CLAUSE 29.—(Estate Duty where property of deceased has been transferred to private company.)

HC Deb 25 June 1930 vol 240 cc1183-244

Sir DENNIS HERBERT

Before the Committee enters upon the discussion of this Clause, I desire to submit to you a matter for your Ruling, Mr. Young, of which I have already given you notice. May I make this preliminary observation? I raise this point, not as a party matter, but as a matter affecting the control of the House of Commons over financial procedure as against the executive Government of whatever party, and it is, therefore, for a very much more serious reason than any of those questions which we are accustomed to discuss across the Floor of the House on the Finance Bill. May I also say, by way of supporting that, that in the event of my contention being correct, no time would be lost in regard to this Bill, for the reason that the result of my intervention, if successful, would be, at the worst, that the Chancellor of the Exchequer would have to put down new Clauses in place of these, either with or without any new Resolution. And now that he has heard the criticisms and seen the large number of Amendments on the Paper, many of which, I understand, he is willing to accept, at least in principle, if he were to put down new Clauses on the lines of the Amendments he is prepared to accept, probably the time occupied would be very much less.

With that observation to explain my submission, I would say that the submission I desire to make to you is, that Clauses 29 to 33, both inclusive, are out of order, on the ground that they are not authorised by the necessary Financial Resolution. The Clauses, apparently, are based on the 13th Resolution, which, in dealing with what may be described as the subject to be taxed, refers to "a company." The Clauses, on the other hand, propose to tax, under the definition given of private companies, companies which are not within the jurisdiction of this Parliament. There will be several points which I shall have to submit to you in the course of raising the whole question, and, if at any time you can see fit to say that on a particular point you are with me, it may possibly save time. I must, in a matter of this importance, put my points very carefully in compartments, and not fail to draw attention to each point in proper sequence. The first point is that Clauses which tax companies outside the jurisdiction of this Parliament are not within the 13th Resolution, which deals only with "company." On that, I suggest that the matter is clear beyond dispute, for this reason, that in all our proceedings here—Motions, Resolutions and Acts of Parliament—the word "company" is habitually used without qualification or addition, and, as we endeavour not to do absurd things in this House, it cannot under these circumstances apply to companies which are not under the jurisdiction of Parliament.

May I refer in support of that to another word, the use of which is analogous to the use of the word "company"; that is, the word "person"? The word "person" appears in our Parliamentary proceedings very frequently in all Acts of Parliament without any qualification limiting it in words to persons who are within the jurisdiction of this Parliament. If, therefore, it were to be held that the word "person," when used in our proceedings, was not confined to persons within the jurisdiction of this Parliament, it would have the curious result that all our legislation and all our proceedings would purport to affect and to bind all foreigners who are the subjects of other countries all over the world, who might be described as persons, although they may never have resided in or have had any connection with this country. I ought also to call attention to the fact that the word "company" with which we are dealing here is included in the word "person" under the Interpretation Act of 1889. Therefore, I think that I am justified in saying that the analogy between the use of the word "company" and the use of the word "person" is complete, and that it would reduce matters to an absurdity if the word "company," used without qualification, were to be held to extend to foreign companies not within the jurisdiction of this Parliament. I use that expression "not within the jurisdiction of this Parliament" because, of course, companies which are registered outside this country are sometimes within the jurisdiction of Parliament, because they carry on business here and have a registered office here. The same thing applies, of course, to the word "person." Our legislation properly applies to persons in this country, whether British subjects or not, but they must be within the jurisdiction of this Parliament. That is a matter which is almost self-evident, and is a matter of common sense.

I am able to quote a definite precedent for what I am advocating, as a position similar I think in every respect to the point which I am raising now, arose as lately as 1922 in connection with the Finance Bill of that year. Hon. Members who were in the House then, and a great many others, will remember that in that year the Finance Bill contained Clauses to deal with what were popularly known as one-man companies. In considering the proposals of the then Chancellor of the Exchequer in that Finance Bill, the word "company" was used in the same kind of way in which it is proposed to be used in these Clauses here. The hon. Member for Watford (Sir D. Herbert) at that time pointed out that the object of the Clause might be defeated by not getting in foreign companies, and being a much less experienced Member of Parliament than he is now, he put down an Amendment to add after the word "company" the words "whether incorporated in the United Kingdom or elsewhere"—practically the same as is done in this Bill where, after the word "company," appear the words "wheresoever incorporated." The Amendment was ruled out of order by the then Chairman of Ways and Means (Mr. James Hope), and the point is explained in a speech which follows immediately after the announcement of the Chairman, who said: The Amendment standing in the name of the hon. Member for Watford (Mr. D. Herbert) is not in order, but he has put in a revised version which would be in order."—[OFFICIAL REPORT, 20th June, 1922; col. 1222, Vol. 155.] The revised version of the Amendment being moved, the hon. Member explained that he had been obliged to make the alteration to bring the Amendment in order, because it had been ruled out on the ground that the Money Resolution, upon which the Clause was founded, was confined to companies registered in this country. It was only confined to companies registered in this country, because it simply used the word "company" in precisely the same way as the word "company" is used in the 13th Resolution, which is one of the Resolutions upon which this Bill is founded. Perhaps I am not going too far in quoting in support of this contention the fact that that particular Ruling was referred to in the subsequent debate on the Clause in question—or rather on a revised Clause which was put in, the original one having been withdrawn—by Sir Halford Mackinder, who, in discussing the matter, said that he would have preferred a Clause drawn in the form suggested by the hon. Member for Watford, but he realised that, in, order to do that, it would require a fresh Resolution in Ways and Means. It is also important that the then Chancellor of the Exchequer, the right hon. Gentleman the Member for Hillhead (Sir R. Horne)—whose business, of course, it is to know, and who in fact is necessarily some authority on matters of this kind—at a later stage of the debate, in referring to the fact that an attempt had been made to deal with foreign companies, said that the Resolution on which this Clause was based would not allow him to deal with the matter which the hon. Gentleman raised—namely, the taxation of foreign companies.

I hope that I have made my point to your satisfaction, that these Clauses are outside the 13th Budget Resolution. Many of my hon. and right hon. Friends on this side, and I feel sure many Members on all sides of the Committee, will realise that this is a point of far greater importance than the mere importance of it as applied to this particular instance. In those circumstances, my friends and I have gone into the matter with the greatest care, and we have endeavoured to see whether we could raise, in order to be able to meet them, any arguments against the position as we submit it to you. Therefore, I have a word or two to say in support of what I am going to ask you to do. I ask, as these Clauses transgress the Financial Resolution, that you should rule, in accordance with the precedent which I will quote in a moment, that you can put no question whatever upon these Clauses; in other words, that the Clauses cease to be a part of the Bill. The result, if you do that, would be that the right hon. Gentleman would then have a choice of two alternatives—he could either bring in another Resolution in Ways and Means, which would extend to companies wherever incorporated, and then put down the Clauses again in revised form, or put down new Clauses without any further Financial Resolution, if his revisions included the leaving out of foreign companies.

It has been intimated to me that it might be suggested that this was not a proper time at which to raise this particular question, and that it ought to have been raised on the Second Reading of the Bill. It is proper that I should address myself to you on that particular point. I considered very carefully whether we ought to raise this point on Second Reading, and, having taken the best advice that I could obtain on the subject, I came to the conclusion, in accordance with that advice, that the Second Reading was not the proper time on which to raise it, but that it should be raised on reaching the Clauses in Committee. I submit that it is a well-known and recognised practice in this House that, if a portion of a Bill, which is not the main object of the Bill, requires a Money Resolution, that Resolution is usually not introduced at all, not passed through Committee, and not agreed to by the House, until after the Bill has had its Second Reading, but it is passed through Committee and agreed to by the House before the time that particular Clause is reached in Committee. In this case, the particular Clauses with which we are dealing are by no means an essential part of the Finance Bill. They are Clauses which, in accordance with a comparatively recent custom, have been introduced into the Finance Bill to stop certain loopholes whereby taxpayers avoided paying what was regarded by the Revenue as their fair share of taxation. Therefore, I submit that it is in accordance with the general practice of the House that no objection could properly be raised to these particular Clauses being outside the Resolution until the time was approaching for those Clauses to be considered on the Committee Stage; and the obvious reason for that is that in this particular case it was open to the right hon. Gentleman at any moment to introduce another Money Resolution in Committee of Ways and Means to cure the defect. Again I do not need to rely entirely upon what I suggest is the practice and Well-known custom of the House. I can submit to you many important precedents on the point which I respectfully suggest cannot be over-ridden without some very serious and good reason. I am sure the Committee will understand that I speak with nothing but the greatest respect for the Chair at any time, but these were decisions not of the Chairman of Committee of Ways and Means but decisions of two of the greatest Speakers this House has had in modern times, Mr. Speaker Peel and Mr. Speaker Lowther. In the Finance Bill of 1914 there were two Clauses which it was alleged—and it was afterward admitted that it was so—were not covered by any Money Resolution which had been passed when the Budget Resolutions were passed. On the Order for Second Reading of the Finance Bill being called the matter was raised by Mr. Cassel and Sir Frederick Banbury, and Mr. Speaker Peel dealt with the matter. The reference is found in Volume 62 of the Fourth Series of the OFFICIAL REPORT, in column 1567 and the following columns.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

It could not have been Mr. Speaker Peel in 1914.

Sir D. HERBERT

I apologise if I said Mr. Speaker Peel. It was, of course, Mr. Speaker Lowther. He said: The objection taken by the hon. and learned Member is that this Finance Bill goes beyond the 'leave to introduce' or its equivalent, the Bill having been introduced upon Resolutions. In other words, goes beyond Resolutions existing when the Order for Second Reading was made; there has been some slight alteration in our procedure since then—we have got rid of the leave to introduce. Mr. Speaker Lowther proceeded to deal with the suggestion which had been made that the Bill should be withdrawn, and said: The answer which I give to that is, that the irregularity can be cured without any injustice being done to any section of the House or to any interest concerned."—[OFFICIAL REPORT, 22nd June, 1914; cols. 1569–70, Vol. 63.] Cured, that is to say, by the bringing in of a Resolution which would be sufficient to carry those Clauses. Then Mr. Lowther, having taken the position that the proper time to make this particular point was when those Clauses were reached in Committee, quoted in support the decision of Mr. Speaker Peel in 1894. I am going to refer to that, but I may mention now, as a matter of some interest, that in that case the Chancellor of the Exchequer apparently changed his mind. No Resolution was introduced to support those Clauses, and when they were reached in Committee the Chairman of Committee of Ways and Means, who, I think I am right in saying, was Mr. Whitley, the late Speaker of this House, without the question being raised any further by anybody—and I submit, Mr. Chairman, that this is a question which you should deal with on your own initiative as soon as the point is brought to your knowledge—said: I put no question on Clauses 13 and 14. There is no Resolution to authorise their consideration. An hon. Member, Mr. Fell, afterwards Sir Arthur Fell, asked: Do they disappear entirely from the Bill? And the Chairman said: That is so. The right hon. Gentleman who is now the Member for St. George's (Sir L. Worthington-Evans), then Mr. Worthington Evans, asked whether the Chairman's attention had been drawn to an Amendment on the Order Paper in the name of the Chancellor of the Exchequer. As I say, apparently the Chancellor of the Exchequer had changed his mind and had decided not to proceed with the Clauses, and had put down an Amendment to leave them out. In accordance with what he had already done, the Chairman said: My duty overrides the Amendments on the Paper."—[OFFICIAL REPORT, 15th July, 1914; col. 1798, Vol. 64.] In other words, no question on the Amendments could be put to the House. The Clauses simply were not in the Bill.

Mr. DENMAN

May I ask whether we cannot get on to Clause 29?

The CHAIRMAN

This is a point of Order, and I must listen to it. We cannot have two points of Order at one time.

Sir D. HERBERT

I hope the hon. Member will have a little patience. The point I am endeavouring to put is not a very easy matter to explain—[Interruption.] If the hon. Member will not have patience I must continue my address to the Chair and to leave his remarks to be answered at some other time. The other precedent to which I am referring was a decision of Mr. Speaker Peel given on the Finance Bill of 1894. The reference is in Volume 24 of the Fourth Series of the OFFICIAL REPORT, Column 1200 and the following columns. In that case objection was taken to Clause 15 of the Finance Bill by Mr. Gibson Bowles on the order for Committee being read, which was just before going into the Committee stage. Mr. Speaker Peel, having said that the hon. Member had done right in referring to the importance of the matter and drawing attention to the Clause, said: In my opinion the original Resolution in Committee of Ways and Means did not contemplate the extra imposition of duty involved in the operation of Clause 15. Having declined to interfere then, saying that that was not the proper time, he said: Therefore, when Clause 15 is reached in the Committee stage the House will take no cognisance of it unless a Resolution of the Committee of Ways and Means authorising the additional duties imposed by the Clause has been 'previously agreed to. It will be necessary for the House to go into Committee of Ways and Means and pass a Resolution which will cover the additional duties before the Committee can consider the Clause. I feel that I owe some apology to you and the Committee for having occupied some time in putting this point. It may be said, I think, that when one really goes into it the point is not an intricate one to those who are familiar with our financial procedure, and my only excuse for having submitted it at such length and in such detail is that I regard this as a matter of the very greatest importance—the preservation of the peculiar financial procedure upon which alone rests the control of the House of Commons over financial matters. I hope I have shown to the satisfaction of the Chancellor of the Exchequer that under the peculiar circumstances and the somewhat intricate nature of these Clauses it will be better for him to put down the Clauses in a form which would occupy very much less time than they are likely to occupy in the form in which they are at present. I ask you, Sir, to rule that these Clauses, not being covered by any Financial Resolution, cannot now be considered in Committee; and if there is a point against my submission with which I have not yet dealt, I hope you will allow me an opportunity of dealing with it, if I am able to do so, when you have given your opinion on this point.

The CHAIRMAN

I am very much obliged to the hon. Member for Watford (Sir D. Herbert) for giving me notice that he intended to raise this point of Order. He has put it to me this afternoon in three stages. First, he called attention to the Budget Resolutions, and he contends that these Clauses are not covered by the Budget Resolutions and therefore ought not to be recognised as being in the Bill. In reply to that, I have to say that, if that were the only point raised, this stage would be too late for that point to be made; he should have raised the point before Mr. Speaker at the beginning of the Second Reading of the Bill. The second point he put to me was that on a certain occasion he himself moved an Amendment in Committee and that the then Chairman ruled the Amendment out of order. It was clearly within the competence of the Chairman to rule that Amendment out of order. He was not called upon to deal with the Clause in any other way than to look at it from the point of view of the hon. Member's Amendment, and the contention of the hon. Member that he could move his Amendment in another way is a different thing from asking me to exclude five Clauses from the Bill.

Further, he submitted that it has not been the practice of the House to deal with Clauses in Committee which were outside the Money Resolution and he has cited two Clauses of the Finance Bill of 1914. Again, on that point, I suggest to him that he is too late in raising his point of Order. In the 1914 Bill there were two Clauses on which no question was put. It is perfectly true that those two Clauses, were not dealt with in the Ways and Means Resolutions, and that before they could be considered new Money Resolutions would have been necessary.

