HC Deb 05 June 1930 vol 239 cc2489-506

There are a number of Amendments down to this Clause, many of which are consequential, and we might have a general discussion on the Clause on the first Amendment.


I beg to move, in page 11, line 42, to leave out the words "or accounts have."

Clauses 13 and 14 are very long and complicated, but I understand that they are only minor provisions which the Chancellor promised with the intention of removing certain hardships which may occur under the present Income Tax law when a new firm begins business.


The hon. Member is discussing Clauses 13 and 14. I called Clause 13, to which there are a number of Amendments. The hon. Member for Oxford (Captain Bourne) has the first Amendment down. There are quite a number which are consequential, and I suggest that we might have a discussion on Clause 13 on the first Amendment.


I am following your directions and moving that Amendment. I was trying to grasp what the Clause meant. I understand the Clause to remove certain hardships, but I take exception to it because it allows the Revenue to say which is the period to be regarded as the one year before assessment. Why should the Revenue be given this option? They are an interested party, and there should be some right of appeal. If the Revenue are given this option, we should have strong reasons offered to us why a right of appeal should not be given to the Special or General Commissioners.


The Clause gives very far-reaching powers of deciding the accounting dates for any particular firm. It is a consequence of a decision given in the High Court by Mr. Justice Rowlatt; therefore I am not going to complain of the general purposes of the Clause, but I rise to ask the Attorney-General something in the nature of a conundrum. I want to know how the Inland Revenue would deal under paragraph (a) with the very common and harmless case of a firm or company which desires for reasons of its own to change its accounting day from 30th December to 30th November? Obviously that firm, not having 12 months' accounts to submit, could not come under paragraph (a), and presumably, therefore, it would come under paragraph (b), under which the Commissioners of Inland Revenue would decide what period of 12 months should be deemed to be the profits or gains which are to be taken to be the profits or gains of the year preceding the year of assessment. The Attorney-General knows quite well that there are many trading firms, and in particular many manufacturing firms, who depend entirely upon their stocktaking to arrive at an accurate figure of their profit or losses in the preceding year. Firms may wish to change their stocktaking date from the end of a period of 12 months to the end of 11 months. My own firm did it many years ago. We always used to make the 30th of December our accounting date, but for good reasons we changed it to the 30th November, and therefore were able to produce only a profit and loss account for 11 months for that year. I ask how the Commissioners of Inland Revenue can possibly deal with a case of that sort under this Clause.

I have no objection to the general powers taken, but it is quite obvious that words should be inserted in the Clause to deal with such a frequent and common case as I have described. There is no question of trying to dodge the payment of revenue. There are a great many reasons—market reasons, financial reasons, all sorts of reasons—why a firm may wish to change the accounting period from one period of the year to another. As it stands, the Clause does not deal with such cases; or, if they are dealt with under the Clause, it is left to the Commissioners to decide what period shall be deemed to be the year the profits or gains of which are to be taken to be the profits or gains of the year preceding the year of assessment. The commissioners may say in such a case: "We are sorry that you Cannot put before us a 12 months' trading account, and the only period of 12 months we can accept as the basis of profits of the year preceding is a period of 12 months about two or three years ago." Under the Sub-section they would be entitled to say that to a firm which could put forward trading accounts for only 11 months. I am sure the Attorney-General will recognise that there is something in my point, and I will be obliged if he will consider what I have said and, if necessary, include something in the Bill on Report stage which will meet it.

9.0 p.m.


After a year's experience of Revenue work I would be the first to admit that there are many conundrums which anybody can ask but which it is extraordinarily difficult to answer. I am not going to pretend for one moment that I have anything like an encyclopaedic knowledge, for I see sitting opposite to me a great many gentlemen who could very easily prove that I have not. I will do the best I can, and that is all I can do. In 1926, when a change over was made to the one-year period, there was included in the Finance Act of that year a Section, Section 34, designed to deal with these cases, and, broadly speaking, we desire to continue Section 34, subject to minor details. The first difficulty relates to new companies. The whole principle of Income Tax is that, although you pay income in respect of the income of the year of assessment, yet by a conventional standard it is measured by the income of the previous year. In the case of a business, instead of taking as the year of measure a purely artificial year—the financial year from the 6th of April in one year to the 5th of April in the following year—which is not a period which coincides with the period of the accounts of any business, you are entitled to take as the year of measure the actual 12 months' accounts of the business, so long as those accounts end at some date within the year of measure. Section 34 of the Act of 1926 started in this way: Where in the case of any trade, profession or vocation.… it has been customary to make up a balance sheet. But what is the position of a new company? Of course, a limited liability company must keep accounts. One can predicate of it that it will go on keeping accounts so long as it lives, or the directors will find themselves in gaol. On the other hand, can we say of a new company that it has been "customary to" make up the accounts? Mr. Justice Rowlatt heard a case which raised this very point. All of us who know him know what a very high authority he is on these matters, but even he said of Section 34, "I cannot understand it." He decided that in a case such as I have mentioned you could not say that it had been "customary" for the company to make up its accounts, and that consequently you could not accept as the measure the firm's accounts, notwithstanding that they ended within a date during the term of measure. You could not take that because you could not say it had been "customary." Obviously that is not good business. It is very undesirable.

