HC Deb 30 June 1924 vol 175 cc971-1034
Major COLFOX

I beg to move, in page 4, line 37, to leave out from "1916" to the word "shall," in line 42.

This Amendment is really one with another Amendment, which also appears in my name, and applies to the Schedule. With your permission, Sir, I would like to discuss the two Amendments as one, which they really are, although technically down as two. The point of the two Amendments, taken together, is to re-impose a duty on entertainment admission charges of 6d. and under, which, according to the Bill as at present drawn, will be free from tax altogether. The Chancellor of the Exchequer, a few moments ago, said that the various Amendments on the Order Paper would cost the country so many millions for this and so many millions for the other. This Amendment will not cost the country anything; in fact, it will increase the revenue. Therefore, I submit, he ought to look upon it with a favourable eye as being an increase to his revenue, which should be only too welcome to him. With this increase, if granted, much good might be done in various directions, but, I submit, that one very useful way of using it would be to reintroduce the penny postage in this country, which, under the present proposals, is found to be impossible.

A good deal of resentment was felt formerly to the Entertainments Duty on the ground that it pressed more hardly on the cheaper prices of admission than it did upon the more expensive, that is, in proportion. It was quite rightly said that the poorer section of the community had to pay, in proportion to the amount of money which they spent upon themselves, a larger sum in taxation than the richer people. That was perfectly true, and, therefore, my Amendment is drawn to meet that objection, because I propose that for admission up to 3d. the tax should be ¼d., and between 3d. and 6d., ½d. I have taken the trouble to dot down the percentage of tax upon all the various prices of admission as they appear in the Second Schedule to the Bill. It will be noticed that on a 15s. seat 13 per cent. and a fraction is paid; on a 10s. 6d. seat, 14 per cent. and a fraction; on a 7s. 6d. seat, 13 per cent. and a fraction; on a 5s. seat, 15 per cent.; on a 3s. seat, 16 per cent.; on a 2s. seat, 16 per cent.; on a 1s. 3d. seat, 16 per cent.; on a 1s. 1d. seat, 15 per cent.; on an 8d. seat, 16 per cent.; and on a 7d. seat, 14 per cent. There is a fraction in most cases as well, from which it will be seen that a rough approximation of the proportion paid in taxation to the amount paid in admission to the entertainment is round about 14 per cent. Under my proposal, the amount which would be paid in taxation on a 6d. seat would be 8⅓ per cent.; on a 5d. seat, 10 per cent.; on a 4d. seat, 12½ per cent.; on a 3d. seat, 8⅓ per cent.; on a 2d. seat, 12½ per cent.; and on a 1d. seat, 25 per cent.

Therefore, in every case, with the one exception of the Id. admission ticket, which, so far as I am personally concerned, I should be quite pleased to let go altogether, the advantage lies with the cheaper admission tickets, rather than with the dearer ones, as was formerly the case, so that the objection that was raised to the Entertainments Duty last year and formerly, entirely ceases to operate, since the cheaper seats, if my proposal be carried, will get the advantage over the more expensive seats. Further, there can be no doubt, I think, in the minds of unprejudiced people, that entertainment in all its forms is a luxury, and that it is a right principle of taxation that luxury should be taxed; and, further, that it is a right principle of taxation that every citizen of the country should bear his proportionate share of that taxation. I made a speech somewhat on these lines on the Budget, when it was first introduced, and I was told by several hon. Members, in private conversation afterwards, that by so doing I was running a great risk of losing votes in my constituency. Be that as it may, I feel that a principle, if right, should be advocated, whether one is going to lose personally or not. But, since I made that speech, I have had the opportunity of visiting my constituency, and holding a fairly large number of meetings, at each of which I have brought forward this proposal, and have found on every single occasion that it has appealed to the sense of justice and fairness of my audience, who, on each and every occasion, have been glad that I brought the matter forward. Therefore, I would urge the Chancellor of the Exchequer to incorporate my suggestion in his Finance Bill, because of its transparent justice, and also because of the fact that he will thereby increase his revenue. There can be no two opinions in the minds of unprejudiced and fair people that all sections of the community should be prepared to bear their fair proportion of the taxation and expense of this country, and I submit that my proposal would have that effect.

Mr. HOPKINSON

I beg to support this proposal and should like the Chancellor of the Exchequer to give his mind to what is involved. It seems to me, that having at last got, as Chancellor of the Exchequer, a real representative of the old Manchester school to which I myself belong, he should consider what is the bearing of those excellent and sound economic principles on a proposal to reduce the Entertainments Duty. I think if he were to follow up the line of thought I have suggested he might arrive at the same conclusion as I have done. The question really is, if we drop the revenue to be obtained from the Entertainments Duty on the lower-priced seats, where is the money to come from to make up the deficit involved? It appears to me that, ultimately, it will come either from food taxation in one form or another, or from some form of direct taxation, and I venture to submit to him, he and myself being the only two Members of the House who really understand the old Manchester school, that the burden upon the struggling poor at the present time is made far greater if direct taxation be increased. I have worked out what is the weekly contribution per man in direct taxation in my own works, and I find the result very startling indeed. I find, as a matter of fact, that if there were on my business no direct taxation, Income Tax or Super-tax, and no rates, which are another form of direct taxation, the wages of every man I employ would go up by the amount of 17s. 3d. per week. [An HON. MEMBER: "Would they get it?"] Under the system I work they would get every penny of it. It seems to me that any addition to the enormous burden of direct taxation is to be deprecated. At the present time, perhaps, one of the reasons we are suffering from the burden of unemployment is that the supply of liquid credit is distinctly reduced, as compared with the period before the War. The reduction of liquid credit is very largely due to heavy taxation, particularly the Super-tax. I think, therefore, that the Chancellor will probably agree with me this—at any rate, perhaps agree privately, although not in front of the House—that of all burdens which the poor have to suffer at the present day, Super-tax is the most direct load upon the poorest paid labour in the country. For this reason, those of us who are engaged in industry would, if we were relieved from the burden of Income Tax, spend the money thus left to us in riotous living in some form or another! But the money paid in Super-tax is almost invariably what would form new capital.

A little knowledge of the industrial conditions of this country would show the Chancellor of the Exchequer that the Super-tax levied on those who are engaged in the industries of this country is taking away directly the funds which would become further capital, and would be available for the extension of industry and for the relief of unemployment. That being so, a reduction of Super-tax would be of much greater use to the poorest paid workers of this country, and would relieve their burden imcomparably more, because their burden is not so much the low wages as the state of unemployment at the present time. Certainly it would relieve them very much more to reduce the Super-tax by an equivalent amount, than to reduce the Entertainments Duty. I do hope that the Chancellor, who, as I say, probably looks upon these matters more or less as I do; will give his mind to a consideration of this problem; go back upon the policy suggested, and will take an equivalent amount from direct taxation in order that he may restore this most admirable, most fair, and in every way beneficial tax upon the entertainments industry.

Mr. SNOWDEN

I never expected to live to see the day when the hon. Member for the Mossley Division (Mr. Hopkinson) and I would be agreed on any question under the sun. The charm of the hon. Member in this House is that he stands alone. All the opinions he expresses are entirely of his own manufacture. He suggested that we should be in agreement. I am afraid that is not the case. I do not think that on an Amendment of this character it is appropriate to enter into an elaborate discussion of the incidence of direct and indirect taxation The hon Gentleman gave us an interesting statement to the effect that but for direct taxation, and if direct taxes could be abolished, the wages he paid his workmen would be increased by 17s. a week. Might I make a comment upon that statement? When direct taxation was about one-fifth of the amount that it is to-day, were the wages of the workpeople 17s. per week higher than they are to-day? [HON. MEMBERS: "No!"] The hon. Gentleman knows that that was not so. Wages were lower when the Income Tax stood at 1s. in the £ and there was no Super-tax.

Mr. HOPKINSON

Is the right hon. Gentleman speaking of wages in general? Is he referring to district rates, or trade union rates? It is difficult to say offhand, without consideration, whether there has been any actual increase in the real value of wages in the two periods, because my rate is not the district rate.

Mr. SNOWDEN

However, to deal with the Amendment before the House. It is an Amendment which, I admit, is in a somewhat different category to most of the Amendments on the Order Paper, because if it were accepted, it would increase the yield of the revenue. The hon. and gallant Gentleman who moved the Amendment suggested how we might dispose of the additional revenue. I am afraid that he has little idea of the yield of the proposed increase of taxation he suggests by this Amendment. The amount of increase of revenue by the adoption of the proposal of the hon. Member would be under £1,000,000 a year. The cost of penny postage, which he suggested, would be well over £5,000,000 per year. However, the proposal of the hon. and gallant Gentleman cannot be accepted, because it is quite impracticable. He proposes to put on one farthing in a great many cases, namely, those where the admission price is threepence and less. There are millions of people who will be affected by this. Again, it would be quite impossible to adjust the price to this small tax. That is the insuperable obstacle to the adoption of the hon. and gallant Gentleman's proposal. The hon. Member for Mossley spoke of the tenets, theories and principles, of the Manchester School. It is a long time since the theories of the Manchester School dominated political opinion in this country. However, in one great respect the principles of Liberal finance and Liberal taxation was to exempt from taxation altogether a minimum income. I remember Mr. Gladstone on one occasion said something to the effect that it was nothing short of criminal to tax an income which, in itself, was insufficient to provide for the bare necessities of life. The proposal I make to abolish the duty on prices below sixpence conforms to that canon. In one sense an entertainment may not be a luxury; what in the entertainment may be a luxury is the accommodation that is provided. People may pay 6d. to see an entertainment for which other people pay 3s. 6d., others 15s., and so on. These larger prices probably represent luxury. Again, I think that an entertainment, sports, and the like, which will be affected by the abolition of the duty, are in the nature of rational and health-giving things. For these reasons, first of all because it would be quite impossible to work the hon. Member's Amendment, and, secondly, because I desire to relieve taxation upon the poorest part of the population and particularly in relation to certain reasonable means of recreation and amusement, I must ask the House to stand by the proposal made by the Government.

Lieut.-Colonel GUINNESS

The Chancellor of the Exchequer seemed to me to be making too much of the administrative difficulty involved in charging a duty in so low a unit as a farthing, because surely this farthing would not be dealt with by those who go to the entertainment; it would be paid in bulk in the form of stamps or otherwise, which could be arranged by the proprietor of the entertainment. I think also the argument about direct and indirect taxation hardly applies. It might apply if the remission was going to the consumer of the entertainment, but, as I will show in a moment, a great deal of it is likely to stick between the fingers of the proprietor of the entertainment; hence there is really no application of this description of direct and indirect taxation. I do not commit myself in any way to the details of the Amendment which the hon. and gallant Gentleman the Member for West Dorset (Major Colfox) has put down. Personally I had a different scheme in view for insuring that the benefits should be passed on, but I did not put down an Amendment, because I doubted whether it would be in order as it would have increased the charge upon the taxpayer.

But I do sympathise with the object of this Amendment, because there is no, doubt that in the way the scheme has been drawn there is very great danger that a large amount of the benefit will not be passed on. The cinema trade, in the long agitation which they have conducted for the last few years, have been repeating continually that they did not wish to make any money out of the remission of the Entertainments Duty in the form of keeping back the tax which is taken off—that they proposed to get their benefit by getting more people to their entertainment. The schedule which is proposed to the Chancellor makes it certain that the proprietors of entertainments must get some of this money which is being remitted because they cannot give back the halfpennies to the public. It is impossible to give change in the denomination of a halfpenny. In the same way, when you come to charge for admission for sports, it is impossible, where you have to charge a shilling or a multiple of a shilling, to give back a penny. It is quite certain in all these cases a lot of benefit must go, for administrative reasons, to the proprietors. I do not say that the proposal of my hon. and gallant Friend the Member for West Dorset (Major Colfox) will give back to the full to those sections of the public who lose on the admission, but it would achieve a rough-and-ready justice; and I do think, in view of the fact that, in the nature of the case, a great deal of the remission would not be passed on, it would be fair to average out the loss to the public by charging this smaller entertainments duty in this Bill, and so take from the proprietors some part of the admission which would otherwise go into their pockets.

5.0 P.M.

Mr. W. M. ADAMSON

I am inclined to think that the real reason behind the moving of this Amendment is because of the fear hon. Members opposite have of taking something away from the very poorest of those who go to see our picture entertainments. Some of us on these benches look to this proposal as only the beginning of what the Chancellor of the Exchequer is going to do in this direction. The Mover of this Amendment spoke of the Entertainments Duty as a luxury tax. That might be obvious if the hon. Member had in mind 15s. being paid for an entertainment, but the very section to which the hon. Member refers in his Amendment includes only those who pay 6d. and under for admission. In other words we are going to penalise school children who go to the theatre or to see an entertainment of educational value by imposing an additional charge upon them. The very poorest of our population who pay 6d. or less for admission do not call it a luxury. I wonder if the hon. and gallant Member who moved this Amendment has ever sat in a 6d. seat or a seat at less than 6d; if so he would certainly appreciate the luxury of that entertainment. I hope the Chancellor of the Exchequer will refuse this Amendment, and I trust what we have done in the way of a reduction of the Entertainments Duty is merely a beginning of the entire abolition of the tax upon all working-class entertainments in regard to the lower amounts paid for admission.

Major COLFOX

One or two most astounding arguments have been brought forward against this Amendment. The statement, because it was not an argument, was made by the Chancellor of the Exchequer, and by the hon. Member for Cannock (Mr. W. M. Adamson), was to the effect that the Entertainments Duty is not a, luxury tax, and the hon. Member who spoke last said that an entertainment might be a luxury if you had to pay 15s. for admission. Apparently it is a luxury for one man to be entertained, whereas it is a necessity for another, and that seems to me to be a most extraordinary perversion of mind. The Chancellor of the Exchequer said that the difficulty of the collection of these small amounts made the scheme suggested by me unworkable and impracticable. I think my hon. and gallant Friend the Member for Bury St. Edmunds (Lieut.-Colonel Guinness) disposed fully of that argument, as it must be quite obvious that it is quite easy to collect even small amounts by stamps in bulk. We have been told that an argument against this Amendment is that it is criminal to tax the lowest possible income. I would point out that no man, woman, or child is compelled to attend any place of entertainment, and, therefore, you are not compelling anybody by this proposal to contribute to the taxation of the country. I contend that my proposal is the essence of justice, and no sound arguments have been adduced to show that it is either unworkable or unjust, and, therefore, I feel that it is absolutely necessary to take a Division upon it.

Question put, "That the words proposed to be left out stand part of the Clause."

The CHAIRMAN

(having collected the voices): The "Noes" have it.

Major COLFOX

Since you have put the Question, Mr. Chairman, in the form "That the words proposed to be left out stand part of the Clause," and as you have declared that "the Noes have it," the words are now left out.

The CHAIRMAN

I confess, as my attention was drawn at the time to something else, that possibly I have made a mistake.

Mr. MASTERMAN

We challenged the Question on this side and declared "The Ayes have it."

The CHAIRMAN

I did not hear the challenge.

Major COLFOX

You, Mr. Chairman, declared "The Noes have it" in the presence of us all, and, having done that, you cannot go back upon your own decision in this matter.

The CHAIRMAN

If that be so, it will be necessary to put the words in on the Report stage.

