HC Deb 28 May 1952 vol 501 cc1422-38

(1) For the purpose of section one hundred and one of the Income Tax Act, 1952 (which grants relief in respect of maintenance, repairs, insurance and management of property), a person occupying any premises or having any interest therein as lessee or tenant thereof shall be treated as if he were the owner thereof if, under the covenants or stipulations contained in the lease or agreement by virtue of which he occupies or has such interest in the premises, the whole of the burden of repairing the premises falls upon him.

(2) The provisions of this section shall have effect from and after the fifth day of April, nineteen hundred and fifty-two, and accordingly subsection (1) of section three hundred and fourteen of the Income Tax Act, 1952, shall be read as if the words "or, in the case of expenditure by a tenant, could, if he had been the owner"" were omitted.—[Viscount Hinchingbrooke.]

Brought up, and read the First time.

Viscount Hinchingbrooke (Dorset, South)

I beg to move,"That the Clause be read a Second time."

This Clause has moderately respectable antecedents. It was first introduced on the Committee stage of the 1946 Finance Bill, and repeated on the Report stage, and it was again introduced in the Committee stage of the 1947 Bill. These are quite good vintage years, and I rather hope that the Committee will consider this Clause to be full-bodied and palatable.

It certainly had some powerful support when it was introduced for the second time in 1947. Then, Sir John Anderson, now Lord Waverley, with his great experience as Chancellor of the Exchequer, spoke in its favour, and one or two of my right hon. Friends were also good enough to give it their support.

The object of the Clause is to give tenants on repairing leases the same rights as owners to reclaim from the revenue on the maintenance, repair, insurance and management of their property. On the earlier occasions, I declared a personal interest in this matter, and I do so again. I inhabit that type of house, and I am myself in the particular class of persons whom this Clause will advantage.

The position of such tenants today is this. Schedule A tax is payable by the tenant but it is deducted from the rent. In fact, the owner pays the tax. Since the tenant does not actually pay the tax, he is precluded from claiming against the revenue for the costs of repair. Likewise the owner, although he pays the tax, is precluded from claiming because he does not carry out the repairs.

We have the extraordinary situation that these tenants with repairing leases are not able to repair their properties and claim against the Revenue to the extent that many other persons can. I have no doubt whatever that property in this class is tending to fall into disrepair in comparison with properties managed by their owners and by tenants with long leases. One only has to go around London and the countryside to see certain classes of property of this sort standing at a relative disadvan- tage in appearance compared with others, particularly in the agricultural world.

There is no doubt that in the last few years the State has gone to extreme limits to aid the position of owners of property of all sorts in keeping their properties up to date and in good condition, whereas this class to which I have referred has been allowed to remain depressed. It is, in fact, twice as expensive for tenants in this class to repair their houses with Income Tax standing at 9s. 6d. in the pound. Many of them, under enforcement provisions relating to local byelaws or the terms of their lease, have to carry out periodical painting operations on their houses and have to repair their dwellings, perhaps in expensive matters like drainage, and they have to do that out of their net income. I believe that at a time of national shortage of houses there ought to be no discrimination between the classes of houses as regards repairs. All houses capable of repair should be repaired, and all should receive the equivalent financial assistance from the State.

I should like to read a few sentences from a speech that I made on the 1946 Finance Bill because the words there are as compressed as any that I can possibly find now to explain the situation. I said: The law has hitherto generally held— I say 'generally held' because two inroads, to which I will refer in a moment, have been made into it in recent years— that the Income Tax Acts only grant maintenance relief against tax levied in respect of the property, and also, and this is what is important, where it is borne by the person who maintains the property. … I suggest to the House that Parliament has already recognised that this is a bad principle in two respects, by two separate pieces of legislation… First of all, the Finance Act, 1940"… that is the Finance (2) Act— provided that tenants with a lease of over 50 years were to be treated as if they were owners, and, apart altogether from what was the class of property or what was the relation between the rent and Schedule A, these tenants were enabled to put in a full maintenance claim on the ordinary statutory repairs, in exactly the same way as owners. That is the first inroad into the practice. The second inroad is with regard to the Income Tax Act, 1945, Section 32, which is now Section 101 of the new Income Tax Act, 1952. This provided that the relief which the owner of agricultural property can obtain is not to be restricted to the Schedule A Tax, but can be allowed against other sources of income. That piece of legislation"— and I want to impress this upon the Committee— vitiates the principle that a tenant cannot get relief because he does not bear tax in respect of the property."—[OFFICIAL REPORT. 15th July, 1946 Vol. 425, c. 916.] 6.30 p.m.