Every Member of the Committee will agree that it is undesirable to have to assess on a completely artificial period. In the case of a business which has just started and is on an ascending scale, is doing rather better every year, it will pay that business to have its year of measure thrown back as far as possible. The accounts are going up all the time. If you get a company which is going downhill it pays them to throw their year of measure as far forward as possible, and in a case such as that it does not pay them to take the actual business year, but to take as the artificial standard the 6th and the 5th April which involves a complicated splitting of accounts. Probably hon. Members will say that the next Clause also contains complications, but in that Clause we have endeavoured to meet the case of the company that is going downhill, and we are putting ourselves in the position even in the case of a new company of accepting the actual business accounts. We accept as our period of measurement a 12 months' account which ends at the same date as in previous years. This is purely a reform which Mr. Justice Rowlatt indicated should be made, and he said that the framers of the Act of 1926 did not contemplate the use of this word "customary" and that very important results would follow from it. What is customary is the question of fact. It is not a question upon which the Courts can lay down any definite guidance. One body of Commissioners may take a different view from another body of Commissioners, and where are you to draw the line? If a company has gone on making up accounts for two years, three years, or four years, is that customary? It is a very bad thing to have a purely arbitrary system, and that is going to be done away with under this Clause.

The only other point is that we are seeking to amend Section 34 of the Finance Act, 1926, in order to deal with this difficulty. I hope the Committee will not expect too detailed an explanation, and in order to make the matter plain it would be necessary for hon. Members to take out pens and pieces of paper, write the thing out and even to draw graphs, but I think they may take it from me that it is possible from the Finance Act, 1926, as it stands to do what I have already described if you want to dodge payment of the tax. Suppose that a company has a fairly steady and prosperous year, and then the same company has three most exceptional months during which they make money hand-over-fist, and in that three months that company makes more than in the previous year. What they do is that in making up the accounts they leave a gap, and leave out the three months during which they make such large profits, and start keeping a new account commencing at the end of those three months of 12 months and making the year finish within the year preceding the years of assessment. It is to avoid that possibility that this Clause is put forward. We provide for a perfectly legitimate change-over in dates from one date to another for business reasons, and we are not proposing any alteration of the law with regard to that point. I will quote Section 34 of the Finance Act, 1926, Sub-section (1, a) which provides that If no account for a period of one year was made up to date within the year preceding the year of assessment, or if more accounts than one were made up to dates within that year, the Commissioners of Inland Revenue shall decide what period of 12 months shall be deemed to be the year the profits or gains of which are to be taken to be the profits or gains of the year preceding the year of assessment. That is the existing law.


Suppose that in the year preceding the year of assessment the firm has finished its year in 11 months instead of 12 months. In that case, do the Commisisoners fix the 12 months' profit?


I think the answer is that, on the hypothesis which the hon. Member puts, there would then be no business year of 12 months finishing in the year of assessment, and they have to decide what period of 12 months they are taking. What would happen in that case would be that they would make up the artificial account for the period from the 6th April to the 5th April for the year preceding the year of assessment. That would involve a dissection of accounts, and it would make up an artificial account.


Is it not the case that there would be two accounts made up by the Commissioners, and paragraph (a) would not apply, because there would be more than one account?


I do not think the case has been put where there would be two accounts. Take the preceding assessment as the term of measurement. Say that in September of the year of measure the firm's accounts are made up, but for some perfectly legitimate reason, instead of being 12 months' accounts, they are for a period of 11 months. That is the only account which they have in the year of measure and it is not 12 months.