Lieut.-Colonel HOWARD-BURY

I beg to move, in page 4, line 44, at the end, to insert the words Provided that no Entertainments Duty shall be chargeable on any agricultural or horticultural show where the Commissioners of Customs and Excise are satisfied that the whole of the profits therefrom are devoted to agricultural or horticultural or educational purposes. The Entertainments Duty was introduced to place a tax upon performances run for profit nearly every day in the year, and it never was the intention to tax occasional agricultural or horticultural shows held once or twice a year not for the ordinary purposes of making a profit. Ever since this tax has been in force it has been more and more realised by making small concessions that these shows are not entertainments, and should not be looked upon in that light. Most of these shows run in the North of England, in addition to having a band, some of them arrange sports, but even if you only arrange a race for school children that brings the show under the Entertainments Duty, and if you have a choir in place of a band at any small show of this kind, it brings that show under the Entertainments Duty.

I think it should be within the capabilities of the Law Officers of the Crown to be able to decide exactly what is an entertainment and give us an accurate definition, so that it will include only those regular entertainments which are run for profit, and not include those which are only occasionally held solely for agricultural, horticultural or educational purposes, such as the promotion of horse breeding, the giving of prizes for allotment gardens, or for increasing the production of vegetables, and other utilitarian purposes for which prizes are given away.

The resultant profit is so small that since the introduction of the Entertainments Duty there has been a deficit at many of these shows, and a great many of them have been given up in consequence. Some of them have been faced with two or three bad years, and the Entertainments Duty has absorbed the whole of the small profits they were making, and they have been compelled to close down. I suggest to the Chancellor of the Exchequer that he should exclude these particular forms of entertainment from this tax. I am sure that many Members of the Labour party would be only too ready to vote for this concession. I would like to read a few words from a speech made by the Lord Privy Seal on this point, in which he said: It would be proper that the Government should recognise that at least those purely temporary and occasional forms of entertainment, not organised primarily for the purpose of making a profit, but for the purpose of carrying on a custom or meeting local necessities, should be entirely exempt from the Entertainments Duty. That was what the Lord Privy Seal said on this point.

Mr. GAVAN-DUFFY

Why did you not do it?

Lieut.-Colonel HOWARD-BURY:

We did not realise how small the concession was until it was too late, and we are now asking for this concession to be increased. Where does the money realised at entertainments come from? It comes from the theatres and cinemas, and the amount realised from the shows I am dealing with is very small indeed, and its imposition is annoying and irritating. We want to encourage these shows, and this duty is very detrimental to their success. The amount required to make this concession is a very small one. The right hon. Gentleman has made a great concession this year in regard to the Entertainments Duty, and he has made it, we might say, for the purpose of vote catching, and I know this proposal of mine is not one likely to attract votes, as only a small amount is required.

Lieut. - Colonel WATTS - MORGAN

There is an election coming on.

Lieut.-Colonel HOWARD-BURY

The Chancellor of Exchequer might see his way to grant this small concession. At times the right hon. Gentleman, I know, is very careful in regard to national finance, but at other times he is extremely reckless. This would only amount to a few thousands a year, and if the Chancellor of the Exchequer can afford to give away £2,500,000 a year that was coming in from the McKenna Duties, he can, surely, afford this. I would, therefore, ask the Chancellor of the Exchequer to continue the concession that was begun last year, and to carry it out fully, so that what are genuinely agricultural and horticultural shows may be exempt from this so-called Entertainments Duty.

Sir THOMAS INSKIP

The Amendment which my hon. and gallant Friend has moved is one which I hope will secure support in all parts of the Committee. I heard the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan), who is so very articulate this afternoon, ask why this was not done last year, and I propose to try to answer that question.

Lieut.-Colonel WATTS-MORGAN

I beg leave to correct that remark. I only said that there might be an election; I did not say anything about last year.

Sir T. INSKIP

The hon. and gallant Member's memory is not so keen as his voice.

Lieut.-Colonel WATTS-MORGAN

Is it quite in order, Mr. Young, for the hon. and learned Gentleman to impute to me a sentence which I never said at all?

Sir T. INSKIP

If the hon. and gallant Gentleman is so very touchy about it, I will certainly withdraw.

Lieut.-Colonel WATTS-MORGAN

It is a question of being accurate; it is not at all a question of being touchy.

Sir T. INSKIP

Then, as I may take it that the hon. and gallant Gentleman would not have asked the question, it must have been one of his neighbours. Perhaps I might suggest that, if all of them keep silence, none of them will have false charges made against them.

Lieut.: Colonel WATTS - MORGAN

Surely, we are entitled to have some respect shown to this side of the Committee, and not to be described as "neighbours," seeing that we are hon. Members of the House just as much as the hon. and learned Gentleman opposite is?

Sir T. INSKIP

I am very unfortunate this afternoon, but I do want to secure the support of hon. Members in all parts of the Committee for this Amendment. Let me suppose that someone asked the question why we did not do this last year. If I may remind hon. Members of the provisions of the Finance Act, 1923, with regard to this point, they will remember that two conditions must be fulfilled before a horticultural or an agricultural show can be exempt. First of all, the society which provides the entertainment must be solely or partly established for the purpose of promoting the interests of any industry; and, secondly, the enter- tainment must consist solely of an exhibition of the products of the industry in question or of materials, machinery, appliances, or foodstuffs used in the production of its products. It was anticipated—and I can speak with some slight authority on this point, because I had a connection with the Finance Bill of 1923—it was anticipated that the new provisions would be interpreted liberally in the interests of the horticultural and agricultural societies, in which all Members of the House are genuinely interested, and that, where there was really no entertainment outside the genuine purposes of such a show, no Entertainment Duty would be charged.

In a particular show in which I am interested from time to time in Wigtownshire, the Wigtownshire Horticultural Society's Exhibition, there has been an illustration of the change in practice, which may or may not have synchronised with the advent to office of the Labour Government, or it may be that there has been a change of some officer; but, of course, I cannot attack the permanent servant, and must make my criticism upon the right hon. Gentleman and his administration. In 1923 the society conducted its show and obtained the exemption, but this year, through following the same procedure, it has been told that it is not entitled to the exemption which it was intended should be conferred upon it by the Act of 1923, for reasons which I am sure will astonish hon. Members. As I have pointed out, such a show has to consist of an exhibition of the products of the industry or of materials or foodstuffs and so on used in the production of its products. The Wigtownshire Horticultural Society is unfortunate enough to have included within its prize-list a number of so-called children's classes, the only reason for calling them children's classes being to limit the age of the competitors. The exhibits in the children's classes include a bouquet of wild flowers, a collection of wild fruit, and a knitted woollen jumper. The next set of classes are eight or ten in number, and include the cooking of four plain soda scones, four potato scones, one home-made loaf, and so on. Other classes are for the exhibition of sections of honey and for toffee and fancy sweets; and the last class which I wish to mention to the Committee is for the knitting, not by children, but by persons of any age, of a woollen or silk jumper.

The administration of the Customs and Excise Department has said that the Horticultural Society of Wigtownshire is not entitled to exemption from Entertainments Duty, on the following grounds. So far as the classes intended for children are concerned, they must, they say, be promoted by some school or educational authority before they can come under the protection of the Statute. The next objection is that the cooking of scones and home-made loaves relates to the promotion of public health, and, therefore, has nothing to do with the horticultural society. The next objection is that the exhibition of sections of honey has nothing to do with a horticultural society, because it pertains to the agricultural interest. The next objection is that, with regard to the exhibition of toffee and fancy sweets—even if all the other objections could be got over as to the inclusion of honey, the baking of scones, the exhibition of a bouquet of wild flowers, and so on—the inclusion of toffee and fancy sweets renders the entertainment one that is not solely in the interests of horticulture, because they belong to the department of public health. [An HON. MEMBER: "What about the jumpers?"] I will tell the hon. Member about the jumpers. The jumpers are objected to by this official—who is careful to write that he is writing under instructions, indicating, if one may read between the lines, that he suspects that all that he is writing is not common sense—this official objects to the jumpers on the ground that he is instructed that they relate, not to the horticultural industry, but to the home industry, whatever that may be.

Mr. MACKINDER

What is the date of that?

Sir T. INSKIP

The date of the exhibition with regard to which I have been quoting the particulars was the 24th August, 1923, and the date of the letter of which I have given the effect to the Committee was the 23rd June, 1924. I suggest to hon. Members in all parts of the Committee that this is really a reductio ad absurdumof this Section. I am fortunate enough to have this illustration, because some of my interests are in that part of the country, and it is a show which concerns a sparsely populated district and excites great interest. The society will be quite unable to continue if this Entertainments Duty is to be levied upon it. I have no doubt, and I do not think that any hon. Member in this Committee will have any doubt, that this particular society and numbers of other similar ones come within the purview of the relief which the House of Commons intended to give. This sort of quibble is unworthy of Parliament, even if the permanent officials are justified in the interpretation which they put upon the words of the Section, and I hope that from that point of view the Amendment of my hon. and gallant Friend will be accepted. If it is not accepted, I have given notice of an Amendment, which I shall ask leave to move in due course, to substitute for the word "solely," in the Act of 1923, the word "mainly," which will enable this Section to be administered in accordance with the dictates of common sense.

Captain BRASS

I desire to support what my hon. and gallant Friend has said in moving the insertion of these words. The Chancellor of the Exchequer is perfectly willing in his Budget to give a general concession, as far as the Entertainments Duty is concerned, to everyone who goes to a cinema or theatre or similar place of amusement. The agricultural or horticultural show is much more a matter of business than of pleasure. A man goes to the cinema or to the theatre because he wants to be amused, but he goes to an agricultural show for a different purpose. He goes there because he wants to exchange ideas with his friends, because he wants to learn something, and also because he may want to compete. He may have cattle which compete with other cattle in the particular show in question, and there is no doubt that these shows have done an enormous amount of good for agriculture in this country. Why is it that we in this country are so far ahead of other countries in the breeding of pedigree herds? I feel firmly convinced that it is due to a large extent to the number of agricultural shows that we hold in this country. It is there that you get this healthy competition, and I myself think that competition is the lifeblood of any industry. Hon. Members opposite may not agree with that, because I think they do not agree with healthy competition quite so much as we do on this side. I do think, however, that the healthy competition of these agricultural shows is a very great help in increasing the efficiency of the industry. This Entertainments Duty does hit our agricultural shows and is harmful to them in a certain degree, and I do think that at the present time, when we are already handicapped in every industry in this country by unemployment, we want to do all that we can to remove any possible handicap on a great industry like the agricultural industry of this country.

Mr. LOVERSEED

The only source of attraction in the very sparsely populated districts like my own is the small agricultural and horticultural shows which are held during the summer months. I have had letters from the promoters of quite a number of the smaller shows in my constituency, pointing out that this tax has a very serious effect upon their undertakings, and I hope the Chancellor of the Exchequer will see his way to accept this Amendment, or otherwise to include in an Amendment the point suggested by the hon. and learned Member for Central Bristol (Sir T. Inskip). I do not wish to labour the point, but I hope the Chancellor of the Exchequer will accept this Amendment, which I believe will have the support of every Member of the Committee who represents an agricultural district.

Major STEEL

I hope the right hon. Gentleman will see his way to accept this Amendment. On all sides of the House we realise that these agricultural shows do a great deal of good. They encourage the breeding of good cattle and promote competition between farmers, and the name this country has got throughout the world for cattle and sheep breeding is, to a certain extent at all events, due to the holding of these agricultural shows. I know very well that there is a very large number, especially of small agricultural societies, which are in rather a bad way. The hon. and learned Gentleman the Member for Bristol (Sir T. Inskip) referred to one society in Wigtownshire. I know of another society, not so very faraway from that county, which is also in a very bad state financially, and I attended their annual meeting last winter, when the question came up whether they could carry on the show again this year. It was pointed out that during the last two or three years there had been a deficit, which was to a large extent caused by the amount the society had had to pay in Entertainments Duty. The principal object of an agricultural show is that the farmers may send their stock there and exhibit and thereby promote the breeding of good stock. Of course, one has to realise that a large number of the people who go to a show are not particularly interested in stock, and that you cannot get a sufficient amount of gate money to make the show pay unless you are going to have some other attraction, and therefore it is necessary that a society should have some attraction in the nature of sports or horse jumping or something of that sort in order to attract the public. The profits of such a society are entirely used for the purpose of carrying on the show, or for some agricultural purpose, and, indeed, the Amendment provides that the Commissioners of Customs and Excise shall not give this relief unless they are satisfied that the whole of the profits are used for some agricultural purpose. In view of the difficulties of so many of these societies, especially the small ones—I am particularly pleading for the small ones—in carrying on their annual show unless some remission is given to them in relation to Entertainments Duty, I would ask the right hon. Gentleman to give the Amendment favourable consideration.

Sir JOHN MARRIOTT

I wish to put in a plea for a class which has not been mentioned in this Debate. I am not so greatly concerned in regard to the great agricultural societies and shows, but I am very intimately concerned to try to get this very small remission of taxation on behalf of the small permanent shows—on behalf of allotment holders. These are people who do not organise shows on a great scale. Their efforts are generally on the most modest possible scale, but they are doing work in our cities of incomparable value. Both in the constituency I now represent and that which I formerly represented there are a very large number of these small allotment holders' societies. They are very closely interested in the Amendments, and I hope the Chancellor of the Exchequer will give it sympathetic consideration.

Mr. GEOFFREY HOWARD

I hope the right hon. Gentleman will see his way to accept the Amendment. Anyone who has any acquaintance with rural districts knows the real cases of hardship that arise. I have had occasion to bring before the Financial Secretary a case of real hardship that happened near my home: a small agricultural show in Yorkshire which, struggling under great difficulties and in bad weather, the previous year had instituted a writing competition for the school children of the village. Not being well up in the forms of procedure they failed to get the leave of the education committee to hold it, which would have exempted them from paying Entertainments Duty. The Excise officer descended upon them and claimed £7, a most serious sum of money for them. I really think this might be done in the case of agriculture and horticulture in the rural districts.

Mr. HANNON

I also should like to support the Amendment. I am the vice-president of an agricultural show which has been in existence for the last 20 years and has done most valuable educational work in the Midland Counties. It has been gathering strength during the past few years, but is particularly handicapped by this tax. We had at the last show something like 12,000 people, who could not have been brought there if certain forms of entertainment had not been provided to attract them, and the educational value of the show would have been far less if we had not got a large number of people present. No one is more sympathetic with the efforts of the rural population to educate themselves than the Chancellor of the Exchequer. All through the country we have small rural shows being organised for the purpose of educating the allotment holders and smallholders in obtaining the highest economical results from their holdings. I agree with my hon. Friend the Member for York (Sir J. Marriott) on the importance of encouraging these allotment and smallholders to make the best of their opportunities, and it would be deplorable if in this House, after all the sympathy we have expressed Session after Session with the smallholders and allotment holders, we should tax them now so as to prevent them making all that possible out of their opportunities. We are all anxious to support these agricultural, horticultural and poultry shows and these small organisations, which serve as an education to a class of people we all wish to encourage, and I hope the right hon. Gentleman will extend his sympathy to the Amendment.

