Lords Sitting of 1 March 1911

Preamble
The Marquess of LINLITHGOW—Took the Oath.
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:
Swansea Gas. [H.L.].
Local Government Provisional Order (No. 12).
Local Government Provisional Order (No. 13).
The same were ordered to lie on the Table.

SLOUGH URBAN DISTRICT WATER BILL. [H.L.]
ELY RURAL DISTRICT WATER BILL. [H.L.]
LUTON WATER BILL. [H.L.]
HASTINGS CORPORATION (WATER AND FINANCE) BILL. [H.L.]
GREAT NORTHERN RAILWAY (IRELAND) BILL.
PENLLWYN RAILWAY BILL.[H.L.]
ASHBORNE AND DISTRICT GAS BILL.[H.L.]
GREAT YARMOUTH PORT AND HAVEN BILL. [H.L.]
Report from the Committee of Selection, That the Lord Newton be proposed to the House as a Member of the Select Committee in the place of the Viscount Hutchinson (E. Donoughmore), and that the Lord Newton be Chairman of the said Committee; read, and agreed to.

IRISH UNIVERSITIES ACT, 1908.
Statutes for the Queen's University of Belfast: Laid before the House (pursuant to Act) al d to be printed. (No. 25.)
PAISLEY CORPORATION ORDER CONFIRMATION BILL.
  AYRSHIRE (LOCH BRADAN) WATER DISTRIBUTION ORDER CONFIRMATION BILL.
    IRVINE BURGH ORDER CONFIRMATION BILL.
    Read 3a (according to order), and passed.

DUTIES ON CLAY.
LORD CLIFFORD OF CRUDLEIGH LORD CLIFFORD OF CRUDLEIGH rose to ask His Majesty's Government for what reason the Commissioners of Inland Revenue refuse to make public the interpretation they put on subsection 5 of section 20, Finance Act, 1909–1910, or to state what kind of clays are, in their opinion, not included in the exceptions of "common clay and common brick clay."
The noble Lord said: My Lords, I have put this Question on the Paper because it seems to me that the method of procedure involved is one to which public attention should be called. The facts of the matter are those. The section of the Finance Ac to which I allude excludes from the definition of minerals all common clay, common brick clay, common brick earth, or sand, chalk, limestone, or gravel. It is not. I think, unnatural for any one making a return and coining in contact with this exception to ask the Commissioners of Inland Revenue for some information as to the way in which they intended to construe the section. Accordingly I wrote to the Commissioners and asked them to give me some kind of definition of what they considered common clays. I expected to get an answer to the effect that they considered that clays which paid more than a certain amount were in the category of uncommon clays. or that they had taken some geological line of difference between the nature of one clay and another. To this request, however, I got no satisfactory reply.
I then endeavoured to extract information from them by suggesting that clays worked in the ordinary way were common clays, but this they disputed; and then I received this letter—
"I am directed by the Board of Inland Revenue to acquaint you that they do not feel justified in giving an answer in general terms which might commit them in advance to a definite course of action in individual cases, the facts and circumstances of which have not been laid before them. In these circumstances, beyond observing that all unworked clay must be regarded as normally liable to Mineral Rights Duties unless it is shown to fall within the exceptions in the subsection, the Board do not feel that they can usefully add anything."
The Commissioners, therefore, stand in this position, that every person who has any mineral to which this exception might possibly refer is obliged to appeal because he cannot get any answer from the Commissioners as to the interpretation they are

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going to put upon these exceptions. In addition to that, it is quite impossible for one person to know whether the clay in which he is dealing is going to be treated in the same way as clay belonging to another person and very possibly competing in the same trade.
This is establishing—and I suppose to that extent we ought to feel flattered—a small Finance Act individually for each of us; but it seems to me, in consonance with the common principles of taxation, that the rules of taxation should be clear and should be the same for all. The method of taxation here seems to be determined entirely by the Commissioners' own opinion, and there are no means by which any body of taxpayers can bring their decision generally before the Courts of law because the Commissioners openly say in the letter that they are going to judge each individual applicant by a rule entirely for himself and for himself alone. If this is going to be the practice, it is a serious innovation. I have therefore ventured to call your Lordships' attention to it, and to ask His Majesty's Government whether they cannot see some way of giving an explanation of this exception which may be intelligible to all and applicable to all to whom the exception in the Act refers.
LORD DENMAN: My Lords, I do not think there is any innovation, as the noble Lord appears to think, in this matter. I will read to the House the subsection of the Finance Act to which the noble Lord refers. it runs—
"The Mineral Rights Duty shall not be charged in respect of common clay, common brick clay, common brick earth, or sand, chalk, limestone, or gravel."
The question whether any particular kind of clay falls within this exception is one which has to be dealt with as it arises, and for this reason. I am informed by the Inland Revenue that there are hundreds of different kinds of clay, and that it would be impossible to frame a definition as to what clays come within the term "common clay and common brick clay." The Commissioners of Inland Revenue decide the question in each case which comes before them, having regard to the composition of the clay, the use to which it is put, and the rate of royalty in respect of it, and in cases of doubt they take expert geological advice. If the taxpayer is dissatisfied with the decision of the Commissioners,
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his proper course is to appeal to a referee in the manner provided by Section 33 of the Finance Act and the rules made under the section. I may add that the referees were appointed for the express purpose of deciding such cases as those to which the noble Lord has referred.
LORD CLIFFORD OP CHUDLEIGH: Will the referees give the reasons for their judgment?
LORD DENMAN: I cannot state whether the referees will publish the reasons why they arrive at any decision. I will make inquiries as to what the exact practice of the referees is. I will, of course, undertake to convey what the noble Lord has said to the Commissioners of Inland Revenue, but I cannot hold out any hope that they will alter what is their practice, because, for the reasons I have stated, it is absolutely impossible that they can frame a definition that will cover all the different kinds of clay with which they may have to deal.
LORD AVEBURY: My Lords, it seems to me that the argument of the noble Lord who has just sat down is no answer to my noble friend, but rather strengthens the case which he has brought before the House. In the first place, the noble Lord tells us that there are many kinds of clay. Well, I should have thought that made it all the more desirable that the kinds of clay liable to duty should be distinguished from those not liable to duty. Then the noble Lord said that the main points on which the Commissioners determine the matter were the composition of the clay, the use to which it is put, and the price paid for the clay. There is no great difficulty in determining the composition of the clay. Clay is alumina mixed with a larger or smaller proportion of impurities, and it would be easy to say that clay containing a certain proportion of alumina should not be taxed. Then as to the use made of it, it might be provided that any clay used for making ordinary bricks would not be liable to duty; and as to the price paid for the clay, it would be quite easy to say that no clay which was sold below a certain price would be liable to the duty. I submit, therefore, that the reasons which have been given for not complying with the request of the noble Lord who brought forward this question were really not germane to the point, but that if anything they go to strengthen his case.