Would it not be open to that firm to make up its accounts from the 6th April to the 5th April? That would be two accounts for the year, and in that case paragraph (b) would come in, and the Commissioners would assume the right to judge which 12 months was to be taken.


The right hon. Gentleman is quite right. What happens in that case is that the Commissioners of Inland Revenue take the artificial period from the 6th April to the 5th April and dissect the accounts, and make up what they think is the measure upon which the company has to pay. That is not being changed by this Bill, and we are merely continuing what is done at the present time by Section 34 of the Finance Act, 1926. We are merely altering Section 34 of that Act in the two respects which I have indicated. We are doing away with the word "customary," and we make quite certain that there will not be any gaps by taking a lower period of measure. Subject to that we merely repeat Section 34 of the Finance Act of 1926.

The hon. Member for Farnham (Mr. A. M. Samuel) said that the Commissioners of Inland Revenue are being allowed to decide, and there is no appeal, and he said that that seemed hard. It is a poor answer to say that we are following in that matter Section 34 of the Act of 1926. We are doing so in fact, but we must try to improve upon what was done in 1926. I think the real answer is this: It does not so much matter what period you take, so long as you adjust the inequalities which result from taking a particular period. It would obviously be bad to take some period which had already served as a measure and had already borne taxes. That would be double taxation. Consequently, Section 34 of the Act of 1926 provides, in Sub-section (3)—which, as the Committee will see, is not touched, and still remains the law—that: An appeal shall lie against any assessment or additional assessment or in respect of any repayment of tax under Sub-section (2), and any such appeal shall be made to the General or Special Commissioners. If a taxpayer says, "You, the Commissioners, have hit me very hard here. You have taken an unfair period, and the result of your taking an unfair period is that you have served upon me an additional assessment, or a fresh assessment, and I have had to pay more tax," the taxpayer then has the right of appeal to the General or Special Commissioners against that assessment, and, consequently, he has his right of appeal against the consequences of what the Commissioners of Inland Revenue do in taking a particular period of 12 months. That, no doubt, is why the Chancellor of the Exchequer in 1926 was satisfied to leave the matter in this way, and, for my part, in this matter at any rate, I think the Chancellor of the Exchequer of that time was justified. It is necessary that this matter should be determined, and, as long as there is an appeal against the consequences, all is well. Therefore, I think the Committee will do well to leave this provision as it is.


The calculation made from the figures of any particular year may be quite in order and quite fair, but that is not the point. The Attorney-General has fenced away from the point which I put to him. The point is this: Why should the Revenue be given the option of fixing the period which is to be regarded as the one year before the year of assessment? If the Revenue is to be given that option, that may be the point of grievance of the taxpayer. The Revenue ought not to be the judge in its own case, and the taxpayer ought to be conceded the right of going to the General or Special Commissioners to adjudicate upon his grievance, if he has one, in regard to whether the period selected by the Revenue is a fair one. That is the point that I want to put to the Attorney-General, and not as to whether the deductions based upon any one period are fair or not.


Why does the taxpayer object to a particular period of 12 months being taken? He objects because it results in inequity to him—it results in double taxation, or in his paying too much tax. He must, before he is called upon to pay any tax at all, be served with an assessment, and, as he is given here the right of appeal to the General or Special Commissioners, I maintain that, although he has no right of appeal in so far as the period taken is concerned, he is absolutely protected from any inequity which follows as the result of taking any particular period. That protection he gets by virtue of his appeal to the General or Special Commissioners. That is why it was that in 1926 this House was prepared to leave the matter in that way, and that is why I suggest that this Committee may rest content that the taxpayer is amply protected.


The appeal seems to be against the assessment, but suppose that, while the period taken is complained of, the assessment is perfectly right. If the assessment is right, there will be no successful appeal against it. The hardship is in taking the particular period in question, and the Clause says that the Commissioners of Inland Revenue can fix the period. The period having been fixed, the assessment may be perfectly right. It is no use then appealing against the assessment, because it is right, but the period may be a double period, or a period which is not a representative period. It may be, as the Attorney-General said, a period including three months of totally unusual profits. That period having been selected by the Commissioners of Inland Revenue, the assessment may be right, including those three months' exceptional profits, but the period is not representative of the business of the individual or company. What I want to know is, whether the appeal against the assessment is sufficient also to cover the period, if the assessment is correct.