Mr. SNOWDEN

The kind of show to which the hon. Member who has just sat down has alluded is now exempted from Entertainments Duty. It is only when the horticultural or agricultural or industrial society goes outside the purpose for which it exists and makes its exhibition something other than an agricultural or horticultural show or an industrial exhibition that it is liable to the duty. The hon. and gallant Gentleman the Member for Clitheroe (Captain Brass) spoke about the need for encouraging the breeding of pedigree horses. That question is not in the least involved in the Amendment, and if it were carried it would neither injure nor improve the breeding of pedigree horses.

Captain BRASS

I think the right hon. Gentleman realises that a large amount of the money which is necessary to carry on these shows comes from the people who are not breeding the horses but from those who go to see the shows.

Mr. SNOWDEN:

Really, the hon. and gallant Gentleman did not need to remind me of that very obvious fact. I cannot but admire the interest which hon. Members opposite are taking in the matter raised by the Amendment, and I will do some of them the justice to say that when they sat upon this side of the House they did raise this question, and some of them were successful last year in getting a concession, and I would ask them whether the concessions which were given last year are not sufficient to meet every reasonable need. [HON. MEMBERS: "No!"] I am sure they are. The hon. and learned Gentleman the Member for Central Bristol (Sir T. Inskip) gave us the case of a show in his own constituency. I wish he had submitted that case to me. We get a great many complaints of that sort and in a number of cases we are able to give some accommodation.

Sir T. INSKIP

I should be very glad to go to the Treasury and try to get some remission, but I cannot say some of us are encouraged sometimes in these matters. If I had been to the Treasury, I should probably be too late to try to bring some pressure to bear in the matter.

Mr. GEOFFREY HOWARD

The case I put before the Committee was taken to the Treasury, and I got a refusal.

Mr. SNOWDEN:

Probably it was not a good case. Let me remind the hon. Members what the conditions are:

  1. "(a) That the entertainment is provided by a society which is not established or conducted for profit; and
  2. (b) That the society is established solely or partly for the purpose of promoting the interest of any industry (including agriculture, horticulture and live-stock breeding); and
  3. (c) That the entertainment consists solely, apart from a performance of music by a band, of an exhibition of the products of the industry for promoting the interests of which the society exists or of materials, machinery, appliances or foodstuffs used in the production of those products, or displays of skill by workers in the industry in work pertaining to the industry."
Those elaborate regulations were introduced into the law last, year by the Government in which the hon. and learned Gentleman was Solicitor-General, and I submit that they cover everything which can reasonably be regarded as being within the province of an agricultural or horticultural society or an industrial exhibition, and if such a society goes outside provisions which are made here and introduces something altogether extraneous to the purpose for which this society was formed, it is competing in the entertainment business with other entertainments.

May I point out a further result which would accrue from the adoption of the Amendment? At the present time these horticultural or agricultural shows can dispose of their profits as they think fit. They can give donations to local hospitals or to other local charities, as I believe in many cases they do, but if this Amendment were passed, it would limit these societies in the disposal of their profits, because they could only be used for agricultural, horticultural or educational purposes. The interpretation would give rise to many complaints and a sense of injustice. This Amendment would cost a considerable amount of money, and there are other Amendments on the Paper of a somewhat analogous character. Of course, the adoption of the Amendment would cost a great deal less than it would have cost 12 months ago, because a good part of the income from these shows will be exempt from Duty. They will be entirely free unless the charge is more than 6d., and the duty at present paid up to 1s. 3d. will also be less. That will give a very considerable amount of relief.

Captain BRASS

Can the right hon. Gentleman say what the cost would be?

Mr. SNOWDEN

No. It is difficult to say what the exact cost would be but, at all events, it is more than I am in a position to afford. If we were to make a further concession than that which was given last year we should be opening the door still further for claims which it would be difficult to resist. There is an Amendment on the Paper to exempt from Entertainments Duty all entertainments where the profits are devoted to charitable purposes.

Mr. MASTERMAN

So they ought to be.

Mr. SNOWDEN

When we come to that Amendment, I shall have something to say to show that some of these entertainments ought not to be exempt. I would remind the right hon. Gentleman that some enterments which are supposed to be for the purpose of charity are far from eligible in that respect. The Regulations which are in existence are quite sufficient to cover every bona-fide agricultural, horticultural or similar show. The concession in regard to the Entertainments Duty already made will go a long way to relieve these societies, and I cannot afford this suggested new concession, however small the amount involved may be. Therefore, I regret that I cannot accept the Amendment. I do not look forward to the Entertainments Duty being a permanent part of the fiscal system of this country. I have expressed my views upon it on many occasions. It is an irritating tax, a tax which it is difficult to collect, and it is bound to create a great deal of irritation, but I am afraid that we shall have to submit to these irritations until we are in a position to wipe out the tax altogether.

Lieut.-Colonel GUINNESS

I think the Committee will be much disappointed at the very uncompromising and rigid attitude which the Chancellor of the Exchequer has taken up in regard to this admitted grievance. When the hon. Member for Bedford (Mr. G. Howard) brought forward a case and said he went to the Treasury, the Chancellor of the Exchequer said the fact that the Treasury had turned it down showed what an absurd ease it was. I do not think that is at all the reason. I think the inference is not that the case was absurd and not that the Treasury was unreasonable, but that the law as it at present stands is not well calculated to deal with these grievances. It is a most undesirable principle to suggest that Members of Parliament should be always going to the Treasury on these matters. The Chancellor of the Exchequer suggested that it was rather the fault of the hon. and earned Member for Central Bristol (Sir T. Inakip) that his grievance had not been remedied, and that if he had gone to the Treasury it would have been all right. In the next sentence he tells us what happened to another hon. Member who went to the Treasury. The only relief that we can get in these matters is not by going to the Treasury, who can only interpret the law, but by amending the law so as to get the right provisions. It is very unsatisfactory.

Mr. STEPHEN

It was very unsatisfactory last year when you were on this side.

Lieut.-Colonel GUINNESS:

Last year a new system was tried, but that system has proved too rigid. Some limitation must, obviously, be imposed, but after a year's experience it is not unreasonable to try to lighten the burden where it seems to press unduly. Ft is an unreasonable limitation that you shall only be allowed at these shows to get remission of taxation if the entertainment is purely of a, character relating to the industry or interest concerned. The Chancellor of the Exchequer said that it would do nothing to help horse breeding if we allow them to have these entertainments duty-free. It would help horse breeding by obtaining more money for that purpose. It is not suggested that the giving of a variety performance. at an agricultural show, or some other kind of side show, is going to help the breeding of horses, but these agricultural shows cannot be carried out unless they get funds, and they can only get funds by attracting a large entrance from the public. You can only get that public support if you cater for the public. You can then use the money which the public give for an afternoon's amusement for the encouragement of agriculture and horse breeding.

It is reasonable to help agriculture by the modification of the present system. At the same time, I think that this Amendment is very widely drawn. It may be that it would allow such a latitude in entertainments as would enable a really serious leakage in Duty to take place and would allow advantage to be taken by organisations which the Committee has not in view. It might be, as the Chancellor of the Exchequer has pointed out, that this Amendment would be inconvenient in limiting the objects to which the funds raised by such shows might be applied. However, I think he would do well to adopt the alternative of the hon. and learned Member for Central Bristol, to amend the legislation of last year by widening Sub-section (b) of Section 11, which deals with the definition of societies qualified for this concession, and bringing in educational and philanthropic societies, and then, under Subsection (c), enabling the concession to be enjoyed if the entertainment consists mainly of the character laid down. I believe in that way the Treasury will be able to meet the legitimate case that has been put forward on behalf of these shows, and which will be put forward on behalf of charitable, educational and philanthropical entertainments, and that there will be sufficient discretion and sufficient elasticity to avoid any undue leakage of revenue.

Mr. BLACK

I support the claims made on behalf of the Amendment. We who represent agricultural areas know that at these small shows which only last for a day or two in the country districts there is no competition with other entertainments. I was rather surprised to hear the statement made by the Chancellor of the Exchequer that he would be losing a substantial sum of money because these shows would compete with other entertainments in the neighbourhood. The small side shows at these rural agricultural shows are to help them to pay. It is with the utmost difficulty that some of these shows can make a credit balance. If there is a wet day the show is a loss, and in addition to the loss the promoters of the show have to pay Entertainments Duty. I appeal to the Chancellor of the Exchequer to listen to the requests that have been made. I feel very strongly about it, because many societies in my district have sent me letters, and I hope the Mover of the Amendment will carry it to a Division. My impression is that on all sides we shall find a desire that this Amendment should be embodied in the Finance Act. I hope the Chancellor of the Exchequer will say that he will meet the matter in some, way. We are not bound by the phraseology of the Amendment; what we want is the substance.

6.0 P.M.

Mr. SNOWDEN

It is quite evident that there is a widespread, strong feeling upon this matter, and I do not think it would be impossible to meet the kind of grievance illustrated by the hon. and learned Member for Central Bristol (Sir T. Inskip) this afternoon. Those hon. Members who heard the hon. and learned Member will remember that he suggested that in the event of the Amendment, not being accepted or carried he would later move a further Amendment. I am extremely anxious to meet the Committee if it be administratively possible, and if it can be done without opening the door too wide and encouraging an abuse of the concessions which have already been made. If the Committee will allow me, I am prepared to put forward this suggestion—to consider what we can do in the way of amending the Regulations, particularly the third Regulation, in order to cover such a case as that cited by the hon. and learned Member for Central Bristol, and to give a little more latitude than is permitted at the present time, so as not to regard as disqualifying for exemption from duty all those little things to which the hon. and learned Member referred. I am prepared to consider this matter and see what we can do between now and the Report stage, and if the Committee will agree with that I will promise to do the very best I can to see if some accommodation may be possible.

Viscount WOLMER

I would like to try to get some complete understanding as to what the promise of the right hon. Gentleman amounts to. I want the right hon. Gentleman to be under no misconception as to what we are asking for on this side of the House and below the Gangway, because, judging from his first speech, he seems to us to have been under a misconception as to the conditions in which these country shows take place. We have in mind a small country village where the show is an annual event, and the show cannot be made a success unless you bring in these ancillary industries such as children's knitting competitions and the like, which my hon. and learned Friend the Member for Bristol (Sir T. Inskip) detailed to the House. That sort of thing must be made part of the annual show. I believe that it was the intention of the House to include those items last year. The words then put in have been found to be too narrow. All we are asking is that they shall be extended. [HON. MEMBERS: "Agreed!"] I am not going to 'be browbeaten by hon. Members opposite, and if they continue to interrupt speeches of hon. Members on this side it will simply mean that those speeches will take longer.

We are not concerned with the words. Provided that the Chancellor of the Exchequer finds a form of words which will meet the case of the ordinary village show we will be content. From his speech it appears that he has no personal experience of such shows, and has not the slightest conception of the conditions in which they work. Everybody who has had practical experience of these shows knows that it is necessary that all the resources of the village, all the branches of industry and activity in the life of the village must be grouped together in this one show, each department with its own representation. It is of course a country village which is mainly agricultural, but these other things must be brought in, and entertainments are also necessary so as to attract as great a number of people as possible. It is grotesque to say that a show held in those conditions is competing against theatrical and other outside entertainments. If the right hon. Gentleman is going to meet us in substance we are not going to trouble him about the words, but I am not going to be silenced by the barking, bellowings and noise of hon. Members opposite.

Mr. MASTERMAN

I am toe old a hand in this House not to know that it is a good thing to accept a concession when it is given in the temperate spirit in which this has been given by the Chancellor of the Exchequer. I am sure that he understands the point and intends to meet it. There are only two points about which I would like to ask him. The first is, whether the general decision which he will give will cover the subsequent Amendments on the Paper dealing with further modifications of the Entertainments Duty. If it does so it will very greatly shorten this Debate, and we are just as anxious to shorten it as he is. The second is as to the modification of Section (11) of the Finance Act of 1923. The point is whether he could not find it possible to put in a modification as a new Clause, as was suggested by my hon. and learned Friend opposite, instead of leaving it to the Report stage, which may be a hurried procedure. If he could do that there would be no need for us to advance points which some of us consider to be of great importance, points connected with philanthropic, educational and charitable purposes. He may not be able to meet us completely, but he may put down the words of a, new Clause, and we can take a Debate on that.

Sir T. INSKIP

I accept what the Chancellor of the Exchequer has stated, that he would be prepared to insert my word "mainly" in place of "solely." I understand him, with the natural caution of a Chancellor, to say that he is anxious not to insert something which will raise more difficulties, but. I do think that this is a fairly simple Amendment, and if he will put in this new sub-Clause which I propose now, I think that the matter is so simple that, on Report stage, if there is any complication, he will be able to correct it. I think that the Committee generally prefers to settle these matters as it goes along, and I think that my hon. Friends behind me will be prepared to accept what the Chancellor has suggested if he will do it now.

Mr. SNOWDEN

I do not think that it is reasonable to expect me, on the spur of the moment, to see everything which would be involved in an Amendment of this nature. The whole matter shall be fully considered with the object of arriving at a conclusion which will meet the strongly-expressed views of so many Members of the Committee. The question of amending Section 11 of the Finance Act, 1923, to which my right hon. Friend has referred, will have to be considered by the draftsman, but, at any rate, I cannot go further than what I have stated. Before we get to the Report stage there can be submitted to the House the conclusions at which I have arrived.

Amendment negatived.

Mr. ROBERT JACKSON

I beg to move, in page 4, line 44, at the end, to insert the words Provided that no Entertainments Duty shall be chargeable on performances of musical societies where the Commissioners of Custom; are satisfied that the profits derived from such performances are devoted to objects of a musical educational character. My object in moving this Amendment is to remove what is an obstacle to the spread of musical education in. this country. In doing so, I am fortunate in appealing to a Chancellor of the Exchequer who is, I believe, a patron of the musical art. In 1921 the President of the Board of Education set up a Committee on adult education. This Committee in their Report stated unanimously that it would be a good thing for the development of popular musical education to make use of the musical societies that existed up and down the country. I maintain that the operations of these societies are entirely educational, and in that I want no better support than the findings of this Committee on adult education. I do not think that the Chancellor of the Exchequer will advance against the Amendment the argument that it would interfere with the revenue which he derives from other entertainments. On the contrary, I submit that the development which is taking place in the work of these voluntary organisations is creating an additional set of customers for the more professional entertainments from which the Chancellor draws his taxation.

The members of these societies devote a considerable amount of time to the work of rehearsal and practice, especially during the winter months, and they look to their performances as a means of augmenting their income. I submit that their work is of real educational value, and in support of that I would remind the Chancellor that in the agricultural districts of the Eastern Counties this kind of musical effort is spreading to an enormous extent. I am pleased to note that the President of the Board of Education is present. The constituency which I represent is essentially an industrial con- stituency, but it is part of a vast agricultural area and it is also the centre from which a multitude of musical activities may be spread throughout the villages and over our countryside, and if you are going to preserve British agriculture you are also going to restore merry England to your countryside. These societies are doing an enormous amount of educational work, and the incidence of this tax is making it difficult for them to carry on. I know that the Chancellor of the Exchequer may be prompted by his very excellent Financial Secretary to retort that in the case, for instance, of the Glasgow Orpheus Society, that society has bulging profits. I can only say that the Glasgow Orpheus Society is like most Scottish institutions and like most Scotsmen unique, but, on the other hand, if the Chancellor will look at the objects of the society he will find that they are entirely of an educational and useful character. The appeal which I am making has the unanimous endorsement of no fewer than 45 musical associations in the Eastern Counties, with a membership of something like 4,000. All these 4,000 people are keen musicians, anxious to further the cause of music. They hold that the existence of this duty is unduly interfering with their operations. I hope that the Chancellor of the Exchequer will regard the work of these societies as of even greater educational value than the work of fat stock shows.