The right hon. and learned Member for Neepsend (Sir F. Soskice) was put up, or put himself up, to answer me both in 1946 and 1947. I do not know what answer we shall get today from his opposite number. Deep calls to deep, and Solicitor-General to Solicitor-General, and both of them are apt to be the dutiful representatives of those dark and reactionary forces that inhabit that palatial mansion down the river. The right hon. and learned Member for Neepsend has shifted his ground twice in defending the position of the Inland Revenue. In 1946 he said that a tenant with a beneficial interest— that is to say, a tenant who pays less in rent than the Schedule A value— was already in the position of a landlord in that he could claim for maintenance up to the extent of his beneficial interest and that, therefore, nothing could be done to him.

That, of course, is a fact, but it does not follow that nothing could be done to him, because it seems to me that tenants with a beneficial interest and tenants without a beneficial interest are already in extraordinary positions of relative advantage and disadvantage. For instance, a man who pays a rent of £1 on a Schedule A value of £300 can claim up to £299 in repairs from the Inland Revenue, but a man who pays in rent what is practically the Schedule A value can claim next to nothing at all.

It must be quite common to have a situation in a certain street with two identical houses inhabited by two people with identical incomes, both of them with repairing leases. One may have a beneficial interest and one may not. The man with a greater beneficial interest has a start of 29s. 6d. over the other man for every£1 he spends on repairs— that is to say, £1 in rent and 9s. 6d. which he gets back from the Inland Revenue. That is unfair as between tenants, and, worst of all, it is bad luck upon the house and the repairs to that house tenanted by a man without a beneficial interest.

The right hon. and learned Gentleman also said in the same year that a tenant without a beneficial interest would have his rent adjusted downwards to take account of the fact that he does the repairs himself. But surely it is idle to suppose that rents are adjusted downwards to take account of repairs. Who makes any sort of calculations when leases are drawn up? What happens with a lease of 49 years when, after say the first 10 years, the cost of repairs has risen two or three times what it was at the beginning of the lease? So far as I know, nobody has been able to break a lease and negotiate a new lease with any hope of that factor being taken into account. All the nice suppositions on that leg of the argument made by the right hon. and learned Gentleman seem to me to be thrown out of gear by the fact that since he used that argument the cost of repairs has risen by 20 per cent. or 30 per cent.

In 1947 the right hon. and learned Gentleman, as the spokesman of the Inland Revenue, entirely changed his ground. He did not refer to his previous argument at all, because I think he saw the futility of it. He recognised, perhaps, for the first time, that he was faced with the fact that capital allowances are now given to agricultural tenants and landlords alike and that no differentiation is made. He perhaps realised that he was faced with the fact that tenants with leases over 50 years are given maintenance relief by the Finance Act, 1940, and perhaps he realised that tenants with leases under 50 years can claim for repairs to the extent of their beneficial interest.

At any rate, he changed his ground completely. One can only suppose that those who instructed him made a mad rush to stop the breach. What they said, through the right hon. and learned Gentleman, was that this concession for which I am asking could never be given because if it was given all rent would qualify as a deduction against income. I really must quote what the right hon. and learned Gentleman said because it seems to me that the Inland Revenue are really carrying the argument to absurdity, and I was always taught at school that if the defence floundered in absurdity that proved conclusively that the original proposition was correct.