If you select a particular period, it must be a period of 12 months. The right hon. Gentleman will agree that there is no hardship on the taxpayer if he has to pay taxes in respect of income which he has in fact received. The great hardship is in having to pay double taxation, and, if there is any question of double taxation, obviously the right procedure is to appeal against the assessment. So long as there is no question of double taxation, why should not a taxpayer pay taxes in respect of income which he has actually received in any given period of 12 months, the hypothesis being that he has not already paid it? Otherwise, of course, there is an appeal against the assessment. In case of double taxation, you appeal against it by appealing against the assessment. The period having been fixed, that is the starting point, the terminus from which you begin, and, as you go on from year to year, you follow on with periods of 12 months after that. The whole point is that any irregularities adjust themselves, good years compensating for bad years.


So long as the given period is not in two years.


If there is any question of any period coming in twice, either as measure or as tax, I can assure the right hon. Gentleman that there will be an appeal against the assessment.


If it is only the period?


If there is any question of double taxation, either by measure or anything else, there is an appeal against the assessment.


The Attorney-General has given the case of a period of three months which is particularly good, and which the taxpayer, from his point of view, might try to miss out; but take the contrary case, namely, that of three particularly bad months which the Inland Revenue desire to miss out, selecting a period of 12 months which does not include them. They have a perfect power to do that under these words, and there is no appeal against it, because the assessment for that period of 12 months is a correct assessment. What is the position then?


Why should not the taxpayer pay tax on income that he has received? So long as he does not pay it twice, I do not see what grievance he has.

Captain BOURNE

I am much obliged to the Attorney-General for his explanation of this Clause, which indicates that on the whole the Clause has the meaning that I thought it had. There are, however, two points which I should be glad if the Attorney-General would explain. Section 34 of the Finance Act, 1926, deals with one account only, and I am puzzled by the words "account or accounts," and "accounts.… made up to a date or dates." As I understand it, by Section 29, of the Act of 1926 the three years' average was abolished, and the preceding year was constituted the year of measurement. If that is correct, I am not certain why it is necessary to reintroduce the three years immediately preceding the year of assessment. I cannot quite understand the point. It seems that what is actually taken as the year is the year preceding that in which the account is made up to a definite date. Taking the part of the world with which I am familiar as regards farming, the account is generally made up to when the tenancies change, which will be the 2nd February. Presumably, that account would be the measure for that year, running from the 3rd February to the 2nd February each year. I cannot see what is the necessity for the accounts for the three years immediately preceding that, unless they are going to be used to average out the year. It does not seem that that is the case. Am I right in assuming that the only object of these words is to prevent the taxpayer missing out the three good months, to which the Attorney-General referred, and equally to prevent the Inland Revenue missing out, the three bad months?

The second point is with regard to the words "was the only account made up." There is one point that occurs to me with which the Attorney-General did not deal. You have the case of a farm where a partner either retires or dies during the year of assessment. It is perfectly obvious that an account is going to be made up from the date of his retirement in order that his share of the business may be paid up or an assessment made to ascertain it. It does not necessarily follow that the partnership or business will come to an end, and I want to know whether in the event of a partner either dying or retiring, and the account not being made up to the normal trading year, but to another date for some reason, that would take the account for assessment of Income Tax out of paragraph (a)? I can quite conceive the case where a farmer would be prepared to carry on as a firm, in spite of the fact that in the case of one partner dying it was necessary to make up a special account. It may be necessary to make up a special account in the middle of November, and estimate his share of the business, although the business ordinarily makes the accounts up to 31st December. It would not be the only account in such a case, and, therefore, it would not come in under paragraph (a). That is a matter which, at least, requires consideration between now and the Report stage.


I am not altogether satisfied with what the Attorney-General has said in regard to the appeals against the period of assessment. In spite of what he said in his concluding remarks, I should like to point out that with the case of the 11 months' assessment which for some perfectly legitimate commercial reason is taken, he stated, in practice the assessment would be made from the 6th April to the 5th April, whatever those 11 months might be. That is what he said. After all, the question is, what is going to be done to the traders of the country? If it is a practical thing, and if there is a short period for some legitimate reason, and that period is going to be taken for this particular 12 months, surely it is obvious that some months might escape taxation while other months might have to pay, being assessed twice over.


I did say I thought that was the practice existing to-day, but I would say that we are not seeking to change or to alter that at all. If I was right, that will continue to be the practice. If the practice to-day is to put on, artificially, an extra month at the end of the 11 months by means of an analysis of the new accounts, that will continue. We are not seeking to snake any alteration whatsoever in the existing law.