Mr. SNOWMEN

I regret that I act unable to accept the Amendment. Under the existing law, entertainments for educational purposes are regarded as philanthropic for the purpose of relief from Entertainments Duty, provided that the whole of the expenses do not exceed 30 per cent. of the receipts. This proposal in its general application to all entertainments devoted to philanthropic and charitable purposes is of the same character as other Amendments on the Paper, and it would be quite impossible to accept one without accepting the others. The united effect of them all, from the financial point of view, would be far too great for the Budget to bear. There are also administrative difficulties. If this exemption were allowed for non-profit-making societies, it would be quite impossible to resist demands in favour of wholly educational entertainments. It is very difficult to define what is meant by an educational entertainment. It might be said that a performance of Shakespeare, if carried out by an amateur dramatic society, had an educational effect. Therefore, it would be exempt from Entertainments Duty. Assuming that the patrons of a performance pay the tax, why should the same people going to hear a performance of an oratorio by some local harmonic society be exempt from the tax, and yet have to pay the tax if they hear the same oratorio by professional people? I do not think that that can be justified at all. Insuperable difficulties would arise in defining what was a performance of an educational character. As I said on previous Amendments, incongruities and hardships arising out of the application of the Entertainments Duty will have to be endured until we are in a position to sweep that tax away altogether.

Mr. JACKSON

The Chancellor's illustration of a performance by local amateurs and a similar performance by professional people does not hold good. The Commissioners have given a remission of tax where the concert is a municipal concert.

Mr. SNOWDEN

The interpretation of the word "educational" in regard to a performance under the existing law is that education must be tutorial. In the case of the concert cited that definition falls to the ground. Where a lecturer is in direct communication with his audience the education is of a tutorial nature.

Amendment negatived.

Lieut-Colonel HOWARD-BURY

I beg to move, in page 5, line 19, at the end, to add a new Sub-section— (4) Notwithstanding anything in Section one of The Finance (New Duties) Act, 1916, as amended by any subsequent enactment, Entertainments Duty shall not be charged for admission to any entertainment where the Commissioners of Customs and Excise are satisfied that the whole of the profits thereof are devoted to philanthropic, charitable, or educational purposes. As the Chancellor of the Exchequer has just said, the position to-day is, that where 30 per cent. of the expenses of any of these entertainments is exceeded the Entertainments Duty comes into force for that entertainment. That figure has been arrived gradually. The year before the allowance was 20 per cent. I think that tends to the view that this form of entertainment, where all the profits are to go to charitable purposes, was never intended originally to come under the Entertainments Duty. Each Government each year has made some small concession. At first it allowed expenses up to 20 per cent., then up to 30 per cent., which is the position we are` in to-day. More and more money is required for the hospitals. The hospitals have been very hard hit by the high taxation, and, with the duty as it is to-day, money that would go to the hospitals is taken away from them. I ask the Chancellor of the Exchequer to exempt entertainments that are solely for philanthropic, charitable and educational purposes. I know what is in the right hon. Gentleman's mind. He thinks that bogus charities would crop up or increase in number. But what happened before the Entertainments Duty was put into operation? If there were bogus charities in those day, the police interfered nod stopped them. Why should not the police he used to-day to stop anything of the kind? I ask the Chancellor to look upon this Amendment favourably, because every penny that he takes in this way means a lot to the charities concerned. The total amount to the Treasury is not very great, but the cost of collection is very considerable. The bulk of the money received by the State from the Entertainments Duty comes from the theatres and cinemas with their regular entertainments day after day, whereas entertainments on behalf of hospitals are given only occasionally. The right hon. Gentleman cannot say that an occasional entertainment like this competes with regular entertainments. It would be held only Once or twice a year for the particular purpose of raising money for a charitable object—for a hospital, for improving medical arrangements, or for building a new ward. Even if the Chancellor of Exchequer cannot give total exemption, I ask him at least to allow a larger margin for expenses. A wet day may make all the difference between 30 per cent. and 35 per cent. of the expenses. The concession would not cost very much money.

Mr. G. THORNE

I desire to support the Amendment, particularly in the interests of the hospitals. I have had very strongly put to me the cases where those who desire to support our hospitals—I suppose that the same thing applies to all parts of the country—decline to do so because of this Entertainments Duty. I am told that the tax so frustrates their efforts that in all probability they will be compelled to give up the task. That is very undesirable, because the hospitals are in great need of support, as I know from my own district. I trust that the Chancellor, whose sympathies will be in this movement, will give the Amendment favourable consideration.

Viscount WOLMER

The Chancellor of the Exchequer indicated, in answer to an interruption just now, that he was afraid that if this Amendment were agreed to there would be a large increase in the number of performances that were given ostensibly on behalf of charities, but which really had as their purpose the remuneration of those who took part in them. Surely, that is not an insuperable difficulty? Surely there are means of seeing that only bona-fide charity concerts and entertainments receive the relief which is proposed in this Amendment? The right hon. Gentleman will find some difficulty in convincing the Committee that it is impossible for the Treasury to draw a reasonable line of distinction. I appeal to him for the hospitals, not only on the ground of humanity, but also on the ground of economy. Hospitals are doing a national work if ever there was one. They are doing it with the greatest efficiency and far more cheaply than the State can or could do it. If the voluntary hospital system goes under, the State will have to step in and the hospitals will be run with the taxpayer's money. Many of us feel that hospitals so controlled would not be more efficient and would probably be less efficient than our present hospitals, and they would certainly cost a great deal more. It is a matter of real economy, therefore, that the voluntary system should, if possible, be maintained.

I hope that on that ground the Chancellor of the Exchequer will be able to meet us in some way. He must be aware of the tremendous straits to which the hospitals are reduced. Before the War they could rely on large subscriptions and large donations from wealthy men. To a large extent, that source of income has been dried up by the tremendous taxation of to-day. That is inevitable and nobody makes any complaint of that. The hospitals are trying to find new sources of income. They are trying to broaden the basis of their subscriptions and trying to collect thousands of pennies where formerly they got a few cheques, and one of the most useful methods which they employ for this purpose is the holding of public entertainments. It is an extraordinary thing how people like to give money through the medium of entertainments such as bazaars and the like. You can raise £500 through entertainments and bazaars from people out of whom you would not get a quarter of the amount unless you could give them some quid pro quo. It is an extraordinary psychological fact. Personally, I would rather pay the money and not go to the entertainment, and I think other hon. Members are in that position, but that is not the view of the public. It is easier to raise money, if you can do so, under the cloak of an entertainment of some sort, and the Chancellor of the Exchequer in maintaining this duty is discouraging and hindering one of the most useful methods of raising money to maintain hospitals.

Mr. BIRKETT

May I add my voice to those already raised in support of this Amendment? I think it would be wise, before the Committee makes a final decision on this matter, that the right hon. Gentleman should tell us the exact amount involved in an acceptance of this proposal. I am given to understand that the amount involved is comparatively small and, if that be so, it is right to urge upon the Chancellor the wisdom of bowing to what seems to be the general sense of hon. Members in all parts of the Committee upon this particular matter. I agree that safeguards are quite necessary, but it is obvious from the observations which have already fallen from the right hon. Gentleman that adequate safeguards can easily be provided to ensure that the real purpose which the supporters of the Amendment have in mind is faithfully carried out. I desire to make my appeal solely upon this ground. Provided that adequate safeguards exist nobody will dispute that the matters contemplate in the wording of the Amendment, namely, philanthropic, charitable or educational purposes are for the public advantage, and, if that be so, the unanimous testimony is that the imposition of this duty is hindering the advancement of those purposes which tend to the public advantage, and upon that ground I ask the right hon. Gentleman to make this concession.

Mr. SNOWDEN

There can be no two opinions on the point that entertainments for the purpose of raising funds for charitable purposes should be exempt from the Entertainments Duty, but that concession must be protected by what the last speaker called adequate safeguards. An adequate safeguard has already been devised, and it lies in the provision that not more than 30 per cent. of the receipts should be devoted to expenses. The objection to this Amendment was anticipated by one speaker who referred to the possibility, if that safeguard were removed, of the widespread use of the exemption for the purpose of holding bogus charity entertainments. I think it is a very real danger. What would happen if the 30 per cent. safeguard were swept away? Every hon. Member knows that a great many of these entertainments, concerts and the like, said to be for the purpose of raising funds for charitable objects are promoted by individuals and, if this safeguard were struck out, there would be nothing to hinder an individual from organising and advertising a concert and appropriating 90 per cent. or even 95 per cent. of the receipts as expenses of promotion. The House of Commons, in past years, when dealing with this matter, in its wisdom inserted the safeguard that 30 per cent. of the receipts should be the limit of the expenses; and I think it will be agreed that unless in very exceptional cases that 30 per cent. of the receipts is as extravagant an allowance as ought to be made. Because of that, I am afraid I cannot accept this Amendment. I do not believe the charities will suffer to the extent imagined by the Noble Lord the Member for Aldershot (Viscount Wolmer), and the street collections for hospitals, to which I think he referred, are not affected at all by the imposition of the Entertainments Duty. My point is that the present safeguard of 30 per cent. is necessary, and we could not go beyond it without encouraging those who might desire to make profit out of the promotion of so-called charity entertainments. The hon. Member for East Nottingham (Mr. Birkett) asked me what this concession would cost? If it were possible to confine it simply to the purposes described in the Amendment it would cost about £100,000 a year, but if we were to give way here, we should open the door, and a great many other claims would come in which would be irresistible, and the cost would be a great deal more than the figure I have given. I am as anxious as any hon. Member to avoid discouraging voluntary effort for the aid of philanthropic institutions, and if I were convinced that the continued existence of the 30 per cent. limit was a hindrance to philanthropic work I would gladly raise it, but I do not think it is so, and I regret therefore I cannot accept the Amendment.

Mr. HANNON

Would it be possible for the right hon. Gentleman, between now and the Report stage, to consider some modification of the Amendment which would enable an exception to be made in the case of hospitals only. As the right hon. Gentleman knows, in the case of entertainments organised for the assistance of hospitals great care is taken to prevent any abuses creeping in. He can easily satisfy himself that the committees which are responsible for the management and protection of hospitals are almost entirely composed of people who would not be parties to any transactions of the kind indicated as being possible in other cases. The Chancellor's sympathy might take the practical form of allowing hospitals, at any rate, to be exempt from the operations of the provision of the Finance Bill in this respect.

Mr. S. ROBERTS

It has been interesting to listen to the Debate on the Entertainments Duty and to note the universal opinion which appears to prevail that the incidence of the tax in wrong. We were given to understand that the duty was to fall upon the person who was going to be entertained, but the whole of this Debate shows clearly that it is the opinion of hon. Members—whether they are right or wrong—that it does not fall on the person who is entertained but on the promoters of the entertainment. I was going to ask the Chancellor to raise the expenses limit to a higher level than 30 per cent. Only this morning I received a letter from a gentleman who is getting up a boy scouts' fete, in which he stated: The Inland Revenue have put a pistol into my chest for £225 deposit with regard to Entertainment Tax. He was trying to turn the pistol off his chest and on to mine. At the same time, this is a fete in aid of a very admirable organisation, and they are required to put down £25 before going on with the entertainment. I presume the deposit is necessary to avoid the payment of duty at the entrance. There are many of these entertainments where 50 per cent. would be an adequate safeguard and would get rid of all possibility of bogus entertainments. I suggest, too, there are other ways in which the bogus entertainments could be dealt with. Could there not be a provision under which the promoters of an entertainment would be bound to give their services voluntarily and not to receive anything. That would seem a better and a simpler safeguard. The very fact that the amount coming in now is only £100,000, collected in very small sums, shows that the charities are losing considerably and that the concession would be of great benefit. It would be more than an actual cash benefit, because it would take away a great deal of the annoyance now caused to anybody who is promoting a charitable entertainment and who has to go through all the complicated procedure of giving bonds and securities to the customs officer, of getting tickets specially printed and so forth—all to bring in a comparatively small sum of money. It is a tax which irritates very much and brings in very little, and I ask the right hon. Gentleman to reconsider his decision.

Mr. G. OLIVER

I direct the Chancellor's attention to a fact which has not been discussed so far. A number of speeches have dealt with profits arising from these local efforts, but I wish to call attention to the case of local efforts where no profit arises but where losses are incurred. I refer to a case in my own constituency. In the town of Ilkeston there is annually held a small exhibition of art work—painting, needlework and work of that description. The promoters make no profit but, on the contrary, incur loss. The exhibition is, in the main, run by working men, and they incur a loss of from £5 to £8 each year, despite which they are required to pay Entertainments Duty to the Treasury. I trust the Chancellor will take into consideration the desirability of making some exemption in cases where the entertainment results in a loss

Major BURNIE

This is a most difficult subject, and I quite agree with the Chancellor that if this Amendment were accepted, it might lend itself to the purposes of the bogus entertainment promoter, who, while working ostensibly in the cause of charity, would absorb all the money. The hon. Member for Moseley (Mr. Hannon) asked why should not hospitals be exempted? He will find later in the Paper a proposed new Clause, standing in my name, a Clause which I placed before the Committee last year and which, to my mind, would exempt the hospitals from this duty. My proposal is, that the Entertainments Duty should not be levied on any entertainments promoted by any charity registered under the War Charities Act, 1916. I think it would make it perfectly easy for the Chancellor to guard against bogus entertainments and at the same time to relieve the hospitals. This difficulty only arises where the expenses exceed 30 per cent. In an indoor entertainment it is easy for the honest entertainer to keep the expenses below 30 per cent., and as a rule for the sake of charity the artists give their services free, but in an outdoor fete, where we are very dependent on the weather, the expenses sometimes exceed 30 per cent. With that in view, I placed this Clause on the Paper last year, and I have done so again this year.

Sir GODFREY COLLINS

Many hon. Members are anxious that the Chancellor of the Exchequer should reconsider his decision before the Report stage. He has advised the Committee that the cost to the Exchequer would be as much as £100,000; in other words, charitable institutions are being taxed to-day to that extent, and I think that, in view of the difficult financial position in which many of these institutions find themselves today, the Government might be well advised to meet the Committee on this point, especially because the Government during the last year or two—I think, last year and again this year—have been finding money from public funds for the use of hospitals. While, on the one hand, they are taxing these institutions, on the other hand, they are helping them from public funds, and I sincerely hope, in view of the Amendment moved last year by the hon. Member for Pontypool (Mr. T. Griffiths), whom we are all glad to see back in his place, that the Government will reconsider this question. During the course of the Debate on that occasion, the Financial Secretary to the Treasury reminded the Committee of the safeguards which the Chancellor of the Exchequer has announced this afternoon, but the present Chancellor of the Exchequer, listening to the Debate a year ago, decided to vote in favour of this particular Amendment.