The right hon. and learned Gentleman quitted altogether the field of repairs, house ownership and tenancy, and charged into a different field altogether. He said: … if you are going to say with regard to a tenant on a short lease that he must be allowed to treat his repairs as a deduction against his general income, as can a tenant on a long lease, you are in effect saying that all rent should qualify as a deduction against general income or as against profits. If you say that, what logical distinction can you draw between rent and any number of other personal payments? Take the case of keeping one's family—one cannot use that as a deduction against one's profits or income, one has to pay that out of one's net income … If you can treat the rent you pay for your private premises as a deduction, logically you can draw no distinction between that sort of payment for your personal needs and any other payment for the upkeep of your family, for the education of children, or any other personal payments you may make."—[OFFICIAL REPORT, 16th June, 1947; Vol. 438. c. 1705.] I should have thought that that amply proved the proposition. Nobody has Ever suggested that rents should be constituted a statutory deduction from income. Rents are quite different from repairs. The whole field of repairs is covered at the present time, except this very narrow one, and there is every case in justice, in the common experience of all of us with regard to these houses, that that gap should be completely closed.

One big heave by the Committee tonight, and perhaps we shall be able to carry this reform against the Inland Revenue. But if my hon. and learned Friend the Solicitor-General, in the stress of the debate in this last stage of the Bill, does not feel that he can give a concession, I do plead with him, in view of the arguments that have been used, that he will promise that some action between now and next year will be taken by the Treasury and the Inland Revenue to give this matter a thorough-going review. If they cannot make up their minds to swallow this principle, will they not get it remitted to the Royal Commission on Profits and Income so that it can be given that meticulous examination which my hon. Friends and I have so long demanded?

The Solicitor-General (Sir Reginald Manningham-Buller)

I think it might be convenient to the Committee if I answered my noble Friend at this stage. This may have the advantage of enabling the matter to be further elucidated or it may perhaps shorten the discussion.

My noble Friend, in moving this Clause, has advanced his argument with his usual eloquence and force. I think he has developed his argument with remarkable ingenuity. By endeavouring to answer the speeches made by the right hon. and learned Member for Neepsend (Sir F. Soskice), my predecessor, he has sought to make it difficult for me to advance the same arguments on this occasion. He also sought to drive a wedge between Solicitors-General, but that is a very difficult operation, as I can assure him; and I am afraid that he will probably find my speech as disappointing and unsatisfying as he found that of my predecessor.

This Clause is slightly more extensive in its scope then the one my noble Friend put forward in 1946 and 1947. The previous Clause gave relief only to a tenant occupying on a full repairing lease. This Clause not only purports to cover such a tenant, but will also—so it is worded—cover a lessee under a full repairing lease who has sub-let the premises without covenanting with the sub-lessee to repair.

Let me, in passing, deal with that particular instance. I would say to my noble Friend that if the lessee under a repairing covenant has sub-let at a profit then he is allowed relief in respect of the cost of maintenance and repairs, etc., as a deduction from his liability to tax on the rent he has received from his sub-tenant. Therefore, it does not seem to me that there is really any need to make any particular provision for the tenant who has sub-let without a covenant to repair.

What did rather surprise me in my noble Friend's speech was that he did not endeavour to meet the point—and I think it is a substantial and a difficult point—advanced on the previous occasions by my predecessor in replying to his proposals in 1946 and 1947. One really cannot ignore, as my noble Friend suggested one should, the fact that a tenant who agrees to enter into a lease—a full repairing lease —will, because he is accepting an obligation to execute all the repairs, normally be able to secure a lower rent than he would if the landlord were liable for all the repairs and the tenant liable for none. I am sure that my noble Friend must recognise that that must be so, whatever the general levels of rent may be, however the general levels rise or fall. The tenant who accepts an obligation to execute repairs will normally secure a tenancy at a lower rate than a tenant who leaves the landlord to execute repairs.