Yes, but in view of this Clause, surely what is done to-day and what is the existing practice is of very considerable importance. The Attorney-General asserted that there could be no appeal on the period of assessment. After all, the period of assessment may involve very considerable issues, because if a certain case is assessed twice over, it is obviously unjust, and, therefore, it does seem to me that some words should be inserted which would act as a safeguard. If for any legitimate commercial reason, a company does take an abnormal period of 11 months, 10 months or nine months, as is frequently the case, I really think that some words ought to be put in which would safeguard them and give them a right of appeal on the period, and allow the question of the period to come in and be argued on the appeal. I think the Attorney-General might consider that matter between now and the Report stage.


As the Attorney-General has said, this is a very difficult and obscure Clause. It has been said before that Section 34 of the Act of 1926 is also obscure. The Committee wants to be satisfied exactly what alteration the Bill makes in the existing law. I confess that, with the very best will in the world to follow the Attorney-General, I am not now quite satisfied as to what the effect is. It is clear, reading the Act itself, that there was some such doubt in the Parliament of that time, as in our minds to-day, because the words of Section 34 are practically designed to meet the sort of difficulty to which my hon. Friends have alluded. Section 34 of the Act of 1926 contains these curious words: Where, in the case of any trade, profession.… it is customary to make up accounts. Then in paragraph (b) of the same Clause it says: If no account for a period of one year was made up to date.… the Commissioners of Inland Revenue shall decide. When you read the Bill, you find that the words: customary to make up accounts"— have been struck out, and in place thereof it is proposed to describe the period definitely, and it is defined as three years preceding the year of assessment. When you come to look at the rights of the person who may be aggrieved, it says in the Act: If no account for a period of one year was made up.… the Commissioners of Inland Revenue shall decide"—

whereas, in the Bill, it says: in any case to which the provisions of paragraph (a) do not apply the Commissioners of Inland Revenue shall decide. Therefore, surely there is a very clear distinction between the rights of the aggrieved person under the existing Act and the provisions of the Clause which we are now discussing. I am quite certain that the Attorney-General desires, as much as anybody in the Committee, that there should be no grievances about this matter, and that he desires to do the fair thing by the man who may be aggrieved. Therefore, I would reinforce my hon. Friend's appeal that we should consider between now and Report whether the Bill really gives the aggrieved person the rights which the Attorney-General thinks it does. It is a matter of grave doubt. There is all the difference in the world between giving an appeal upon the assessment and upon the period, because the assessment may be perfectly right and there may be no ground of appeal whatever, but if the period as to which the assessment is made is all wrong, a man may suffer real hardship. I hope the right hon. Gentleman will give an undertaking to consider the matter further.

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

The Committee divided: Ayes, 243; Noes, 116.

