixon, Herbert

    Howard-Bury, Lieut.-Col. C. K.

    Briscoe, Captain Richard George

    Duckworth, John

    Hughes. Collingwood

    Buckingham, Sir H.

    Dudgeon, Major C. R.

    Iliffe, Sir Edward M.

    Bull, Rt. Hon. Sir William James

    Eden, Captain Anthony

    Jephcott, A. R.

    Bullock, Captain M.

    Edmondson, Major A. J.

    Jowitt, W. A. (The Hartlepools)

    Burman, J. B.

    Ednam, Viscount

    Kedward, R. M.

    Butler, Sir Geoffrey

    Elliot, Walter E.

    Kindersley, Major G. M.

    Butt, Sir Alfred

    Elvedon, Viscount

    Lamb, J. Q.

    Cassels, J. D.

    England, Colonel A.

    Lloyd-Greame, Rt. Hon. Sir Philip

    Cayzer, Sir C. (Chester, City)

    Falle, Major Sir Bertram Godfray

    Locker-Lampson, Com. O. (Handsw'th)

    Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)

    Ferguson, H.

    Lord, Walter Greaves

    Chadwick, Sir Robert Burton

    Fletcher. Lieut.-Com. R. T. H.

    Lumley, L. R.

    MacDonald, R.

    Rees, Capt. J. T. (Devon, Barnstaple)

    Tattersall, J. L.

    Macnamara, Rt. Hon. Dr. T. J.

    Remnant, Sir James

    Thompson, Luke (Sunderland)

    Maitland, Sir Arthur D. Steel-

    Rhys, Hon. C. A. U.

    Thomson, Sir W. Mitchell (Croydon, S.)

    Makins, Brigadier-General E.

    Richardson, Lt.-Col. Sir P. (Chertsey)

    Titchfield, Major the Marquess of

    Milne, J. S. Wardlaw

    Roberts, Samuel (Hereford, Hereford)

    Tryon, Rt. Hon. George Clement

    Mitchell, W. F. (Saffron Walden)

    Robinson, Sir T. (Lancs., Stretford)

    Vaughan-Morgan, Col. K. P.

    Mitchell, Sir W. Lane (Streatham)

    Ropner, Major L.

    Waddington, R.

    Moles, Thomas

    Russell, Alexander West. (Tynemouth)

    Ward, Col. J. (Stoke-upon-Trent)

    Moore-Brabazon, Lieut.-Col. J. T. C.

    Russell-Wells, Sir S. (London Univ.)

    Warrender, Sir Victor

    Nesbitt, Robert C.

    Samuel, Samuel (W'dsworth, Putney)

    Watson, Sir F. (Pudsey and Otley)

    Newton, Sir D. G. C. (Cambridge)

    Sandman, A. Stewart

    Wells, S. R.

    Nicholson, O. (Westminster)

    Savery, S. S.

    Wheler, Lieut.-Col. Granville C. H.

    Nield, Rt. Hon. Sir Herbert

    Simms, Dr. John M. (Co. Down)

    Wilson, Sir C. H. (Leeds, Central)

    Oliver, P. M. (Manchester, Blackley)

    Sinclair, Col. T. (Queen's Univ., Belfst.)

    Wintringham, Margaret

    Oman, Sir Charles William C.

    Smith-Carington, Neville W.

    Wise, Sir Fredric

    O'Neill, Rt. Hon. Hugh

    Somerville, A. A. (Windsor)

    Wolmer, Viscount

    Pennefather, Sir John

    Somerville, Daniel (Barrow-in-Furness)

    Wragg, Herbert

    Perring, William George

    Spero. Dr. G. E.

    Yerburgh, Major Robert D. T.

    Pilkington, R. R.

    Stanley, Lord

    Pownall, Lieut.-Colonel Assheton

    Stuart, Lord C. Crichton-

    TELLERS FOR THE AYES.—

    Ralne, W.

    Sueter, Rear-Admiral Murray Fraser

    Sir Kingsley Wood and Colonel

    Rawson, Alfred Cooper

    Sutherland, Rt. Hon. Sir William

    Spender-Clay.

    Rees, Sir Beddoe

    Sykes, Major-Gen. Sir Frederick H.

    NOES.

    Ackroyd, T. R.

    Forestier-Walker, L.

    Lambert, Rt. Hon. George

    Acland, Rt. Hon. Francis Dyke

    Gardner, B. W. (West Ham, Upton)

    Lane-Fox, Lieut.-Colonel G. R.

    Adamson, Rt. Hon. William

    Gardner, J. P. (Hammersmith, North)

    Lansbury, George

    Adamson. W. M. (Staff., Cannock)

    Gates, Percy

    Laverack, F. J.

    Alden, Percy

    Gibbins, Joseph

    Law, A.