I do not plead for consistency, and it may well be that in his short experience at the Treasury the right hon. Gentleman has found out that, if you open the door too wide, entertainments for bogus charitable purposes might be started, but he took into the Division Lobby most of his followers who are gathered here to-day. I will not remind them of their vote last year, but we are now pleading for a very simple question. On an Amendment moved an hour ago, the Chancellor of the Exchequer held out hopes and gave a distinct understanding to the Committee that he would reconsider his former decision before the Report stage. No hon. Member wishes to open the door too wide to allow bogus charitable institutions to profit by the Amendment, but we plead that, as the safeguards put into the Act the year before last against bogus institutions work out in practice to-day, when hospitals undertake charitable entertainments they do so with the fear that they may incur a loss in doing so. What we are asking is that uncertainty may be translated into certainty, and that when these charitable institutions, hospitals or others, get up entertainments for their own funds, the Chancellor of the Exchequer in his taxing capacity will not take the larger portion of their profits. I, therefore, hope we can have some assurance that before the Report stage the Government will reconsider their former decision.

Lady TERRINGTON

As one who has worked very hard indeed on behalf of charity, and organised a certain number of entertainments for them, I can assure the Committee that we have always done our utmost to ascertain what were the good and what were the bogus charities. I am sure, as far as I am concerned, that I am perhaps over careful, but at the same time I have been able to do much very hard work once I have satisfied myself on the point. Quite apart from the hospitals—and God knows they need money badly enough—it is not perhaps generally realised that institutions devoted to child welfare, nursing associations, orphanages, and many other charities are sufferers under the law as it stands. If you are having an open-air fête, for instance, there is always the question of the weather and the possibility of a wet day, and there is loss of money caused in that way, but even if you do not have a wet day, you have to pay insurance against it—it might be only a few pounds—and, therefore, it is necessary to press for this Amendment. I very much hope that, if this question is not satisfactorily answered by the Government, hon. Members will stand by what they think is right and go to a Division, if necessary, in which case I, for one, shall support the Amendment.

Mr. STORRY-DEANS

I hope the Noble Lady the Member for Wycombe (Lady Terrington), who has just spoken, will infuse some portion of her own courage into those who sit immediately in front of her on those benches. I did not rise especially to congratulate the Noble Lady, but rather to suggest to the Government that this question of bogus charities is really not a matter for the revenue authorities, but is a pure matter for the police, and I would undertake, with assistance from an hon. and learned Friend, to devise a sufficient police safeguard against a bogus charity promoter. It is not the bogus charity of which we are afraid—anybody can detect that—but it is the bogus charity promoter, the person who, under the guise of promoting an entertainment for the sake of charity, really devises it for the betterment of his own pocket. A very familiar kind of case is where someone who is not allowed to run a cinematograph show on Sundays for his own profit runs it ostensibly for the benefit of a charity, but really be charges against the entertainment a proportion of his rent and a proportion of all sorts of standing charges, which he would have to pay in any case, so that he really gets a very considerable benefit, although he does it ostensibly for the benefit of a charity. I would suggest that everyone who seeks exemption from the Entertainments Duty in respect of an entertainment which he promotes should first of all satisfy the police that he is genuinely promoting the entertainment for the benefit of charity, and not for his own benefit or that of anyone taking part in it.

I myself know many cases, and particularly, of a bicycle association in Sheffield, which has for years promoted an entertainment for the benefit of the hospitals. Sometimes its entertainments have been ruined by reason of a rainy day, and then it has found itself at a considerable loss, and at the same time it has had to pay quite a considerable amount in tax. I suggest that the Government should bring this matter forward again, and I think the Financial Secretary, with the assistance, for instance, of the learned Attorney-General at his side, would be able to provide a form of police safeguard against the bogus charity entertainment or promoter which would satisfy the Treasury and enable the Chancellor of the Exchequer and the Treasury to carry out this undoubtedly beneficial, though small, reform.

The FINANCIAL SECRETARY to the TREASURY (Mr. W. Graham)

I regret that I had to be out of the House for a minute or two when the Amendment was moved, but I heard the reply of the Chancellor of the Exchequer, that he was unable to make any concession on this proposal. May I add a word or two in reply to the Debate which has since taken place? My hon. Friend the Member for Greenock (Sir G. Collins) twitted us, I think, with some possible inconsistency as between the votes which we gave last year and what we are defending on the present occasion, but I think there is a very adequate reply, in that we have not in any way weakened in our position in regard to the Entertainments Duty as a whole, and that we have taken the first step this year in wiping out a considerable part of it. In so far as the Entertainments Duty has been wiped out, it inures to the advantage, at all events under 6d., of the kind of entertainment which has charity or philanthropic enterprise in view. But there is a practical point in reply to my hon. Friend, that, so long as any part of the Entertainments Duty continues, it is plain that there must be provisions to protect the revenue and the public against the bogus entertainment and against other forms of entertainment which are not strictly in the interests of charity at all. I think my right hon. Friend made the point perfectly plain, and I suggest to hon. Members in all Harts of the Committee that there is already adequate provision.

First of all, there is no Entertainments Duty at all where the whole of the proceeds are devoted to charity. They are entirely free, but in the other cases, where some part of the proceeds is retained, it has been necessary to work out this limit of 30 per cent. of the expenses which are incurred in order to protect the public against the danger which I have described. The hon. and learned Member for the Park Division of Sheffield (Mr. Storry-Deans) suggested that we might make certain alterations, or further concessions, but may I remind the Committee that originally, in 1916, this percentage was 20, and under pressure, I think, from hon. Members in all parts of the House it was raised to 30 per cent. in 1922. There is abundant evidence at the disposal of the Customs and Excise Authorities to show that that limit of 30 per cent. is strictly required. Every hon. Member impartially viewing the situation will agree that as we proceed above the limit of 30 per cent. for expenses then the profit to individuals increases. The public must be protected against that, and in the next place it must be protected against the class of entertainment which, while not promoted for the private profit of individuals, is nevertheless not in the interests of charity. There are many entertainments which have only in view the avoidance of a loss, and I do not think the Committee seriously would press for complete exemption from Entertainments Duty where in fact they are competing with other forms of entertainment in the locality exposed to this duty. From that point of view I think the existing position so long as this tax survives is safeguarded and accordingly I ask the Committee not to press this Amendment upon us to-night.

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

The Committee divided: Ayes, 220; Noes, 165.

Division No. 120.] Ayes. [7.3 p.m.
Acland, Rt. Hon. Francis Dyke Eyres-Monsell, Com. Rt. Hon. B. M. Mond, H.
Agg-Gardner, Rt. Hon. Sir James T. Falconer, J. Moore-Brabazon, Lieut.-Col J. T. C.
Alexander, Brig.-Gen. Sir W. (Glas. C.) Falle, Major Sir Bertram Godfray Morden, Colonel Waiter Grant
Allen, R. Wilberforce (Leicester, S.) Fletcher, Lieut.-Com. R. T. H. Morrison-Bell, Major Sir A. C.(Honiton)
Alstead, R. Forestier-Walker, L. Morse, W. E.
Amery, Rt. Hon. Leopold C. M. S. Galbraith, J. F. W. Moulton, Major Fletcher
Aske, Sir Robert William Gates, Percy Muir, Ramsay (Rochdale)
Astor, Maj. Hn. John J. (Kent, Dover) George, Major G. L. (Pembroke) O'Neill, Rt. Hon. Hugh
Astor, Viscountess Gibbs. Col. Rt. Hon. George Abraham Owen, Major G.
Baird, Major Rt. Hon. Sir John L. Gilbert, James Daniel Pattinson, S. (Horncastle)
Baldwin, Rt. Hon. Stanley Gilmour, Colonel Rt. Hon. Sir John Pease, William Edwin
Balfour, George (Hampstead) Greene, W. P. Crawford Pennefather, Sir John
Banks, Reginald Mitchell Grenfell, Edward C. (City of London) Percy, Lord Eustace (Hastings)
Barclay, R. Noton Gretton, Colonel John Phillipps, Vivian
Barnett, Major Richard W. Guinness, Lieut.-Col. Rt. Hon, W. E. Pielou, D. P.
Barnston, Major Sir Harry Gwynne, Rupert S. Raffan, P. W.
Beckett, Sir Gervase Hacking, Captain Douglas H. Raine, W.
Bellairs, Commander Carlyon W. Hamilton, Sir R. (Orkney & Shetland) Rea, W. Russell
Benn, Sir A. S. (Plymouth, Drake) Hannon, Patrick Joseph Henry Reid, D. D. (County Down)
Berkeley, Captain Reginald Harmsworth, Hon. E. C. (Kent) Remer, J. R.
Berry, Sir George Harris, John (Hackney, North) Remnant, Sir James
Betterton, Henry B. Hartington, Marquess of Rhys, Hon. C. A. U.
Birchall, Major J. Dearman Harvey, T. E. (Dewsbury) Richardson, Lt.-Col. Sir P. (Chertsey)
Birkett, W. N. Henn, Sir Sydney H. Robinson, S. W. (Essex, Chelmsford)
Blades, Sir George Rowland Hennessy, Major J. R. G. Ropner, Major L.
Blundell, F. N. Herbert, Dennis (Hertford, Watford) Roundell, Colonel R. F
Bonwick, A. Herbert, Capt. Sidney (Scarborough) Russell-Wells, Sir S. (London Univ.)
Bourne, Robert Croft Hill-Wood, Major Sir Samuel Samuel, A. M. (Surrey, Farnham)
Bowater, Sir T. Vansittart Hogbin, Henry Cairns Samuel, Samuel (W'dsworth, Putney)
Bowyer, Captain G. E. W. Hogg, Rt. Hon. Sir D. (St. Marylebone) Savery, S. S.
Brass, Captain W. Hohier, Sir Gerald Fitzroy Scrymgeour, E.
Brassey, Sir Leonard Hood, Sir Joseph Sheffield, Sir Berkeley
Bridgeman, Rt. Hon. William Clive Hope, Rt. Hon. J. F. (Sheffield, C) Shepperson, E. W.
Briscoe, Captain Richard George Hopkinson, A. (Lancaster, Mossley) Sinclair, Major Sir A. (Caithness)
Brittain, Sir Harry Hore-Belisha, Major Leslie Somerville. A. A. (Windsor)
Brunner, Sir J. Howard, Hn. D. (Cumberland, Northrn.) Somerville, Daniel (Barrow-In-Furness)
Buckingham, Sir H. Howard, Hon. G. (Bedford, Luton) Spears, Brig.-Gen. E. L.
Bullock, Captain M. Hughes, Colling wood Spero, Dr. G. E.
Butler, Sir Geoffrey Hunter-Weston, Lt.-Gen. Sir Aylmer Steel, Samuel Strang
Cassels, J. D. Huntingfield, Lord Stewart, Maj. R. S. (Stockton-on-Tees)
Cautley, Sir Henry S. Iliffe, Sir Edward M. Stranger, Innes Harold
Cayzer, Sir C. (Chester, City) Inskip, Sir Thomas Walker H. Stuart, Hon. J. (Moray and Nairn)
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) James, Lieut.-Colonel Hon. Cuthbert Stuart, Lord C. Crichton-
Cecil. Rt. Hon. Lord H. (Ox. Univ.) Jephcott, A. R. Sutcliffe, T.
Chadwick, Sir Robert Burton Johnstone, Harcourt (Willesden, East) Sykes, Major-Gen. Sir Frederick H.
Chamberlain, Rt. Hn. J. A. (Birm., W.) Jones, C. Sydney (Liverpool, W. Derby) Terrington, Lady
Chamberlain, Rt. Hon. N (Ladywood) Jones, Henry Haydn (Merloneth) Thomson, F. C. (Aberdeen, South)
Clarry, Reginald George Kay. Sir R. Newbald Thomson, Trevelyan (Middlesbro. W.)
Clayton, G. C. Keens, T. Thomson, Sir W. Mitchell (Croydon, S.)
Cobb, Sir Cyril Kindersley, Major G. M. Thorne, G. R. (Wolverhampton, E.)
CockerIII, Brigadier-General G. K. King, Captain Henry Douglas Thornton, Maxwell R.
Colfox, Major Wm. Phillips Lamb, J. Q. Tryon, Rt. Hon. George Clement
Collins, Sir Godfrey (Greenock) Lane-Fox, George R. Turton, Edmund Russborough
Comyns-Carr, A. S. Laverack, F. J. Vaughan-Morgan, Col. K. P.
Conway, Sir W. Martin Leigh, Sir John (Clapham) Waddington, R.
Cope, Major William Lessing, E. Ward, G. (Leicester, Bosworth)
Cowan, D. M. (Scottish Universities) Linfield, F. C. Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Craig, Captain C. C. (Antrim, South) Locker-Lampson, G. (Wood Green) Warrender, Sir Victor
Croft, Brigadier-General Sir H. Lorimer, H. D Wells, S. R.
Crooke, J. Smedley (Derltend) Lumley, L. R. Weston, John Wakefield
Cunliffe, Joseph Herbert McCrae, Sir George White, H. G. (Birkenhead- E)
Curzon, Captain Viscount Macfadyen, E. Willison, H.
Dalkeith, Earl of McLean, Major A. Wilson, Sir C. H. (Leeds, Central)
Davidson, Major-General Sir J. H. Macnaghten, Hon. Sir Malcolm Windsor-Clive, Lieut.-Colonel George
Davies, Alfred Thomas (Lincoln) Macnamara, Rt. Hon. Dr. T. J. Wintringham, Margaret
Davies, Ellis (Denbigh, Denbigh) McNeill, Rt. Hon. Ronald John Wise, Sir Fredric
Davies, Maj. Geo. F. (Somerset, Yeovil) Macpherson, Rt. Hon. James I. Wood, Major Rt. Hon. Edward F. L.
Davison, Sir W. H. (Kensington, S.) Maitland, Sir Arthur D. Steel- Wood, Sir H. K. (Woolwich, West)
Deans, Richard Storry Makins, Brigadier-General E. Worthington-Evans, Rt. Hon. Sir L.
Dixon, Herbert Marriott, Sir J. A. R. Yerburgh, Major Robert D. T.
Dudgeon. Major C. R. Martin, F. (Aberd'n & Klnc'dine, E.)
Dunnico, H. Masterman, Rt. Hon. C. F. G. TELLERS FOR THE AYES.—
Eden, Captain Anthony Milne, J. S. Wardlaw Colonel Howard-Bury and Mr.
Edmondson, Major A. J. Mitchell, Sir W. Lane (Streatham) Samuel Roberts.
Edwards, John H. (Accrington) Moles, Thomas
Noes
Adamson, Rt. Hon. William Ammon, Charles George Barker, G. (Monmouth, Abertillery)
Adamson, W. M. (Staff., Cannock) Attlee, Major Clement R. Barnes, A.
Alden, Percy Ayles, W. H. Batey, Joseph
Alexander, A. V. (Sheffield, Hillsbro') Baker, Walter Black, J. W.
Bramsdon, Sir Thomas Hudson, J. H. Richards, R.
Broad, F. A. Jackson, R. F. (Ipswich) Richardson, R. (Houghton-le-Spring)
Brown, A. E. (Warwick, Rugby) Jenkins, W. (Glamorgan, Neath) Ritson, J.
Buchanan, G. Jewson, Dorothea Roberts, Rt. Hon. F. O. (W. Bromwich)
Buckle, J. John, William (Rhondda, West) Romeril, H. G.
Burney, Lieut.-Com. Charles D. Johnston, Thomas (Stirling) Samuel, H. Walter (Swansea, West)
Burnie, Major J. (Bootle) Jones, Morgan (Caerphilly) Seely, H. M. (Norfolk, Eastern)
Buxton, Rt. Hon. Noel Jones, T. J. Mardy (Pontypridd) Sherwood, George Henry
Chapple, Dr. William A. Jowett, Rt. Hon. F. W. (Bradford, E.) Shinwell, Emanuel
Charleton, H. C. Kenyon, Barnet Smith, Ben (Bermondsey, Rotherhithe)
Climie, R. Kirkwood, D. Smith, T. (Pontefract)
Cluse, W. S. Lambert, Rt. Hon. George Snell, Harry
Collins, Patrick (Walsall) Lansbury, George Snowden, Rt. Hon. Philip
Costello, L. W. J. Law, A. Spence, R.
Cove, W. G. Lawrence, Susan (East Ham, North) Spencer, George A. (Broxtowe)
Darbishire, C. W. Lawson, John James Spencer, H. H. (Bradford, South)
Dickson, T. Leach, W. Spoor, B. G.
Dukes, C. Lee, F. Stamford, T. W.
Duncan, C. Livingstone, A. M. Stephen, Campbell
Edwards, C. (Monmouth, Bedwellty) Lowth, T. Stewart, J. (St. Rollox)
Edwards, G. (Norfolk, Southern) Lunn, William Sturrock, J. Leng
Egan, W. H. MacDonald, Rt. Hon. J. R. (Aberavon) Sutton, J. E.
Gardner, B. W. (West Ham, Upton) McEntee, V. L. Thomas, Rt. Hon. James H. (Derby)
Gardner, J. P. (Hammersmith, North) Mackinder, W. Thompson, Piers G. (Torquay)
Gavan-Duffy, Thomas Maclean, Neil (Glasgow, Govan) Thurtle, E.
Gibbins, Joseph Mansel, Sir Courtenay Tinker, John Joseph
Gillett, George M. March, S. Trevelyan, Rt. Hon. C. P.
Gosling, Harry Marley, James Turner-Samuels, M.
Gould, Frederick (Somerset, Frome) Martin, W. H. (Dumbarton) Viant, S. P.
Graham, W. (Edinburgh, Central) Maxton, James Wallhead, Richard C.
Greenall, T. Middleton, G. Warne, G. H.
Grenfell, D. R. (Glamorgan) Mills, J. E. Watson, W. M. (Dunfermilne)
Griffiths, T. (Monmouth, Pontypool) Morel, E. D. Watts Morgan, Lt.-Col. D. (Rhondda)
Groves, T. Morris, R. H. Webb, Rt. Hon. Sidney
Grundy, T. W. Morrison, Herbert (Hackney, South) Wedgwood, Col. Rt. Hon. Josiah C.
Guest, J. (York, Hemsworth) Morrison, R. C. (Tottenham, N.) Welsh, J. C.
Guest, Dr. L. Haden (Southwark, N.) Mosley, Oswald Westwood J.
Hall, G. H. (Merthyr Tydvil) Muir, John W. Wheatley, Rt. Hon. J.
Hardie, George D. Murray, Robert Whiteley, W.
Harris, Percy A. Nichol, Robert Wignall, James
Hartshorn, Rt. Hon. Vernon Nixon, H. Williams, David (Swansea, E.)
Hastings, Sir Patrick O'Grady, Captain James Williams, Dr. J. H. (Lianelly)
Hastings, Somerville (Reading) Oliver, George Harold Williams, Lt.-Col. T. S. B. (Kenningtn.)
Haycock, A. W. Paling, W. Williams, T. (York, Don Valley)
Healy, Cahir Palmer, E. T. Wilson, C. H. (Sheffield, Attercliffe)
Henderson, Rt. Hon. A. (Burnley) Parkinson, John Allen (Wigan) Wilson, R. J. (Jarrow)
Henderson, A. (Cardiff, South) Perry, S. F. Windsor, Walter
Henderson, T. (Glasgow) Pethick-Lawrence, F. W. Wright, W.
Henderson, W. W. (Middlesex, Enfld.) Potts, John S. Young, Andrew (Glasgow, Partick)
Hirst, G. H. Purcell, A. A.
Hobhouse, A. L. Rathbone, Hugh R. TELLERS FOR THE NOES.—
Hodges, Frank Raynes, W. R. Mr. Kennedy and Mr. John
Robertson.
Mr. BALDWIN