Those two Clauses were italicised in the Bill, and, being italicised, they were for all practical purposes not part of the Bill. Before they could be considered a Money Resolution was necessary, and, no Money Resolution having been brought in, the Chairman refused to entertain any question on those two Clauses. It was admitted generally, I think, by the whole House, that they were beyond the scope of the Money Resolution on which the Bill was based, but, as they were italicised Clauses, they were outside the scope of the Bill, they were for all practical purposes dead Clauses, and could not be made alive until a Money Resolution had been introduced. The case is quite different in relation to this Bill, because there are no italicised Clauses in this Bill. The Bill as it stands is just the same as it was introduced and as it was read a second time and, on those grounds, I suggest that, not having any italicised Clauses, the Committee is in Order in considering these Clauses. In the circumstances, I decline to add anything more to my Ruling beyond saying that the further point of Order which has been raised falls to the ground.

Sir D. HERBERT

You are quite correct, Mr. Young, and I ought to have mentioned that the particular sections in the Act of 1914 to which I referred were in italics. You have now ruled that for practical purposes those Clauses were not in the Bill, but may I suggest two things? It is the practice to put Clauses of that kind, which are not authorised, in a Bill in order that the House may consider them from a Second Reading point of view. That is done in order that hon. Members may know what is the intention of the promoters of the Bill, and I submit, in the first place, that the Clauses which are not authorised, and which will require a Money Resolution before they can be dealt with in Committee, are necessarily printed somewhere in the Bill when it gets to Second Reading. A Bill which reaches its Second Rending with Clauses in italics is put to the House with the knowledge that those Clauses have to be proceeded with, and will be part of the Bill.

May I suggest that the printing of Clauses in italics, if I may respectfully say so, has no effect whatever, and that the Measure is not altered by the fact that they are in italics in the Bill. The mere fact that they are printed in italics is only to draw the attention of the House and of everybody concerned during the subsequent stages of the Committee to the fact that this matter has to be dealt with before those Clauses are reached in Committee. Therefore, I respectfully suggest that the precedent of 1914 is by no means one which can be departed from merely by reason of the fact that in that case the Clauses were printed in italics. I believe I am right in saying that there have been cases in recent years of Clauses requiring a Money Resolution which have not been printed in italics, but they have been in the Bill which passed its Second Reading, In those circumstances anyone who attempted, on Second Reading, to have those Clauses struck out, and not sent to the Committee, would be laughed at by anyone acquainted with our procedure. He would be told there is no need for those Clauses to have a Money Resolution at the time of the Second Reading, and they do not require a Money Resolution until they reach the Committee stage.

These Clauses are not an essential part of the Finance Bill of 1930, and I suggest that there is no doubt that, if I had raised this point during the Second Reading stage, Mr. Speaker would probably have said, "The hon. Gentleman is right in calling attention to the fact, and the Chancellor of the Exchequer will no doubt take note of it, and will say that if the hon. Member is right in his contention, he will bring in a fresh Resolution before these Clauses reach the Committee stage." I hope that you, Mr. Young, on further consideration, will reconsider your decision. I am sure no one has more respect for, and more sympathy with the occupant of the Chair than I have, but the matter I have raised is of such great general importance that I must ask you very earnestly to reconsider your decision in the light of what I have just said. So far as I am concerned, I feel that this is a question of setting a precedent which cannot be allowed to remain, and if other hon. and right hon. Gentlemen take the same view, I am afraid that we shall have to take such steps as are open to us to have this question raised again and decided, after we have argued the matter further.

The CHAIRMAN

The hon. Gentleman has again referred to the 1914 Bill in relation to the italicised Clauses. In that case the question was raised on the Second Reading. Those Clauses were italicised, and a Money Resolution was necessary; consequently, as I said before, those Clauses, for all practical purposes, were dead, and nothing could give them life until a Money Resolution was passed. We have to deal to-day with the Clauses of this Bill. This Bill has had a Second Reading, and it has been committed to a Committee of the Whole House. It is not the practice, as far as I can make out after consulting the authorities, for the Chairman to order the withdrawal of any Clauses that have been committed by the House. On page 384 of Erskine May's Parliamentary Practice it is laid down that: Such objections, however, should be taken before the Second Reading; for it is not the practice to order Bills to be withdrawn, after they are committed, on account of any irregularity which can be cured while the Bill is in Committee, or on recommittal. [Interruption.] The word "Bill" is used there. There are here a number a Clauses, those Clauses are part of the Bill, and this statement seems to me to have the same effect as if it were a whole Bill. Therefore, I have no more power to withdraw these Clauses from the Bill than I should have to withdraw the Bill.

Sir D. HERBERT

I was relying upon that opinion of Sir Erskine May in order to support my case. Surely, I made it perfectly plain that this matter could not be raised and dealt with on the Second Reading. If this Bill had been introduced without any Budget Resolutions, of course it could have been thrown out on the Second Reading. Nobody will suggest that a Bill should be thrown out on the Second Reading because there is no Resolution to authorise its financial Clauses. Therefore, I submit that, so far as Financial Resolutions are necessary for the essential, main principles of a Bill, they have to be passed and agreed to by the House before the Bill is introduced. If they refer only to Clauses which are auxiliary or a subsidiary part of the Bill, not only can the Bill not be objected to on the Second Reading because there is no Financial Resolution to support it, but it is not the practice of the House that the Financial Resolution should he introduced or dealt with until after the time when the Bill has had a Second Reading, and when it gets to the Committee stage. The precedents I have quoted show, on the ruling of one distinguished Chairman of this House and two distinguished Speakers of this House and another distinguished Chairman, Mr. Whitley, that Clauses in a Finance Bill which have been submitted to the Committee by means of a Second Reading given by this House have been in recent years properly thrown out, or no question put on them in the Committee stage at the time when they have been reached. In these circumstances, I maintain that this question should be reconsidered.

Mr. DENMAN

I submit that the points which have been raised by the hon. Member for Watford (Sir D. Herbert) do not arise until we reach Clause 33. There is nothing beyond the scope of the Resolution in Clauses 29 to 32, and the hon. Member is not entitled to prejudge what definition the Committee will apply to the words "private company" when we reach Clause 33.

5.0 p.m.

Sir D. HERBERT

I have had that particular point in mind, and if the hon. Member for Central Leeds (Mr. Denman) will read Clause 29, he will find that it is a charge Clause. Clause 30 is also a charge Clause. Those Clauses charge certain subjects, and in order to ascertain what those charges are, we have to refer to Clause 33 I agree for purpose of argument to the suggestion that this question would not arise until we come to Clause 33. The hon. Member for Central Leeds and other hon. Members will no doubt follow me in this. It is not a very difficult argument, but it does need to be followed very clearly. Assuming for the purposes of this argument that my point of Order is right in its main contention that the 13th Resolution does not cover foreign companies, then, if that Resolution does not cover foreign companies, and some part of the Bill does touch foreign companies, that part of the Bill cannot be entertained until it is supported by a sufficient Resolution. I take it that the hon. Member follows me so far. Some part of the Bill, therefore, has got to be left out until that Resolution has been provided. This particular Clause is one of a block of five Clauses, namely, Clauses 29 to 33, which are affected, and, if the hon. Member were right in his suggestion that we should wait until we get to the definition Clause at the end, we should arrive at a state of absurdity, for this reason. The hon. Member would have the Committee pass Clause 29. That Clause would be amended, presumably, in accordance with the Amendment on the Order Paper in the name of the Chancellor of the Exchequer. It would be amended so as to strike out the words "private company," and put something else in their place. It would be possible to go on to amend every one of the four Clauses by striking out all reference to private companies in them, and putting something else in its place. We should then come to Clause 33, and there we should find a definition making private companies include foreign companies—[Interruption]. It includes foreign companies, and my point of Order on the whole block of Clauses was that they should come out because they transgress the Resolution. One would then find that in Clause 33 private companies, and the foreign companies included in that expression, are not charged, because of the alterations which had been made in the previous Clauses. That would result in an absurdity.

A certain part of the Bill is not covered by a Resolution, and, therefore, a certain part of the Bill must go out. We have not yet come to it, says the hon. Member for Central Leeds, but the result of saying that we have not yet come to it is that in the end nothing goes out. That, surely, is an absurdity. It is making ridiculous the rule which says that any part of a Bill—it does not matter whether it is a single Clause or whether it is 20 Clauses—which exceeds the Resolution, must go out, or cannot be considered in Committee until there is a sufficient Resolution. I submit, Mr. Young, that the argument which I have endeavoured to place before you shows that these Clauses, which are all devoted to charging some particular subject, must be taken in such a group as to show, not only the effect of the charge, but upon whom the charge is put, and, therefore, the whole group of Clauses must go. I have shown, I hope, that it would result in absurdity if any other line of conduct were followed, such as that suggested by the hon. Member for Central Leeds.

The CHAIRMAN

The hon. Gentleman has referred to the words "private company" in the Budget Resolution, but the word "company" is not limited or restricted in any way, as far as I can gather. I am not here for the purpose of debating whether the word "company" means what it means in the Resolution, but it seems to me that the word "company" is not in the least limited in any direction. That is how I read the Resolution. If the hon. Gentleman thinks that the word "company" is being interpreted too widely, the proper time for him to discuss it will be when we come to the interpretation Clause.

Sir D. HERBERT

Would you allow me—[Interruption.]—I am only anxious to help, but I think you made a slip there, if I may respectfully say so, which you will forgive me for pointing out. The whole essence of my argument, the whole essence of our submission, is that nothing which is wrong with these Clauses can be put right by an Amendment. That is the whole point. If our submission is right, what should happen would be that, following the course adopted by Mr. Speaker Whitley, when he was Chairman, no Question should be put on these Clauses—that they cannot be called.

The CHAIRMAN

The hon. Gentleman himself has given his interpretation of the word "company," and that is why I replied to it. I do not accept his interpretation of the word "company," and we will leave the matter there so far as the word "company" is concerned, though I do not think it is limited in the Budget Resolution. As to the Ruling of the Chairman—I do not remember who it was—in 1914, again I have to say that the Chairman on that occasion did not put any question on the Clauses concerned because they were italicised and no Money Resolution had been brought in to give them life. I hold the opinion that I have no power, as Chairman of this Committee, to order the withdrawal of five Clauses which have been committed to the Committee by the Order of the House on Second Reading. That is my judgment after very careful consideration arising out of the notice which the hon. Gentleman gave to me several days ago.

Sir AUSTEN CHAMBERLAIN

I hope that you will allow me to make a further submission. In the first place, as to the time at which the objection has to be taken, as I understand the Ruling of Mr. Speaker Peel, which was adopted and expounded by Mr. Speaker Lowther, it really turns upon certain words which were used by Mr. Speaker Lowther. An irregularity, he said, could be cured at that stage by the introduction of a Resolution, without injury or injustice to any party. I think the meaning of that is that, where the defect can be cured during the Committee stage, the proper time to take objection is in Committee, and not on the Second Reading, when the objector would obviously be met by the statement that he was premature, that there was still time, before the Clause to which he was objecting was reached, for the defect to be cured, and that that could be done without injustice to any individual or interest. I submit, therefore, that Mr. Speaker Peel's and Mr. Speaker Lowther's Rulings are really deprived of all meaning if it be said that, once a Bill has been committed, the fact that there is no authority for proceeding with certain Clauses ceases to have any bearing upon those Clauses, and the remedy is out of our hands.

I desire to make a further submission with regard to a second point which you have taken. I understand you to lay great stress upon the fact that the Clauses about which a Ruling was sought in 1914 were italicised, while these Clauses are not. I submit that Clauses are italicised for the convenience of the House, but not in order to dictate to the House or to the Chair what the nature of those Clauses is. If you laid it down that you cannot look behind the character of the print to the substance of the Clause, any Minister would only have to direct the draftsman or the authorities who supervise these matters to avoid italics in future, to deprive the Chairman of his eyes and to render him incapable of preserving the liberties of the House. I respectfully submit, on the first point, that Mr. Speaker Peel's Ruling, adopted by Mr. Speaker Lowther, is to the effect that, where a defect can be cured in Committee without injustice to anyone, in Committee is the proper time, and not before Committee, to raise the point of Order. On the second point, I respectfully submit that whether a particular Clause or passage is printed in italics or not is wholly irrelevant to the duty of the Chairman, which is to regard the substance of the Clause and not the nature of the print.

The CHAIRMAN

On the second point which the right hon. Gentleman has raised, in relation to italicised Clauses, I still hold the opinion that italicised Clauses are not part of any Bill, and have no life, and therefore that they need not be taken cognisance of until a Money Resolution dealing with them has been introduced and passed in the proper form.

Mr. CHURCHILL

Does the whole point turn upon the typography?

The CHAIRMAN

Not necessarily. I am giving my view of what italicised Clauses mean in a Bill. They are there for the purpose of directing attention to the fact that a Money Resolution is necessary, and, if a Money Resolution has not been passed before they are reached, the Chairman does not pay any attention to them, and in my opinion ought not to pay any attention to them. That is what happened in 1914.

Sir D. HERBERT

He mentioned them by number, and said he could put no Question upon them.

The CHAIRMAN

Certainly, he said he could put no Question upon them; they were not in the Bill. The hon. Gentleman, however, who raised this point of Order, raised the point that the word "company" governed the situation. I regard the word "company" as covering the Clause in the Bill, but I say that, if it does not cover the Clauses in the Bill, the preliminary objection should have been taken at the beginning of the Second Reading. That is my view, and I do not think that anything has been said up to now to cause me in the slightest to alter it.

Sir A. CHAMBERLAIN

Would you be good enough to explain, following the Ruling of Mr. Speaker Lowther, when we may raise these matters in Committee, or what are the Questions on which it is necessary that they should be raised before the House goes into Committee? At present we are in danger of relying on these previous Rulings and raising such matters in Committee, and then finding, when we are in Committee, that we have omitted to do what is necessary.

The CHAIRMAN

I am obliged to the right hon. Gentleman. In all these cases the question was raised before the Speaker of the day, but in this case the question has not been raised until the Committee stage. The Bill has been committed to the Committee without any preliminary objection such as was taken in those cases, and I am, therefore, bound to accept the Clauses.

Sir LAMING WORTHINGTON-EVANS

Was it not the case, in the other cases to which reference has been made, that, when they were raised before Mr. Speaker on the Second Reading, he said that it was not necessary, that that was not the right time at which to raise them; and that the real decision that he gave was to this effect: "Do not come to me on Second Reading, because this is one of the Clauses with which you ought to deal in Committee"? May I submit to you, Sir, that there is a real difference between the two classes of Clauses? The whole Bill depends in the one case on a Resolution, while in the other case, as now, there are, I think, some 15 Resolutions. Most of the Bill is perfectly in order, and it is only to that, part of the Bill which, in our submission, is not based on a sufficiently wide Resolution that objection can be taken. It would have been wrong, I submit, to take that objection on the Second Reading, because we should have been treated in exactly the same way as before. Mr. Speaker would have said that that was not the time at which to raise the matter in accordance with those precedents. If I may submit one word on the question of italics, because this also is rather important, do I understand you to say that, if a Bill or Clause was printed in italics, one result would follow, and that a different result would follow if it were printed in ordinary print, even if it were the same Clause in the same words?