IMPERIAL AND LOCAL FINANCE.
THE EARL OF DUNMORE THE EARL OF DUNMORE rose to ask His Majesty's Government whether they adhere to the pledge given by them in this House on the 13th July, 1910, that the Government, if in power, would during the present year make an attempt to deal with the whole subject of the financial relations between the Imperial Exchequer and local authorities; and whether it is the intention of His Majesty's Government to withhold from local authorities half the net proceeds of the Land Values Taxation to which they are entitled under the express provisions of Section. 91 of the Finance (1909–1910) Act, 1910; and to move for Papers.
The noble Earl said: My Lords, your Lordships will remember that last July a pledge was given to us in this House by the noble Earl the Leader of the House that the whole question of local taxation would be dealt with by His Majesty's Government during the present year provided that the same Government found themselves in office. The noble Earl, as representing the then Government, said—
"I can say quite definitely that if we find ourselves next year in the position of advising the Crown we shall make an attempt to deal with the whole of this subject. The noble Earl can take it from me that that is so. Of course, whether it might he possible to conclude the whole subject during the compass of a single session I cannot say, but we shall certainly make the attempt."
The noble Earl not only gave us this definite assurance that the Government would deal with the readjustment of the onerous burdens now falling on the ratepayers, but he also claimed some credit to the Government in the fact that one-half of the yield of the Land Values Duties was to go to the local authorities. In fact, two pledges were made by His Majesty's Government to the ratepayers of this country. The first pledge was that one-half of these Land Taxes was to be allocated to the local authorities. The second pledge was that the Government would deal with the whole question of local taxation during the present year.
The reason I have brought forward this subject is that from discussions which have recently taken place in the House of Commons I fear there is reason to believe that, in spite of the pledge given to us by the noble Earl opposite, no practical steps are to be taken to readjust the financial
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relations between the Imperial Exchequer and the local authorities during the present year; and, further, despite the promises made by the Government which have since been enshrined in that Act of Parliament known as the "People's Budget," that the people as represented by the local authorities are still to be denuded of their share of these Land Taxes. I do not propose to go into a detailed account of the many grievances under which the ratepayers of this country suffer. I dealt with this last year, and to enter into detail now would only be going over old ground again. The reality of those grievances and the urgent necessity of readjusting the burden of taxation have been admitted over and over again As recently as February 20 of this year Mr. Lloyd George stated, in another place, that—
"as long as the Chancellor of the Exchequer has not a final re-arrangement of the relations between local and Imperial finance, it will be, ruinous both to the local and Imperial Exchequer."
Whatever may be the effect on Imperial finance—and I think the Chancellor's words are justified—it certainly is true as regards local finance.
Every year since the passing of the Local Government Act in 1888 the position of the local authorities has become more difficult owing to the ever-increasing burdens thrown on them by Parliament and the effect of legislation on the revenues which were assigned to them. If we take the case of London alone, we find a net additional expenditure since April, 1904, of £680,000 a year after deducting all Government grants. This vast annual expenditure is entirely due to new national duties or to the further development of old duties. Then, again, we find that, in spite of this great increase in the expenditure forced on local authorities by Parliament, the direct effect of much of the legislation of recent years has been to deprive local authorities of the benefits to which they were previously entitled. As I have already stated, I am not going to weary the House by entering into a lot of detail, but, if your Lordships will permit me, I will give one example, very briefly, to show the way in which local authorities have been treated financially by the present Government. Under the Licensing Act of 1904 a Unionist Government for the first time secured for the community the monopoly value of new licences. It provided that just as local authorities benefited

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by the License Duties on licensed premises in their districts, so they should benefit by the amount exacted in payment of monopoly value on every new public-house. Then came along the Liberal Government and with their Budget they laid hands—I might say greedy hands—on this new source of revenue, and claimed the whole of it for the Imperial Exchequer. Another effect of that same Budget was to greatly decrease the assessable value of licensed premises, thereby decreasing the annual revenue which local authorities derive in rates from that source of revenue. Although this has affected London perhaps in a greater degree than the rest of the country, and although as a member of the London County Council I am naturally interested in London's case, I have not risen to present the case for London. I have brought forward this Motion in the interests of the ratepayers of England, Wales, and my own country, Scotland, who I think will probably have a great deal to say in regard to this question.
What I want to ascertain, if I can, is whether the pledges made by His Majesty's Government to the ratepayers of the United Kingdom are going to be redeemed. The last settlement of this question took place in 1888, when the Local Government Act was passed. Certain revenues were then assigned to meet certain services in place of the old system of direct grants in aid. It was admitted recently by the Financial Secretary to the Treasury that these assigned revenues had not expanded as they ought to have done to meet the growing cost of services of a national character such as education and the relief of the poor. At the same time the Financial Secretary attempted to find some shelter for His Majesty's Government in the fact that many of these burdens under which the ratepayers now suffer were not the result of any action of a Liberal Government, but were due to the administration and legislation of a Conservative Government. Mr. Hob-house quoted in support of his argument various measures of social legislation passed by the late Unionist Government. I am glad to find a Radical Minister paying this tribute to the social legislation of a Conservative Government. I am certainly not going to combat his assertion, because in my opinion it is quite immaterial to the question I am discussing. But I might point out, in passing, that the late Unionist Government, in laying these burdens on the
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ratepayers, did at any rate make some restitution—not sufficient, but they did make some restitution—to the local authorities in respect of these burdens, and the present Government have entirely failed to do so. Anyhow, social legislation has got to be paid for, and what we are concerned with is not as to what Government passed these measures, but as to what Government is going to remedy the injustice of the incidence of the cost thereof.
I assert that a Unionist Government would have dealt with this matter. A Liberal Government have pledged themselves to do so, but are showing distinct signs of postponing to an indefinite future the carrying out of their pledges. I think the ratepayers will have every reason to doubt the good faith of the present Government when they read the recent speeches of Mr. Lloyd George and Mr. Hobhouse in the House of Commons. On the Amendment moved to the Address by Mr. Hayes Fisher on February 13, Mr. Hobhouse, replying for the Government, gave us to understand that what the Government meant by the pledges that they gave was not to deal with this question of local taxation at all this year, but to appoint a Committee to find out how they ought to deal with it. This is apparently, as far as I can find out, the interpretation which the Government now put on the assurances given us by the noble Earl opposite and by Mr. Lloyd George. I can undertake to say that that is not the interpretation that was placed on their words by the ratepayers of the country, not one of whom doubted that His Majesty's Government had pledged themselves to bring in some definite scheme to deal with this question of local taxation during the present year.
To turn to another matter. This apparently is not the only pledge which is to be broken. A statement was recently made by the Financial Secretary to the Treasury in the House of Commons from which I infer that the section in the Finance Act of 1909–10 allocating to local authorities one-half of the proceeds of the Duties on Land Values is now to be repealed. When the Budget of 1909 was first introduced it contained no provision for helping local authorities from this source of revenue, but so great was the hostility shown by local authorities throughout the country to this portion of the Budget that the Chancellor of the Exchequer was forced to climb down