Division No. 348.] AYES. [9.38 p.m.
Adamson, Rt. Hon. W. (Fife, West) Burgess, F. G. Freeman, Peter
Adamson, W. M. (Staff., Cannock) Burgin, Dr. E. L. Gardner, B. W. (West Ham, Upton)
Addison, Rt. Hon. Dr. Christopher Buxton, C. R. (Yorks. W. R. Elland) Gardner, J. P. (Hammersmith, N.)
Aitchison, Rt. Hon. Craigie M. Caine, Derwent Hall- Gibbins, Joseph
Alexander, Rt. Hon. A. V. (Hillsbro') Cameron, A. G. Gibson, H. M. (Lancs. Mossley)
Ammon, Charles George Carter, W. (St. Pancras, S. W.) Gill, T. H.
Arnott, John Charieton, H. C. Gillett, George M.
Aske, Sir Robert Chater, Daniel Gossling, A. G.
Attlee, Clement Richard Church, Major A. G. Gould, F.
Ayles, Walter Clarke, J. S. Graham, Rt. Hon. Wm. (Edin., Cent.)
Baker, John (Wolverhampton, Bilston) Cluse, W. S. Gray, Milner
Baldwin, Oliver (Dudley) Clynes, Rt. Hon. John R. Grenfell, D. R. (Glamorgan)
Barnes, Alfred John Cocks, Frederick Seymour Griffith, F. Kingsley (Middlesbro' W.)
Batty, Joseph Cove, William G. Griffiths, T. (Monmouth, Pontypool)
Benn, Rt. Hon. Wedgwood Daggar, George Groves, Thomas E.
Bennett, Capt. Sir E. N. (Cardiff C.) Dallas, George Grundy, Thomas W.
Benson, G. Dalton, Hugh Hall, F. (York, W. R., Normanton)
Bentham, Dr. Ethel Davies, Rhys John (Westhoughton) Hall, G. H. (Merthyr Tydvil)
Bevan, Aneurin (Ebbw Vale) Denman, Hon. R. D. Hall, Capt. W. P. (Portsmouth, C.)
Bowen, J. W. Dickson, T. Hamilton, Mary Agnes (Blackburn)
Brockway, A. Fenner Dudgeon, Major C. R. Hamilton, Sir R. (Orkney & Zetland)
Bromfield, William Duncan, Charles Harbord, A.
Bromley, J. Ede, James Chuter Hardie, George D.
Brothers, M. Edmunds, J. E. Harris, Percy A.
Brown, C. W. E. (Notts. Mansfield) Edwards, E. (Morpeth) Hartshorn, Rt. Hon. Vernon
Brown, Ernest (Leith) Egan, W. H. Haycock, A. W.
Brown, Rt. Hon. J. (South Ayrshire) Elmley, Viscount Hayes, John Henry
Brown, W. J. (Wolverhampton, West) Forgan, Dr. Robert Henderson, Arthur Junr. (Cardiff, S.)
Henderson, Thomas (Glasgow) Matters, L. W. Smith, Alfred (Sunderland)
Henderson, W. W. (Middx., Enfield) Messer, Fred Smith, Frank (Nuneaton)
Herriotts, J. Middleton, G. Smith, Rennie (Penistone)
Hirst, G. H. (York W. R. Wentworth) Milner, Major J. Smith, Tom (Pontefract)
Hoffman, P. C. Montague, Frederick Smith, W. R. (Norwich)
Hopkin, Daniel Morgan, Dr. H. B. Snell, Harry
Horrabin, J. F. Morley, Ralph Snowden, Rt. Hon. Philip
Hudson, James H. (Huddersfield) Morris-Jones, Dr J. H. (Denbigh) Sorensen, R.
Hunter, Dr. Joseph Morrison, Herbert (Hackney, South) Stamford, Thomas W.
Isaacs, George Morrison, Robert C. (Tottenham, N.) Strachey, E. J. St. Loe
Jenkins, W. (Glamorgan, Neath) Mort, D. L. Strauss, G. R.
John, William (Rhondda, West) Moses, J. J. H. Sullivan, J.
Johnston, Thomas Mosley, Lady C. (Stoke-on-Trent) Sutton, J. E.
Jones, Rt. Hon Leif (Camborne) Mosley, Sir Oswald (Smethwick) Taylor, R. A. (Lincoln)
Jones, Morgan (Caerphilly) Muggeridge, H. T. Taylor, W. B. (Norfolk, S. W.)
Jowett, Rt. Hon. F. W. Nathan, Major H. L. Thorne, W. (West Ham, Plaistow)
Jowitt, Rt. Hon. Sir W. A. Naylor, T. E. Thurtle, Ernest
Kedward, R. M. (Kent, Ashford) Newman, Sir R. H. S. D. L. (Exeter) Tillett, Ben
Kennedy, Thomas Noel Baker. P. J. Tinker, John Joseph
Kenworthy, Lt.-Com. Hon. Joseph M. Oliver, George Harold (Ilkeston) Toole, Joseph
Kirkwood, D. Oliver, P. M. (Man., Blackley) Tout, W. J.
Knight, Holford Owen, H. F. (Hereford) Townend, A. E.
Lansbury, Rt. Hon. George Palin, John Henry Trevelyan, Rt. Hon. Sir Charles
Lathan, G. Paling, Wilfrid Vaughan, D. J.
Law, Albert (Bolton) Parkinson, John Allen (Wigan) Viant, S. P.
Law, A. (Rosendale) Pethick-Lawrence, F. W. Walkden, A. G.
Lawrence, Susan Picton-Turbervill, Edith Walker, J.
Lawson, John James Pole, Major D. G. Wallace, H. W.
Lawther, W. (Barnard Castle) Potts, John S. Wallhead, Richard C.
Leach, W. Price, M. P. Watkins, F. C.
Lee, Frank (Derby. N. E.) Ramsay, T. B. Wilson Watson, W. M. (Dunfermline)
Lee, Jennie (Lanark, Northern) Rathbone, Eleanor Wellock, Wilfred
Lees, J. Richards, R. Welsh, James (Paisley)
Lewis, T. (Southampton) Richardson, R. (Houghton-le-Spring) West, F. R.
Lindley, Fred W. Riley, Ben (Dewsbury) Westwood, Joseph
Lloyd, C. Ellis Riley, F. F. (Stockton-on-Tees) White, H. G.
Logan, David Gilbert Ritson, J. Whiteley, Wilfrid (Birm., Ladywood)