The CHAIRMAN

I say that a Clause printed in italics is for all practical purposes not part of the Bill. In the example quoted there were two Clauses printed in italics, and no Money Resolution had been passed to put life into those two Clauses. Therefore, the Chairman declined to put any Question on those Clauses. My point here is that these are not italicised Clauses, and the Bill is in the form in which it was presented to the Committee by the Order of the House. The House has committed this Bill in its entirety to us to be considered. Had there been any italicised Clauses, we should have known that there was something for which a further Money Resolution was necessary—[Interruption.] If it is based on the word "company," then again I must say there is nothing in the Budget Resolution limiting the meaning of the word "company," and on that ground also I think the point of Order fails.

Sir L. WORTHINGTON-EVANS

I want to say a word on the question of "company" in a moment. I was trying to understand your Ruling with regard to the difference between a Clause that is in italics and a Clause that is not. I was going to submit that, if the words of the Clause are the same, the results are the same. The only difference of the italics is that they call attention to the fact that a Money Resolution is required. If it is not in italics but in ordinary print in the same words, a Money Resolution is still required, although the danger signal, which the italics are, has not been shown. The word "company" here must either be used in its legal meaning or in the popular meaning, if a popular meaning attaches to it which is different from the legal meaning. So far as I know, it has not two meanings but only one. Companies in this country are regulated by the Companies Act of 1929. I quite admit that there is no definition in that Act that I can quote. It refers to two sets of companies. It refers to a company registered under the Companies Act as an English company, and a company that is registered abroad, but it only refers to a company that is registered abroad if it comes into this country to carry on business. It then prescribes that it shall fulfil certain conditions. But this word "company" goes far outside those two definitions. Even if you say "company" includes everything that is in the Companies Act, 1929, this Resolution still goes outside it, because it creates a charge upon a subject who transfers his property in certain circumstances to a company registered abroad whether that company comes to this country or does not. There are therefore two sorts of companies registered abroad. One might be covered by the word "company" in this Resolution but the other, in my submission, is certainly not. I do not know whether that point has occurred to you and I would ask you to consider your ruling on it.

The CHAIRMAN

I am not versed in the law, and therefore I take the words as I find them in the Budget Resolution.

Sir L. WORTHINGTON-EVANS

It must have a meaning.

The CHAIRMAN

It has a meaning, but the only meaning that I can read in it is that in the Budget Resolution the word "company" is not limited. From my reading of the Budget Resolution, there is no limit to the word "company," and, therefore, on that ground, the point of Order fails. I also wish to say that the significance of an italicised Clause is this, that a Bill introduced with italicised Clauses on Second Reading and sent to the Committee is practically a Bill with Clauses not recognised as part of the Bill. But all the Clauses here are without italics, and each Clause is recognised as part of the Bill. I again say, with all respect to the Committee, that I do not see any limit to the meaning of the word "company" so far as the Resolution is concerned and, in the second place, I say again that I do not think I have any power as Chairman of the Committee to order the withdrawal of the Clauses.

Sir L. WORTHINGTON-EVANS

I do not want to press it unduly, but this is a matter of extreme importance. You have given an interpretation of the word "company," or perhaps more accurately you have declined to give any definition of the word. I hope you will not misunderstand me if I suggest that we ought have guidance on a legal question, because you have very properly said you are not a lawyer. I am not a lawyer, at least I have not been for 20 years, and this is a matter of real importance, and the Committee, therefore, should have the guidance of the Attorney-General as to what "company" means.

The CHAIRMAN

I think the Committee will be entitled to a legal opinion when it comes to the word in the Bill. At the moment the point is put to me, and my understanding of the word is that it has no limit. If I were asked what it meant, I should say it has no limit. I do not know what lawyers may say about it, but I do not think anything further can be said on the matter. If I am wrong I am wrong, but I firmly believe I am right.

Mr. CHURCHILL

The Ruling which you have given, Sir, as the result of so much care and reflection, for which we are indebted to you, raises in my judgment the most serious and grave issues, and I feel bound, in accepting any Ruling that falls from you, to express, on behalf of those who sit on this side of the House, deep anxiety at some constructions which may be placed upon the Ruling which you have, in your duty and in your unchallengeable authority at this stage, thought right to give. I feel bound to place on record now some of those grave points which as I gather you have decided——

The CHAIRMAN

I think the right hon. Gentleman is now launching out on a criticism of my Ruling. I think, having given my Ruling and believing that I am right, the Committee should now proceed.

Mr. CHURCHILL

With very great respect to you, Sir, it is, as you will readily admit, the duty of Members of the Committee, with proper submission to the Chair, to discharge what they regard as their proper Parliamentary functions and not in any way to be deterred by impatience or disorderly clamour from any part of the House. I am only submitting to you the grave anxiety and the doubt that arises on account of some of the points upon which decisions have been given, which decisions, no doubt, have complete validity as far as this episode is concerned but which, unless they are accompanied by further and fuller Rulings on your part, might easily lead to misconception and to misinterpretation in the future. May I ask, before these very grave Rulings pass into the definite acceptance of our Parliamentary system and custom, whether we are to take it that you have definitely ruled that the word "companies" in itself embraces all companies wherever situated and, if so, how are we to discriminate between the principle which extends the word "companies" to cover all companies and the principle which limits the word "person" to cover only persons of British jurisdiction. That seems to me to be almost a turning point in our Parliamentary procedure and, in accepting your decision. I would only ask for the judgment to be couched in terms which will deal with the far-reaching reactions which must spring from that.

I would also ask you whether, having been called upon in the execution of your office to give these formal and important Rulings which are now passing into our procedure and taking a definite part in the procedure of the House of Commons—precedents which will be cited perhaps for generations—could you explain definitely what is the virtue in italicisation? I had always understood that the typography was purely a matter of convenience—that there was no inherent virtue in the typography, that whether a Clause could or could not be entered upon by the House, ruled on by the Chair and passed by a Committee, depended not at all on whether it was printed in large or small type, in italics or in Roman or any other form, any more than it does upon the colour or character or thickness of the paper on which it is printed. It is a mere device for Parliamentary convenience. But I gather from your Ruling that an entire alteration in the inherent and essential character of Clauses depends upon whether they should be printed in Roman or in italic type, and from that it would appear that your Ruling to some extent is giving the necessary information which would enable the Committee to guard itself against those Ministerial encroachments which my right hon. Friend has mentioned, and which would easily be possible if it were found that Clauses might be altered in their intrinsic character merely by a change in the typography easily and readily at the disposition of the Ministers of the day.

There is one other point. You have said we have lost our right to raise this point of Order because we did not raise it in the Second Reading. You have pointed out that there have been occasions in the past, if I understand your ruling, where these points have been admitted by the Chair in Committee because they had previously been brought to the notice of Mr. Speaker when the Bill was in its Second Reading. If that argument stands upon anything, it stands upon a wrong submission to Mr. Speaker on the Second Reading. Mr. Speaker has said, when the point has been raised, that it is not the time to raise it. Is it possible to establish a claim for the subsequent validity of an objection because it has been raised at a time when it was inadmissible? Are we to lose our opportunity of raising this question at the right time because we failed to raise it at the wrong time previously? I venture to say that these grave changes and innovations in the whole character of our procedure——

The CHAIRMAN

I object to the right hon. Gentleman using the word "innovation."

Mr. CHURCHILL

I withdraw the word "innovation" and I substitute the word "interpretation." The interpretations of these very difficult matters which you have been compelled to make in consequence of your duties and in your difficult position require from you further amplification in order that conclusions may not be drawn from them that may sensibly narrow and stiffen the ordinary and long-established procedure of the House. I would venture to ask that these points might receive from you some further elucidation.

The CHAIRMAN

On the word "company"—again, I am no lawyer—I take the Budget Resolution, and the word there, to me, is not limited in any sense. That is the only ruling which I can give from the Chair in relation to the word "company." When Clauses are italicised and a Bill has passed its Second Reading, it is an intimation to the Committee that a Money Resolution is necessary before the Clauses can have any life in them. Consequently, if there is no Money Resolution introduced to give life to them, they are not part of the Bill at all.

Mr. CHURCHILL

With great respect——

HON. MEMBERS

Order!

Mr. THURTLE

On a point of Order. May I submit to you—

The CHAIRMAN

I have not called upon the hon. Gentleman.

Mr. THURTLE

Mr. Young!

HON. MEMBERS

Name!

The CHAIRMAN

I have not called the hon. Gentleman. The point raised by the right hon. Gentleman has to be settled first.

Mr. THURTLE

That is my point of Order.

Mr. CHURCHILL

I venture, with great respect, to intervene to ask you whether the nature of the Clauses would in any way be altered by the fact that they were in italics, and whether if they were not in italics it would not equally be obligatory upon the Chair to deny them existence and to refuse to put them to the Committee?

The CHAIRMAN

If the Clauses are not italicised they are part of the Bill as it passes Second Reading. If they are italicised, they are for all practical purposes not part of the Bill committed to the Committee. I also indicated in regard to a Bill which came up for Second Reading with no italicised Clauses, that if there was any objection, such as that which has been raised to-day, it should have been raised before Mr. Speaker. In my opinion, I have no power to order the withdrawal of these Clauses which have been committed by the House. I hope that that is sufficient, and that it is not necessary for me to go any further into the matter. I want to say now directly to the right hon. Gentleman, that I have given my Ruling, and I shall abide by it.

Mr. CHURCHILL

Of course, now that you have definitely given your Ruling, and, if I may say so, have shown very great patience in hearing fully the various objections which we felt bound to submit to you and to argue, it is our duty to accept the Ruling you have given for the purposes of this debate and we do so, but I am sure you will not take it as in the slightest degree reflecting either upon the validity of your Ruling or upon your conduct of this difficult matter if I say that we shall feel bound to bring this matter before the House in order that the grave reactions following from this Ruling may be fully debated and decided upon.

The CHAIRMAN

Whether the right hon. Gentleman desires to bring the matter before the House as a House or not does not concern me at the moment.

Sir D. HERBERT

I desire to move, "That the Chairman do report Progress, and ask leave to sit again," for the purpose of explaining the position in which some of us find ourselves as a result of, I think I am right in saying, the somewhat unexpected Ruling. My right hon. Friend has suggested, as indeed I indicated a short time ago, that he might think it necessary to put down a Motion upon the Order Paper to discuss this Ruling in a proper way as permitted by the Rules of the House.

The CHAIRMAN

The hon. Member cannot move to report Progress on any grounds of my Ruling. This is the second time he has referred to my Ruling.

Sir D. HERBERT

I am very sorry if I have transgressed your Ruling in moving to report Progress. I have no intention whatever——[Interruption.]

Mr. BROAD

I think it is time that this foolery was stopped in the interests of Parliamentary proceedings.

The CHAIRMAN

The hon. Gentleman has no right to interrupt when the hon. Member for Watford (Sir D. Herbert) is on his feet.

Sir D. HERBERT

I apologise if I have said anything which appears to interfere with your Ruling. My intention in moving to report Progress is to submit the position——

Mr. ERNEST EVANS

On a point of Order. Is there any Motion at the present moment before the Committee? If no Motion has been put by the Chair, is the hon. Member in order in moving to report Progress?

The CHAIRMAN

I think that the hon. Member is in order in moving to report Progress.

Sir D. HERBERT

I shall take much less time in giving my reasons for moving to report Progress than some hon. Members of the Committee have spent in irresponsible talk on the subject. I wish to move to report Progress for the reason that some of us who desire to raise certain points of Order similar to those raised to-day in the House on subsequent stages of this Bill, and by other means, find ourselves in this difficulty, that if we were to be logical we should take no further part in the proceedings on these Clauses in the Committee. I do not think that it would be for the convenience of the House and the Committee as a whole that anything of that kind should take place. In these circumstances, I desire to take this opportunity of saying that we do not, if we remain in the Committee and discuss these Clauses and Amendments, take any responsibility by reason of the fact that we may have joined in the discussion in Committee, for in our opinion when these Clauses come to the House they cannot be regarded as being authorised.

The CHAIRMAN

I cannot accept the Motion at this stage.

Mr. CHURCHILL rose——

The CHAIRMAN

I am exercising my powers as Chairman. I do not think that this is a proper Motion at this stage. [Interruption.] The right hon. Gentleman could hear what I am saying if there was not so much noise. I am exercising my power as Chairman, and I do not think that this is a proper Motion to put at this stage, and therefore I decline to accept it, and that should put an end to the matter.

Mr. CHURCHILL

With great respect, your Ruling, of course, terminates the Motion—

The CHAIRMAN

That is not a point of Order.

Mr. CHURCHILL

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

I renew this Motion in order particularly to give the Chancellor of the Exchequer the opportunity of making a general statement, which he had given notice of his intention to make on the whole character of the Clause. I submit that it would be a most convenient procedure for us to take it, after this protracted discussion in which heat has been generated, on a Motion to report Progress so that the matter may generally and thoroughly be discussed across the Floor of the House. I make this submission to you with very great respect, hoping that, at any rate, you will give it consideration at this stage.

The CHAIRMAN

The right hon. Gentleman has given different reasons from those given by the hon. Member behind him, and if there is an understanding that the Chancellor of the Exchequer should make some statement I will accept the Motion to report Progress.

Mr. P. SNOWDEN

As the right hon. Gentleman has stated, I rise to take advantage of this Motion—shall I say to pour oil upon troubled waters—and I hope that I shall succeed in bringing back the Committee to a spirit of conciliation. I think that it would be convenient, before we enter upon the discussion of Amendments to this Clause, if I were to state what my attitude will be to the main Amendments which appear upon the Paper. The purpose of this and succeeding Clauses is one which I think commends itself to every section of the Committee. Indeed, the right hon. Member for Epping (Mr. Churchill) at the very earliest opportunity after the Budget Statement said that he would be prepared to help me to secure the object at which I was aiming in these proposals. The purpose of these Clauses is to deal with what is known as one-man companies. That is to say, where a man transfers his property and continues to receive an income which is appropriate to or approximates to the income that he received from the property before the transfer took place. There is, I think, no division of opinion in the Committee that so far as such transfers are made for the purpose of avoiding Estate Duty, the House of Commons should do the best it can to circumvent such action as that, but the difficulty which always arises in attempts to circumvent evasions of taxation is to frame the legislation in such a way that it will hit the guilty only and will not inflict hardship where guilt is not required to be punished. That has been my difficulty, and it has been the difficulty of everybody who has made similar attempts to circumvent evasion.