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and to promise local authorities one-half of these taxes. To put it quite plainly, the Chancellor of the Exchequer had to make certain of receiving sufficient support in the country for his Budget. Therefore he made this definite promise to the local authorities, which has since been embodied in Section 91 of the Finance Act. After a General Election, resulting, as your Lordships will remember, in the loss of, I think, over 100 seats to the Government supporters, that Budget was passed through the House of Commons in circumstances which it is needless to discuss now. The point is that ever since this bargain was struck between the Chancellor of the Exchequer on the one side and the local ratepayers on the other, the Chancellor of the Exchequer has been trying to rid himself of his responsibility in this matter. I think many noble Lords on this side of the House are with me when I say that we are not opposed to a local community deriving its fair share of the increased value of land in urban districts, recognising that part of that increment value may be due to the presence and expenditure of that community. That probably was only partially recognised by the Chancellor of the Exchequer in allocating one-half of the Land Taxes to the local authorities. Now in claiming the whole of these taxes for the Imperial Exchequer the Government have got rid of the only shred of principle on which these taxes can he defended.
Perhaps I am premature in my deductions as to the intentions of His Majesty's Government, but their action in regard to the allocation of these moneys is certainly calculated to breed distrust of their good faith. Let me follow out the transactions in chronological order. In April, 1909, the Land Taxes were introduced and were to be entirely for the benefit of the Imperial Exchequer. In June, 1909, after pressure from the representatives of the ratepayers, one-half of these taxes was allocated to the local authorities. In the beginning of 1910 representations began. coming in from the local authorities in regard to the shortage in the yield from the beer and spirit duties—what is generally known as the whisky money. That same year the Chancellor of the Exchequer, with a great show of generosity, promised to compensate the local authorities for this shortage, which was almost entirely due to the Government's legislation, but in doing this he proposed to impound for that year one-half of the Land
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Taxes to which the local authorities were already legally entitled as a set-off against the compensation he was going to give them on account of the shortage in the whisky money. Then we come to June 30 last year, when the Chancellor of the Exchequer made his Budget statement for 1910–11. In making that statement he announced the intention of the Government to remove the pauper disqualification for an old age pension imposed under their Act of 1908. He did not propose to make this relief as a free gift to the local authorities. It would reduce to some extent the poor rate. Therefore he told the local authorities that they would have to pay just so much as the rates were relieved by—in his own words, not a penny more; and that the Imperial Exchequer would bear all the rest of the cost.
We now come to the latest stage in this comedy. Section 91 of the Finance Act of 1909–10 provides for the payment of half of the net proceeds of the duties on Land Values to the local authorities. That Act became law last year. During the past week the House of Commons has been engaged in discussing important parts of last year's Budget which were hung up by the Government in order to fight a General Election just before Christmas. In consequence of this a new Money Bill has just made its appearance. The Government, with some sarcasm, have christened it the "Revenue Bill." I think the local authorities when they have studied Clause 10 might be excused if they called it the "Revenue Grabbing Bill." Clause 10 is very important, and I propose to give your Lordships its exact words—
"Section 91 of the principal Act, which provides for the payment of half the proceeds of the duties on Land Values for the benefit of local authorities, shall cease to have effect, and shall be deemed never to have had effect."
The clause is short. I cannot say, from the point of view of the local authorities, that it is sweet. Not only do the Government propose to take back what they have promised, and promised in an Act of Parliament, but they go on to provide that the promise shall be deemed never to have had any effect. I think the representatives of the ratepayers in this country will be inclined to ask, When is a promise not a promise?—a conundrum the solution of which I will leave to His Majesty's Ministers in this House.
The Financial Secretary to the Treasury, Mr. Hobhouse, speaking in the House of Commons on February 20, attempted to justify the Government's action by informing the House that they were giving relief to the local bodies in another form by taking over the whole of the cost of the pauper pensions. With a skill I cannot but envy. Mr. Hobhouse has drawn up a profit and loss account, and has shown a balance on the whole transaction in favour of the local authorities to the amount of £40,000 a year. I want, if your Lordships. will permit me, to briefly examine the methods by which Mr. Hobhouse has so ingeniously produced this credit balance. He has, first of all, included in his calculations the compensation paid to the local authorities for the shortage in the Beer and Spirit Duties—a shortage which is entirely due to the Government's legislation, a fact which I think I am justified in saying the Government have admitted because they have stereotyped the amount to be paid under that head to the local authorities at the year 1908–9, which is a period before their recent penal taxation so seriously decreased the yield from this branch of revenue. Mr. Hobhouse then went on to assert that the Old Age Pension Act and the removal of the pauper disqualification, the whole cost of which is to be borne by the Imperial Exchequer, will represent a further contribution to the local bodies of £1.500,000 a year. I had always understood that the Old Age Pension Act was but one step, the first step, towards that further assistance from the Imperial Exchequer in aid of the poor rate which was so strongly recommended by the Royal Commission on Local Taxation. It does not take the form of a direct grant, but is in effect a partial transfer of part of the service of Poor-law relief from the local authorities to the State. It has nothing whatever to do with the Land Taxes, which are derived from purely local sources. There is no justification for earmarking any part of the resources of that taxation towards making up any deficiency in Imperial subventions.
I go further than this, and question the accuracy of the balance which has been arrived at by Mr. Hobhouse. Take London as a test case. In consequence of the removal of the pauper disqualification 10,983 paupers came oft the rates since the beginning of the year. Some of these, I believe, have since returned; but, taking
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this figure as it stands, it represents a saving, in round figures, of some £80.000 a year. Even if we add to this the amount to be paid in compensation for the shortage in the whisky money we only get a further contribution, in round figures, of £47,000 a year, making a total of £127,000 a year. Against this the London ratepayers have sustained a loss of their share of the Land Taxes, which has been estimated at £100,000 a year; and it is important to remember, in estimating the revenue from the Land Taxes, that such revenue would be an increasing one. There is a further loss to the local authorities which the Financial Secretary to the Treasury did not include in his estimate—I refer to the decreased assessable value of licensed premises. This is a very important omission. The loss of assessable value to London under this head is £370,000. This means an annual loss of revenue from local rates of £157,000 a year, including the Metropolitan Water Board rate. If we add the loss of London's share of the Land Taxes we get a total of £257,000 as against a gain of £127,000, showing a. net loss to London, in round figures, of £130,000 a year. Mr. Hobhouse produced a lot of figures and showed a balance in favour of the local authorities throughout the whole of the United Kingdom of £40,000. I have also drawn up a profit and loss account, and I venture to say that my figures are quite correct, and I do not think they will be questioned by any noble Lord on the Government Bench. I have worked out, instead of a balance of £40,000 in favour of the local authorities, that in the case of London alone the balance on the whole transaction is a net loss of £130,000 a year. That, my Lords, is an example of what Mr. Hobhouse has designated a most generous contribution from the Imperial Exchequer to the local authorities.
I wish to be quite fair to His Majesty's Government, but let us look at this from the point of view of the man in the street—the elector who pays rates. Many men supported His Majesty's Government at the General Election in January, 1910, on the promise of receiving some relief from the new Land Taxes pending a final readjustment of the burdens now falling on the ratepayers. His Majesty's Government now come forward and say that they cannot possibly deal with this question of local taxation this year. They also tell

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the ratepayer that they must retain his share of the Land. Taxes until they do deal with the question. They have got the unfortunate ratepayer both ways. They refuse to legislate for him, and until they do legislate they refuse to pay him what they owe him. I submit that, even in the brief statement I have ventured to make to the House to-day, I have shown that the Government have a case, and a serious case, to answer. The ratepayers have not only got to bear the burdens of purely local administration, but also those additional burdens which Parliament is so ready to place upon them. I may mention, in passing, that Parliament since 1888 has passed over 600 different Acts under which new duties are imposed and new powers conferred on local authorities. The undeniable fact is that the cost of local government has increased, is increasing, and ought to be diminished. I do not think the Government are dealing quite fairly with this grave matter on behalf of the overburdened ratepayers, and I hope that we shall receive some definite assurance this evening that steps will be taken without delay to remedy the undoubted grievances I which exist.
Moved. That there be laid before the House Papers respecting the financial relations between the Imperial Exchequer and local. authorities.—(The Earl of Dunmore.)
THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (THE EARL OF CREWE): My Lords, before I say a word in reply to the speech of the noble Earl, perhaps I may be permitted to allude to the loss which the House has sustained by the death of Lord Wolverhampton in connection with the particular subject which is before us at this moment. When Lord Wolverhampton came to this House he was advanced in years, and his health had suffered, arid we did riot enjoy the advantage of hearing any real specimens of that remarkable eloquence which, at its best, placed him in the very front rank of Parliamentary speakers. On such a subject as this, in which his knowledge was almost unsurpassed, we ought, I think, to pay a tribute to his memory, recognise his loss, and express our sympathy with those who are mourning him.
The noble Earl alluded at the beginning of his speech to some observations of mine made in July of last year, and he, I have no
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doubt, thinks that I ought to be appearing at this Table attired in a white sheet with a candle in my hand. I must endeavour to make the best case I can, because it is quite true that I did assert on behalf of His Majesty's Government, as my right hon. friend the Chancellor of the Exchequer did in another place, quite categorically that it was our intention to deal, if possible, with the whole of this subject this year. The noble Earl very fairly quoted the whole of my observations on this particular point, including the expression in which I safeguarded what I said. After saying that we were determined to deal with the subject, I added—
"Whether it might he possible to conclude the whole subject during ff the compass of a single session, I cannot say."
That applied, of course, to a clear session, and I most frankly admit that in making that statement when I did I was thinking of a clear session and not of the session which we are now beginning.
It was impossible to foresee in July last that the Constitutional question would swallow up, as it is going to swallow up, practically the whole time of this session. In the month of July I had no hesitation in saying that I, for one, was very hopeful that that question might have been settled in a manner which would not have involved the expenditure of time which it is going to involve during practically the whole, or at any rate a very great part, of the forthcoming session, and the fact that this is so is to me an acute disappointment. But I might point out to noble Lords opposite that, so far as this question is concerned, we are on a par, because even if we were prepared to proceed with the Constitutional question on the lines which they desire instead of upon our lines, if we were going to proceed to discuss as a Government the whole question of the reform of your Lordships' House including the immensely far-reaching subject of the possible application of the principle of the Referendum, if we were going to take that line instead of taking the line of carrying on the Parliament Bill it would be equally impossible for us, in the compass of a single session, to deal by means of a Bill with the relations between Imperial and local finance. Therefore it does not appear to me that there is any subject for recrimination between the two Parties, because when that statement was made and was accepted by noble Lords opposite it was understood that we all hoped to have a clear session in which to deal with it.