If that is so—and I believe it is—the tenant who is undertaking the obligation to do repairs is really saying this—is he not'?—to his landlord, "I will undertake to pay the repairs, whatever they may cost, to the premises you are going to let me occupy, and, as I am undertaking that, I will pay you, and you ought to accept, a lower rent than if you were taking that obligation upon yourself."

If that is the right way that this should be looked at—and I believe it is—and it may be a good bargain for the tenant or a bad one, depending upon the condition of the premises and the extent of the liability to repair—if that is the right way to look at this, surely one is driven to this conclusion, that the acceptance of liability by a tenant on a full repairing lease is an acceptance of an obligation in lieu of a payment of a higher rent, and whatever he pays on repairs is, although it is paid on repairs, equivalent to the payment of an extra rent.

If that is right then it does mean that one must have regard, in considering this new Clause, not only to the tenant under the full repairing lease, but the tenant whose landlord is liable to do repairs. This Clause gives no benefit or relief whatever to the tenant whose landlord is under an obligation to repair. It does mean that if we give a relief to the tenant who is under the obligation to do full repairs, and make no provision for the tenant who pays only rent, then we are creating, as I see it, a serious anomaly.

The tenant who is not doing repairs is paying a higher rent to his landlord to do those repairs, and we could, as I see it—and my noble Friend did not endeavour to meet this point—avoid that anomaly arising only if we gave the same tax relief in respect of rent to the tenant who is not under a repairing covenant. Once we do that we are giving tax relief in respect of an item of personal expenditure. We are making a breach in principle, and it would be difficult to know where to draw the line, and it is because of that anomaly that I must tell my noble Friend that it is not possible for the Government to accept his Clause today.

6.45 p.m.

However, I should like just to remind the Committee of what is the position now under the law as it now stands with regard to tax relief in respect of the maintenance and repair of property. So far as business premises and agricultural land are concerned, the trader or farmer deducts maintenance and the cost of repairs as a business expense in computing profits for Income Tax purposes—as, indeed, he can deduct rent. So there is no need to make further provision in that case. where the owner of property gets relief for expenditure in five years that exceeds that allowed for repairs allowance.

For that purpose the word "owner" is given a particular definition. It includes the tenant under a long lease— the ground lessee: for that purpose it is a lease of over 50 years. It also includes a tenant under a short lease who has had a beneficial interest and who pays the whole or part of Schedule A because he lives rent free or pays a rent less than Schedule A and the result is that a tenant or lessee, like a freeholder, can claim relief in so far as he pays tax on the property.

The Income Tax Acts have always maintained as a general principle, apart from one apparent exception to which I shall refer in a moment, that maintenance relief is given only against Schedule A tax on property. The one departure from that is in relation to agricultural property, and there it was decided as a matter of policy that maintenance relief should be given and could be given against income other than income of the property concerned. That alteration was part of a general plan for assisting productive industry, including agriculture. It was a deliberate act of policy—contained in Section 101 of the 1952 Act—rather in the application of the principles of Schedule D than of creating a new Schedule A relief.

That is the present position of the law. As I have told my noble Friend, we cannot accept his new Clause in view of the serious difficulty that it would be bound to create in contrasting the position of the tenant who is paying full rent and who is not liable to repairs, and that of the tenant who is under a full repairing lease. I have advanced such reasons as I can. I am sure that my noble Friend will see a remarkable similarity between them and the reasons advanced by my predecessor. I hope on this occasion to have the support of my predecessor if he speaks in the course of the debate. If he does not preserve the unanimity between Law Officers I may have an opportunity of reminding him of a speech which he made recently, but I fear that that opportunity will not arise today.

My noble Friend asked for an assurance that the question would be reviewed. I understand that the Royal Commission is reviewing the operation and scope of Schedule A. I do not know when their labours will be completed, and I can give no assurance about that, but I feel sure that in their general review of the whole operation of Schedule A they will pay attention to the speeches which my noble Friend has made in support of this proposal on more than one occasion.