We must look at the facts, and it follows that any attempt to distinguish between the legitimate and the illegitimate and to protect the genuine transaction as against the non-genuine transaction must lead to exceptions and provisos and complications of all sorts. I hope the Committee will, at least, give me this credit, that the complications in these Clauses arise from a sincere desire to be scrupulously fair, and I am sure that I shall have the co-operation of the Committee in trying to frame Clauses which will attain the object we have in view and will, at the same time, inflict no unmerited hardship. That is my position. I have examined very carefully, with the help of my expert advisers, the Amendments, and I want frankly to admit that the examination has laid bare certain flaws in the Clauses. Therefore, I want to begin with a short statement of how far I shall be able to meet the object of those who have put down the Amendments, and I think I shall be able to satisfy the Committee that I have gone a long way, if not the full way, to meet the objections or the criticisms, or the fears, shall I say, that have been indicated in the Amendments which have been placed upon the Order Paper.

If right hon. and hon. Members have the Amendment Paper before them they will be able to follow me as I deal with the Amendments successively. The first two Amendments in my name are (on page 2491 of the Order Paper) in page 24, line 20, leave out the word "private" from the designation of the company, and after the word "company" to insert the words "to which this Part of this Act applies." This Amendment will not in any way prevent consideration of the definition of such companies when we come to Clause 33, but it will meet the point raised by the hon. Member for Watford (Sir D. Herbert) as to the undesirability of having in two Statutes two separate definitions of a private company, and will meet his Amendment on that point. My next Amendment is, in page 24, line 35, after the word "thereon" to insert the words "and as property in which the deceased had an interest." That Amendment is on page 2493 of the Order Paper. The Amendment will remove any doubt that what was always intended in relation to this Clause is actually its effect, namely, that what is deemed to pass upon the death should be aggregated with other property passing at the death.

My next Amendment is in page 24, line 39 (page 294 of the Order Paper), after the word "that" to insert the words: (a) the sum computed as aforesaid shall be reduced by the amount, if any, by which the principal value of the subject of the transfer at the date of the transfer or the principal value thereof at the date of the death, whichever is the greater, is shown to the satisfaction of the Commissioners of Inland Revenue to fall short of the said sum; and (b) I do not desire or intend to impose in this Clause a charge greater than would have accrued had the property not been transferred, and this Amendment is designed to secure that result. I quite realise that it may be possible that under the Clause, as drafted, cases may occur where double taxation could be imposed. That is to say, that there would come into the estate money which had been received and also which might still be included in the estimate of the value of the estate. That I want to avoid. I do not want to tax twice over anything that has been transferred during the course of these transactions. My next Amendment is in page 25, line 20 (page 249 of the Order Paper), to leave out the words "for full consideration," and to insert instead thereof the words: where the consideration for the sale was received wholly by the deceased for his own use or benefit and is satisfied in one or more of the following manners, that is to say, by a sum of money of an amount determined at the time of the transfer or by shares or debentures of the company. This Amendment raises a very difficult point, on which I have endeavoured to meet hon. Members opposite, or what, I understand is the point that they have in their minds. As the matter is an important one I will, with the Committee's consent, indicate what it is intended to do in this Clause in regard to the question of consideration of the transfer of property. I hope that the explanation will allay some of the apprehensions of hon. Members in regard to the matter. This subject can be approached from various points of view. What I am proposing will, I think, on consideration, be found to be satisfactory and will secure what, I think, will be regarded as just and proper in the opinion of the Members of the Committee. I will give the best and simplest explanation that I can.

Where the transferor of property takes the whole consideration of the property transferred, in money or shares or expressed to be payable at the time of transfer, and no part of it is paid to other persons, the transfer will not fall within the terms of the Clause. That is what it is intended to secure by the Amendment that I have put down and which I am now trying to explain. That is a clear case of out-and-out sale by the deceased for his own benefit. This property is replaced by the consideration that he receives, which will be liable to duty on his death. It is somewhat similar to the case that I described a few moments ago where I proposed an Amendment which would prevent double taxation. Where, however, other persons than the transferor get part of the consideration paid or payable, or the transferor, in addition to the money or shares, reserves or in any manner secures to himself a benefit such as the right to participate in profits otherwise than by way of dividend on any shares, or computed capital, the transferor will not be excluded from the operations of the Clause.

6.0 p.m.

It is only if the complete necessary conditions of the Clause are fulfilled, and if some other benefit is reserved which is, in effect, the fruit of capital with which the transferor has parted—that a claim for duty arises on his death. In such cases the question arises whether, in computing the transferor's benefits for the purposes of the Clause which the transferor takes, all payments made to him by way of cash should be excluded. It will be obvious to the Committee that some limitation must be imposed; otherwise what are in effect annual payments payable out of income of the company could be labelled purchase money and a legitimate claim for Estate Duty would be avoided. I think, however, it will be safe to exclude from the "benefits," for the purpose of the Clause, all cash payments made to the transferor, provided they are made to him at the time of the transfer or secured to him at the time and are genuine instalments of purchase money and not payments that terminate at death.

Major NATHAN

I observe in the Amendment as printed on the Paper a slight difference in the form in which it appears in the Blue Paper. There is a change of the word "is" in the Blue Paper to the word "was" in the White Paper. I do not know whether any significance is to be attached to the change.

Mr. SNOWDEN

The Attorney-General assures me that it does not matter which word is used. Probably the draftsman, going through the Clause last night, came to the conclusion that this slight verbal alteration is necessary. Now I come to the Amendment in Sub-section (2), to insert the words: situate in Great Britain. This point, was raised by the hon. and gallant Member for Oxford (Captain Bourne) and the Amendment is designed to make it clear that the Clause is confined to transfers of real property wholly situate in this country. The next Amendments are in paragraph (c) to insert after the first "of" the words: or any interest in and then at the end of the first paragraph (c) to insert the words: transfers of personal chattels not yielding income. These Amendments deal with the transfer of non-income producing properties and are designed to exclude cases which might come under the Clause but which obviously should not. There are such cases as the transfer of such property by an employé or some person who obtains benefits which are incidental to his employment but which have no relation at all to the transfer of property. These Amendments with regard to transfers are purely drafting. Now I come to the Amendment on line 35, to leave out the words "and for the purposes of this section" and to insert instead the words: (3) In ascertaining for the purposes of this section the value of a benefit— (a) in the case of a benefit consisting of a payment, a deduction shall be made in respect of any Income Tax (other than Sur-tax) paid or borne by the deceased in respect of that payment; and and the Amendment on line 38, to insert at the end of Sub-section (2) the words: due allowance being made in respect of any rent paid by the deceased. The first of these Amendments is designed to meet the point raised by the hon. and gallant Member for Newbury (Brigadier-General Brown) and the second to meet the point raised by several hon. Members, including the hon. Member for Orkney and Shetland (Sir R. Hamilton) and the right hon. Member for Tamworth (Sir A. Steel-Maitland). If I may be permitted to detain the Committee for a moment or so may I indicate briefly what further Amendments I shall be ready to accept as they stand, or to meet the case in some other way. There are some Amendments which I am ready to accept but which might be improved by a change in drafting. That will present no difficulty. I desire to assure hon. Members that I do not rule out of consideration other Amendments, apart from those which I have decided to accept. I do not rule them out, and if during our discussions they can be reasonably and properly met, within the general framework and principle of the Clause, I will do my utmost to meet the wishes of the Committee. There is one other concession I have to announce and it is in connection with the Amendment in the name of the hon. Member for Watford (Sir D. Herbert), which substitutes the average of the benefits taken in the three years in place of the highest proportion. I have no objection to that. There may be some consequential alterations necessary following on the acceptance of that Amendment. I am also ready to accept the Amendment on page 25 standing in the name of the hon. Member for Bethnal Green North East (Major Nathan) and other hon. Members. They propose in Sub-section (2) to insert the words: which, had it remained in the disposition of the deceased at his death, would have passed thereon for the purposes of Estate Duty. This is an important Amendment. It was not contemplated that the Clause should apply otherwise than in the sense suggested, but the Amendment makes it quite clear and I am prepared to accept it. There are Amendments in the name of various hon. Members which seek to exclude from the benefits remuneration taken by the transferor for services, and remuneration paid to employés. It is somewhat difficult to agree with this without effecting an easy means of avoiding the operation of the Clause, and I cannot see my way to admit the principle. When we come to discuss it on some appropriate Amendment the ingenuity of some hon. Member may find a means of overcoming the various substantial difficulties which I foresee. I think I have met the case of the genuine employé by limiting the sum of money chargeable under the Clause to the value of the property transferred at the date of the transferor's death or at the date of the transfer whichever is the higher. I am accepting the proposal to take the average of the benefit for the three years preceding the death. In that way I think I have met a very large number of the Amendments, certainly the most important Amendments, and I hope I have succeeded in bringing greater clarity into the Clause. I do not claim to have an absolutely full knowledge of the difficulties and intricacies and complications of the Bill. The Minister can hardly be expected to do that. It is the function of the Minister to say what he wants; what objects he wants to achieve; and it is for the draftsman to put it into the Bill.

Sir KINGSLEY WOOD

The Minister is responsible.

Mr. SNOWDEN

I am not seeking to evade any of my responsibilities, but every Minister must rely upon the expert knowledge at his disposal and upon the advice of the Law Officers of the Crown. I hope that this explanation and the very conciliatory spirit I have shown will greatly facilitate the progress of the Bill.

Sir L. WORTHINGTON-EVANS

Of course, we welcome the conciliatory attitude of the Chancellor of the Exchequer. I do not want to say that he surprised us, though he certainly has done so with the explanation which he has given. We thank him for accepting some Amendments and for explaining a great many others. But has anyone in this Committee ever seen a Bill conducted in this way before? A Clause is brought down which the Chancellor of the Exchequer says is lacking in clarity. He says that he cannot be expected fully to understand it, and before we enter upon the discussion of it he has to explain that he is going to accept Amendments. For the last 10 minutes we have been chasing all over the Order Paper to find out, first of all, the Amendments to which the Chancellor of the Exchequer refers. He lost his place and we lost our places. It is almost impossible to follow this Clause even as printed in the Bill, and it is very much more difficult now that we have a lot of Amendments put down by the Chancellor of the Exchequer.

What I suggest is that the right hon. Gentleman should reprint the Clause, showing exactly what Amendments he has accepted, what he himself has put on the Paper, and what the Clause will look like, so that we can have an opportunity of seeing whether the concessions that he claims to have made—I think he has made some concessions—are sufficient to meet the very substantial points that we have upon the Clause, and an opportunity of putting down further Amendments if the accepted Amendments are not sufficient. I can see one or two of the right hon. Gentleman's Amendments which do not go far enough, and we should require to put some more Amendments on the Paper. I do not know whether you, Mr. Deputy-Chairman, are going to conduct this Committee with manuscript Amendments thrust at you all the time. Those Amendments of which the Chancellor of the Exchequer has given notice are starred on the Amendment Paper and were put down last night. The right hon. Gentleman has now explained them for the first time, and it is obvious, certainly as regards two of them, that they do not go far enough, and that other Amendments would be necessary.

It is most inconvenient for the Committee to discuss without any notice what is really a new Clause. I say this not with any desire to harass the Chancellor of the Exchequer. [Interruption.] It is a matter of complete indifference to me whether hon. Members who jeer believe me or not. These Clauses are so difficult that probably the hon. Members who are jeering have never begun to contemplate the meaning of a single word of them. The alterations make the difficulty greater for the moment, because we have never had an opportunity of seeing them set out. Perhaps a Motion to report Progress will enable us to have an interval so that we can see the Clause reprinted and put down Amendments that we consider necessary. I do not know whether the Chancellor of the Exchequer feels disposed to postpone further discussion upon the Clause. I assure him that it seems to me much more likely that we shall make good progress if we see the Clause before we discuss it.

Mr. LEIF JONES

The right hon. Gentleman's memory seems a little short. I remember many Bills, with some of which the right hon. Gentleman was concerned, in which very great alterations were made in a Clause, and usually the Opposition have been grateful to the Minister who has accepted Amendments and taken the trouble before discussion began to indicate what their purport was. I am extremely obliged to the Chancellor of the Exchequer for explaining the effect of the Amendments. I agree that these Clauses are most complicated. They deal with a subject which has been before Parliament for a great many years. We know the design and object in view and we are all agreed upon it. I do not agree that it is necessary to postpone discussion of the Clauses. As we reach the Amendments one by one I think we shall find that the matter is cleared before us. The Chancellor's speech has not darkened counsel, but the contrary. We know now what the Chancellor of the Exchequer is going to do in these complicated matters about companies.

Sir BOYD MERRIMAN

I rise to ask the learned Attorney-General to be good enough to tell us, as the result of what has been stated by the Chancellor of the Exchequer, whether I followed correctly what the present position is, so that we may appreciate what is the general effect of the Amendments referred to. Am I right in supposing that, in spite of the Amendments, it is still immaterial how long ago the transfer was made to the company, provided that the transferor is still alive? Am I right in supposing that it does not matter now whether the company is an English company or a foreign company; that it does not matter whether the company was or was not formed with any sort of connection with the evading of Death Duties; that it does not matter even now whether the deceased had or had not any proprietary interest in or any control over the company; that it does not matter whether the company is or is not still a private company, however that is going to be defined, at the time of the deceased's death—the test is that it was a private company at the time when the transfer was made, may be 20 or 30 years ago, though it may have become a public company by now—that it does not matter whether or not the transfer was made to the company for any purpose connected with the evasion of Death Duties; and that so long as the thing was not at the time of sale a transfer connected with the transfer of a business and is not one of the things caught by the next Clause as a life interest, it does not matter whether the transfer was or was not made for good and valuable consideration?

The ATTORNEY-GENERAL (Sir William Jowitt)

If the transfer is made for consideration—leave out "good"—so long as the consideration is paid to the transferor the company and transfer are out of the Clause altogether.

Sir B. MERRIMAN

Is that not only limited to sale?

The ATTORNEY-GENERAL

Certainly.

Sir B. MERRIMAN

I said, assuming that there was not a sale or one of the other things—assuming it is not a sale there may be other transfers which are for good consideration but are not sales at all. If a premium apprentice pays a premium to a company it is not a sale, but it is for valuable consideration. I hope that the Attorney-General will think the matter over again. If it would not be within the Clause why is it necessary to except bona fide sales? If a man in any form whatever transfers money to the company, if you find it necessary to except the transfer of money as the consideration for a bona fide sale, you are not excepting transfers of money for other valuable considerations, surely? I do not expect the Attorney-General to wispier these questions off-hand but I invite him to consider them. Is it still immaterial whether the payment by way of benefit which the transferor receives is or is not for full consideration and has or has not any relation whatever to the original transfer?

The DEPUTY-CHAIRMAN (Mr. Dunnico)

The hon. and learned Member is now departing far from the Motion to report Progress. The Chancellor of the Exchequer has explained the purpose of some of the Amendments, and within reason the hon. and learned Member is entitled to ask general questions, but obviously at this moment he cannot discuss the whole merits or demerits of that part of the Bill contained in Clauses 29 to 33.