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As the position now stands we arc anxious to make such advance as we can towards dealing with the question. Last year before there was any question of the Dissolution of Parliament, a Committee of Local Government experts had been appointed in order to get together the necessary materials for preparing a measure. Now we propose to proceed further on the same lines. We do not think that it would be advantageous to appoint a further Royal Commission to inquire into the subject. So far as general principles are concerned, they were threshed out, examined, and reported on in the very remarkable Report with which all your Lordships are acquainted of the Commission of 1901. I do not think, as far as the general aspect of the question is concerned, that any improvement could be made upon the Report of that Commission. There are, however, all manner of details which have to be closely considered before it is possible to deal with the whole question, and with that object we propose to appoint a Departmental Committee of a confidential character which will at the same time have the advantage of learning the opinions on the subject of the clerks of county councils and local authorities, as well as those of others. That is the best advance we can make during the present session, and although noble Lords opposite may be prepared to repeat the rather severe strictures of the noble Earl upon our conduct I think that, in their heart of hearts, they will admit that in view of the circumstances of the moment that is as much, from the purely business point of view, that it is possible for us to undertake.
The noble Earl subjected to a close examination the efforts which the Chancellor of the Exchequer has made to deal with the question so far as it is possible to do so under his present finance proposals, and he accused us of a second breach of faith owing to the fact that we were not handing over to the local authorities half the proceeds of the Land Taxes, but instead, as the Chancellor of the Exchequer said, we are relieving them of the cost which in the ordinary course would fall upon them in connection with the removal of the pauper disqualification. The noble Earl brushed all that aside, because he assumed that the cost of the removal of the pauper disqualification would in any case have fallen upon Imperial funds. I really
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do not know what warrant the noble Earl had for that assumption. It was always assumed—assumed in public, assumed everywhere—that the local authorities would refund to the Imperial Exchequer the sums which they gained by the fact that these old people were no longer set as a burden upon them, and to treat the assumption of that £1,500,000 or £2,000,000 as a pure matter of course and as no real relief to the local authorities is an attitude of mind that I can only qualify as audacious. After all, you have to look at these things in pounds, shillings, and pence, and if, as a matter of fact, the ratepayers are relieved of this sum, as they are going to be, that is a distinct fact which cannot be got over; and it seems to me that the Chancellor of the Exchequer or his representative the Financial Secretary was thoroughly justified in another place in placing that item on the credit side, and the other item, the half-share of the Land Values Duties—that is to say, about £250,000 in the first year and about £300,000 in the second year—on the debit side.
The noble Earl opposite has used a common rhetorical device in speaking of the ratepayer. He speaks of the ratepayer at one time meaning one and the whole body of ratepayers, and at another time he speaks of him and uses figures to support his contention when he only means the London ratepayer. who. I quite admit, does not get the full advantage of this particular transaction. That is a matter for separate argument. London may have a grievance to this extent, that under the Land Tax arrangement London would have profited somewhat more than London will profit under the pauper arrangement. I do not think the grievance is a very substantial one, but so far as it is a grievance for the sake of argument let it be admitted. But, of course, in speaking of the ratepayer you must speak of the whole class of ratepayers all over the country. and consider what the advantage is to them. Unless you are prepared to take the attitude of the noble Earl and treat the £1,500,000, or it may be £2,000,000, of the old age pauper figures as something which the ratepayer would claim in any case from the taxpayer—unless you are prepared to say that, and treating the ratepayers as a whole class, it seems to me that my right hon. friend is entirely justified in saying that the balance on this special arrangement comes out considerably in favour of the ratepayer.

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In 1901 it was estimated by the. Royal Commission that the ratepayer had a grievance as against the taxpayer to the tune of about £2,500,000. I do not propose to go into any examination of those figures, but what I think we can venture to say is that this present allocation for this year is an attempt to reduce the grievance of the ratepayer, although we frankly admit that it does not go the whole way, or anything like the whole way. towards a complete settlement of the question. When the noble Earl went on to say that it was an agreed matter that the proceeds of the Land Taxes ought to be the exclusive property of the ratepayer, he was, I think, entering upon very controversial ground. It is, no doubt, sometimes argued that the particular gain in the way of increment which the land owner receives is due to the exertions of those in the immediate district, and that therefore if the tax is to be imposed at all that they should receive the benefit. But we all know that, as a matter of fact, that is by no means invariably true. There are a great many cases in which it is the precise opposite of truth. There is no need to multiply instances. In the county in which I live—in Cheshire—there are quarters where land has appreciated to an enormous extent and become. extremely valuable owing to the fact that people who carry on business in Lancashire in some cases, and in other cases in Staffordshire, have chosen to occupy the more attractive portion of Cheshire as a residential quarter. It is impossible to say, whatever your views may be about increment taxes, that those particular increments are due to the exertion of the local authority in the particular district.
I could go further. There are many such cases round London. There are other cases where the increment is due to the exertions and to the business enterprise of a railway company. I suppose in strict justice, if justice in such things were possible, or strict equity, the proceeds ought to go to the shareholders of the railway company; but, as we know, it is impossible to enter into minutiœ of that kind. I merely quote this instance to show that we and a good many others are not prepared to admit the dictum which the noble Earl laid down with so much certainty—that it was a matter of general agreement that the proceeds of the increment tax ought to go to the local authority immediately concerned. That is, in our view, a justification of the course
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which my right hon. friend has taken in this year ear-marking these taxes for the general purse instead of handing them over to the local authorities. I do not know that any useful purpose would be served by my entering further into the whole subject. I quite admit that the arrangement for this year is, and must be a provisional arrangement, for the reasons which I have endeavoured to explain; but it must not be supposed that we do not recognise to the full quite as much as noble Lords opposite, the importance and urgency of the whole question, including, among other things, the question of areas. This is a very difficult question and one which we must all admit is in a condition of no little confusion. It will be a long and a serious matter to get it put thoroughly right, but I hope that the steps we are taking will do something towards that, and that when we have cleared away these larger obstructive questions we may be in a position finally to deal with it.
THE MARQUESS OF LANSDOWNE: My Lords, I rise at once to express my concurrence and that of my friends who sit near me in what was said by the noble Earl as to the loss which this House has sustained by the death of Lord Wolverhampton. Lord Wolverhampton came to this House at a time when he no longer possessed those brilliant Parliamentary qualities which earned for him such well-deserved reputation in the House of Commons; but for all that there was not one of us who did not feel that his presence added distinction to this Assembly. We sincerely respected him, and we listened with attention to any words that fell from him in the course of debate. We desire to join our sympathy with that which the noble Earl has expressed for those who are mourning for him.
With regard to the matter which my noble friend behind me has brought before the House in a speech, if I may be permitted to say so, of very great clearness and ability, I desire to say a few words only. It is hardly unfair to say that there really is no defence to the charge which my noble friend has brought against His Majesty's Government. There is a plea for extenuating circumstances, but no real defence as to the facts. I do not suppose that in the history of Parliament more categorical pledges or distinct undertakings