Longbottom, A. W. Romeril, H. G. Whiteley, William (Blaydon)
Longden, F. Rosbotham, D. S. T. Wilkinson, Ellen C.
Lovat-Fraser, J. A. Rowson, Guy Williams, David (Swansea, East)
Lowth, Thomas Salter, Dr. Alfred Williams, Dr. J. H. (Llanelly)
Macdonald, Gordon (Ince) Sanders, W. S. Williams, T. (York, Don Valley)
MacDonald, Rt. Hon. J. R. (Seaham) Sandham, E. Wilson, C. H. (Sheffield, Attercliffe)
MacDonald, Malcolm (Bassetlaw) Sawyer, G. F. Wilson, J. (Oldham)
McElwee, A. Scrymgeour, E. Wilson, R. J. (Jarrow)
McEntee, V. L. Scurr, John Winterton, G. E. (Leicester, Loughb'gh)
McKinlay, A. Sexton, James Wise, E. F.
Maclean, Sir Donald (Cornwall, N.) Sherwood, G. H. Wood, Major McKenzie (Banff)
McShane, John James Shield, George William Wright, W. (Rutherglen)
Malone, C. L'Estrange (N'thampton) Shillaker, J. F. Young, R. S. (Islington, North)
March, S. Shinwell, E.
Marcus, M. Short, Alfred (Wednesbury) TELLERS FOR THE AYES.—
Markham, S. F. Simmons, C. J. Mr. Charles Edwards and Mr. B.
Marley, J. Sinkinson, George Smith.
Mathers, George Sitch, Charles H.
Acland-Troyte, Lieut.-Colonel Croft, Brigadier-General Sir H. Henderson, Capt. R. R. (Oxf'd, Henley)
Ainsworth, Lieut.-Col. Charles Croom-Johnson, R. P. Heneage, Lieut. Colonel Arthur P.
Albery, Irving James Davidson, Rt. Hon. J. (Hertford) Herbert, Sir Dennis (Hertford)
Atkinson, C. Davidson, Major-General Sir J. H. Hills, Major Rt. Hon. John Waller
Balfour, George (Hampstead) Davies, Dr. Vernon Hurd, Percy A.
Balfour, Captain H. H. (I. of Thanet) Davies, Maj. Geo. F. (Somerset, Yeovil) Kindersley, Major G. M.
Balniel, Lord Davison, Sir W. H. (Kensington, S.) King, Commodore Rt. Hon. Henry D.
Beaumont, M. W. Dixon, Captain Rt. Hon. Herbert Lamb, Sir J. Q.
Betterton, Sir Henry B. Duckworth, G. A. V. Lane Fox, Col. Rt. Hon. George R.
Boothby, R. J. G. Edmondson, Major A. J. Law, Sir Alfred (Derby, High Peak)
Bourne, Captain Robert Croft Erskine, Lord (Somerset, Weston-s. M.) Leighton, Major B. E. P.
Boyce, H. L. Ford, Sir P. J. Lewis, Oswald (Colchester)
Bracken, B. Forestier-Walker, Sir L. Llewellin, Major J. J.
Griscoe, Richard George Glyn, Major R. G. C. Locker-Lampson, Rt. Hon. Godfrey
Buckingham, Sir H. Graham, Fergus (Cumberland, N.) Long, Major Eric
Butler, R. A. Grattan-Doyle, Sir N. Maitland, A. (Kent, Faversham)
Cadogan, Major Hon. Edward Greene, W. P. Crawford Makins, Brigadier-General E.
Carver, Major W. H. Grenfell, Edward C. (City of London) Margesson, Captain H. D.
Cautley, Sir Henry S. Gretton, Colonel Rt. Hon. John Marjoribanks, E. C.
Chadwick, Capt. Sir Robert Burton Hacking, Rt. Hon. Douglas H. Meller, R. J.
Chapman, Sir S. Hall, Lieut.-Col. Sir F. (Dulwich) Monsell, Eyres, Com. Rt. Hon. Sir B.
Churchill, Rt. Hon. Winston Spencer Hanbury, C. Morrison, W. S. (Glos., Cirencester)
Cobb, Sir Cyril Hannon, Patrick Joseph Henry Nicholson, O. (Westminster)
Colville, Major D. J. Hartington, Marquess of O'Connor, T. J.
Courtauld, Major J. S. Harvey, Major S. E. (Devon, Totnes) Ormsby-Gore, Rt. Hon. William
Crichton-Stuart, Lord C. Haslam, Henry C. Percy, Lord Eustace (Hastings)
Peto, Sir Basil E. (Devon, Barnstaple) Somerville, A. A. (Windsor) Wardlaw-Milne, J. S.
Pownall, Sir Assheton Somerville, D. G. (Willesden, East) Warrender, Sir Victor
Ramsbotham, H. Southby, Commander A. R. J. Waterhouse, Captain Charles
Remer, John R. Spender-Clay, Colonel H. Wayland, Sir William A.
Roberts, Sir Samuel (Ecclesall) Stanley, Maj. Hon. O. (W'morland) Wells, Sydney R.
Ross, Major Ronald D. Steel-Maitland, Rt. Hon. Sir Arthur Williams, Charles (Devon, Torquay)
Russell, Alexander West (Tynemouth) Sueter, Rear-Admiral M. F. Windsor-Clive, Lieut.-Colonel George
Salmon, Major I. Thomas, Major L. B. (King's Norton) Womersley, W. J.
Samuel, A. M. (Surrey, Farnham) Thomson, Sir F. Wood, Rt. Hon. Sir Kingsley
Samuel, Samuel (W'dsworth, Putney) Tinne, J. A. Worthington-Evans, Rt. Hon. Sir L.
Sandeman, Sir N. Stewart Train, J.
Shepperson, Sir Ernest Whittome Turton, Robert Hugh TELLERS FOR THE NOES.—
Sinclair, Col. T. (Queen's U., Belfst) Vaughan-Morgan, Sir Kenyon Major the Marquess of Titchfield
Smith-Carington, Neville W. Wallace, Capt. D. E. (Hornsey) and Major Sir George Hennessy.
Smithers, Waldron Ward, Lieut.-Col. Sir A. Lambert