Sir B. MERRIMAN

I had concluded my catalogue of questions. I am perfectly certain that anyone who tried to follow the Chancellor of the Exchequer must have found it impossible on the spur of the moment to decide what was the effect of the concessions which have been made. It is very desirable that we should appreciate what are the general principles which still survive as a result of the concessions. When we know on general lines what the result is, we shall be able to see how much it is necessary to discuss this, that or the other Amendment. I have not put these questions with a view to obstruction, but with a view to elucidation. I shall be prepared, if necessary, to give an illustration or two, but after what you have said I will leave the matter where it is.

The ATTORNEY-GENERAL

It is not from any disrespect or discourtesy to the hon. and learned Gentleman that I do not attempt to answer the catalogue of questions which, quite naturally, he has put to me. I do not think it would conduce to the elucidation of the matter if I were to attempt to answer the various unrelated questions which he has asked. I think it is inevitable that we should wait until we get to the detailed discussion of these matters before dealing with them, and, indeed, conscious as I am of the limitation of my own powers in connection with such a complicated matter as this Clause, I do not think I could cause my mind to jump about and deal with one separate point after another in answer to these questions. If I tried to do so, I fear I should only make the matter confusing for myself and for the Committee. On the other hand, I think I can help the hon. and learned Gentleman to this extent. He asked a question as to whether motive was in any way material. Let me point out, at once, that the whole trouble and complication of a Clause of this sort is that motive cannot be material. We all agree that we would do our best to hit the tax evader and let the innocent man go free. With that principle everybody would agree, and, in that way, motive comes into it; but when you have to define to a court of law the canons which are going to enable you to tell the tax evader from the innocent man, you cannot introduce Motive at all. You must actually have concrete tests of what people do and not the intentions with which they do things.

As an illustration, the hon. and learned Member asked if this Clause would apply to a company which was formed without any idea of evading Death Duties. But the common practice of evaders is to utilise an existing company which perhaps has been formed for a wholly different purpose—to buy a company and then utilise it for the purpose of tax evasion. I merely give that as an illustration of the impossibility of allowing the motives, which the formers of the company had in mind, to enter into the matter. I think, however, the Committee will find that the matter is not very difficult to get on with—at least not more difficult than the Clause must be, of necessity, because it deals with an exceedingly difficult question. The large main differences involved are, first, that with regard to the three years period. The next main difference is that we take care to show that the area upon which Estate Duty is to be collected, cannot be larger than the area of the thing transferred. You cannot get an obligation for Estate Duty arising out of a trumpery or small transfer. The third large point is that instead of sales for "full consideration" we except bona fide sales so long as the consideration, whatever it may be, is payable to the transferor, and the fourth point is that in calculating the benefits, we allow to be deducted, capital payments as part of the purchase price. Of course there are other small Amendments which we can only consider when we come to the detailed examination of the Clause, but these are the four main broad principles and I think the Committee will find that the matter is no more difficult now than it was before, or than it must be, since we are considering such an exceedingly complicated question.

Mr. CHURCHILL

We are in a very difficult position—almost an impossible position. The Chancellor of the Exchequer has studied the Amendments which my hon. Friends on this side, both above and below the Gangway, have had on the Paper for a long time past. He has considered them with the aid of his accomplished advisers, and he has seen that there is considerable validity, even from his own point of view, in many of them. In consequence, he has adopted a number of them; he has put down other Amendments of his own, and, in regard to a third class of Amendments, he has said that he will accept them with some alteration in the wording. The result is that be has virtually transformed this Clause and it is now, to all intents and purposes, a new Clause entirely different in its general presentation and in its general approach to this subject from the Clause originally in the Bill. The right hon. Gentleman said that this was a complicated matter, and the Attorney-General has also admitted its complexity. In such a complicated matter every part, or almost every part, depends upon every other part, and, consequently, if a number of essential points are subject to alteration, the view which one takes of the Clause as a whole and its method of treating the subject, must naturally be subject to change also. I know that the right hon. Gentleman wants to get on with his Bill, but I cannot believe, in view of the situation which has developed, and without a reprint of the Clause in the form in which the right hon. Gentleman now presents it, that a discussion embarked upon to-night is going to carry us very far. I listened to the right hon. Gentleman's very careful and patient exposition of the changes which he is making, and I am bound to say that I found great difficulty in following their actual effect upon the Clause. The hon. Member for Plaistow (Mr. Thorne), no doubt, understood them at once——

Mr. THORNE

Yes, and I understand your scientific method of obstruction. [HON. MEMBERS: "Order!"]

Mr. CHURCHILL

Of course, it would be very easy to get on with our business if every difficult point or argument which was advanced from one side were to be merely swept away by the other side under the general heading of "obstruction." Even if obstruction were a Parliamentary charge, which it is not, even if the hon. Member were allowed under the Rules of Order to apply much harsher terms than that to me, it would in no way induce me to abridge my remarks or shirk any aspect of my Parliamentary duty. I am asking the Chancellor of the Exchequer if he would not be well advised to accept the Motion and allow us to address ourselves to the consideration of this Clause when we have it before us in the form in which the right hon. Gentleman means to propose it. I certainly do not want to appear uncharitable, but the right hon. Gentleman has admitted that flaws have been shown in his original proposals by the Amendments which my hon. Friends have placed on the Paper, and it is not necessarily a very great concession on his part, when a mistake in the drafting of his Clause or in the statement of his proposals has been pointed out to him by the Opposition, that he should seek to put it right. It is not a concession which one need spend all the rest of one's days in being grateful for. If the right hon. Gentleman has profited by the improved drafts suggested from this side of the Committee, so far from our being grateful to the right hon. Gentleman—except that we are always grateful to him when he is kind to us in manner—it is he who ought to be deeply grateful to my hon. Friends who, without the expert knowledge at their disposal which the right hon. Gentleman enjoys, without the prolonged and profound consideration which he has been giving to these matters for months past, have been able to point out to him a way in which he can achieve his object with greater advantage and in a clearer manner. I do not think there is much gratitude to be brought into this proposal.

Mr. THORNE

On a point of Order. Has the discussion which has been going on for the last 10 minutes anything to do with the question of reporting Progress?

The DEPUTY-CHAIRMAN

I am afraid that, from the outset, this discussion has been rather out of order, but the Chancellor of the Exchequer took advantage of the Motion to make certain statements explanatory of the Amendments which he proposes to move and I cannot properly refuse to hon. Members on the other side of the Committee a reasonable opportunity of expressing their opinions on those explanations. I think, however, that the discussion should now be confined to reasons for or against reporting Progress.

Mr. CHURCHILL

I think, Mr. Dunnico, that you will admit—and fortify yourself in your authority by the reflection—that nothing could have been more precisely directed to the exact Motion before the Committee than the argument which I was advancing. Owing to the concession which the Chancellor has made, not to our entreaties, but to our arguments, not a concession made necessarily out of good will to us, but made in submission to reasoning which has appealed to him and his advisers, this Clause has been so completely transformed that it is virtually a new Clause and it is not possible for the Committee to understand it until they see it in its integrity as now presented, and until they see exactly what they are being asked to do. It is only committing us to a long and laborious discussion, which cannot possibly reach a fruitful conclusion, to persist in going further with this debate and from that it follows, I think with reasonable assurance, that the Chancellor of the Exchequer would be well advised to accept the Motion and to put the Clause in its amended form on the Paper in order that when we meet again next week we shall have been able to study fully the new situation which has developed. It is quite true that the right hon. Gentleman may feel that this course would entail some loss of time, but I do not believe that in the long run such would be the case. I certainly cannot conceive that, in the present state of affairs, we are likely to progress far, however late we sit to-night. I am precluded from suggesting that the right hon. Gentleman should postpone the Clause in order to take another Clause because we agreed to withdraw that proposal, but I suggest that he would be well advised to accept the Motion which we shall certainly press to a Division.

Mr. P. SNOWDEN

The right hon. Gentleman said that he appreciated the kindness which I had shown.

Mr. CHURCHILL

Of manner.

Mr. SNOWDEN

I wish the right hon. Gentleman would take some other way of showing his appreciation. I certainly am not encouraged to be conciliatory by the reception which he has given to my suggestion. We have now been sitting for three hours, and we have not yet entered upon the discussion of the Amendments. I certainly do not accept the suggestion which has been made by the right hon. Gentleman opposite. I have taken the very unusual, almost unprecedented, course of explaining to the Committee beforehand the line which I intended to take on these Amendments. It has been urged first by the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) and later by the right hon. Gentleman the Member for Epping (Mr. Churchill) that it is necessary that they should see the Amendments which I am prepared to accept incorporated in the Clause, before they can arrive at an understanding of how they will affect the Bill. Really, if, as the right hon. Gentleman says, he is anxious to facilitate business, he has shown us a very strange way of facilitating business since a quarter to four o'Clock this afternoon. Something like two hours were, I will not say wasted, because I might not be permitted to use that word, but, at any rate, two hours have been taken on a point of Order of the most trivial importance, and now advantage has been taken of my unusual courtesy—[Interruption]—of my doing something which is very unusual for the convenience of the Committee, and this is the way in which it has been met. If the right hon. Member for Epping and the right hon. Member for St. George's are not prepared to co-operate, there is only one course open. The right hon. Member for Epping made a most defiant speech one day last week, when he said, "We shall use all our resources in order to prevent your getting this Bill."

Mr. CHURCHILL

No, I did not.

Mr. SNOWDEN

The right hon. Gentleman knows he did. If that is the attitude of the right hon. Gentleman now, if he and his party are not prepared to co-operate, and if they are not prepared to accept, except after these prolonged discussions, concessions that I make, there is only one thing we can do, and that is that we shall have to ask the House of Commons to support a Guillotine Resolution. I would remind hon. Members opposite that the Prime Minister has announced the programme of business that must be carried through—[An HON. MEMBER: "Must?"] Yes, that must be carried through, and will be carried through, before this Session is prorogued, and before hon. Members can go away upon their holidays. Therefore, I would remind them that every day they delay progress with the consideration of this or other Measures which will be passed before the House rises, they are detaining themselves from taking their own holidays. I shall certainly not accept the suggestion of the right hon. Gentleman. I think it is most unreasonable, and I think it, is high time that the tomfoolery we have had this afternoon ceased.

HON. MEMBERS

Withdraw!

Sir KINGSLEY WOOD

I should like—

Mr. MILLS rose in his place, and claimed to move, "That the Question be now put," but the CHAIRMAN withheld his assent, and declined then to put that Question.

Sir K. WOOD

I suggest to the Chancellor of the Exchequer and to the Committee that he has only himself to thank for the position in which he finds himself this afternoon. Few hon. Members of the House can have witnessed such a total lack of the proper method of conducting a Bill as we have seen this afternoon with regard to these Clauses, and it is for this reason that I press the Motion which is before the Committee. The right hon. Gentleman said we ought to be grateful and pleased with the way in which the Chancellor of the Exchequer had dealt with this Clause, but it is perfectly evident that neither the Chancellor of the Exchequer nor the Attorney-General had been through this Clause as we should expect Ministers to do before it was presented to the House.

Mr. WESTWOOD

On a point of Order. Are we to understand that the right hon. Gentleman is discussing the merits of the Clause or the Motion to report Progress?

Sir K. WOOD

I will proceed by saying that it is perfectly evident that neither the Chancellor of the Exchequer nor the Attorney-General has made himself acquainted with the Bill which they have presented to this House, and what in fact has happened is that, after the Bill had been presented and the Amendments had been put upon the Paper, for the first time they have addressed themselves to the proposals in this Clause; and they now come forward and place you, Mr. Dunnico, and the Committee at an obvious disadvantage by only this morning placing on the Order Paper certain important Amendments. I should not for a moment criticise the Government if one or two Amendments had been put down for the first time this morning, but it is unpardonable, from the point of view both of the Chair and of the Members of the Committee, to ask us to deal with all these Amendments that have been put on the Paper in this way. The right hon. Gentleman has no right to thank the Chancellor. [Interruption.] It is not a matter of congratulating Ministers for bringing in Amendments and putting them on the Paper at this very late hour. The proper course, and the course which has always been taken by men who have occupied the high position of Chancellor of the Exchequer, has been to present their Bills in a proper form to the House. From that point of view alone, it is only fair to the Committee that we should be able to examine these Amendments and to see what they imply and whether in fact they carry out the suggestions of the Chancellor of the Exchequer.

He has sought to refer to incidents which have occurred at previous sittings in connection with this Bill. No doubt for his own purposes, he quite wrongly stated what had been said by my right hon. Friend the Member for Epping (Mr. Churchill), and if we are to have a controversy as to what was said upon some occasion last week, we are quite prepared to have it, but I do not propose myself to follow that, point. I wish to address myself to the two threats which, not for the first time, the Chancellor of the Exchequer has made to the Committee. He has made the threat, first, that he will apply a guillotine to this Bill if he can get the House to agree to it. Secondly, he has threatened the Committee with sitting, I suppose, for some considerable time in August. It is not the first time that the Chancellor of the Exchequer has threatened the Committee in the course of this Bill. Only a night or two ago he threatened to get seven or eight Clauses, and he got one. Whatever reasons or threats the Chancellor of the Exchequer likes to bring forward, we on this side propose to do our duty in connection with this Bill, and if the Chancellor of the Exchequer so mismanages his Bill——

Mr. W. THORNE

On a point of Order. May I ask whether you think the discussion has gone on long enough?

Sir K. WOOD

No threat that the Chancellor addresses to this Committee will make the least difference to us. If he had frankly stated that the real reason for the course which has had to be taken to-day was the fact that he has put down very late Amendments on the Paper, I think the Committee would have been prepared to give him every consideration, but the tone and temper of the Chancellor of the Exchequer are such that he is the

man who is really responsible for what has occurred.

Mr. P. SNOWDEN

rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 284; Noes, 144.