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were ever given than the undertaking given, on the one hand. by the Chancellor of the Exchequer in the House of Commons, and, on the other, by the noble Earl speaking from his place in this House. The noble Earl chooses his words carefully, and he told us definitely—that was the word he used—that this question would be dealt with during the next session of Parliament; and the Chancellor of the Exchequer added to that an assurance that the question should not only be dealt with but dealt with thoroughly.
What is the noble Earl's explanation? He tells us that in the month of July the Constitutional Conference was sitting, and that he was at that time so hopeful of the result that lie was able to announce arrangements founded upon the assumption that this year we should have what he described, as a clear session. I was one of those who shared to some extent the hopes of the noble Earl—and I desire to be careful in anything that I say not to add to the unauthorised statements which have lately appeared in reference to what happened, or what did not happen, at the Conference—but I cannot say that I ever felt so absolutely sanguine of the result of our deliberations that I should have thought myself at liberty to allot Parliamentary time twelve months ahead in the confident belief that the discussions of the Conference were bound to clear away the whole of the great Constitutional difficulties which had been remitted to our consideration. The noble Earl must not be surprised if, in these circumstances, a very considerable feeling of irritation—I would almost say exasperation—has been produced in the minds of the local authorities who were encouraged to look forward to this relief. I think I correctly describe what took place in the House of Commons last year when I say that there was nothing that went so far towards smoothing the passage of the Land Taxes through that House as the assurance that half the proceeds of those taxes was to go into the pockets of the local authorities. For these Land Taxes were the invention of the local authorities; they had their origin, I fancy, with some Scottish local authorities with which my noble friend behind me is familiar; and it was the assurance that part of the spoils at any rate, was to go into the pockets of the local authorities that placated a good many of the opponents of the Chancellor of the Exchequer's proposal.
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My noble friend has shown with considerable success that the solatium which is offered to the local authorities is not by any means adequate. I am not sufficiently conversant with the figures to follow that question in detail. I would only point this out, that in a good many of the calculations which I have heard made there seems to be this fallacy. It is assumed that because the old age pensions which will be payable in consequence of the removal of the pauper disqualification represent a certain sum, that sum is the measure of the relief to the ratepayers. That is entirely fallacious. The ratepayers remain saddled with their establishment charges, their fixed charges, and so forth, so that the £1,500,000 assumed by the taxpayers of the country is by no means £1,500,000 put into the pockets of the ratepayers. I must say that to many of us it does seem most unfortunate that this opportunity should have been missed for dealing with a subject which both sides regard as one of the greatest possible urgency. I say we are missing an opportunity because I believe it is a matter of notoriety that His Majesty's Government will probably be in the fortunate position of having a large surplus to dispose of. They might, therefore, have given this much needed relief. We can have no assurance that they will be in an equally fortunate position another year. Nor personally do I derive very much comfort from the announcement that this matter is to be referred to a Departmental Committee. I should, however, like to be assured, if the matter is to go to a Departmental Committee, that the Committee will be instructed to find the means of giving effect to the pledges given by Ministers last year, and that they will not merely be given a roving commission to inquire into a subject which has many ramifications and which lends itself to almost indefinite investigation.
THE EARL OF DUNMORE: I do not wish to detain your Lordships, but I would like to reply to one remark made by the noble Earl who leads the House. The noble Earl complained of my taking the figures of London in order to prove the case as regards the ratepayers of the whole of the country. I strictly stated that 1 was not presenting the case for London. It is true that in dealing with the figures presented to the House of Commons by Mr. Hobhouse I did take the case of London to disprove

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the balance which Mr. Hobhouse arrived at, but I took the figures for London because I happened to be in a position to obtain those figures with greater accuracy than I could obtain them with regard to the whole country. Mr. Hobhouse claimed a balance in favour of the local authorities throughout the United Kingdom on the whole of this transaction of £40,000 a year. I have shown that, in the ease of London alone, there is a balance on the wrong side against the local authorities of £130,000 a year; and I take it that on that showing it is extremely improbable—in fact, it is impossible—that for the local authorities throughout the United Kingdom there can be any credit balance.
The noble Earl took some exception to my claim that the proceeds of the duties on Land Values should go to the local communities. I gave that as my own opinion. My case was in no way connected with my opinion. My case was that a bargain was struck between the Chancellor of the Exchequer and the ratepayers throughout the country that one-half of the proceeds of the Land Taxes should be paid to the local authorities. If I might put it a little stronger, the Chancellor of the Exchequer, in order to obtain sufficient support for his Budget in the country, made this bargain with the local authorities who were opposed to the Budget in order to get their consent and support. As regards the £1,500,000 which the noble Earl said I had practically given the Government no credit for, I give them full credit for that amount, but I still claim that, taking the effect of all the legislation which has been passed by the present Government and taking the relief afforded to the rates by the £1,500,000, there still remains a great loss to the ratepayers throughout the whole of the country.
It was with great regret and disappointment that I listened to the statement of the noble Earl. The only advance His Majesty's Government can give us is that they are going to appoint another Committee of Inquiry. A Royal Commission, admittedly strong and representative of many different views, sat for some five years inquiring into this same matter. I might remind the House that if the recommendations of the Majority Report had been carried out, there would have been something like £2,500,000 of extra grants for the local authorities; and if the recommendations of the Minority
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Report had been carried out, there would have been something like £1,500,000 in increased subventions. This was several years ago. The position of local authorities is far worse now than it was then. In these circumstances I am disappointed that His Majesty's Government can find no further help than appointing another Committee to inquire into the matter.
Motion, by leave, withdrawn.

SIR. A. K. WILSON'S MEMORANDUM.
THE EARL OF SELBORNE*THE EARL OF SELBORNE rose to ask the Lord Privy Seal whether the words attributed to the First Lord of the Admiralty in The Times of 22nd February. in reply to Lord Hugh Cecil, are correct: "If any member submits to me a document and I approve it, that document has the approval of the Board of Admiralty"; and, if so, whether the words "the approval of the Board of Admiralty" are meant to have the same force in this connection as "a decision of the Board of Admiralty" taken at a formal meeting of the Board and, if so, whether he will lay on the Table the Orders in Council or other official documents establishing this rule.
The noble Earl said: My Lords. I thought it would be more convenient if I postponed this Question from yesterday, when your Lordships' time was more fully occupied, until to-day, and I understood that the noble Earl the Leader of the House was not averse to that course. I have put down my Question in this form for two reasons. I want to have the opportunity, in asking it, of allaying what I think may be a public misapprehension arising from the answer of the First Lord of the Admiralty in the House of Commons, and I want to point out to His Majesty's Government the grave and serious inconvenience that I think has been caused by the precedent they have set up in connection with this document which had the approval of the First Lord.
The First Lord of the Admiralty said, in answer to a Question—and I assume that the answer has been correctly reported—
"If any member submits to me a document and I approve it, that document has the approval of the Board of Admiralty."
Now, that is quite true, and yet it is untrue. A quorum of the Board of Admiralty is