Sir F. Soskice

I should not have intervened in the debate and caused further time to be spent on this matter but for the fact that the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) referred to me personally. I intervene only to say that, having listened to the clear and forceful argument of the Solicitor-General, I find it altogether and completely convincing. I thought it was exactly the argument which I had advanced, but it was better put than I put it, and I am grateful to the hon. and learned Gentleman for putting in such elegant and complete form what I had, obviously, to judge by the impression left on the mind of the noble Lord, put in rather a fragmentary and inconsistent form in the speeches which I made.

I should have thought that the Solicitor-General was obviously perfectly right in his analysis of the situation. He dealt with the long-term lessee, who for the purpose of deductions, is under Section 17 of the Finance (No. 2) Act, 1940, treated as the owner. He then dealt with the situation of the short-term lessee who is entitled to make his deductions to the extent that he is, as the Solicitor-General describes him, a beneficial owner.

With regard to the short-term lessee on a full repairing covenant, I must confess that I thought the Solicitor-General was perfectly right in saying that really the amount he pays by way of what is, in effect, extra rent stands on exactly the same footing as any other personal expenditure, and if one gives relief in those circumstances one would be involved in giving relief in respect of a pure rental payment. The Solicitor-General's argument seemed to me to be a complete answer to the case put forward by the noble Lord.

I am glad to hear that, as one had anticipated would be the case, this problem, together with so many other problems which arise under the Income Tax code, will be reviewed in due course by the appropriate committee which is going into these matters, or may be going into them.

The Solicitor-General

It is a Royal Commission.

Sir F. Soskice

I understood the Solicitor-General to say that what I have been saying was his information.

The Solicitor-General

I said that I understood they were considering the whole of Schedule A.

Sir F. Soskice

This is a problem which arises under Schedule A, and no doubt the Royal Commission will take this within their purview as they will all other analogous problems. I cannot now usefully add anything, except to thank the Solicitor-General for putting in such a cogent form that which I should have liked to put into words similar to his.

Mr. Ralph Assheton (Blackburn, West)

Unlike my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke), I have not a personal interest in this matter because I happen to live in the kind of house to which the Clause does not apply, but when I hear two Law Officers on opposite sides "ganging up" as they have been doing this afternoon I begin to be suspicious.

I should like to say a word on behalf of the tenants who, I think, are receiving a bad deal out of this. I see the logic of both arguments which have been put forward. The former Solicitor-General put his arguments very well on two previous occasions in my hearing, and my hon. and learned Friend has done the same. From the Revenue point of view, these are very good arguments, because the Revenue always has to say to itself, "What will be the next thing? Where will this lead?"

My noble Friend put his finger on the real point when he said it is rather bad luck on the house which happens to be occupied by a man who is not in a position properly to maintain it. There may be two houses in the same road, one of which is maintained out of taxed income and the other out of untaxed income, and it is likely that the one maintained out of untaxed income will be better maintained than the other.

The argument of the Solicitor-General was that a tenant taking a house with an obligation to repair would pay a lower rent than he would otherwise pay. That is true, and there may, therefore, be some argument as to who ought to receive the relief, whether it should be the landlord or the tenant, but if relief is to be given in the respect of the repairing of houses, why should it be denied in the case of one house when it is given in another? I am glad to hear that the Royal Commission will put their minds to this matter, and I am certain they will find some commonsense solution of a problem which seems to puzzle Solicitors-General and Inland Revenue alike.

Mr. Angus Maude (Ealing, South)

After the proceedings of the mutual admiration society between Solicitors-General to which we have listened I should hesitate to drive any further the wedge which my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) is accused of driving. I hope, too, that I shall not be considered unduly unfair if I ask my hon. and learned Friend how it came about that after listening to the arguments of the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) in 1947 he so far forgot himself as to vote in favour of my noble Friend's new Clause on that occasion. It seems to me that the arguments cannot have been as convincing then as they have been found to be today.