Division No. 387.]	AYES.	[6.55 p.m.
Adamson, Rt. Hon. W. (Fife, West)	England, Colonel A.	Lambert, Rt. Hon. George (S. Molton)
Adamson, W. M. (Staff., Cannock)	Evans, Capt. Ernest (Welsh Univ.)	Lansbury, Rt. Hon. George
Addison, Rt. Hon. Dr. Christopher	Foot, Isaac	Lathan, G.
Aitchison, Rt. Hon. Craigie M.	Forgan, Dr. Robert	Law, Albert (Bolton)
Alpass, J. H.	Freeman, Peter	Law, A. (Rosendale)
Ammon, Charles George	Gardner, B. W. (West Ham, Upton)	Lawrence, Susan
Arnott, John	George, Rt. Hon. D. Lloyd (Car'vn)	Lawrie, Hugh Hartley (Stalybridge)
Aske, Sir Robert	George, Major G. Lloyd (Pembroke)	Lawson, John James
Attlee, Clement Richard	George, Megan Lloyd (Anglesea)	Lawther, W. (Barnard Castle)
Baker, John (Wolverhampton, Bilston)	Gibbins, Joseph	Leach, W.
Baldwin, Oliver (Dudley)	Gibson, H. M. (Lancs, Mossley)	Lee, Frank (Derby, N. E.)
Barnes, Alfred John	Gill, T. H.	Lee, Jennie (Lanark, Northern)
Barr, James	Gillett, George M.	Lees, J.
Bellamy, Albert	Glassey, A. E.	Lewis, T. (Southampton)
Benn, Rt. Hon. Wedgwood	Gossling, A. G.	Lindley, Fred W.
Bennett, Capt. Sir E. N. (Cardiff C.)	Gould, F.	Logan, David Gilbert
Bennett, William (Battersea, South)	Graham, D. M. (Lanark, Hamilton)	Longbottom, A. W.
Benson, G.	Graham, Rt. Hon. Wm. (Edin., Cent.)	Longden, F.
Bentham, Dr. Ethel	Granville, E.	Lowth, Thomas
Bevan, Aneurin (Ebbw Vale)	Greenwood, Rt. Hon. A. (Colne)	Lunn, William
Birkett, W. Norman	Grenfell, D. R. (Glamorgan)	Macdonald, Gordon (Ince)
Blindell, James	Griffith, F. Kingsley (Middlesbro' W.)	MacDonald, Rt. Hon. J. R. (Seaham)
Bondfield, Rt. Hon. Margaret	Griffiths, T. (Monmouth, Pontypool)	MacDonald, Malcolm (Bassetlaw)
Bowen, J. W.	Groves, Thomas E.	McElwee, A.
Bowerman, Rt. Hon. Charles W.	Grundy, Thomas W.	McEntee, V. L.
Broad, Francis Alfred	Hall, F. (York, W. R., Normanton)	McKinlay, A.
Brockway, A. Fenner	Hall, G. H. (Merthyr Tydvil)	MacLaren, Andrew
Bromfield, William	Hall, Capt. W. P. (Portsmouth, C.)	Maclean, Sir Donald (Cornwall, N.)
Brooke, W.	Harbord, A.	Maclean, Nell (Glasgow, Govan)
Brothers, M.	Hardie, George D.	MacNeill-Weir, L.
Brown, C. W. E. (Notts, Mansfield)	Harris, Percy A.	McShane, John James
Brown, Ernest (Leith)	Hartshorn, Rt. Hon. Vernon	Malone, C. L'Estrange (N'thampton)
Brown, Rt. Hon. J. (South Ayrshire)	Haycock, A. W.	Mander, Geoffrey le M.
Buchanan, G.	Hayday, Arthur	Mansfield, W.
Burgess, F. G.	Hayes, John Henry	March, S.
Buxton, C. R. (Yorks, W. R. Elland)	Henderson, Rt. Hon. A. (Burnley)	Marley, J.
Caine, Derwent Hall-	Henderson, Arthur, Junr, (Cardiff, S.)	Marshall, F.
Cameron, A. G.	Henderson, Thomas (Glasgow)	Mathers, George
Cape, Thomas	Henderson, W. W. (Middx., Enfield)	Matters, L. W.
Carter, W. (St. Pancras, S. W.)	Herriotts, J.	Messer, Fred
Charleton, H. C.	Hirst, G. H. (York W. R. Wentworth)	Middleton, G.
Chater, Daniel	Hirst, W. (Bradford, South)	Millar, J. D.
Church, Major A. G.	Hoffman, P. C.	Mills, J. E.
Clarke, J. S.	Hollins, A.	Milner, Major J.
Cluse, W. S.	Hopkin, Daniel	Montague, Frederick
Clynes, Rt. Hon. John R.	Hore-Belisha, Leslie	Morgan, Dr. H. B.
Cocks, Frederick Seymour.	Horrabin, J. F.	Morley, Ralph
Compton, Joseph	Hudson, James H. (Huddersfield)	Morrison, Herbert (Hackney, South)
Cove, William G.	Hunter, Dr. Joseph	Morrison, Robert C. (Tottenham, N.)
Cowan, D. M.	Hutchison, Maj.-Gen. Sir R.	Mort, D. L.
Daggar, George	Jenkins, W. (Glamorgan, Neath)	Moses, J. J. H.
Dallas, George	John, William (Rhondda, West)	Mosley, Sir Oswald (Smethwick)
Dalton, Hugh	Johnston, Thomas	Muff, G.
Davies, E. C. (Montgomery)	Jones, F. Llewellyn- (Flint)	Muggeridge, H. T.
Day, Harry	Jones, Henry Haydn (Merioneth)	Murnin, Hugh
Denman, Hon. R. D.	Jones, J. J. (West Ham, Silvertown)	Nathan, Major H. L.
Dickson, T.	Jones, Rt. Hon. Leif (Camborne)	Naylor, T. E.
Dudgeon, Major C. R.	Jones, Morgan (Caerphilly)	Newman, Sir R. H. S. D. L. (Exeter)
Dukes, C.	Jones, T. I. Mardy (Pontypridd)	Noel Baker, P. J.
Duncan, Charles	Jowett, Rt. Hon. F. W.	Oldfield, J. R.
Ede, James Chuter	Jowitt, Rt. Hon. Sir W. A.	Oliver, George Harold (Ilkeston)
Edge, Sir William	Kedward, R. M. (Kent, Ashford)	Oliver, P. M. (Man., Blackley)
Edmunds, J. E.	Kelly, W. T.	Owen, Major G. (Carnarvon)
Edwards, C. (Monmouth, Bedwellty)	Kennedy, Thomas	Palin, John Henry
Edwards, E. (Morpeth)	Kenworthy, Lt.-Com. Hon. Joseph M.	Palmer, E. T.
Egan, W. H.	Kirkwood, D.	Parkinson, John Allen (Wigan)
Elmley, Viscount	Knight, Holford	Pethick-Lawrence, F. W.
Phillips, Dr. Marion	Sherwood, G. H.	Townend, A. E.
Picton-Turbervill, Edith	Shield, George William	Trevelyan, Rt. Hon. Sir Charles
Pole, Major D. G.	Shillaker, J. F.	Turner, B.
Potts, John S.	Short, Alfred (Wednesbury)	Vaughan, D. J.
Pybus, Percy John	Simmons, C. J.	Viant, S. P.
Quibell, D. J. K.	Sinclair, Sir A. (Caithness)	Walkden, A. G.
Rathbone, Eleanor	Sinkinson, George	Walker, J.
Raynes, W. R.	Smith, Frank (Nuneaton)	Wallace, H. W.
Richards, R.	Smith, H. B. Lees (Keighley)	Watkins, F. C.
Richardson, R. (Houghton-le-Spring)	Smith, Rennie (Penistone)	Watson, W. M. (Dunfermline)
Riley, F. F. (Stockton-on-Tees)	Smith, Tom (Pontefract)	Watts-Morgan, Lt.-Col. D. (Rhondda)
Ritson, J.	Smith, W. R. (Norwich)	Wellock, Wilfred
Roberts, Rt. Hon. F.O. (W. Bromwich)	Snell, Harry	Welsh, James C. (Coatbridge)
Robinson, Sir T. (Lancs, Stretford)	Snowden, Rt. Hon. Philip	West, F. R.
Romeril, H. G.	Snowden, Thomas (Accrington)	Westwood, Joseph
Rosbotham, D. S. T.	Sorensen, R.	White, H. G.
Rowson, Guy	Stamford, Thomas W.	Whiteley, William (Blaydon)
Russell, Richard John (Eddisbury)	Strachey, E. J. St. Loe	Wilkinson, Ellen C.
Salter, Dr. Alfred	Strauss, G. R.	Williams, Dr. J. H. (Llanelly)
Samuel, Rt. Hon. Sir H. (Darwen)	Sullivan, J.	Williams, T. (York, Don Valley)
Sanders, W. S.	Sutton, J. E.	Wilson, C. H. (Sheffield, Attercliffe)
Sawyer, G. F.	Taylor, R. A. (Lincoln)	Wilson, J. (Oldham)
Scott, James	Thomas, Rt. Hon. J. H. (Derby)	Wilson, R. J. (Jarrow)
Scrymgeour, E.	Thorne, W. (West Ham, Plaistow)	Winterton, G. E. (Leicester, Loughb'gh)
Scurr, John	Thurtle, Ernest	Wright, W. (Rutherglen)
Sexton, James	Tillett, Ben	Young, R. S. (Islington, North)
Shaw, Rt. Hon. Thomas (Preston)	Tinker, John Joseph
Shepherd, Arthur Lewis	Tout, W. J.	TELLERS FOR THE AYES.—
		Mr. B. Smith and Mr. Paling.
NOES.
Acland-Troyte, Lieut.-Colonel	Edmondson, Major A. J.	Mitchell, Sir W. Lane (Streatham)
Albery, Irving James	Erskine, Lord (Somerset, Weston-s. M.)	Mond, Hon. Henry
Allen, Sir J. Sandeman (Liverp'l., W.)	Everard, W. Lindsay	Nicholson, O. (Westminster)
Amery, Rt. Hon. Leopold C. M. S.	Falle, Sir Bertram G.	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Atholl, Duchess of	Ferguson, Sir John	Nield, Rt. Hon. Sir Herbert
Baldwin, Rt. Hon. Stanley (Bewdley)	Fermoy, Lord	O'Neill, Sir H.
Balfour, George (Hampstead)	Fison, F. G. Clavering	Peto, Sir Basil E. (Devon, Barnstaple)
Balniel, Lord	Ganzoni, Sir John	Ramsbotham, H.
Beamish, Rear-Admiral T. P. H.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Reid, David D. (County Down)
Beaumont, M. W.	Glyn, Major R. G. C.	Remer, John R.
Berry, Sir George	Grace, John	Rentoul, Sir Gervais S.
Betterton, Sir Henry B.	Graham, Fergus (Cumberland, N.)	Reynolds, Col. Sir James
Bevan, S. J. (Holborn)	Greaves-Lord, Sir Walter	Richardson, Sir P. W. (Sur'y, Ch't'sy)
Birchall, Major Sir John Dearman	Grenfell, Edward C. (City of London)	Roberts, Sir Samuel (Ecclesall)
Bird, Ernest Roy	Gretton, Colonel Rt. Hon. John	Ross, Major Ronald D.
Bourne, Captain Robert Croft	Gritten, W. G. Howard	Ruggles-Brise, Lieut.-Colonel E. A.
Bowater, Col. Sir T. Vansittart	Guinness, Rt. Hon. Walter E.	Russell, Alexander West (Tynemouth)
Bowyer, Captain Sir George E. W.	Gunston, Captain D. W.	Salmon, Major I.
Bracken, B.	Hacking, Rt. Hon. Douglas H.	Samuel, A. M. (Surrey, Farnham)
Brass, Captain Sir William	Hamilton, Sir George (Ilford)	Samuel, Samuel (W'dsworth, Putney)
Briscoe, Richard George	Hammersley, S. S.	Sandeman, Sir N. Stewart
Brown, Col. D. C. (N'th'l'd., Hexham)	Hanbury, C.	Shepperson, Sir Ernest Whittome
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Hartington, Marquess of	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Buckingham, Sir H.	Harvey, Major S. E. (Devon, Totnes)	Smith-Carington, Neville W.
Bullock, Captain Malcolm	Heneage, Lieut.-Colonel Arthur P.	Smithers, Waldron
Butler, R. A.	Hennessy, Major Sir G. R. J.	Somerset, Thomas
Cadogan, Major Hon. Edward	Herbert, Sir Dennis (Hertford)	Somerville, A. A. (Windsor)
Carver, Major W. H.	Hills, Major Rt. Hon. John Waller	Southby, Commander A. R. J.
Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Spender-Clay, Colonel H.
Cazalet, Captain Victor A.	Hope, Sir Harry (Forfar)	Stanley, Lord (Fylde)
Chapman, Sir S.	Howard-Bury, Colonel C. K.	Steel-Maitland, Rt. Hon. Sir Arthur
Christie, J. A.	Hudson, Capt. A. U. M. (Hackney, N.)	Thomas, Major L. B. (King's Norton)
Churchill, Rt. Hon. Winston Spencer	Hunter-Weston, Lt.-Gen. Sir Aylmer	Titchfield, Major the Marquess of
Cobb, Sir Cyril	Jones, Sir G. W. H. (Stoke New'gton)	Train, J.
Colfox, Major William Philip	King, Commodore Rt. Hon. Henry D.	Tryon, Rt. Hon. George Clement
Colville, Major D. J.	Lamb, Sir J. Q.	Vaughan Morgan, Sir Kenyon
Cranborne, Viscount	Lane Fox, Col. Rt. Hon. George R.	Wallace, Capt. D. E. (Hornsey)
Crichton-Stuart, Lord C.	Law, Sir Alfred (Derby, High Peak)	Waterhouse, Captain Charles
Croft, Brigadier-General Sir H.	Lewis, Oswald (Colchester)	Wells, Sydney R.
Crookshank, Capt. H. C.	Locker-Lampson, Rt. Hon. Godfrey	Williams, Charles (Devon, Torquay)
Culverwell, C. T. (Bristol, West)	McConnell, Sir Joseph	Wilson, G. H. A. (Cambridge U.)
Dalkeith, Earl of	Macdonald, Capt. P. D. (J. of W.)	Windsor-Clive, Lieut.-Colonel George
Dalrymple-White, Lt.-Col. Sir Godfrey	Macquisten, F. A.	Wolmer, Rt. Hon. Viscount
Davidson, Rt. Hon. J. (Hertford)	MacRobert, Rt. Hon. Alexander M.	Womersley, W. J.
Davidson, Major-General Sir J. H.	Maitland, A. (Kent, Faversham)	Wood, Rt. Hon. Sir Kingsley
Davies, Dr. Vernon	Makins, Brigadier-General E.	Worthington-Evans, Rt. Hon. Sir L.
Davies, Maj. Geo. F. (Somerset, Yeovil)	Margesson, Captain H. D.
Dixon, Captain Rt. Hon. Herbert	Mason, Colonel Glyn K.	TELLERS FOR THE NOES.—
Duckworth, G. A. V.	Merriman, Sir F. Boyd	Sir Frederick Thomson and Sir
		George Penny.

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

The Committee divided: Ayes, 149; Noes, 287.

