§ Mr. Douglas (Battersea, North)
I beg to move, in page 4, line 6, to leave out "of five pounds," and to insertnot exceeding one per cent. of the net profits of the solicitor from carrying on the profession of solicitor for the last accounting period for which an accountant's certificate has to be delivered.This Clause relates to the fund which it is proposed to establish for the purpose of making restitution, in certain cases, to people who may have suffered through the default of a solicitor whom they have employed. As the Clause stands, it is proposed that this fund should be raised by means of an equal levy upon every solicitor, no matter what might be the extent of his practice or profits. That is a proposal of a very unusual nature. It is not general in cases of this sort that no regard whatever should be had to the ability of the individual to pay. This proposal means that the solicitor who has a very good practice and makes a large income would contribute no more than one who has a very small practice and a small income. I do not suppose anybody will suggest that those who are the poorest are the most dishonest. I sincerely hope no suggestion of that sort will be made. Indeed, it would appear on the face of it that the larger the practice the larger the risks involved. It has been said by those who are concerned in the promotion of the Bill on behalf of the Law Society that one of its objects is to increase public confidence in solicitors as a body, and thereby to secure for them the opportunity of engaging in their practice more successfully and earning more money. If that object is, in fact, achieved by the Bill, it ought to inure pro rata to the benefit of all persons engaged in the profession, those who are already doing well and those whose incomes and practices are comparatively small. Therefore, I hope they would make no objection to contributing to the fund according to their means. In the Second Reading Debate on the Bill, I pointed out the burdens which would be imposed upon solicitors by statutory enactment if the Bill became law. These burdens amount in all to an average of 672 about £30 or more a year. The Law Society is responsible for the statement that the average income of a solicitor is £400 a year. If that be so, the case is all the stronger for distributing the burden more equitably and placing it upon those whose shoulders are strong enough to bear it.
§ Dr. Peters (Huntingdon)
I listened with a good deal of sympathy to the arguments of the hon. Member for North Battersea (Mr. Douglas) but I hardly think that his Amendment is the sort of thing we ought to do in a Bill of this kind. I do not want to go into the arguments at length on this occasion, but I suggest that it would be far better to allow the Bill to remain as it is than to accept an Amendment which would place it more or less on a new basis.
§ Major Milner
I would point out to the Committee that all solicitors, whatever their incomes, pay the same amount for their certificate to practise. In London they have to pay £9, and in the country £6. In this case there is no discrimination between those in receipt of large or small incomes. I would also point out that the opportunities of the avocation do not vary in large or small practices. I can recall the case of a man with a small practice who was responsible for the administration of a large estate. Therefore, it does not seem to matter whether the practice is large or small. The proposal of my hon. Friend the Member for North Battersea (Mr. Douglas) had the consideration, although it was not a very lengthy consideration, of the Joint Select Committee, and it was pointed out then, and I am sure it will be clear to the Committee to-day, that it would be quite impracticable to have payments made to this fund on the basis of the amount of income received. If this proposal were carried, the amount of income would have to be disclosed in order that assessment might be made. It is true that accounts have to be audited, but the results are not necessarily disclosed to some body other than the Income Tax authorities. I imagine that there would be an outcry among the members of any business or profession which had to submit their takings or profits to some outside body. For that reason it is quite impracticable to adopt my hon. Friend's suggestion. I think that the proposal contained in the Bill is very fair. It is simple and it is easy of applica- 673 tion, whereas my hon. Friend's proposal would involve very considerable delay and very considerable practical difficulties. Solicitors or members of any other profession or trade would strongly object to the disclosure of their incomes for the assessment of payments to a fund of this character, and I hope my hon. Friend will not press his Amendment. I can assure him that it was carefully considered by the Select Committee.
§ The Attorney-General
I hope that my hon. Friend the Member for North Batter-sea (Mr. Douglas) will not press his Amendment. This matter was considered by the Select Committee, as my hon. and gallant Friend the Member for South-East Leeds (Major Milner) has pointed out. There are certain payments in all professions which are made at a flat rate so as to avoid the necessity of having ah investigation. It was felt that the present procedure was the best to meet the case.
§ Amendment negatived.
§ Mr. Douglas
I beg to move, in page 5, line 43, at the end, to add:(10) The provisions of this section shall not take effect until such time as solicitors shall become exempt from the obligation of paying stamp duty upon practising certificates.The object of the Amendment is to provide that the Clause shall not take effect until solicitors are exempt from the obligation of paying Stamp Duty upon practising certificates. Unfair burdens of taxation are imposed upon the profession, and no other profession has been singled out for taxation in the same way as have solicitors. A solicitor, in London, before he can continue to practise is obliged to pay each year for a practising certificate, for which the Treasury demand a sum of £9. He has also to pay a fee of £1 to the Law Society, and this Bill provides that he shall be subject to a levy of £5 a year towards the compensation fund, and that he shall be compelled to become a member of the Law Society, which imposes a further charge of three guineas a year. He is also obliged to pay for an audit and certificate, and this will cost at least 10 guineas a year. If as a matter of public policy this Committee is of the opinion that these fees and obligations should be imposed upon solicitors, then they ought in all fairness to relieve solicitors from the obligation 674 to pay special taxation which has no justification, justice or equity. It is a purely fortuitous circumstance that 140 or 150 years ago the then Chancellor of the Exchequer, casting about for revenue and being defeated in one proposal, chose to impose this burden upon persons practising in this profession. By accident, what was done then has, during the course of years, inflicted this extremely unfair taxation upon solicitors. There is no justification for it. Whenever this matter has been debated not a single person has defended it on grounds of equity. It has been defended by Chancellors of the Exchequer on grounds of expediency, but I hope we are now moving away from that view in dealing with matters of public finance, and that we shall try to adjust the burden of taxation proportionately and equitably upon every citizen.