May I ask the Chancellor of the Exchequer——

The DEPUTY - CHAIRMAN (Mr. Entwistle)

I had better put the Question.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill,"

Mr. BALDWIN

May I ask the Chancellor of the Exchequer what steps he proposes to take, in view of the defeat on the Finance Bill?

Mr. SNOWDEN

There has not yet, of course, been very much time to consider our position and to judge what action we should take in view of the result of the new Coalition. I would suggest that we proceed with the Bill and then, if I have any further announcement to make with regard to this decision, I will make it at a later stage.

Mr. BALDWIN

I beg leave to move, "That the Chairman do report Progress, and ask leave to sit again."

I do not know whether hon. Members below the Gangway realise that a defeat of this kind is one of a very serious nature. We realise it fully and it has been the immemorial custom of this House to regard a defeat on the Committee stage of the Finance Bill as a defeat of some consequence, and while I quite agree it would be impossible for the Chancellor of the Exchequer at this moment to say what be and his Government are prepared to do, I think this House should give them reasonable time for consideration.

Sir G. COLLINS

It will be within the recollection of several Members of this House that, I think, two years ago during the Committee Stage of the Finance Bill of that year an Amendment was moved in this House while the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) was Chancellor of the Exchequer and an Amendment was carried against the Government of the day after a long Debate and a very close Division in a very large House. I think I recollect that directly the right hon. Gentleman was asked a similar question as to what would be the intention of the Government in view of the decision of the Committee, and, if my recollection is correct, the right hon. Gentleman, being always a House of Commons man, told the Committee on the spur of the moment that he would accept a decision of the Committee and invited the Committee to proceed with its business. If my memory is correct the Chancellor of the Exchequer has followed the example set by the right hon. Gentleman opposite.

Mr. AUSTEN CHAMBERLAIN

The hon. Gentleman has correctly stated what occurred two years ago, but I think he has drawn the wrong inference. The representative of the Government on that occasion was prepared at once to inform the House of the decision of the Government on the vote which the House had come to. He said they were prepared at once to accept that decision. But the Chancellor of the Exchequer at the present moment is neither prepared to accept nor to refuse the decision of the House. He has himself asked time for further consideration, and I submit it is contrary to all practice that the Committee should be asked to proceed with a Bill which may already be dead in the mind of the Government or when the Government brings that mind to bear on it. The Committee cannot usefully go on with all the stages of the Bill without knowing whether the Government mean or not to carry out the decision just come to. If the Chancellor of the Exchequer had been in a position to say at once that the decision would be accepted I do not suppose my right hon. Friend would then have thought it necessary or proper to move to Report Progress. It clearly is not in accordance with the precedent of two years ago that the Government should, while their own mind is not made up on this question, invite the Committee to make up its mind on the whole series of further propositions. Therefore, I think we must adjourn further proceedings until such time as the Government have decided in the first place whether they will accept this decision or not, and in the event of their accepting it, how many defeats they can submit to without feeling bound to treat an adverse vote of the Committee as a vote of want of confidence.

Mr. SNOWDEN

The right hon. Gentleman has suggested that there is a practical distinction between the precedent quoted by the hon. Gentleman below the Gangway (Sir G. Collins) and the present occasion, but I should like to remind him that there are other distinguishing features which have to be considered. The Government of that day commanded a majority of the House of Commons, and, therefore, it was defeated by practically the desertion of Members of its own party. May I remind the right hon. Gentleman that at the early part of this Session, when the Labour Government assumed office, the Prime Minister stated that they were not going to regard defeat in Committee as involving resignation, and that only when the House of Commons by its vote registered its want of confidence in the Government would they consider that they were under an obligation to resign. With regard to the immediate matter at issue, the House of Commons has registered its view in regard to that Amendment, and the Amendment for the time being stands. I told the Leader of the Opposition, in reply to his question, that we would continue the discussion of the Bill, and in the meantime the Government would consider the matter. I do not think I can go further than that.

Mr. MILLS

I think I shall have the assent of many of my colleagues on these benches in what I am going to say. When the Prime Minister came into office, he made it perfectly clear that he would only go out of office on a definite Vote of Censure which stood in the name of the Leader of the party opposite or of the Leader of the Opposition below the Gangway. I want to submit if we are to be trailed in the mud like this and if every adverse decision is to be treated as a slight, the sooner the battle comes the better. I can assure hon. and right hon. Gentlemen opposite that Members on these benches are not shirking the fight, and they will be highly disillusioned in the constituencies when they come to face us. We have at least blown the bubble that Labour is unfit to govern. On this front bench there are men who left school to go to work before their predecessors had left home to go to school, and these men have vindicated their position.

The CHAIRMAN

The question before the Committee is that Progress be reported.

Mr. MILLS

This Amendment is a very trivial one. It would only involve an expenditure of something like £4,000 if it were carried into effect. Therefore, the importance attached to it by hon. and right hon. Gentlemen opposite really seems to be out of all proportion to the facts. We have got the Opposition in such a tangle that they have no idea exactly where they stand.

Mr. DENNIS HERBERT

I do not suppose that anyone on this side of the House expects the Government to resign, but that is not the object of this Motion to Report Progress. This is, I hope, still a serious business assembly, and, if the Committee makes a somewhat serious alteration in a Government Bill, it is hardly possible to expect the Committee to go on discussing other points arising on the Finance Bill unless and until we know whether the Government are going to accept this decision or will take steps to reverse it hereafter, making any such Motion a definite Vote of Confidence. We know that the skins of the Government are fairly tough in present circumstances. It is not a question of asking them to resign. It is a question of discussing this Bill on proper business lines, and the Committee certainly cannot make up its mind what it should do on subsequent Amendments while it is in a state of uncertainty as to what attitude the Government intend to take up with regard to the decision just arrived at. The Government have only one of two courses open to them: either at once to accept the decision of the House and announce that they will make no attempt to reverse it, or to agree to the Motion to Report Progress until they can inform hon. Members what their decision is.

Viscount WOLMER

The hon. Member for Dartford (Mr. Mills) could not have heard what the Chancellor of the Exchequer said, or he would not have been under the impression that the carrying out of this Amendment would only cost £4,000. The Chancellor told the Committee that it would cost £100,000 and that he had not got the money for even a very much less expensive Amendment. It therefore is a complete mistake to suggest that the Amendment is not a serious one. I feel that the House is, under the circumstances, entitled to some guidance from the Government as to what is going to happen in the future. Are we to go on considering Clauses without any lead from the Government as to what view they will take of an adverse decision of the Committee? After all, the Chancellor of the Exchequer must have known that the position of the Government on some of these Amendments would be exceedingly difficult and precarious, because they had not a majority at their back. Surely, then, he ought to have made up his mind with regard to the more important of them as to what attitude the Government were prepared to take up in the event of an adverse decision. As yet apparently the Government have not made up their minds, and I submit that the Committee is entitled to insist that they should do so, and tell us what their attitude is to be, before any further progress is made.

Mr. ERNEST BROWN

I have no desire to support any Motion to report Progress. We want our business done and done quickly, so as to get this great Budget of the Chancellor of the Exchequer through. But I clearly understood when I gave my vote on the Amendment it would cost £100,000, and we were told that more adequate safeguards were needed to prevent it costing more. I appeal to the Chancellor of the Exchequer to devise some means at a later stage for limiting the effect of this Amendment.

Colonel GRETTON

Surely the House of Commons is not being treated with the respect usually paid it by the Government. The Prime Minister is here. He is sitting beside his colleague the Chancellor of the Exchequer, and there are other important Ministers present. Surely they can tell the Committee what they intend to do about this Amendment. Surely we can be informed by the Prime Minister whether the Government will accept the decision of the Committee or whether they desire to consider their own position. The matter is quite simple. The practice of the House of Commons in these cases is a sound and right one. It is wrong to ask the Committee to proceed with the discussion of a Measure like this when the Government are not prepared to state the course they will take with regard to an adverse vote.

Mr. GEORGE LAMBERT

Is this House to be treated seriously or not? I want to put a question to right hon. Gentlemen opposite. Last year there happened to be a discussion and Division on an Amendment couched in almost precisely the same terms as the one carried to-day. That Amendment was resisted by the Government of the day. It was resisted by the Leader of the Opposition, and it was also resisted by the then Financial Secretary to the Treasury. Personally, I have a clear conscience on this matter, because feeling that we have incurred enormous expenditure I was prepared to and did vote for the Government in order that the revenue necessary to meet that expenditure should be raised. Hon. Members must not think that they can vote expenditure on reforms without

also voting the necessary money. If they think that they will find they are very much mistaken. But I do ask that this House shall be treated as a business assembly, and though our friends here voted for this proposal last year and this year, too, hon. Gentlemen opposite really voted against it last year. Why have they changed their minds now? I would like to ask the Leader of the Opposition, who now asks the House to report Progress, when an Amendment has been carried by his party, an Amendment which he himself voted against last year, is there any consistency in that? I do hope the House of Commons will treat these great financial questions with some amount of gravity, and I must say the position of the Leader of the Opposition in voting this year for an Amendment which he resisted last year, is incapable of defence in any reasonable assembly.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 169; Noes, 237.