Division No. 388.]	AYES.	[7.6 p.m.
Acland-Troyte, Lieut.-Colonel	Dugdale, Capt. T. L.	Mond, Hon. Henry
Albery, Irving James	Edmondson, Major A. J.	Nicholson, O. (Westminster)
Allen, Sir J. Sandeman (Liverp'l., W.)	Erskine, Lord (Somerset, Weston-s.-M.)	Nield, Rt. Hon. Sir Herbert
Amery, Rt. Hon. Leopold C. M. S.	Everard, W. Lindsay	O'Neill, Sir H.
Atholl, Duchess of	Falle, Sir Bertram G.	Peake, Captain Osbert
Atkinson, C.	Ferguson, Sir John	Penny, Sir George
Baldwin, Rt. Hon. Stanley (Bewdley)	Fermoy, Lord	Peto Sir Basil E. (Devon, Barnstaple)
Balfour, George (Hampstead)	Fison, F. G. Clavering	Ramsbotham, H.
Balniel, Lord	Ganzoni, Sir John	Rawson, Sir Cooper
Beamish, Rear-Admiral T. P. H.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Reid, David D. (County Down)
Beaumont, M. W.	Grace, John	Remer, John R.
Berry, Sir George	Graham, Fergus (Cumberland, N.)	Rentoul, Sir Gervais S.
Betterton, Sir Henry B.	Greaves-Lord, Sir Walter	Reynolds, Col. Sir James
Bevan, S. J. (Holborn)	Grenfell, Edward C. (City of London)	Richardson, Sir P. W. (Sur'y, Ch't'sy)
Birchall, Major Sir John Dearman	Gretton, Colonel Rt. Hon. John	Roberts, Sir Samuel (Ecclesall)
Bird, Ernest Roy	Gritten, W. G. Howard	Ross, Major Ronald D.
Bourne, Captain Robert Croft	Guinness, Rt. Hon. Walter E.	Ruggles-Brise, Lieut.-Colonel E. A.
Bowater, Col. Sir T. Vansittart	Gunston, Captain D. W.	Russell, Alexander West (Tynemouth)
Bowyer, Captain Sir George E. W.	Hacking, Rt. Hon. Douglas H.	Salmon, Major I.
Bracken, B.	Hamilton, Sir George (Ilford)	Samuel, A. M. (Surrey, Farnham)
Brass, Captain Sir William	Hammersley, S. S.	Samuel, Samuel (W'dsworth, Putney)
Briscoe, Richard George	Hanbury, C.	Sandeman, Sir N. Stewart
Brown, Col. D. C. (N'th'l'd., Hexham)	Hartington, Marquess of	Shepperson, Sir Ernest Whittome
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Harvey, Major S. E. (Devon, Totnes)	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Buckingham, Sir H.	Heneage, Lieut.-Colonel Arthur P.	Smith-Carington, Neville W.
Bullock, Captain Malcolm	Hennessy, Major Sir G. R. J.	Smithers, Waldron
Butler, R. A.	Herbert, Sir Dennis (Hertford)	Somerset, Thomas
Cadogan, Major Hon. Edward	Hills, Major Rt. Hon. John Waller	Somerville, A. A. (Windsor)
Carver, Major W. H.	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Southby, Commander A. R. J.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Hope, Sir Harry (Forfar)	Spender-Clay, Colonel H.
Cazalet, Captain Victor A.	Howard-Bury, Colonel C. K.	Stanley, Lord (Fylde)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Hudson, Capt. A. U. M. (Hackney, N.)	Steel-Maitland, Rt. Hon. Sir Arthur
Chapman, Sir S.	Hunter-Weston, Lt.-Gen. Sir Aylmer	Stuart, Hon. J. (Moray and Nairn)
Christie, J. A.	Jones, Sir G. W. H. (Stoke New'gton)	Thomas, Major L. B. (King's Norton)
Churchill, Rt. Hon. Winston Spencer	King, Commodore Rt. Hon. Henry D.	Titchfield, Major the Marquess of
Cobb, Sir Cyril	Lamb, Sir J. Q.	Train, J.
Colfox, Major William Philip	Lane Fox, Col. Rt. Hon. George R.	Tryon, Rt. Hon. George Clement
Colville, Major D. J.	Law, Sir Alfred (Derby, High Peak)	Vaughan-Morgan, Sir Kenyon
Cranborne, Viscount	Lewis, Oswald (Colchester)	Waterhouse, Captain Charles
Crichton-Stuart, Lord C.	Llewellin, Major J. J.	Wells, Sydney R.
Croft, Brigadier-General Sir H.	Locker-Lampson. Rt. Hon. Godfrey	Williams, Charles (Devon, Torquay)
Crookshank, Cpt. H. (Lindsey, Gainsbro)	McConnell, Sir Joseph	Wilson, G. H. A. (Cambridge U.)
Culverwell, C. T. (Bristol, West)	Macdonald, Capt. P. D. (I. of W.)	Windsor-Clive, Lieut.-Colonel George
Dalkeith, Earl of	Macquisten, F. A.	Wolmer, Rt. Hon. Viscount
Dalrymple-White, Lt.-Col. Sir Godfrey	MacRobert, Rt. Hon. Alexander M.	Womersley, W. J.
Davidson, Rt. Hon. J. (Hertford)	Maitland, A. (Kent, Faversham)	Wood, Rt. Hon. Sir Kingsley
Davidson, Major-General Sir J. H.	Makins, Brigadier-General E.	Worthington-Evans, Rt. Hon. Sir L.
Davies, Dr. Vernon	Margesson, Captain H. D.
Davies, Maj. Geo, F. (Somerset, Yeovil)	Mason, Colonel Glyn K.	TELLERS FOR THE AYES.—
Dixon, Captain Rt. Hon. Herbert	Merriman, Sir F. Boyd	Sir Frederick Thomson and Captain
Duckworth, G. A. V.	Mitchell, Sir W. Lane (Streatham)	Wallace.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Bondfield, Rt. Hon. Margaret	Cluse, W. S.
Adamson, W. M. (Staff., Cannock)	Bowen, J. W.	Clynes, Rt. Hon. John R.
Addison, Rt. Hon. Dr. Christopher	Bowerman, Rt. Hon. Charles W.	Cocks, Frederick Seymour
Aitchison, Rt. Hon. Craigie M.	Broad, Francis Alfred	Compton, Joseph
Alpass, J. H.	Brockway, A. Fenner	Cove, William G.
Ammon, Charles George	Bromfield, William	Cowan, D. M.
Arnott, John	Brooke, W.	Daggar, George
Aske, Sir Robert	Brothers, M.	Dallas, George
Attlee, Clement Richard	Brown, C. W. E. (Notts, Mansfield)	Dalton, Hugh
Ayles, Walter	Brown, Ernest (Leith)	Davies, E. C. (Montgomery)
Baker, John (Wolverhampton, Bilston)	Brown, Rt. Hon. J. (South Ayrshire)	Day, Harry
Baldwin, Oliver (Dudley)	Buchanan, G.	Denman, Hon. R. D.
Barnes, Alfred John	Burgess, F. G.	Dickson, T.
Barr, James	Burgin, Dr. E. L.	Dudgeon, Major C. R.
Bellamy, Albert	Buxton, C. R. (Yorks, W. R. Elland)	Dukes, C.
Benn, Rt. Hon. Wedgwood	Caine, Derwent Hall-	Duncan, Charles
Bennett, Capt. Sir E. N. (Cardiff C.)	Cameron, A. G.	Ede, James Chuter
Bennett, William (Battersea, South)	Cape, Thomas	Edge, Sir William
Benson, G.	Carter, W. (St. Pancras, S. W.)	Edmunds, J. E.
Bentham, Dr. Ethel	Charleton, H. C.	Edwards, C. (Monmouth, Bedwellty)
Bevan, Aneurin (Ebbw Vale)	Chater, Daniel	Edwards, E. (Morpeth)
Birkett, W. Norman	Church, Major A. G.	Egan, W. H.
Blindell, James	Clarke, J. S.	Elmley, Viscount
England, Colonel A.	Lawrie, Hugh Hartley (Stalybridge)	Roberts, Rt. Hon. F. O. (W. Bromwich)
Evans, Capt. Ernest (Welsh Univer.)	Lawson, John James	Robinson, Sir T. (Lancs, Stretford)
Foot, Isaac	Lawther, W. (Barnard Castle)	Romeril, H. G.
Forgan, Dr. Robert	Leach, W.	Rosbotham, D. S. T.
Freeman, Peter	Lee, Frank (Derby, N. E.)	Rowson, Guy
Gardner, B. W. (West Ham, Upton)	Lee, Jennie (Lanark, Northern)	Russell, Richard John (Eddisbury)
George, Rt. Hon. D. Lloyd (Car'vn)	Lees, J.	Salter, Dr. Alfred
George, Major G. Lloyd (Pembroke)	Lewis, T. (Southampton)	Samuel, Rt. Hon. Sir H. (Darwen)
George, Megan Lloyd (Anglesea)	Lindley, Fred W.	Sanders, W. S.
Gibbins, Joseph	Logan, David Gilbert	Sawyer, G. F.
Gibson, H. M. (Lancs, Mossley)	Longbottom, A. W.	Scott, James
Gill, T. H.	Longden, F.	Scrymgeour, E.
Gillett, George M.	Lowth, Thomas	Scurr, John
Glassey, A. E.	Lunn, William	Sexton, James
Gossling, A. G.	Macdonald, Gordon (Ince)	Shaw, Rt. Hon. Thomas (Preston)
Gould, F.	MacDonald, Rt. Hon. J. R. (Seaham)	Shepherd, Arthur Lewis
Graham, D. M. (Lanark, Hamilton)	MacDonald, Malcolm (Bassetlaw)	Sherwood, G. H.
Graham, Rt. Hon. Wm. (Edin., Cent.)	McElwee, A.	Shield, George William
Granville, E.	McEntee, V. L.	Shillaker, J. F.
Greenwood, Rt. Hon. A. (Colne)	McKinlay, A.	Short, Alfred (Wednesbury)
Grenfell, D. R. (Glamorgan)	MacLaren, Andrew	Simmons, C. J.
Griffith, F. Kingsley (Middlesbro' W.)	Maclean, Sir Donald (Cornwall, N.)	Sinclair, Sir A. (Caithness)
Griffiths, T. (Monmouth, Pontypool)	Maclean, Neil (Glasgow, Govan)	Sinkinson, George
Groves, Thomas E.	MacNeill-Weir, L.	Smith, Frank (Nuneaton)
Grundy, Thomas W.	McShane, John James	Smith, H. B. Lees (Keighley)
Hall, F. (York. W. R., Normanton)	Malone, C. L'Estrange (N'thampton)	Smith, Rennie (Penistone)
Hall, G. H. (Merthyr Tydvil)	Mander, Geoffrey le M.	Smith, Tom (Pontefract)
Hall, Capt. W. P. (Portsmouth, C.)	Mansfield, W.	Smith, W. R. (Norwich)
Harbord, A.	March, S.	Snell, Harry
Hardie, George D.	Marley, J.	Snowden, Rt. Hon. Philip
Harris, Percy A.	Marshall, Fred	Snowden, Thomas (Accrington)
Hartshorn, Rt. Hon. Vernon	Mathers, George	Sorensen, R.
Haycock, A. W.	Matters, L. W.	Stamford, Thomas W.
Hayday, Arthur	Messer, Fred	Strachey, E. J. St. Loe
Hayes, John Henry	Middleton, G.	Strauss, G. R.
Henderson, Right Hon. A. (Burnley)	Millar, J. D.	Sullivan, J.
Henderson, Arthur, Junr, (Cardiff, S.)	Mills, J. E.	Sutton, J. E.
Henderson, Thomas (Glasgow)	Milner, Major J.	Taylor, H. A. (Lincoln)
Henderson, W. W. (Middx., Enfield)	Montague, Frederick	Thomas, Rt. Hon. J. H. (Derby)
Herriotts, J.	Morgan, Dr. H. B.	Thorne, W. (West Ham, Plaistow)
Hirst, G. H. (York W. R. Wentwortn)	Morley, Ralph	Thurtle, Ernest
Hirst, W. (Bradford, South)	Morrison, Herbert (Hackney, South)	Tillett, Ben
Hoffman, P. C.	Morrison, Robert C. (Tottenham, N.)	Tinker, John Joseph
Hollins, A.	Mort, D. L.	Tout, W. J.
Hopkin, Daniel	Moses, J. J. H.	Townend, A. E.
Hore-Belisha, Leslie	Mosley, Sir Oswald (Smethwick)	Trevelyan, Rt. Hon. Sir Charles
Horrabin, J. F.	Muff, G.	Turner, B.
Hudson, James H. (Huddersfield)	Muggeridge, H. T.	Vaughan, D. J.
Hunter, Dr. Joseph	Murnin, Hugh	Viant, S. P.
Hutchison, Maj.-Gen. Sir R.	Nathan, Major H. L.	Walkden, A. G.
Jenkins, W. (Glamorgan, Neath)	Naylor, T. E.	Walker, J.
John, William (Rhondda, West)	Newman, Sir R. H. S. D. L. (Exeter)	Wallace, H. W.
Johnston, Thomas	Noel Baker, P. J.	Watkins, F. C.
Jones, F. Llewellyn- (Flint)	Oldfield, J. R.	Watson, W. M. (Dunfermline)
Jones, Henry Haydn (Merioneth)	Oliver, George Harold (Ilkeston)	Watts-Morgan, Lt.-Col. D. (Rhondda)
Jones, J. J. (West Ham, Silvertown)	Oliver, P. M. (Man., Blackley)	Wellock, Wilfred
Jones, Rt. Hon Leif (Camborne)	Owen, Major G. (Carnarvon)	Welsh, James C. (Coatbridge)
Jones, Morgan (Caerphilly)	Palin, John Henry	West, F. R.
Jones, T. I. Mardy (Pontypridd)	Palmer, E. T.	Westwood, Joseph
Jowett, Rt. Hon. F. W.	Parkinson, John Allen (Wigan)	White, H. G.
Jowitt, Rt. Hon. Sir W. A.	Pethick-Lawrence, F. W.	Whiteley, William (Blaydon)
Kedward, R. M. (Kent, Ashford)	Phillips, Dr. Marion	Wilkinson, Ellen C.
Kelly, W. T.	Picton-Turbervill, Edith	Williams, Dr. J. H. (Llanelly)
Kennedy, Thomas	Pole, Major D. G.	Williams, T. (York, Don Valley)
Kenworthy, Lt.-Com. Hon. Joseph M.	Potts, John S.	Wilson, C. H. (Sheffield, Attercliffe)
Kirkwood, D.	Pybus, Percy John	Wilson, J. (Oldham)
Knight, Holford	Quibell, D. J. K.	Wilson, R. J. (Jarrow)
Lambert, Rt. Hon. George (S. Molton)	Rathbone, Eleanor	Winterton, G. E. (Leicester, Loughb'gh)
Lansbury, Rt. Hon. George	Raynes, W. R.	Wood, Major McKenzie (Banff)
Lathan, G.	Richards, R.	Wright, W. (Rutherglen)
Law, Albert (Bolton)	Richardson, R. (Houghton-le-Spring)	Young, R. S. (Islington, North)
Law, A. (Rosendale)	Riley, F. F. (Stockton-on-Tees)
Lawrence, Susan	Ritson, J.	TELLERS FOR THE NOES.—
		Mr. B. Smith and Mr. Paling.

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

The DEPUTY-CHAIRMAN

Sir Laming Worthington-Evans.

Sir L. WORTHINGTON-EVANS

This Clause is now so much amended that I do not know really where I am. May I ask you which particular Amendment I am called upon to move?

The DEPUTY - CHAIRMAN

The Amendment which I called is the first on the Order Paper standing in the name of the right hon. Gentleman—In page 24, line 18, after the word "person," to insert the words: having a proprietary or other interest in a company and not being merely an employé of a private company. I made inquiries as to whether the right hon. Gentleman wished to move this, having regard to the statement of the Chancellor of the Exchequer, and I understood that he wished to move it.

Sir L. WORTHINGTON-EVANS

I am not by any means certain that the point which I had in mind requires to be protected in this way. [Interruption.] The point was that in the Bill, as originally drafted in Clause 29—[Interruption.]