    Allen, R. Wilberforce (Leicester, S.)

    Gillett, George M.

    Lawrence, Susan (East Ham, North)

    Alstead, R.

    Gorman, William

    Lawson, John James

    Aske, Sir Robert William

    Gosling, Harry

    Leach, W.

    Attlee, Major Clement R.

    Gould, Frederick (Somerset, Frome)

    Lee, F.

    Ayles, W. H.

    Graham, D. M. (Lanark, Hamilton)

    Lessing, E.

    Baker, Walter

    Graham, W. (Edinburgh, Central)

    Loverseed, J. F.

    Baldwin, Rt. Hon. Stanley

    Greene, W. P. Crawford

    Lowth, T.

    Barclay, R. Noton

    Greenall, T.

    Lunn, William

    Barnes, A.

    Griffiths, T. (Monmouth, Pontypool)

    McCrae, Sir George

    Batey, Joseph

    Groves, T.

    McEntee, V. L.

    Black, J. W.

    Grundy, T. W.

    Macfadyen, E.

    Bondfield, Margaret

    Guest, J. (York, W. R., Hemsworth)

    Mackinder, W.

    Bonwick, A.

    Guinness, Lieut.-Col. Rt. Hon. W. E.

    McLean, Major A.

    Bramsdon, Sir Thomas

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Maclean, Nell (Glasgow, Govan)

    Brlant, Frank

    Hall, F. (York, W. R., Normanton)

    Mansel, Sir Courtenay

    Broad, F. A.

    Hall, G. H. (Merthyr Tydvll)

    March, S.

    Bromfield, William

    Hamilton, Sir R. (Orkney & Shetland)

    Martin, F. (Aberd'n & Kinc'dine, E.)

    Brown, A. E. (Warwick, Rugby)

    Harney, E. A.

    Martin, W. H. (Dumbarton)

    Brunner, Sir J.

    Harris, John (Hackney, North)

    Mason, Lieut.-Col. Glyn K.

    Buckle, J.

    Harris, Percy A.

    Masterman, Rt. Hon. C. F. G.

    Burney, Lieut.-Com. Charles D.

    Hartshorn, Rt. Hon. Vernon

    Middleton, G.

    Burnle, Major J. (Bootle)

    Harvey, T. E. (Dewsbury)

    Millar, J. D.

    Buxton, Rt. Hon. Noel

    Hastings, Somerville (Reading)

    Mond, H.

    Cape, Thomas

    Haycock, A. W.

    Montague, Frederick

    Chamberlain, Rt. Hon. J. A. (Birm., W.)

    Hemmerde, E. G.

    Morris, R. H.

    Chamberlain, Rt. Hon. N. (Ladywood)

    Henderson, A. (Cardiff, South)

    Morrison, Herbert (Hackney, South)

    Chapman, Sir S.

    Henderson, T. (Glasgow)

    Morrison, R. C. (Tottenham, N.)

    Chapple, Dr. William A.

    Henderson, W. W. (Middlesex, Enfld.)

    Morse, W. E.

    Charleton, H. C.

    Hillary, A. E.

    Mosley, Oswald

    Church, Major A. G.

    Hindle, F.

    Moulton, Mayor Fletcher

    Clarke, A.

    Hirst. G. H.

    Muir, John W.

    Climle, R.

    Hobhouse, A. L.

    Murray, Robert

    Cluse, W. S.

    Hodge, Lieut.-Col. J. P. (Preston)

    Murrell, Frank

    Collins, Sir Godfrey (Greenock)

    Hodges, Frank

    Naylor, T. E.

    Compton, Joseph

    Hoffman, P. C.

    Newman, Sir R. H. S. D. L. (Exeter)

    Conway, Sir W. Martin

    Hore-Beilsha, Major Leslie

    Nichol, Robert

    Costello, L. W. J.

    Hudson, J. H.

    Nixon, H.

    Cove, W. G.

    Jackson, R. F. (Ipswich)

    O'Grady, Captain James

    Crittall, V. G.

    Jenkins, W. (Glamorgan, Neath)

    Oliver, George Harold

    Davies, Ellis (Denbigh, Denbigh)

    Jenkins, W. A. (Brecon and Radnor)

    Owen, Major G.

    Davies, Evan (Ebbw Vale)

    Jewson, Dorothea

    Paling, W.

    Davison, J. E. (Smethwick)

    John, William (Rhondda, West)

    Palmer, E. T.

    Dickle, Captain J. P.

    Johnstone, Harcourt (Willesden, East)

    Pattlnson, S. (Horncastle)

    Dodds, S. R.

    Jones, C. Sydney (Liverpool, W. Derby)

    Percy, Lord Eustace (Hastings)

    Dukes, C.