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

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


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

I do this in order to put myself in order so that no remarks which I may now make may impinge upon any discussion which may take place upon the Clause. We have had a very useful day's discussion in which there has been a great deal of good work and good temper displayed, and a certain amount of give and take. The Government have allowed the House of Commons to participate in moulding the legislation for which we are all jointly responsible, and, therefore, seeing that the Prime Minister is in his place, I should like to ask, what are the views of the Government as to the distance we should get to-night and the hour at which we should endeavour to terminate our proceedings? I ask this question early because, whatever the decision is, it is most important that we should utilise the available time to the best possible advantage. If it is decided that we are to make a very long effort to-night, we can examine everything in a most thorough and searching manner, but if, on the other hand, there is a desire to terminate the proceedings at a time which will not expose Members to extreme inconvenience, it will certainly require a great deal of care on the part of Members on both sides of the Committee in order to compress our discussions and make them as fruitful as possible. Perhaps the Attorney-General, speaking for the Government, or the Prime Minister, will let us know what they have in mind. I wish to make it clear that no agreement of any sort or kind has been entered into, either across the Floor of the House or behind the Chair, but we are entitled to ask what are the wishes of our masters in these matters, so that we may arrive at an arrangement for the common good?

The PRIME MINISTER (Mr. Ramsay MacDonald)

I respond very gladly to the invitation which has been given to us by the right hon. Gentleman. I do not like to aid and abet in the neglecting of duty of a very thorough and penetrating critic of the Clauses. At the same time, all we want to-night is to get to the end of Clause 16. When we have got Clause 16, which fact has been mentioned before, we shall be prepared to move to report Progress.


I am bound to say that the declaration of business which the Prime Minister has made does not seem to us on this side of the Committee to be unreasonable in view of the progress which has been made to-night and considering the postponement of Clause 12. It seems to us on this side of the Committee that we ought to be able to make a very well compressed examination of the four Clauses which now lie before us. I beg to ask leave to withdraw the Motion to report Progress.

Motion, by leave, withdrawn.