§ Dr. Peters
I am afraid I cannot agree with my hon. Friend the Member for North Battersea (Mr. Douglas), or with the Amendment he has moved. It is quite clear, however, that the solicitors' branch of the legal profession is badly dealt with as far as taxation is concerned. A solicitor pays £80 on his articles, £25 admission fees and £9 or £6 for his practising certificate. A barrister has to pay £50 on his articles and £25 on his admission. An accountant pays 2s. 6d. on his articles and an annual fee of £10, and an estate or house agent pays 28. 6d. on his articles and an annual fee of £2. A chartered accountant pays 2s. 6d. on his articles and no more, whereas chartered accountants in these days are usually making a good deal more than lawyers. Architects pay 10s. on their articles and nothing further, and a doctor pays 1s. on his articles and nothing further. I quite agree that we should like to see some reduction, but this is not the time. Looking back to the time when this taxation was imposed, I think it is unfortunate that this question has been raised whenever the country has been at war. Therefore there is always an answer to it— nothing can be done. I cannot see that we can press the point at the moment, although representations have been made to the Chancellor of the Exchequer.
§ Mr. Goldie (Warrington)
Did I understand the hon. member to say that the taxation on the certificate is £9?
§ Dr. Peters
It is £9 if one practises in London and £6 in the provinces. That is the actual cost of the annual certificate.
§ The Attorney-General
Of course, everyone sympathises with people, professional or otherwise, who desire to get taxation reduced or their grievances, or what they think to be their grievances, redressed. I do not want to dispute for a moment that the sort of facts and figures the hon. Member has put before us establish a case proper for consideration, but I am sure he will realise that, after all, this is a tax that has been in existence for a very long time, and in present financial conditions it is obviously difficult to remit a tax which has been accepted, with protests from time to time, for a large number of years. When more normal conditions arise it may well be that the solicitors' profession will press more strongly, but it would produce a most unfortunate impression if, having considered these matters, in which there has been great public interest, they said they would not proceed with these reforms, some of which they admit are necessary in order to maintain the standard that they desire to maintain, unless the tax is remitted, in war-time. We could not accept the Amendment, which without wishing to enter into arguments on the question, no doubt will receive consideration on a different occasion.
§ Major Milner
I do not think there is much left to say, but I would like to tell my hon. Friend that I, and I think the members of the Law Society, are entirely in sympathy and agreement with the views he has expressed as to the illogicality of the taxation imposed upon solicitors compared with other professions. It is of interest to note, not only are the figures given by the hon. Member opposite correct, but that the totals of the taxation are very impressive indeed and really form a very substantial contribution on the part of the solicitors' branch of the legal profession to the national income. For example, in the 10 years ending 1938 no less was paid in Stamp Duties than £1,895,000. That averages £189,000 per annum, a very considerable sum indeed imposed on this branch of the profession. It is not imposed on any other section of the community throughout the length and breadth of the land. While one recognises that the present is not the best time at which to make an 676 application for the remission or a reduction of these Stamp Duties, one hopes that at no distant time some Chancellor of the Exchequer will be so impressed by the obvious injustice of this imposition, which was really introduced over 100 years ago by something in the nature of a side wind, that he will be willing to make a considerable reduction. I am also obliged to the Attorney-General for what he pointed out in regard to the position under the present Bill. I am afraid that for the time being the solicitors must bear the very substantial burden imposed upon them and trust in the sense of justice of some future Chancellor to make the remission which is really their due.
§ Mr. Douglas
I am not very much mollified in my attitude by the suggestion that this is a wrecking Amendment, nor that it is brought forward from motives of self-interest. I would not put forward an argument for the benefit of some particular section of the community. I have tried, and I hope I have succeeded in pointing out that a section of the community is subject to an unfair and discriminating burden, and I hoped that the Attorney-General, if he chose to use the ground of expediency during war-time as a reason for not acceding to my proposition, would have admitted the general line of the argument that this is an unjust discrimination against one particular profession and that the fact that it has existed for 140 years is no justification for it. There is a fresh generation of solicitors coming into existence at every moment, and the fact that their predecessors have been penalised in this way is no reason why it should continue for ever. Nor does the Amendment propose to remove the tax during war-time. It proposes that the provisions of the Section should come into operation at such time as the Chancellor of the Exchequer found himself able to remove the tax. That is the wording and the purpose of the Amendment. Nevertheless, I recognise that in war-time it is difficult to remove injustices if it costs money to the Exchequer. But I only accept that as an argument for a temporary suspension of the pressure which I think ought to be put upon the Chancellor to remove the tax, and I hope that hon. Members, whether connected with the legal profession or not, will in the future support the effort to redress this injustice. I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause ordered to stand part of the Bill.