    Jones, Henry Haydn (Merioneth)

    Perry, S. F.

    Duncan, C.

    Jones, Rt. Hon. Lelf (Camborne)

    Pethick-Lawrence, F. W.

    Edwards, C. (Monmouth, Bedwellty)

    Jones, Morgan (Caerphilly)

    Phillipps, Vivian

    Edwards, G. (Norfolk, Southern)

    Jones, T. I. Mardy (Pontypridd)

    Ponsonby, Arthur

    Egan, W. H.

    Jowett, Rt. Hon. F. W. (Bradford, E.)

    Potts, John S.

    Emlyn-Jones, J. E. (Dorset, N.)

    Keens, T.

    Pringle, W. M. R.

    Falconer, J.

    Kennedy, T.

    Raffan, P. W.

    Finney, V. H.

    Kenyon, Barnet

    Raffety, F. W.

    Foot, Isaac

    King, Captain Henry Douglas

    Ramage, Captain Cecil Beresford

    1470

    1471

    Rathbone, Hugh R.

    Snowden, Rt. Hon. Philip

    Ward, G. (Leicester, Bosworth)

    Raynes, W. R.

    Spence, R.

    Ward, Lt.-Col. A. L. (Kingston-on-Hull)

    Rea, W. Russell

    Spencer, H. H. (Bradford. S.)

    Warne, G. H.

    Reid, D. D. (County Down)

    Stamford, T. W.

    Watson, W. M. (Dunfermline)

    Richards, R.

    Starmer, Sir Charles

    Watts-Morgan, Lt.-Col. D. (Rhondda)

    Richardson, R. (Houghton-le-Spring)

    Steel, Samuel Strang

    Webb, Lieut.-Col. Sir H. (Cardiff, E.)

    Ritson, J.

    Stewart, J. (St. Rollox)

    Webb, Rt. Hon. Sidney

    Robertson, J. (Lanark, Bothwell)

    Stewart, Maj. R. S. (Stockton-on-Tees)

    Wedgwood, Col. Rt. Hon. Josiah C.

    Robinson, S. W. (Essex, Chelmsford)

    Stranger, Innes Harold

    Welsh, J. C.

    Robinson, W. E. (Burslem)

    Sturrock, J. Leng

    Westwood, J.

    Romeril, H. G.

    Sullivan, J.

    Wheatley, Rt. Hon. J.

    Roundell, Colonel R. F.

    Sutcliffe, T.

    White, H. G. (Birkenhead, E.)

    Samuel, A. M. (Surrey, Farnham)

    Sutton, J. E.

    Whiteley, W.

    Samuel, H. Walter (Swansea, West)

    Terrington, Lady

    Williams, A. (York, W. R., Sowerby)

    Scrymgeour, E.

    Thomas, Rt. Hon. James H. (Derby)

    Williams, David (Swansea, E.)

    Scurr, John

    Thompson, Piers G. (Torquay)

    Williams, Dr. J. H. (Llanelly)

    Seely, H. M. (Norfolk, Eastern)

    Thorne, G. R. (Wolverhampton, E.)

    Williams, Lt.-Col. T. S. B. (Kenningtn.)

    Sexton, James

    Thornton, Maxwell R.

    Williams, Maj. A. S. (Kent, Sevenoaks)

    Shaw, Rt. Hon. Thomas (Preston)

    Thurtle, E.

    Williams, T. (York, Don Valley)

    Sherwood, George Henry

    Tinker, John Joseph

    Willison, H.

    Shinwell, Emanuel

    Trevelyan, Rt. Hon. C. P.

    Wilson. R. J. (Jarrow)

    Short, Alfred (Wednesbury)

    Turner, Ben

    Windsor, Walter

    Simon, E. D. (Manchester, Withington)

    Turner-Samuels, M.

    Wright, W.

    Sinclair, Major Sir A. (Calthness)

    Varley, Frank B.

    Young, Andrew (Glasgow, Particke)

    Smillie, Robert

    Viant, S. P.

    Smith, Ben (Bermondsey, Rotherhithe)

    Vivian, H.

    TELLERS FOR THE NOES.—

    Smith, T. (Pontefract)

    Wallhead, Richard C.

    Mr. Spoor and Mr. Allen Parkinson.

    Snell, Harry

    Question put, and agreed to.

    Mr. SNOWDEN: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    As such good progress has been made, I am able to make this Motion.
    Committee report Progress; to sit again To-morrow.
    The remaining Order were read, and postponed.

    NEW CLAUSE,—(Provisions as to bequests to hospitals.)

      ADJOURNMENT.
      Resolved "That this House do now adjourn."—[Mr. Kennedy.]
      Adjourned accordingly at One Minute after Eleven 'O'Clock.