Division No. 121.] AYES. [7.33 p.m.
Alexander, Brig.-Gen. Sir W. (Glas. C.) Clayton, G. C. Hill-Wood, Major Sir Samuel
Amery, Rt. Hon. Leopold C. M. S. Cobb, Sir Cyril Hogg, Rt. Hon. Sir D. (St. Marylebone)
Astor, Maj. Hn. John J. (Kent, Dover) Cockerill, Brigadier-General G. K. Hohler, Sir Gerald Fitzroy
Astor, Viscountess Colfax, Major Wm. Phillips Hood, Sir Joseph
Atholl, Duchess of Conway, Sir W. Martin Hope, Rt. Hon. J. F. (Sheffield, C.)
Austin, Sir Herbert Cope, Major William Hopkinson, A. (Lancaster, Mossley)
Baird, Major Rt. Hon. Sir John L. Craig, Captain C. C. (Antrim, South) Howard, Hn. D. (Cumberland, Northrn.)
Baldwin, Rt. Hon. Stanley Craik, Rt. Hon. Sir Henry Howard-Bury, Lieut.-Col. C. K.
Banks, Reginald Mitchell Croft, Brigadier-General Sir H. Hughes, Collingwood
Barnett, Major Richard W. Crooke, J. Smedley (Deritend) Hunter-Weston, Lt.-Gen. Sir Aylmer
Barnston, Major Sir Harry Cunliffe, Joseph Herbert Huntingfield, Lord
Beckett, Sir Gervase Curzon, Captain Viscount Iliffe, Sir Edward M.
Bellairs, Commander Canyon W. Dalkeith, Earl of Inskip, Sir Thomas Walker H.
Benn, Sir A. S. (Plymouth, Drake) Davidson, Major-General Sir J. H. James, Lieut.-Colonel Hon. Cuthbert
Berry, Sir George Davies, Alfred Thomas (Lincoln) Jephcott, A. R.
Betterton, Henry B. Davies, Maj. Geo. F. (Somerset, Yeovll) Kindersley, Major G. M.
Birchall, Major J. Dearman Davison, Sir W. H. (Kensington, S.) King, Captain Henry Douglas
Blades, Sir George Rowland Deans, R. Storry. Lamb, J. Q.
Blundell, F. N. Dixon, Herbert Lane-Fox, George R.
Bourne, Robert Croft Eden, Captain Anthony Leigh, Sir John (Clapham)
Bowater, Sir T. Vansittart Edmondson, Major A. J. Locker-Lampson, G. (Wood Green)
Bowyer, Captain G. E. W. Ednam, Viscount Lorimer, H. D.
Brass, Captain W. Falle, Major Sir Bertram Godfray Lumley, L. R.
Brassey, Sir Leonard Forestier-Walker, L. McLean, Major A.
Bridgeman, Rt. Hon. William Clive Galbraith, J. F. W. Macnanhien, Hon. Sir Malcolm
Briscoe, Captain Richard George Gates, Percy McNeill, Rt. Hon. Ronald John
Brittain, Sir Harry Gilmour, Colonel Rt. Hon. Sir John Maitland, Sir Arthur D. Steel.
Buchanan, G. Greene, W. P. Crawford Makins, Brigadier-General E.
Buckingham, Sir H. Grenfell, Edward C. (City of London) Marriott, Sir J. A. R.
Bullock, Captain M. Gretton, Colonel John Milne, J. S Wardlaw
Burney, Lieut.-Com. Charles D. Guinness, Lieut.-Col. Rt. Hon. W. E. Mitchell, W. F. (Saffron Walden)
Butler, Sir Geoffrey Gwynne, Rupert S. Mitchell, Sir W. Lane (Streatham)
Cassels, J. D. Hacking, Captain Douglas H. Moles, Thomas
Cautley, Sir Henry S. Hannon, Patrick Joseph Henry Moore-Brabazon, Lieut.-Col. J. T. C.
Cayzer, Sir C. (Chester, City) Harmsworth, Hon. E. C. (Kent) Morden, Colonel Walter Grant
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Hartington, Marquess of Morrison-Bell, Major Sir A. C. (Honiton)
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Harvey, C. M. B. (Aberd'n & Kincardne) Newman, Sir R. H. S. D. L. (Exeter)
Chadwick, Sir Robert Burton Henn, Sir Sydney H. O'Neill, Rt. Hon. Hugh
Chamberlain, Rt. Hn. J. A. (Birm., W.) Hennessy, Major J. R. G. Pease, William Edwin
Chamberlain, Rt. Hon. N. (Ladywood) Herbert, Dennis (Hertford, Watford) Pennefather, Sir John
Clarry, Reginald George Herbert, Capt. Sidney (Scarborough) Penny, Frederick George
Percy, Lord Eustace (Hastings) Shepperson, E. W. Warrender, Sir Victor
Perring, William Geroge Simms, Dr. John M. (Co. Down) Wells, S. R.
Phillpson, Mabel Somerville, A. A. (Windsor) Weston, John Wakefield
Pielou, D. P. Somerville, Daniel (Barrow-In-Furness) Wilson, Sir C. H. (Leeds, Central)
Rains, W. Spender-Clay, Lieut.-Colonel H. H. Wilson, Col. M. J. (Richmond)
Reid, D. D. (County Down) Steel, Samuel Strang Windsor-Clive, Lieut.-Colonel George
Remer, J. R. Stuart, Hon. J. (Moray and Nairn) Wise, Sir Frederic
Remnant, Sir James Stuart, Lord C. Crichton. Wolmer, Viscount
Rhys, Hon. C. A. U. Sutcliffe, T. Wood, Major Rt. Hon. Edward F. L.
Richardson, Lt.-Col. Sir P. (Chertsey) Sykes, Major-Gen. Sir Frederick H. Wood, Sir H. K. (Woolwich, West)
Roberts, Samuel (Hereford, Hereford) Thomson, F. C. (Aberdeen, South) Worthington-Evans, Rt. Hon. Sir L.
Ropner, Major L. Thomson, Sir W. Mitchell-(Croydon, S.) Yerburgh, Major Robert D. T.
Roundell, Colonel R. F. Tryon, Rt. Hon. George Clement
Russell-Wells, Sir S. (London Univ.) Turton, Edmund Russborough TELLERS FOR THE AYES.—
Samuel. A. M. (Surrey, Farnham) Vaughan-Morgan, Col. K. P. Commander B. Eyres-Monsell and
Sandeman, A. Stewart Waddington, R. Colonel Gibbs.
Savery, S. S. Ward, Lt.-Col. A. L. (Kingston-on-Hull)
NOES.
Acland, Rt. Hon. Francis Dyke Grenfell, D. R. (Glamorgan) Mackinder, W.
Adamson, R. Hon. William Groves, T. Maclean, Neil (Glasgow, Govan)
Adamson, W. M. (Staff., Cannock) Grundy, T. W. Macnamara, Rt. Hon. Dr. T. J.
Alden, Percy Guest, J. (York, Hemsworth) Mansel, Sir Courtenay
Alexander, A. V. (Sheffield, Hillsbro') Guest, Dr. L. Haden (Southwark, N.) March, S.
Allen, R. Wilberforce (Leicester, S.) Hall, G. H. (Merthyr Tydvil) Marley, James
Alstead, R. Hamilton, Sir R. (Orkney & Shetlan) Martin, F. (Aberd'n & Klnc'dine, E.)
Ammon, Charles George Harbord, Arthur Martin, W. H. (Dumbarton)
Aske, Sir Robert William Hardie, George D. Masterman, Rt. Hon. C. F. G.
Attlee, Major Clement R. Harris, John (Hackney, North) Maxton, James
Ayles, W. H. Harris, Percy A. Middleton, G.
Baker, Walter Hartshorn, Rt. Hon. Vernon Mills, J. E.
Banton, G. Harvey, T. E. (Dewsbury) Mond, H.
Barclay, R. Noton Hastings, Sir Patrick Morel, E. D.
Barker, G. (Monmouth, Abertillery) Hastings, Somerville (Reading) Morris, R. H.
Barnes, A. Haycock, A. W. Morrison, Herbert (Hackney, South)
Batey, Joseph Healy, Cahir Morrison, R. C. (Tottenham, N.)
Berkeley, Captain Reginald Henderson, Rt. Hon. A. (Burnley) Morse, W. E.
Birkett, W. N. Henderson, A. (Cardiff, South) Mosley, Oswald
Black, J. W. Henderson, T. (Glasgow) Moulton, Major Fletcher
Bonwick, A Henderson, W. W. (Middlesex, Enfld.) Muir, John W.
Bramsdon, Sir Thomas Hirst, G. H. Muir, Ramsay (Rochdale)
Broad, F. A. Hobhouse, A. L. Murray, Robert
Brown, A. E. (Warwick, Rugby) Hogbin, Henry Cairns Murrell, Frank
Brunner, Sir J. Hore-Belisha, Major Leslie Nichol, Robert
Buckle, J. Howard, Hon. G. (Bedford, Luton) Nixon, H.
Burnie, Major J. (Bootle) Hudson, J. H. O'Grady, Captain James
Buxton, Rt. Hon. Noel Jackson, R. F. (Ipswich) Oliver, George Harold
Chapple, Dr. William A. Jenkins, W. (Glamorgan, Neath) Owen, Major G.
Charleton, H. C. Jenkins, W. A. (Brecon and Radnor) Paling, W.
Climie, R. Jewson, Dorothea Palmer, E. T.
Cluse, W. S. John, William (Rhondda, West) Parkinson, John Allen (Wigan)
Clynes, Rt. Hon. John R. Johnston, Thomas (Stirling) Pattinson, S. (Horncastle)
Collins, Sir Godfrey (Greenock) Jones, C. Sydney (Liverpool, W. Derby) Perry, S. F.
Collins, Patrick (Walsall) Jones, Henry Haydn (Merioneth) Pethick-Lawrence, F. W.
Comyns-Carr, A. S. Jones, Rt. Hon. Leif (Camborne) Phillipps, Vivian
Costello, L. W. J. Jones, Morgan (Caerphilly) Potts, John S.
Cove, W. G. Jones, T. J. Mardy (Pontypridd) Purcell, A. A.
Darbishire, C. W Jowett, Rt. Hon. F. W. (Bradford, E.) Raffan, P. W.
Davies, Ellis (Denbigh, Denbigh) Jowltt, W. A. (The Hartlepools) Raffety, F. W.
Dickie, Captain J. P. Kay, Sir R. Newbald Rathbone, Hugh R.
Dickson, T. Keens, T. Raynes, W. R.
Dudgeon, Major C. R. Kennedy, T. Rea, W. Russell
Dukes, C. Kenworthy, Lt.-Com. Hon. Joseph M. Richards, R.
Duncan, C. Kenyon, Barnet Richardson, R. (Houghton-le-Spring)
Dunnico, H. Kirkwood, D. Ritson, J.
Edwards, C. (Monmouth, Bedwellty) Lambert, Rt. Hon. George Roberts, Rt. Hon. F. O. (W. Bromwich)
Edwards, G. (Norfolk, southern) Lansbury, George Robertson, J. (Lanark, Bothwell)
Edwards, John H. (Accrington) Laverack, F. J. Robinson, S. W. (Essex, Cheimsford)
Egan, W. H. Law, A. Romeril, H. G.
Falconer, J. Lawrence, Susan (East Ham, North) Samuel, H. Walter (Swansea, West)
Finney, V. H. Lawson, John James Scrymgeour, E.
Fletcher, Lieut.-Com. R. T. H. Leach, W. Seely, H. M. (Norfolk, Eastern)
Gardner, B. W. (West Ham, Upton) Lee, F. Sherwood, George Henry
Gardner, J. P. (Hammersmith, North) Lessing, E. Shinwell, Emanuel
Gavan-Duffy, Thomas Linfield, F. C. Sinclair, Major Sir A. (Caithness)
George, Major G. L. (Pembroke) Livingstone, A. M. Smith, Ben (Bermondsey, Rotherhithe)
Gibbins, Joseph Loverseed, J. F. Smith, T. (Pontefract)
Gilbert, James Daniel Lowth, T. Snell, Harry
Gillett, George M. Lunn, William Snowden, Rt. Hon. Philip
Gosling, Harry McCrae, Sir George Spears, Brig.-Gen. E. L.
Gould, Frederick (Somerset, Frome) MacDonald, Rt. Hon. J. R. (Aberavon) Spence, R.
Graham, W. (Edinburgh, Central) McEntee, V. L. Spencer, George A. (Broxtowe)
Greenall, T. Macfadyen, E. Spencer, H. H. (Bradford, South)
Speor, Dr. G. E. Thurtle, E. White, H. G. (Birkenhead, E.)
Stamford, T. W. Tinker, John Joseph Whiteley, W.
Starmer, Sir Charles Toole, J. Wignall, James
Stephen, Campbell Trevelyan, Rt. Hon. C. P. Williams, David (Swansea, E.)
Stewart, J. (St. Rollox) Turner-Samuels, M. Williams, Dr. J. H. (Lianelly)
Stewart, Maj. R. S. (Stockton-on-Tees) Viant, S. P. Williams, Lt.-Col. T. S. B. (Kenningtn.)
Stranger, Innes Harold Wallhead, Richard C. Williams, T. (York, Don Valley)
Sturrock, J. Leng Ward, G. (Leicester, Bosworth) Wilson, C. H. (Sheffield, Attercliffe)
Sullivan, J. Ward, Col. J. (Stole-upon-Trent) Wilson, R. J. (Jarrow)
Sutton, J. E. Warne, G. H. Windsor, Walter
Terrington, Lady Watson, W. M. (Dunfermilne) Winteringham, Margaret
Thomas, Rt. Hon. James H. (Derby) Watts Morgan, Lt.-Col. D. (Rhondda) Wright, W.
Thompson, Piers G. (Torquay) Wedgwood, Col. Rt. Hon. Josiah C. Young, Andrew (Glasgow, Partick)
Thomson, Trevelyan (Middlesbro. W.) Welsh, J. C.
Thorne, G. R. (Wolverhampton, E.) Westwood, J. TELLERS FOR THE NOES.—
Thornton, Maxwell R. Wheatley, Rt. Hon. J. Mr. Spoor and Mr. T. Griffiths.

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

Question again proposed, "That the Clause, as amended, stand part of the Bill".

Sir K. WOOD

In his Budget speech, the Chancellor of the Exchequer stated what were his intentions with respect to the remission of this tax. He said: I propose to give relief on the cheapest seats, which are used by the less well-to-do member of the community, by abolishing the duty on payments for admission up to and including 6d., and by reducing the duty on payments over that amount up to and including 1s. 3d."—[OFFICIAL REPORT, 29th April, 1924; col. 1605, Vol. 172.] I would remind the Committee that this remission has taken effect as from 2nd June, so that the effect, I think, can be fairly well ascertained by now, because nearly a month has gone by since first this payment was remitted, and the point I want to put to the right hon. Gentleman is whether he can assure the Committee that the proper people are getting the benefit of the remission. The matter has been raised in the House several times during the last few days, and evidently some evidence is afforded that in many parts of the country the remission has not been made in such a way as to give the benefit to the people for whom it is intended. I know, for instance, that many Members have questioned the Chancellor of the Exchequer, and he has from time to time made various statements concerning the matter. The first time that his attention was called to the matter was when it was stated—I have no doubt quite accurately—in an interview with a representative deputation that if the Entertainments Duty were reduced the public would get the benefit. He also stated on that occasion, 19th June, that he saw no reason to believe that that undertaking would not be generally fulfilled. [HON. MEMBERS: "Speak up."] Very many instances have been brought to the notice of the Chancellor up and down the country, both in regard to the cinemas and also in relation to sports, in relation to the duty, that instead of the benefit going to the public it had gone into the pockets of the people who promoted these things. On more than one occasion the Chancellor has said he was making inquiries into the matter, and he could assure the-House that, if the information he subsequently obtained substantiated the allegations, and he came to the conclusion that action was necessary, he should not hesitate to take such action. On another occasion the hon. Member who speaks, I suppose, to a large extent, on behalf of the entertainments business here—

Mr. LANSBURY

Who is he?

Sir K. WOOD

The hon. Member for Ashton-under-Lyne (Sir W. de Frece).

Mr. LANSBURY

Does he not represent his constituents?

Sir K. WOOD

Certainly; but, at any rate, he speaks with authority on this question before us. He has put questions to the Chancellor of the Exchequer, and on the occasion to which I am referring it appeared to me that he raised the issue with the Chancellor as to whether or not the theatre industry had really given any undertaking in the matter. He seemed to me to imply 'that so far as the theatres were concerned their promise was only conditional upon the full Entertainments Duty being remitted. Whether that is so or not the Chancellor will, no doubt, tell us this evening. It certainly does raise a matter of importance so far as the theatres of the country are concerned. It seems to me—if I may put it so to the Chancellor—that the matter resolves itself into two parts. The first deals with the cinema trade, and the second with places like the Oval, Lord's and so on, and with football grounds. So far as the cinema trade is concerned, I think it is perfectly fair to state that a very large proportion, I believe, of those engaged in the cinema business are honourably carrying out the undertaking which they gave to the Chancellor of the Exchequer. I should be glad if the right hon. Gentleman can inform the Committee what were the exact terms of the undertaking, because there is considerable difficulty arising, or has arisen, as regards the interpretation of the arrangement that has been made.