I found the arguments of my hon. and learned Friend convincing up to a point, but, as my noble Friend said, when he got to the point which the right hon. and learned Member for Neepsend had dealt with five years ago about the logical process of extending the relief to all forms of rent if the new Clause were accepted, I found it impossible to follow him. There is no doubt that we have here a position in which some people doing repairs obtain relief and others doing repairs do not obtain relief.

Had we an overwhelming number of houses, if there was a free market in houses and if there was plenty of accommodation, I could well see that the rent adjustments might be made and could operate freely, but my contention is that in present circumstances they do not so operate. For one thing, the demand for houses, flats and even agricultural property is so great that tenants will pay a far higher rent in many cases where the property is not rent-controlled than they would otherwise do.

Further, there is no doubt at all that the operation of the Rent Restriction Acts in conjunction with the very high cost of repairs at present means both that landlords are not unduly hard about the enforcement of covenants to repair and that tenants are less than willing to go to the limit to which they might have to go if action were taken. The result of those two things in conjunction is that fewer repairs are being done to properties than would be done were some tax relief available.

It seems, to me that in present circumstances, when the operation of the Rent Restriction Acts is meaningless, when the stock of houses in this country is deteriorating rapidly, and has been deteriorating for many years, we ought to do nothing to make that situation worse and we ought in fact to make a concession which will enable properties to be kept in proper repair.

Since a Government which professed to dislike landlords persisted on two separate occasions in retaining a discrimination in favour of the landlord compared with the tenant, I hope that now a Government which has always believed in encouraging the ownership of property will prove to be a little more favourably disposed towards the Clause.

7.0 p.m.

Mr. Gerald Williams (Tonbridge)

The Solicitor-General put up some clever arguments and I am not going to pit my legal skill, which is nil, against his. He says that the real argument is that a lower rent is obtained from the tenant who does not repair his house. I am sure that is so in many cases, but not in all cases. Let us take the example of two new houses that are let. Both the tenants when taking over the tenancy will say, "There will not be any repairs for many years to come." It is possible that both may pay the same rent, but maybe in 30 or 40 years' time these repairs will have become very crippling.

I also want to impress on the Solicitor-General, as did my right hon. Friend the Member for Blackburn, West (Mr. Assheton), that there is a principle about this. The Government want houses to be repaired. They want them to be in good order, and they go so far as to allow Schedule A concessions to be extended to agricultural property beyond the actual amount of Schedule A assessment, which shows how keen they are that houses shall be properly looked after. If there is no maintenance payment for the tenant, it becomes a crippling job for him and, in some cases, almost impossible. I would go further and say that in some cases it might be unsanitary where the issue of the repair of drains arises. That is not the sort of thing which the Government want to see at the present time.

The principle of keeping houses in good repair should be the first aim of the Government when the housing situation is so bad, because if they are not kept in repair they will be condemned all the sooner, and the Minister of Housing and Local Government will be hit by it, as will the Chancellor of the Exchequer, because Schedule A will cease to come in for those houses. The rates will also stop going to the local authorities.

I want particularly to put a question to the Solicitor-General. I am wondering whether, under the present system, it is not encouraging a certain amount of law breaking. Would it be possible for the landlord to do the repairs when the tenant has a repairing lease and then get a cheque from the tenant to cover those repairs? That may be done on the quiet now, and as the law stands it is certainly encouraging people to break it.

I also want to mention one other case which hon. Members have in mind and that is the case of smallholdings. It is usual in the case of farms for the landlord to do the repairs but in some smallholdings the smallholder himself has to do those repairs. In many cases he is unable to get his maintenance claim, with the result that he has to cut down on something else such as putting fertilisers on his land, which will have an almost disastrous effect. I ask the Solicitor-General to bear in mind what has been said this afternoon, and I am glad that several hon. Members on this side of the Committee have talked on this subject in view of the fact that my hon. and learned Friend has stated that he expects it will be considered by the Commission which will be reporting before long.