Mr. MACLEAN

On a point of Order. May I ask which right hon. Member on the Front Opposition Bench is addressing this Amendment to the Committee?

The DEPUTY-CHAIRMAN

I understood that the right hon. Gentleman was moving the Amendment.

Sir L. WORTHINGTON-EVANS

I was saying that, owing to the alteration made in the Bill by the Chancellor of the Exchequer, I was not sure whether it was now necessary to move this Amendment. The point was that I wanted to protect the employé of a private company, who might have transferred to a private company some property, from having his Death Duties increased because of that transfer, even though he had no proprietary interest whatever in the company. That was the absurd position which Clause 29 was in as it was submitted to the Committee, but I believe that the Amendments which the Chancellor has indicated will meet that point, and therefore I do not now move this Amendment.

Sir HENRY BETTERTON

I beg to move, in page 24, line 20, after the word "made," to insert the words, "not more than 10 years prior to his death."

The purpose of the Amendment is to ensure that there shall be some limit to the operation of the Clause. I suggest 10 years, but that is purely arbitrary, and might be more or less. It is not fair or right that there should be no limit at all to the time. As the Clause stands now, if a person who dies has at any time—it may be 20, 30, or 40 years—before his death made a transfer of property to a company, he is covered by the Clause. I submit that it is only fair that a reasonable period should be stated in the Bill beyond which the Clause is not operative. It is unfair that it should be unlimited in point of time.

The ATTORNEY-GENERAL

I am afraid that we cannot accept this Amendment. The Committee will realise that we are only following precedent in that all Finance Bills when dealing with Estate Duties always consider the state of affairs prevailing at the date of death. If you are going to make the Bill apply to settlements that have already been made with regard to events that take place in the future, it will be quite illogical to attempt to draw any arbitrary division in point of time. For instance, a transfer nine years ago would be within, and a transfer 10 years ago would be without. That cannot be right. Surely the right principle to consider is this. So long as you confine your legislation to the state of affairs prevailing at the date of the death—and of course we do not make it apply to deaths that have taken place, but only to deaths that take place after the passing of the Bill—that is all that can be expected. The area on which this duty is imposed is limited to the extent of the transfer. The right hon. Gentleman argued that it was necessary to have an Amendment lest a small gift might bring about the obligation to pay a large duty. This is now a misapprehension, because, in view of the Amendments we have got, the area upon which the duty is to be calculated cannot be larger than the thing transferred. If you transfer a plot of ground worth £100 to a private company, the only part of the estate of the private company on which duty can be calculated is £100. The argument which the right hon. Gentleman raised does not apply now, as it did before.

Mr. ARTHUR MICHAEL SAMUEL

I am not opposing the Clause, but, having listened to every word that the Attorney-General said, I am in a fog as to what the Clause means. What does the hon. and learned Gentleman mean when he talks about the extent of the transfer? He must remember that many of us on this side are not lawyers, but plain business men, and all we want is to understand what we are dealing with. He talks about the extent of the transfer, and it is abracadabra to us.

The DEPUTY-CHAIRMAN

The only point raised here is that of time. We cannot discuss the whole general question. The only point before the Committee is whether there should be a time limit imposed restricting the operation of this Clause.

Mr. SAMUEL

I agree, but the hon. and learned Gentleman made use of the words "extent of transfer." I am not attacking the point; I want to know what he means. He then talked about nine years quite arbitrarily, and then made use of the expression "eleven years." Why arbitrarily 11 years? My hon. Friend who moved the Amendment made use of the expression "10 years" as a peg on which to hang a question as to how the time is to be limited. It is unfair to have an unlimited period in this case. A transfer of property may have been made years ago, long before the death of the person concerned, and it is only fair that some limit should be put in the Clause to make it operate only in respect of transfers that were made within a reasonable period prior to death. What objection can there be to that? The Attorney-General says that he does not like 10 years; he mentioned nine, so let him put in some limit, and let us know where we are, so that there will be no chance later on of an unbounded amount of litigation to the annoyance and cost of everyone. The House ought to fight against passing legislation which we ourselves do not understand, so that when it comes before the taxpayers and questions arise, we may not have the scandal of taxpayers being forced into the Law Courts to fight out points which ought to be decided here. I have no intention to obstruct in this matter, and we may not go to a Division, but we ought to insist on having a thorough examination of what the effect of this Clause will be if no limit of time is put into it.

Major GEORGE DAVIES

The Attorney-General's explanation of his objection to this Amendment sounded all right to him, but I have two grave objections to put forward. My first point is that we have to consider the bearing of this Amendment on some future Amendment which the Chancellor of the Exchequer has indicated he will accept. That shows the difficulty under which we are working. As a humble back bencher I have taken a great deal of trouble to study the implications of this extraordinarily complicated Measure. It hangs together in a very intricate way, and it is difficult to understand the extent to which an Amendment which is adumbrated will affect the situation with which we are dealing at the moment. My other objection is this. The Attorney-General has stated that he does not propose to make this Clause retroactive with respect to the date of death, that is, make it apply to anyone who dies prior to the Bill becoming an Act of Parliament. I suggest that another date which is just as important is the date on which some individual had conveyed certain property, under certain conditions, with no idea that what he did would be affected by this subsequent legislation. While it may not be retroactive with regard to the date of death, it certainly is going to affect transactions which were carried through prior to its passing.

There are two vital dates concerned, the date of the transfer and the date of the death of the transferor or the transferee, and I maintain that we should receive the protection of a time limit such as is asked for in the Amendment. In regard to other taxation there is a time limit between the date of a gift and the death of the donor. If a gift is made within a period of less than three years before the death of the donor then taxation falls upon it, but if the gift were made earlier than three years it escapes taxation. I suggest that is a good precedent for our request that this Amendment ought to be accepted. No one is suggesting that there is anything sacrosanct about the figure 10 which is mentioned in the Amendment. It is taken as a round figure. It happens to end with an 0 and to be divisible by five. It is possible to have another figure giving a slightly longer or a slightly shorter period.

There is a great deal of agreement on both sides of the Chamber on what we want to do in this Measure. No one wants to allow other people to escape their fair share of taxation. There is a selfish motive, because if they escape their share it will have to be borne by the rest of us. The whole point is how to avoid damaging the innocent when trying to secure the guilty. This Amendment provides a reasonable exception for those who cannot be regarded as being in the category of the guilty. That consideration would apply particularly to transfers that took place seven or eight years before this time. The people who made those transfers were supremely unconscious that any Chancellor of the Exchequer was going to be so bold—and the present Chancellor will regret that boldness before we have parted with the Clause—as to bring forward proposals for dealing with a complicated problem which his predecessors had tried to tackle and had left alone because it bristled with difficulties. I would welcome any really watertight proposal to catch tax evaders, but it is useless to plug up the holes in a ship if that can only be done at the cost of impairing the stability and the fair sailing properties of the ship. There were many cases seven, eight or nine years ago in which people made conveyances without any intention of trying to evade taxation, with no idea of forming one-man companies, and they will be hit by this legislation unless we insert a time limit. I do not regard the period of 10 years as like a decree of the Medes and Persians, but I think the principle at stake should have a little further consideration from the Treasury, and that they ought to meet us in this matter. In their endeavour to scoop in the guilty they are catching a whole lot of innocent people, and we wish to see that equity is done.

Major HILLS

I foresee great difficulties and possible injustices unless some time limit is inserted here. Supposing that some 20 or 30 years before his death a man made a transfer to a company as defined by this Clause. The onus is then on his executors to prove that the transfer comes within the exceptions provided for in Sub-section (2) of the Clause. The Sub-section says that taxation will be payable unless the executors can show that the transfer was one where all the consideration of the sale was received wholly by the deceased for his own use and benefit. Surely the Attorney-General must see that it will be very hard for an executor to prove the exception. Is not that so?

The ATTORNEY-GENERAL

The onus will not be on the executor. In order that Death Duties shall not attach to some property which was not at the date of death the property of the deceased, it must be shown that the property comes within a particular category or class. It is not enough merely to prove it is a transfer, you have to prove that it is a transfer of a particular designation. I do not thank it is right to say that there will be any onus on the executors at all. I think it will be for the tax officials to show that the transfer came within the particular class. The right hon. Gentleman will agree that we can define a class in this way: First define a larger class and then subtract from it. For example, six is seven minus one. We can define six in that way. I am sure he will see what I mean. They are first of all putting up the seven class—which is the seven in the example I have quoted—and they subtract certain things—which are the one—and it will be for the tax collector to show that this transfer comes within the six.

Major HILLS

Of course, that would remove a great deal of the difficulty, but according to my reading of Sub-section (2) it refers to all transfers. I appreciate what the right hon. Gentleman has said about a class of property to which this Clause relates, and if he assures me that the onus will be on the taxing authority to prove that the contingency has arisen which makes the tax payable, that removes one of the difficulties I feel. All the same, I cannot see that it is consistent with justice to go back 20, 30 or 40 years. The transaction may have taken place long before there was any contemplation of a duty in the mind of the transferor. The transaction might go back to a time anterior to the imposition of Estate Duties at all, and surely it would be an absurd result that we should be taking steps to meet the evasion of a duty which had never been imposed at the time the transaction took place. Possibly 10 years is too short a time, but I think there ought to be some time limit.

Further, these provisions will impose great expense on the estate. The revenue authorities, in discharge of their duty, will ask for a return of all transfers of property which have been made by the deceased person, and there will have to be a search through the accounts of the deceased. It will be an enormous business, and a very expensive one in the case of a man who has had large transactions in stocks and shares, or who has been an active man of business. Either the executor will have to prove that a transaction is outside the rule or the taxing authority will bring it inside the rule, and in either event all the accounts and business transactions will have to be gone through. The results to the revenue will not be very large but there will be an enormous expense to the estate of the deceased and a great deal of work for the officials of the Department.

Major NATHAN

I rise to support this Amendment, but not for the reason given by the hon. Gentleman who moved it. The Attorney-General, in reply to the observations of that hon. Member, suggested that the Amendment ceased to be of importance now that the Chancellor of the Exchequer had agreed to insert a provision which will limit the amount on which the duty will be payable. With great respect to the Attorney-General I do not think that meets the point any more than I think his reply to the right hon. and gallant Member for Ripon (Major Hills) met the latter's point. The obligation imposed under this Clause is not upon the executors but upon the company. I would refer the Attorney-General to Clause 31, which makes the duty a debt chargeable against the company and puts upon the company the obligation of notifying the Commissioners of Inland Revenue of the death of the deceased. If the company wilfully fail to do so they are to be liable to a fine of £500. It may be a company incorporated outside these realms, and a company which has never heard of this Finance Bill at all. It may be a company in which the transfer was made many years ago in which the shareholders and the directors have changed more than once during the intervening period. It may be the case that at the time of the death not a single person connected with the company knows what was the origin of the particular transaction. Nevertheless the obligation is imposed on the company of notifying the death, and the duty is a debt due to the Crown from that company.

I do not wish to pursue this matter unduly, but I desire to direct the attention of the Attorney-General to this point, and to stress the view that it is essential for the protection of the company which may become liable that there should be a time limit—I am not particular whether it is five, 10 or 15 years. I think, however, that there should be some time limit, so that the directors have no responsibility beyond a certain period.

Mr. ATKINSON

The Attorney-General has told us that the debt could not be charged on more than the value of the property. This Amendment raises a rather serious question, because there are two dates at which the value of the property transferred is valued. In the first place there is the value at the date when the transfer is made, and the value at the date of the death, and the further those dates are apart the greater may be the discrepancy between the two values. It may be that property worth only £500 when transferred may be worth several thousand pounds 20 years hence, and the question which arises on this Clause is upon which value is the Estate Duty to be collected. [Interruption.] I will postpone any further remarks on this question until I know exactly the effect of the Amendments which the Chancellor of the Exchequer has promised to accept.

Mr. CHURCHILL

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

I make this Motion in order that I may suggest an arrangement which I think will be for the convenience of the Committee. My suggestion is that we should postpone this Clause until we have received the Amendments printed in their amended form and proceed now with the rest of the Bill. I have been looking at the Clauses from Clause 34 to 47, and, after consulting some of my hon. Friends, I am prepared to say that, as far as we are concerned, if Clauses 29 to 33 were postponed, there would be very good prospects of passing Clauses 34 to 47 to-night. I know those Clauses contain one or two points of substance, but I wish to make it perfectly clear that we should reserve the Schedules for further discussion on another day, and we re serve the fullest liberty in regard to the new Clauses. There is also Clause 12, but I do not think it is suggested that that Clause should be dealt with to-night.

Mr. P. SNOWDEN

I am quite prepared to consider the suggestion which the right hon. Gentleman the Member for Epping (Mr. Churchill) has made. With regard to the Clauses we should take at this sitting, I understand the suggestion is that we should get to the end of Clause 47 to-night. If that is so, then I am willing to fall in with the suggestion that we should postpone Clause 29 and reproduce it later on with the Amendments which I propose to incorporate. The right hon. Gentleman has stated that it would be inconvenient to proceed now with Clauses 30, 31, 32 and 33 and I understand the suggestion is that we should postpone those Clauses until we have reached Clause 47. I am prepared to fall in with that suggestion.

Mr. ERNEST BROWN

May I say, on behalf of those sitting on these benches, that we have no objection to the course which has been suggested, although I think it will be rather awkward for us to proceed with the other Clauses at once.

Lieut.-Colonel Sir FREDERICK HALL

The Chancellor of the Exchequer has stated that he will have the Amendments printed which he has suggested in time for the next meeting of the Committee. May I ask the right hon. Gentleman to let us have them on the Amendment on the Paper as soon as possible.

Mr. SNOWDEN

Yes, I will.

Mr. SMITHERS

I presume that we have to discuss the Clauses as they are printed in the Bill. I would like to know what form the Chancellor of the Exchequer proposes for the presentation of his new Clauses and Amendments. Will they be issued in the form of a White Paper?

Mr. SNOWDEN

No, they will be issued on the Amendment Paper in the ordinary way.

Sir D. HERBERT

I wish to thank the Chancellor of the Exchequer for agreeing to the course which has been suggested by the right hon. Gentleman the Member for Epping. I am sure that we shall get through the contentious Clauses much quicker if we can have them placed before us in the amended form. I know the difficulties, and I am aware of the big changes which are being made.

Mr. CHURCHILL

I beg to ask leave to withdraw my Motion.

Motion, by leave, withdrawn.

Question again proposed, "That those words we there inserted."

Sir H. BETTERTON

I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. P. SNOWDEN

I beg to move, "That the consideration of Clauses 29, 30, 31, 32 and 33 be postponed."

The DEPUTY-CHAIRMAN

I think the best course would be to postpone the consideration of those Clauses until Clause 47 has been disposed of.

Mr. CHURCHILL

I suggest that we should postpone them until after Clause 47 has been disposed of, and then we can see if any further postponement is necessary.

Motion made and Question proposed, "That the consideration of the Clause be postponed until after the consideration of Clause 47."—[Mr. P. Snowden.]