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technically two members and the secretary, and therefore if one member of the Board brings to the First Lord a document of which he approves, and it is countersigned by the secretary, that document may be said to have the approval of the Board of Admiralty. But that rule only exists for matters of convenience. In the great routine of business for which the Admiralty is responsible it would be most inconvenient if every document going out with the authority of the Board had to be signed by every member of the Board and countersigned by the secretary. But in my experience it never applies to any matter of real importance. Take the Estimates. What would the House of Commons say if the Estimates were laid on the Table signed by two members of the Board of Admiralty only Why, they would send them back at once, and say, Why have not the other members signed? That is only an indication of the truth of what I say. While it is very convenient that matters of routine and of comparative unimportance can be dealt with on the authority of two members of the Board of Admiralty, I altogether protest against that process being applied to a matter of importance.
Now I come to the question, Was this or was this not a matter of importance? Before I consider that, let me point out how delicate is the position in our Constitution of the Sea Lords. The duty of a sailor all through his career, whether his functions are administrative or executive, is to obey the orders of his superiors. But at the moment in his career when he becomes a Sea Lord his functions change. He becomes an adviser, one of the constitutional advisers of the Government of the day on all matters that affect the administration of the Admiralty. It is not an easy task to fulfil with complete satisfaction. Very often a Sea Lord must be content to find himself overruled by the Cabinet. He will give advice which is not followed. He will have a policy decided upon of which he does not altogether approve. But in nine cases out of ten—indeed, in many more than that—his constitutional function and his duty will have been satisfied by his having given the best advice in his power, and lie will remain a Sea Lord and carry out the policy although he does not entirely agree with it,. But I am not to be supposed to mean that a Sea Lord should, in my opinion, never resort to resignation. I think there are cases—happily they have not occurred within
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my own experience, but I can imagine them—when a Sea Lord would feel it incompatible with his duty and self-respect to continue any longer to occupy that position. I mention that to show how delicate the position of the Sea Lord is; how he never should be obtruded into politics; how lie never should take part in Party politics; how even he should conceal his opinion in the majority of cases when the Government of the day are not taking his advice; though I do not admit that there could not be circumstances in which I should think he was doing his duty best by his country by refusing to continue in the position of a Sea Lord. That is the position of the Sea Lord, and although I have no personal knowledge of the constitution of the Army Council, I imagine the position of the military members of the Army Council is much the same.
What is the position of His Majesty's Government towards these Sea Lords? They have the right to ask for the personal opinion of the Sea Lords. I do not deny that, but I do deny that a Government have the right to publish their notes as the opinion of the Board of Admiralty. Why should they? They can always go to the Board of Admiralty and ask for their opinion, formally and constitutionally. The Government have a perfect right to ask for the opinion of the Board of Admiralty, and it is quite clear that it is the duty of the Board of Admiralty in its corporate capacity to give the best advice it can on any subject referred to it. It can only rest with the Government of the day whether that advice is to be published or not. They alone can at any moment be the judges of the public interest in the matter. But what I want to lay stress upon is this, that if on great matters of State the opinion of the Sea Lords or military members of the Army Council is to be made public, there is only one constitutional way in which that should be done, and that is by the Government of the day seeking the formal advice of the Board of Admiralty or the Army Council and then laying that opinion before Parliament. In this case I do not know what the opinion of the Army Council, on the one hand, or of the Board of Admiralty on the other may be. Surely nothing could have been easier than for the Government to get an expression of opinion on the subjects concerned and to publish them.
But what have the Government done? They have published the opinion of two individual very important Sea Lord, an officer for whom every one of your Lordships has the most profound respect, and an ex-Adjutant-General. I have no reason to assume that the opinions of these two officers do not reflect the corporate opinions of the bodies to which they belong, or recently belonged, but I am entitled to assume that it might not be so. I do assume, for the purposes of this question, that there may be a Sea Lord on the one hand who takes a different view, though I think it very unlikely, and I do assume that there may be a military member of the Army Council who takes a different view from the military view published in the pamphlet to which Sir Arthur Wilson's notes form an appendix. But if there are such, are the Government going to allow their views to he made known in a rival pamphlet? I can conceive no precedent more detrimental to the public service. But on what grounds would they refuse permission? That is the point which I earnestly want to lay before His Majesty's Government and ask them to consider. Have they not set a dangerous and unconstitutional precedent? It seems to me that what was done was lightly done, and that the ulterior consequences were not thought out. It would have been perfectly legitimate, as I have said, to lay the views of the Board of Admiralty or of the Army Council before Parliament. His Majesty's Government have a perfect right to do that, and it may sometimes be their duty to do so. But I do protest against the inevitable result of this unfortunate precedent which has been set—namely, the danger of dragging great expert naval and military advisers into the political arena. I beg to ask the Question standing in my name.
THE EARL OF CREWE: My Lords, the noble Earl has asked his Question in terms of great moderation, and we all recognise the authority with which he speaks as a former head of the Admiralty. Although I have never been in either of the Departments concerned, I will endeavour to the best of my ability to give an answer to the Question. The remarks of my right hon. friend the First Lord were made in another place in reply to a supplementary question, and, as I think the noble Earl clearly understood, were simply intended to refer to the established procedure of the Admiralty by which
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two of the Lords Commissioners executing the office of Lord High Admiral are empowered to act for the Board. As everybody knows, for the discussion of current business full meetings of the Board are held, and, so far as ordinary business is concerned, no departure has been made from the established practice in the matter.
But as regards the particular question of the Memorandum on which the noble Earl has founded his observations, there is this point to be considered, that in these matters the practice of the Admiralty and of the War Office is different. Memoranda issued by, the Admiralty always appear anonymously; Memoranda issued by the War Office habitually appear under the signature of one of the members of the Army Council; and in this instance this particular Memorandum was supplied for use in a debate in this House. It was intended to be for my use, in the first instance, in a debate which has not yet taken place, but which is to take place, I understand, later on, on the Motion of the noble and gallant Field-Marshal Lord Roberts. That Memorandum was supplied to the War Office, and in being issued was issued in the War Office manner with the initials of the First Sea Lord. I am not quite sure whether the noble Earl complains that the Memorandum was issued under initials, or that it was issued at all. He can hardly complain that it was issued under initials because that makes it clear that, although it was issued by the authority of the Board of Admiralty, it represents the stated views of the First Sea Lord.
Rather, I understand, the noble Earl objects to the First Sea Lord having issued a Memorandum at all. I do not find myself in any general agreement with the noble Earl opposite. There is a great deal to be said for preserving complete anonymity in these matters, and for leaving, so far as possible, individual opinions out of controversy. But I would ask the House to consider what happens with regard to these questions of national defence. On the opposite side you find that officers of both Services on the active list write, speak, and are freely quoted in support of particular views. No officer on the active list, be he Field-Marshal or anybody else, has any right to criticise the policy of the Government of the day. That is a rule which cannot in all its fulness be adhered to, but if it is going to be broken with the freedom with which it is habitually broken, it is not

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inadvisable, I think, that opinions of other officers of distinction who for the time being hold office under the Government should be placed before the country. To that extent, and to that extent only. I think in this one particular matter of national defence it is not unreasonable to depart from that rule of anonymity which we all agree in every department of the public service ought to be scrupulously maintained.
LORD ELLENBOROUGH: My Lords, there is one detail which appears to me to have been omitted from this discussion, and that is that any ordinary member of the public, on seeing that a document had been submitted to the Admiralty and approved, would think that it had received the approval of some, at any rate, of the Sea Lords of the Admiralty. Yet we understand that a document submitted by the Civil Lord of the Admiralty to the First Lord, and without any seaman, either at the Admiralty or elsewhere, having been consulted at all, would pass to the general public as a document having received the approval of the Board of Admiralty. I think it is a misfortune that such a misconception should continue, and I think it ought to be made clear on what occasions the opinions receive the approval of the Sea Lords. At the present moment a document of that sort may be published without a single sailor of any experience having been consulted at all. The Sea Lords should not have that heavy additional burden placed on their shoulders.
THE EARL OF CAMPERDOWN: My Lords, I think this subject is one of rather more importance than the noble Earl the Leader of the House appeared to think in the remarks which he addressed to your Lordships. Every one who has had experience of the Admiralty knows perfectly well that the doctrine which the noble Earl, Lord Selborne, laid down from his experience as First Lord of the Admiralty undoubtedly expresses the correct theory of what the Board of Admiralty is; but the noble Earl did not, I think, sufficiently go into the details of this matter.
This question arises in the following way. There has been laid on your Lordships' Table a Command Paper entitled "Notes supplied by the Admiralty"—not by a person who puts his initials to them, but by the Admiralty—"for the use of the War Office in a debate which was to have taken place in November, 1910." In the
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first instance, I ask your Lordships whether any of you remember a Paper put forward in such a form as that. There is no doubt of this, that Lord Roberts and a body known as the National Service League entertain very strong opinions on this matter, and His Majesty's Government entertain very strong opinions on the other side. The noble and gallant Field-Marshal intended to raise this matter in a debate. That was just at the close of last session and Parliament was about to prorogue, and therefore it was not convenient for the noble Earl at that time to raise the debate. Very likely he may be going to do so later; but surely the Government might have left their defence until they had heard what he had to say. Instead of that they print, not a posthumous, but an untimely-born Memorandum of this sort alluding to a debate which was to have taken place, and which, as the noble Earl tells us, is going to take place hereafter. In other words, they have given their answer to Lord Roberts before Lord Roberts has told them what he has to say.
The noble Earl said that this Memorandum was supplied in the first instance above the initials "A.K.W.," the initials of Sir Arthur K. Wilson, who, as we all know, is a very distinguished officer and one who enjoys very largely the confidence of the Navy. I have heard that one of the reasons why he enjoys the confidence of his brother officers and of the Service is that he is very much opposed to anything like publication or advertisement or anything of that kind. I wonder when he wrote this Minute whether he was told that this use as going to be made of it. The noble Earl has told us that there is no, objection to Sir Arthur Wilson's Minute because it was published with his initials. What I object to is that when it appears in this Paper his initials are not there. I have in my hand a book, and Sir Arthur Wilson's Memorandum is published at the end of the Book, and it is perfectly true that the initials "A.K.W." appear there.
I think I can show your Lordships the reasons which caused this Minute to be published. It was published for the purpose of aiding the defence of the War Office against Lord Roberts. The book that I hold in my hand originated with the Secretary of State for War, who is very much opposed to compulsory service, of which Lord Roberts, I believe, is in favour.