I have carefully examined the speeches of the Chancellor of the Exchequer on this subject, and all he is apparently committed himself to in the House is that the public shall have the benefit of the remission of these taxes. A very large number if cinema proprietors are interpreting that very widely indeed. I notice some cinema proprietors are saying that they have given the benefit of the tax to their customers if, for instance, they provide a better film for those persons who witness their entertainment. Another section of these proprietors are saying that they have fulfilled the pledge which they gave to the Chancellor if they provide a seat which is nearer the screen. [HON. MEMBERS: "Nearer, or further away?"] Some say one, some the other. However, the matter, I think, is very well put by Mr. Hewitson, the chairman of the Birmingham and Midland Branch of the Cinematograph Association. He says, in an interview with a representative of the "Birmingham Mail": If not altogether in pounds, shillings and pence, the exhibitors were passing on the concession to the public. It often took the form of improved programmes or of in- creased comfort. In one house under his control the old prices were 6d., 9d. and 1s., and the new prices 5d., 8d. and 1s. He had been prepared to make the 1s. seats 11d., but the patrons had asked for the retention of is. At another house the old prices had been maintained by the vote of the patrons, who had been offered a reduction or an additional variety turn. They decided for the latter by 440 to 122. Mr. Hewitson in his statement——

HON. MEMBERS

Is this Woolwich, or where?

Sir K. WOOD

I am speaking of Birmingham. In this statement Mr. Hewitson added that a change had been followed by an increased patronage of 20 per cent. Other instances cited by Mr. Hewitson were where in these houses a number of higher priced seats had been reduced and a number of cheaper places proportionately increased. Other managements had decided to exhibit newer films. I put it to the Chancellor that this interpretation of the pledge which was given to him certainly opens a very wide door indeed. I fail to see that it fulfils the position; and it seems to me that in a very short time we shall have all the cinema people in the country saying that they have fulfilled their pledge to the Chancellor by putting on some films of a newer character, or something of that kind upon which the public really themselves have really no option. It is very desirable that what the Chancellor no doubt intends is not avoided in the manner in which I have indicated, and which has been put forward by a very responsible authority. If this is going to be the interpretation of the pledge that has been given, I think you will find very shortly that instead of the public getting the reduced prices that it ought to, the matter will be dealt with by the proprietors saying: "We are putting on a wonderful film next week"—the Ten Commandments or something of that sort—"and therefore the full amount must be paid." I put it to the Chancellor that he cannot leave the matter in this way.

I want also to put this to him. I agree very largely with the statement that he has made that he is anxious to get this matter put upon a proper footing. It may be that, we will say, 90 per cent.—as many as that—of the exhibitors in the country are honourably fulfilling their pledges. What, then, is he going to do about the remaining 10 per cent.? Although you may say that the number is a very small one, it will add very greatly to the difficulties in the localities where the various proprietors are competing one against the other. If one proprietor is honourably fulfilling the undertaking which he gave to the Chancellor and another man further down the street is ignoring it it will, I suppose, affect the takings of the man who is behaving honourably.

The other point I wish to mention is the sports aspect of the matter. In this matter the remission has been in no way passed on to the public. I have had given to me instances, and the Chancellor will no doubt be able to make some statement about the case as he promised to do. There is the case of Lord's and the Oval. Other hon. Members can give him instances in connection with the Football Association, and matches where really no remission has been made. I should be glad to know from the Chancellor, and for this purpose I put down an Amendment on the Paper that the Clause should be deleted from the Bill. I shall be glad to hear what the Chancellor has to say; whether he can make any statement to the House dealing with these several aspects of the matter, whether he will be able to assure or reassure the Committee before we pass this Clause that the benefit which he intends should undoubtedly go to the great mass of the public should so go, and that it shall not go into the pockets of people that neither he nor, indeed, any Members of this House, desires to get it.

Major COLFOX

I had expected to have to support my hon. Friend the Member for West Woolwich (Sir K. Wood) in the Amendment to leave out this Clause. Having regard, however, to the very useful Amendments that have been inserted in the Clause I feel it would be a mistake now to delete it. I refer generally to the matter of the Amendment which was inserted earlier this afternoon, and the consequential Amendment which will have the effect of re-distributing the incidence of the tax and making it what it certainly was not before, fair in its incidence. That and the other Amendments which have been carried to this Clause make it, I feel, a, workable, fair, and useful Clause. In spite of the omissions which have been pointed out by my hon. Friend and with which I am heartily in agreement; in spite, I say, of that fact and that many instances of remission of the tax have not been passed on to the consumer, I feel that half a loaf is better than no bread, and having got that, it will be a bad thing now to delete the Clause.

Viscount WOLMER

I am very glad the hon. Gentleman the Member for West Woolwich (Sir K. Wood) has raised this question, and I hope the Committee will be able to get from the Chancellor of the Exchequer the statement he promised us at Question Time the other day. We have not heard from the Chancellor of the Exchequer how he is going to get over the difficulty. I think hon. Members in all parts of the Committee will agree that the difficulty is a very real one. Even though evasion of obligation may exist in a very small proportion of cases, it is extremely unfair that these cinematograph proprietors who are playing the game should be subject to undue competition on the part of those who are not. I have always regretted the remission that the Chancellor made in this tax. It seemed to me that so long as people were to be taxed that a tax on their pleasures was one of the most proper things that you could do.

8.0 P.M.

The Chancellor of the Exchequer decided to reduce the Entertainments Duty, but he certainly did not mean that the money, of which he deprived the Exchequer, should go into the pockets of the owners of these cinema houses. I want to remind the Committee of the enormous amount of money that is at present paid in the cinema industry or profession. I understand that he, who is familiarly known as Charlie Chaplin, gets a salary of over £100,000 a year—that is to say, more than 20 times that received by the Prime Minister of Great Britain. [An HON. MEMBER: "He is worth it!"] Whether he is or not is a matter of opinion. While an industry is in a position to pay such gigantic salaries to its staff, it is, surely, quite wrong that it should Seize this tax, the remission of it which the Chancellor had meant to be for the benefit of the public. Personally, I have always doubted whether the public objected to this tax so strongly as the Chancellor of the Exchequer and other hon. Members thought they did, but I am certain the right hon. Gentleman would have the public behind him if he kept this tax at its full strength if he thought the undertaking given to him some weeks ago was not being properly fulfilled, I hope the Government will adopt some attitude of that sort, or make a statement somewhat to that effect, because until the House of Commons takes steps which are effective to see that this remission of the Entertainments Duty is passed on to the public, it is quite clear that a certain section of the entertainment trade are going to put the remission of this duty into their pockets. That is a thing which was never contemplated, and ought not to be tolerated for a moment.

Mr. SNOWDEN

The hon. Member who has moved this Amendment has done so in order to elicit some statement in regard to the working of these reduction proposals. It is rather early yet to know exactly whether the remission has been passed on in full to the cheaper seats, or how the reduction on the higher priced seats will operate in the long run. I do not think the hon. Member made any serious objection to the statement that a large proportion of the cinema houses have passed on the duty to their patrons. The Association of Proprietors inform me that they have made inquiries into the matter amongst all their members, and they say that 95 per cent. of the members of their association have reduced their prices by an amount corresponding to the reduction bf the duty. Of course, members of the Committee hear a great deal more about the few cases which have not passed on the duty than about the larger number who have done so. I had very exhaustive inquiries made in all parts of the country, and I think it is true to say the vast majority of the cheaper priced houses have honourably carried out the undertaking.

I am informed by the cinematograph people that 95 per cent. of the cinema people of the country are members of the association, and the undertaking I have mentioned was given to me by their official representative, who authorised me to make this statement. Of course, they cannot be expected to exercise any authority over the small minority who are outside the union. The hon. Member for West Woolwich (Sir K. Wood) quoted instances in which the duty is alleged to have been passed on to the public, not by a reduction, but by providing better seats or better fixtures at the same price. May I mention that the prices of admission to cinemas are by no means fixed. They are very varied, often according to the character of the film which is being shown, and if a more expensive film is being shown, then the prices are raised. Therefore, I do not think I should regard it as a violation of the undertaking that was given to me if the public were getting the benefit in some cases in some more artistic form than a mere reduction in the amount charged for admission.

It is rather too early yet to draw any definite conclusion on the question. The hon. Member for West Woolwich cited a hypothetical case, which I do not think justifies the conclusion he intended to draw. He pointed out that prices had been reduced in nine-tenths of the houses and one-tenth had retained the old price, and his sympathy went out to those who had not reduced their prices. I think it should be the other way about, because in that particular instance competition must be immediately effective, and the public will soon find out where the prices have been reduced, and they will go where they can get a seat for a smaller payment than elsewhere. I think we may rely upon competition to secure that the reduction of the duty will sooner or later be passed on to the consumer. From the information which I have been able to collect I am satisfied that in the vast majority of cases the public have reaped the advantage in the form of reduced admission charges.

With regard to sports, I may say that the sports associations were not represented on the delegation which waited upon me, and they were not included in the undertaking which was given. I am told that the sports associations, and particularly the cricket clubs, did not want the duty taken off. I am not quite sure about the accuracy of what I am going to say, but I am under the impression that when the tax of 3d. was first imposed upon the 6d. admission, instead of raising the price to 9d., they raised it to 1s. and made a profit of 3d. upon each person who paid that sum for admission to a match, and consequently they did not want the tax taken off because they were afraid that they would have to reduce the price to the original figure of 6d.

I have had returns from every one of the county cricket clubs, and with the exception of two no change has been made in the price of admission. I understand that they have some kind of automatic arrangement for collecting the admission money, which is adjusted exactly to take 1s., and it would be difficult for them to give change by returning one penny. May I add that there are two county cricket clubs which have reduced their prices, and they deserve mentioning because we were informed by the Leader of the Opposition that one of these county clubs was in a very impecunious position. The two county cricket clubs which have reduced their prices are Warwickshire County Cricket Club and Glamorganshire, and in each case the prices have been reduced by the amount of the tax. The football season will begin in a few months' time, and we shall have to wait and see what they do. On the whole, I think the response all round has been very good, and those who have given the undertaking to me have to the extent of probably 95 per cent. honoured it, and if the minority which has been referred to by the hon. Member far West Woolwich are giving a better entertainment or better seats instead of a reduction in the price of admission, I do not know that there is much to complain about.

Of course, I know that there is some excuse for a very few cinema people trying to put the money into their own pocket. Possibly the incidence of the tax in the past may have been thrown upon the proprietors, and it has prevented them raising their prices, and the consequence has been that they have been working at a smaller profit. We shall, however, have to wait a little longer to see the actual results. I am not in the least inclined to think that we did wrong in making the reductions that we did when the result undoubtedly has been that so large a part of the reduction has been passed on, and I think the operation of the law of competition will secure a full advantage to the public in one form or another. I think the undertaking that has been given to me by the various associations will be recognised in one form or another.

Sir K. WOOD

I want to thank the Chancellor of the Exchequer for the very clear statement he has made; and I may say that it has given considerable satisfaction to me because I thought I should never have lived to see the day when a Socialist Government would put a proposal of this kind into operation. I only want to say that I think there is a little danger in permitting certain cinema people, instead of reducing their prices, meeting the difficulty by way of a better film, or in other ways, because Heaven knows how people would regard the films! The Chancellor of the Exchequer may think a film is very excellent whilst I might have a contrary opinion. The diffi- culty of the matter is leaving it to the proprietors to determine which are the better films, and, as the Chancellor of the Exchequer knows, it is difficult for them to put that matter forward now, because at most of these cinemas the films are booked up for months ahead. Consequently, when I read about the cases in Birmingham which I have mentioned, and where they say they are putting on better films and remitting the duty in that way, it is difficult to understand how this can be done when as a matter of fact the arrangements for their films are made months ahead, and therefore that is an argument which has very little weight. I think there is a very strong case, after what the Chancellor of the Exchequer has said this afternoon, for something being done in the case of the sports associations, because, while I believe it to be perfectly true that the great majority of the cinema people have honourably fulfilled their pledges, the right hon. Gentleman's statement this afternoon shows that the sports associations, with three exceptions, are not doing so, and, therefore, when one is dealing with the matter in a critical fashion, there obviously is a case for something being done there. I should like the Chancellor of the Exchequer at any rate to consider between now and Report whether he cannot devise something in this connection.

After all the remission of this tax was intended to benefit the public, and that is the ground upon which it should be put. If, in fact, it is net benefiting the public, I do not see why this money should go into the hands of these people. After all, at certain tines of the year, the places where most people assemble are these football matches, and it seems to me that the only effect of the Chancellor of the Exchequer's proposal, so far as these many thousands of people are concerned on many days of the week, will be to put money into the pockets of the clubs. At one football match, I believe, 40,000 pennies were put into the pocket of the club concerned, as a result of the proposal. I am sure the Chancellor of the Exchequer never intended that, and I would ask him, between now and Report, to consider whether, on his own statement to the Committee this afternoon, there is not a rather strong case for differentiating between what may be called the entertainments associations and the sports associations. I am sure the Committee will be grateful to the Chancellor of the Exchequer for the very exhaustive, inquiries he has made. I was struck by the fact that he has communicated with practically every county cricket club in the country, and one feels confident that he is regarding this matter as of some consequence. I hope, therefore, that he will have regard to what 1 think is a case which demands attention from him.

Mr. HANNON

As my hon. Friend the Member for West Woolwich (Sir K. Wood) has mentioned Birmingham several times, I think I ought to say that I am convinced that the entertainment houses in Birmingham are prepared to pass on, as far as they possibly can, the advantage of this reduction in tax to their customers, within, of course, the limits of the organisation of the respective theatres. In Birmingham in the entertainment industry, just as in sport, we are doing all that we possibly can to carry out the intentions of the Chancellor of the Exchequer. The Warwickshire Country Club and the Birmingham entertainment industry are living up to the high ideal of Birmingham and the Midlands, and, in defence of Birmingham, I desire to say that the intentions of the Chancellor of the Exchequer are being carried out just as much as they are in any other part of the country.

Mr. D. G. SOMERVILLE

To allow the proprietors of cinema theatres to pass on the benefit of the reduction, not by a reduction in the price bill, by putting on better films, seems to be a very dangerous precedent, of which some people would take advantage, and I should like to be quite clear as to whether that would be regarded as a sufficient excuse, for not passing on the reduction in the tax

Mr. GRAHAM

The point which the hon. Member has just put is quite simple. The Government, of course, have no power of compulsion in this matter over the proprietor of any entertainment, and I have no doubt that in numerous cases where a special film is shown some extra charge will be imposed, which, of course, would be simply another way of stating that the reduction in tax has not been passed on. Apart, however, from exceptional cases, I think the best reply is that, in a very large number of the cases as to which we have received infor- mation so far, the reduction in tax has been passed on. Further, there is this safeguard, that, if it were not passed on, a very large part of the campaign of the cinema proprietors would be defeated, because they wanted to be able to make a lower charge in order to attract additional patronage. I think that that is really the protection in connection with the problem which the hon. Member has raised. I am afraid, however, that I could not give a more definite reply than that which I have now offered.

Clause 7 (Continuation of increased Medicine Duties), ordered to stand part of the Bill.