Mr. Horobin

On the matter of pure economic theory of rent both hon. and learned Gentlemen are right, but if their argument is to be taken as final then they are convicted out of their own mouths, because there is then no case for giving any exception even to the long lease. There is not an argument for attendance even for a 2,000-year repairing lease, and that shows what is the real issue before the Committee. In fact, such great changes have taken place in the cost of repairs and in the rates of taxation even within the period of these comparatively short leases, that serious damage is being done because repairs to houses which ought to take place are not being carried out.

That is the real issue between the two. Both are right in pure theory, and in normal circumstances there is no support for what was said by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). But today what was always seen to be necessary for a very long lease is surely in a matter of practice now necessary for a much shorter lease. We want to get the repairs done to these houses, but I personally do not think that this new Clause is necessarily the right way to do it. It is a very urgent problem, and I hope that some alternative method for doing it will be found, and that these difficulties will be adequately covered.

The Solicitor-General

I should like to say a word in reply to those who spoke after I addressed the Committee. I am delighted to hear that for once I have been right on a pure economic theory, but it is right also that the long leaseholder is more like the owner of the property. My hon. Friends behind me have drawn attention to the state of certain houses. I think myself that they are inclined to attach too much importance to the tax position, particularly in regard to tenants who are under full repairing leases and have no beneficial interest. There appears to be many other factors which have handicapped them in keeping their houses in proper repair. There is the war, the difficulty about getting repairing and building licences, and perhaps even the fact of the Leasehold Property (Temporary Provisions) Act as well as many other factors.

I think it would be wrong to suggest that the tax laws were causing difficulty, and I can only repeat what I have said already that we cannot at the moment accept this Clause. The Royal Commission is sitting and I have no doubt they will have regard to what has been said in the course of this debate. It may be that they will find some solution to the problem to which I referred, and to which the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) in his speech was not able to find any answer. The Royal Commission is engaged in considering Schedule A, and having received the assurance which I have given that it will consider this matter, I hope that my noble Friend will be able to withdraw his new Clause.

Viscount Hinchingbrooke

I am disappointed at the attitude of my hon. and learned Friend. He directs our attention to the fact that a Royal Commission is sitting and he says he feels confident, which means that he is not confident at all, that they will observe the debate and take a note of what has been said. He has not even gone so far as to say he will send a remit to the Royal Commission drawing attention to the disquiet of Parliament—because I think it amounts to that. There have been three years of discussion now and large numbers of Members dislike the present system. If my hon. and learned Friend had been good enough to say that the Government would despatch particulars of this business to the Royal Commission and ask it to give attention to it, then I think I might have been inclined to withdraw my Motion.

It is a matter for some disquiet. It emerges after three years of debates in this Committee that the Inland Revenue, maintaining powerfully and, in some ways cogently, a certain situation, have had that situation defended by successive Solicitor-Generals in the House of Commons. First of all, it was defended by the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice), supported by the Whips of the Socialist Party, and the proposals put forward then were defeated. Then on our side of the Committee, the Solicitor-General, my hon. and learned Friend, has obeyed the instructions of the Inland Revenue and the whips are cracked to get Members to withdraw their Amendments or Motions or allow them to be negatived. Yet it remains true that the representatives of the people sitting on these benches cannot get the law amended to suit the conditions of the time.

Mr. C. R. Hobson (Keighley)

The noble Lord should try it in the Lobby.

Viscount Hinchingbrooke

Hon. Gentlemen opposite are, I can quite see, dismayed by the revelation of the position, by those who have spoken today and on previous occasions. It is a minor matter, but it brings out most clearly that in our present working circumstances in Parliament, where we find the situation that Parliament wants to establish a reform, we are met by the hierarchical apparatus of the State and we cannot go further. I do not want to keep the Committee any longer on this as we must pass to other topics, but I had hoped that my hon. and learned Friend would have considered giving some instruction to the Royal Commission. I trust he will do so, but I do not think his assurances have gone far enough to allow me to withdraw the Clause.

Question put, and negatived.