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The Minister for War asked Sir Ian Hamilton, of course knowing his opinions with regard to compulsory service perfectly well, to write what his opinions were. Sir Ian Hamilton did so. Mr. Haldane then says—
"I have thought it right to publish this Memorandum, written for me by one who has very recently been Adjutant-General. It is an unofficial document originally prepared for my private information."
Up to this point Sir Ian Hamilton gives his private and unofficial opinion. Mr. Haldane then proceeds to give his private, and I do not know whether official or unofficial opinion, and publishes it in the form of this book. The first edition of the book appears not to have had a very large circulation. Then out comes the second edition, and at the end of the book as it then appeared is this Minute of Sir Arthur Wilson's, with Sir Arthur's initials at the bottom of it. But listen to how Mr. Haldane describes it—
"In Appendix V111, I have, with their permission, printed the notes supplied by the Board of Admiralty for the use of the War Office in a debate which was to have taken place last November."
The Secretary of State says it was supplied "by the Board of Admiralty." He quotes it as an official Minute. Which is it? Is it official or is it unofficial? It cannot be both. In the form in which it is given to your Lordships it certainly appears to be an official Paper coming from the Board of Admiralty, because the initials "A.K.W." do not appear.
The noble Earl said, very truly. that it is not allowed to officers in high places to criticise the Government. Then does it come to this, that the Secretary of State for War or the First Lord of the Admiralty may call upon an individual officer to write his opinions and may print them as official, and yet at the same time exercise his discretion and not call upon any officers who might not agree with him? At the Board of Admiralty and the War Office there are, no doubt, differences of opinion among various members. But the Secretary of State does not call upon any of those who disagree with him to write their opinions—not a bit. He then puts forward these views, and adds a Minute written by a member of the Board of Admiralty which he calls "the opinion of the Board of Admiralty" and publishes it in that form. I venture to think that that is a very unjustifiable method of procedure.
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I object to the mode which the War Office has of defending its proceedings. When debates have been raised in this House we have listened to speeches which, though very able speeches, do not seem to some of us to relate very closely to the facts of the case. It really has come to this, that by a sort of system of question and answer, invented largely by the Duke of Bedford, we manage finally to extract certain figures which are by no means favourable to the Territorial Force or to the conditions at the War Office. But then what is the line which the War Office take? They do not go into the facts much in this House. The-Secretary of State makes speeches in the country; he writes books and quotes Minutes which are not official and yet calls-them official. The War Office prefer that mode of defending themselves. I must say I never heard of a Sea Lord writing a. Minute of this kind and printing it, or allowing it to be printed, as if it were the opinion of the Board of Admiralty.
The First Lord of the Admiralty appears to me to be rather inclined to treat his Board as a set of dummies. Only yesterday, in the House of Commons, Mr. McKenna was asked if the Board of Admiralty sits regularly or only occasionally; if it is still a consulting and deliberative body to which all important questions of naval policy and administration are submitted; and if the Board records agreement or disagreement with the questions submitted to the Board. Mr. McKenna replied—
"At the discretion of the First Lord, the Board of Admiralty meets from time to time to consult and deliberate on important questions of naval policy and administration."
Is the whole question of the purpose of our Fleet an important question? Yet this Minute was dismissed without any meeting of the Board, and was published simply on the ipse dixit of one member of the Board. Then the following question was put to Mr. McKenna—
"Will the right hon. gentleman answer the first part of my question: Whether the Board of Admiralty sits regularly or only occasionally?"
Mr. McKenna replied—
"I said from time to time."
It therefore appears that this procedure on the part of the Board of Admiralty, under which a Minute is signed by only two members of the Board, is by no means so exceptional as it used to be during the

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tenure of office of my noble friend Lord Selborne. I should like to know whether Mr. McKenna authorised the production of this matter, and whether he approved of the Minute being published in this book. I can hardly imagine that he can have been very much obliged to his colleague for printing this official or unofficial Minute in this sort of way.
If this be the constitution of the Board of Admiralty, pray what is the constitution of the Army Council? Are they a set of dummies? Sir Ian Hamilton is asked to give his opinion. It is well known what his opinion is. Well, but what is the opinion of the other members of the Army Council? I imagine we must look at this book as the private production of Mr. Haldane and Sir Ian Hamilton. What I object to is that in a case of this sort there should be appended a Minute which the publisher of the book says proceeds from the Board of Admiralty. I think this precedent is a most awkward one, and I hope it will never be repeated.
VISCOUNT MIDLETON: My Lords, after the speech of the noble Earl opposite and the admission which he made that he was not otherwise than generally in accord with the remarks made by my noble friend, it is rather difficult to pursue this matter. But certain points have arisen which seem to me so likely to discredit the whole belief in the statements of the Board of Admiralty and of the Army Council that I think we ought to clear them up before we leave the subject. The noble Earl told us that this special document, so far as it affected the Admiralty, simply conveyed the opinion of Sir Arthur Wilson. whose initials are at the bottom of it; but, as Lord Camper-down has just pointed out, that very opinion is in an official Paper laid before Parliament, headed "Views of the Admiralty." It must be one thing or the other. Either it conveys the views of Sir Arthur Wilson—and we have riot yet heard whether Sir Arthur Wilson consented to its publication—or it conveys the views of the Board of Admiralty, in which case it is, of course, at the option of the Board of Admiralty whether it shall be published or not.
The noble Earl, Lord Dunmore, asked earlier in the evening, When is a promise not a promise? I feel inclined to ask,
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When is the First Lord of the Admiralty the Board of Admiralty and when is he not the Board of Admiralty? and to go a little further and ask a similar question with regard to the Secretary of State for War. Nothing has been said as regards this important point—Why was this publication permitted at all, and has the Secretary of State the power to authorise the publication or has he not? All power, according to the King's Regulations, in such a matter rests with the Army Council except in matters which the Secretary of State for War specially reserves to himself, and it has always been customary to treat the King's Regulations as guiding every man, including the Secretary of State.
If the House will pardon me I will call attention to three of the Regulations which bear specially upon this matter. By Regulation 453 an officer or soldier is—
"forbidden to publish or communicate, either directly or indirectly, to the Press any military information or his views on any military subject without special authority."
That special authority, we must assume, was given by the Secretary of State's prologue at the beginning of the book, but I very much doubt whether anything of the kind was contemplated by the Regulation, or whether there is any precedent for anything of the kind ever having been done before. Later on the same Regulation specially states that—
"an officer is not to prejudge questions which are under the consideration of his superior military authority by the publication, anonymously or otherwise, of his opinions, and he is not to take part in public in a discussion relating to orders, regulations, or instructions issued by his superiors."
It is impossible to write a book of the kind in question without discussing, in public, orders, regulations, and instructions issued by superiors. And that brings us at once to the question put by the noble Earl behind me—Would an officer who desired to write on the opposite side to Sir Ian Hamilton be allowed to do so? It is an important question. I do not say I would defend it, but I think we ought to be told whether this stretching of this regulation, which was obviously intended to be a deterrent, is only to be permitted when an officer is prepared to write on the side of the Secretary of State and is not to be allowed if he wishes to criticise the view which the Secretary of State has taken.

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Then there is Regulation 443, which lays it down that discussions by officers or soldiers with the object of conveying praise, censure, or any mark of approbation in regard to their superiors or any others in His Majesty's Service are prohibited. How is it possible to write a book like this, teaming with remarks, I will not say derogatory to, but depreciating the conclusions of those who differ from the Secretary of State, and lauding one after another each of the expedients which the Secretary of State has put forward and which have been denounced by Lord Roberts, without using laudatory remarks about your superiors which is forbidden by the Regulations? I wish to say a word on the selection of one distinguished officer who had been only a few weeks before a member of the Army Council to convey opinions on which it is very probable there is disagreement in the Army Council. Let me say that I have not had any communication, directly or indirectly, either since this book was published or before, with any man in the War Office with regard to this or any other question. I do not deny Sir Ian Hamilton's very high qualifications for command, or the deserved approbation which he has obtained in all the commands he has held and in all the posts he has filled; but h deny Sir Ian Hamilton's right to be selected by the Secretary of State as a person of peculiar knowledge as Adjutant-General on this particular subject. There is hardly a soldier in a high position in the Army or of his eminence who has spent less time in the War Office and has less knowledge of the details of the subject of recruiting than Sir Ian Harnilton. And when I remember that there are present in the War Office at this moment officers like the Chief of the General Staff, Sir William Nicholson, who has written, I suppose, this book several times over in Minutes on this very question, I think the country has some right to complain that we are given the opinion of one distinguished officer unchecked by those with whom he was serving some time before. That is the inconvenience I see in this. I do not say that there has been any attempt to muzzle any one, but I do suggest that this is a most inconvenient precedent, and I hope the fact that this discussion has taken place and that public attention has been called to it. will prevent its ever being followed.
LORD BRASSEY: My Lords, I do not rise for the purpose of continuing the discussion on questions of official rule and precedent. The observations I shall venture to offer will be directed to general considerations. In the circumstances of the hour the publication of Sir Arthur Wilson's Minute was not, I would submit, ill-timed. Public confidence has been rudely shaken. It has been contended that our naval supremacy is gone or going, that we are open to invasion, that we are unable to assure the safety of our communications across the seas. All this has been discouraging to the burdened taxpayer.
Parliament has been liberal in votes for the Navy. In the ten years, 1901–10, our expenditure exceeded £338,000,000, as against £134,000,000 for Germany. Vindication of Admiralty policy was needed. It has been given by Sir Arthur Wilson. He speaks with authority. As he shows—and it is well that it should be shown—our expenditure in the past has not been misapplied. We are assured—and it is good to have the assurance—that if there were danger, and surely there never was a more imaginary danger, of an invasion from the other side of the North Sea, the Admiralty has somewhere within wireless call nearly double the number of battleships and cruisers that the officer leading the attack could muster. It is well to know that as an inner line of defence we have our destroyers and submarines stationed along the coast. It has been our policy to push the construction of submarines and to improve the type.
Once more, my Lords, our naval administration has not been inefficient. Other Powers may strengthen their battle line more rapidly in proportion to the sums voted. The conditions are not identical. The charge for manning the British Navy necessarily shows an excess as compared with foreign countries. We man our ships with volunteers, and we have a large preponderance in the number of permanent men. If Parliament votes men, ships must be commissioned. Our naval training is on a scale not approached elsewhere. With us expenditure on construction cannot be concentrated on battleships. Half the world's tonnage is under our national flag. The Admiralty is responsible for its protection. Our strength in first-class cruisers measured by dis-

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placement is equal to the combined cruiser force of the United States, France, Germany, and Japan. Works involve a heavy charge. The extensions in our home yards constitute a burden which we have to bear in common with other countries. In addition, we have our vast expenditure on distant yards in foreign stations. No similar charge lies on foreign administrations. We should have an advantage in time of war. When we take into view all the responsibilities of the British Admiralty, it cannot be contended that any of our defensive preparations have been uncalled for or their cost excessive.
My Lords, if we are strong to-day, we have to maintain our position. In new construction, as the Returns laid before Parliament have shown, we had in recent years been falling behind. The instinct of self-preservation has compelled us to renewed exertions. For a time—and we hope for a short time only—they must be sustained. We must be prepared for increased Estimates for the Navy. Encouraged by the assurances lately given, Parliament will not refuse the needful supplies, and if in any degree the Paper which has been under criticism should discourage the ill-timed movement for cutting down the Estimates, its publication will not have been in vain.
THE UNDER-SECRETARY OF STATE FOR WAR (LORD LUCAS): My Lords, I do not rise to say anything upon the matter which the noble Earl, Lord Selborne, directly raised in his notice on the Paper—namely, the Admiralty Memorandum—but rather for the purpose of answering one or two remarks on the question as affecting the War Office and the Army Council. First of all, I think a certain amount of confusion of thought exists with regard to the position of Sir Ian Hamilton in writing for my right hon. friend the Memorandum which is published in this book. Sir Ian Hamilton was not a member of the Army Council when he wrote it, nor, if he had been, does it necessarily follow that he wrote it in his capacity as a member of the Army Council. He wrote it in his position as ex-Adjutant General who, by virtue of that position, was in close touch with the most practical sides of the questions involved in the subject under discussion; and it was not written, as is plainly stated, in any sense as an
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Army Council's Memorandum, nor does it purport in any way to represent the views of the Army Council. Therefore, the question of the responsibility of the Army Council with regard to it does not come in under that head. The responsibility, if the Army Council comes in at all, arises in regard to the publication of the document. I do not know that that point has been raised. But I would only say that the propriety of authorising publication is completely covered by the powers conferred on the Secretary of State by the. Order in Council issued when noble Lords opposite were in power—the Letters Patent and the Order in Council which brought the Army Council into existence.
VISCOUNT MIDLETON: I should like to ask the noble Lord this practical question. If at this moment an officer on full pay were to reply to Mr. Haldane's book, would that matter be dealt with by the Secretary of State alone, or would not the Adjutant-General be the person who would be forced to give the Secretary of State his advice before the Secretary of State dealt with it?
LORD LUCAS: I will deal with that in a moment. The noble Viscount commented on Sir Ian Hamilton's capacity for writing on this subject. On that I would sooner leave the Memorandum to speak for itself. My own view is that the Memorandum will take a great deal of answering, and that Sir Ian Hamilton's career specially fits him in an all-round way for dealing with the complex questions, which must be to a great extent theoretical, as to what the effect of the proposed alterations is going to be. I come now to the question of the advisability of the policy of permitting publication, in view of the general prohibition, which the noble Viscount has quoted, in the King's Regulations against publishing views on military subjects without authority. To that I would reply that if we have erred at all in this matter, we have been too lenient in permitting the publication by officers on the active list of views which we did not ourselves hold. The noble Viscount asked whether any officer who conies under the terms of the Regulation which he quoted had been permitted to publish views which are not held by us. I would refer, as the most obvious case, to the case of the noble and gallant Field-Marshal Lord Roberts, who is, by virtue of being a

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Field-Marshal, an officer on the active list. We have never interfered, and should not dream of interfering, with his publishing the views he holds. Nevertheless, the fact that Lord Roberts does speak and write in favour of national service is an infringement of Article 453 of the Royal Warrant. But, as I say, we do not for a moment attempt to prevent his doing it. We do not attempt to prevent other people in his position from doing it; but had we exercised the full powers which we undoubtedly have under the King's Regulations, the necessity for publishing this book would not have arisen. It is due to the fact, that. these publications have already taken place that my right hon. friend the Secretary of State thought that the time had come when sonic sort of rejoinder should be made, and undoubtedly when you are going to make a rejoinder the best thing to do on a subject of this kind is to take the opinions of people who can give you actual official experience on the matter.
VISCOUNT MIDLETON: I put the question with regard to an officer attacking the view of the Secretary of State, and I am replied to by the noble Lord citing the case of Lord Roberts. But the noble and gallant Field-Marshal writes as a private individual, although he is still on the active list. Does the noble Lord contend that Sir Ian Hamilton wrote as a private individual when he wrote not Merely under the œgis of the Secretary of
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State, but quoted an official document of the Admiralty which is not known to the public and which is only made known to the public through this book
LORD LUCAS: I was not attempting to reply upon anything the noble Viscount said with regard to the Admiralty Memorandum, as I thought that the whole of that ground had been sufficiently covered by my noble friend the Leader of the House. What I was attempting to answer was the point which the noble Viscount raised as to how far it is either expedient or legal for officers on the active list to be allowed to make publications on a subject of this kind.
THE EARL OF SELBORNE: My Lords, I have only one word to say in reply. I certainly do not regret having brought forward this subject. It seems to me that the question can be put in a nutshell. If Sir Ian Hamilton's Memorandum embodies the views of the Army Council, why could not the Army Council endorse it and have it published as their opinion in the form of a Parliamentary Paper? In the same way, if Sir Arthur Wilson's views are those of the Board of Admiralty, the proper and only Constitutional course was to have them communicated to Parliament as the views of the Board of Admiralty in a Parliamentary Paper.
House adjourned at a quarter before Seven o'clock, till To-morrow, a quarter past Four o'clock.