HL Deb 23 April 1913 vol 14 cc285-92


Order of the Day for the Second Reading read.


Your Lordships are, of course, aware of the reasons why it is necessary that this Bill should be brought forward. It arises out; of the decision in the case of Bowles v. the Attorney-General. The decision laid down by the Court was that Income Tax could not be collected until the Finance Bill had received the Royal Assent. It therefore became at once necessary for the Government to see low the difficulty created might be solved, because as a matter of fact what the Court of Law has decided was illegal has been a practice which has grown up fox, a great number of years for the general convenience of bankers, traders, and the community at large. What this Bill practically asks the House to do is to enact a practice which has been in existence for the last sixty years.

I will very shortly state the provisions of the Bill. Clause 1 provides for the collection of taxes on the authority of Resolutions passed in Committee of Ways and Means of the House of Commons, but there are very important limitations as regards that authority for the collection of taxes upon a Resolution alone passed by Committee of Ways and Means. The Resolution must be confirmed by the House within ten sitting days; and, further, it has to be embodied in a Bill and read a second time in the House of Commons within the next twenty sitting days, or else the Resolution ipso facto lapses. It is also provided that the. Resolution must be confirmed by the Act, within four months from the date of the passing of the Resolution or the date on which it is expressed to take effect. The Resolution must also contain a declaration that "it is expedient in the public interest that the Resolution should have statutory effect under the provisions of this Act." A Resolution to that effect was actually moved last night in the House of Commons, and old Members of that House will have recognised that for the first time on a Budget night no Resolution at all was passed.

The very important addition to the Resolution providing that the Resolution shall not have statutory effect unless there is a declaration that it is in the interest that it shall have statutory effect, is, of coarse, with the object of emphasising the importance of this change; and also to provide that unless it is in the public interest effect ought not to be given to it. Then also the Bill is limited to the variation or renewal of existing duties of Customs and Excise and to Income Tax, and new taxes are altogether excluded from its operation. Further, the Bill provides for tile repayment of taxes collected under a Resolution not sanctioned by Parliament within four months, there again "showing how careful the Bill is to see that everything is done in due form and has the proper sanction of Parliament within a reasonable time. Clause 2 provides that the provisional collection of a temporary tax for one month after its expiration shall be subject to repayment in the event of the tax not being renewed by the House of Commons. Deductions made in the past before the passing of the Finance Act in this or in former years are legalised by this Bill. Generally, I may say as regards this Bill that it has been stated in the House of Commons that the Government have undertaken to appoint a Select Committee of that House to see whether any better means than those embodied in this Bill can be devised to meet the difficulty created by the decision in the Bowles case. I may add, in conclusion, that the Bill is an attempt to deal with a temporary difficulty, and the Government consider that it provides the best means of meeting it until the promised Select Committee are able to devise a better solution of the difficulty which has been created by the decision of the Court. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Strachie.)


My Lords, circumstances are not convenient for any lengthened debate upon this Bill, nor, indeed, do I think it would be advisable in view of the fact that it has the certificate of the Speaker of the House of Commons that it is a Money Bill, and therefore one with which under the Parliament Act this House has practically no power at all to interfere. At the same time I must express my very great regret that this legislation has been found necessary at all. The custom and usage of levying taxes, especially indirect taxes, on a Resolution passed in Committee of Ways and Means of the House of Commons is one of long standing and is of great convenience, and really of something more than convenience, for the proper collection of the taxes of the year. I know that the custom has been objected to in debates in another place on this Bill on high Constitutional grounds. That leaves me quite cold, because if ever there was a. sinner in this respect I am the greatest sinner. No one alive, at any rate, has imposed so many new or increased so many old taxes simply on the authority of a Resolution in Committee of Ways and Means as I have done. That custom and usage, though I think in every way useful, is one thing, but to try to put it into the form of a Statute is quite another thing.

The noble Lord who moved the Second Reading of this Bill did not, I think, go far back enough in the reason he gave for its introduction. He based it upon the decision in favour of Mr. Bowles against the Bank of England. But there was something which happened before that. The fact is that the present Chancellor of the Exchequer grossly abused the old custom and usage of levying taxes by Resolution in Committee by postponing the consideration and passing of the Budget until practically the end of the year in which it was introduced, and naturally that aroused objections to the practice which had never been dreamt of before, for I do not believe that even Mr. Bowles, with all his ingenuity, would ever have thought of starting in the case in which he succeeded if the old practice had been followed in the way it had been followed by all Chancellors of the Exchequer who preceded Mr. Lloyd George.

Well, now we have this Bill before us. As the noble Lord has admitted, it is a purely temporary measure. It is an imperfect measure, because it does not deal with the most important part of this question, the levying of the new taxes. What happens when a new Customs Duty or Excise Duty is imposed obviously is this: the very moment that the persons concerned in the article on which the duty is to be levied get wind of the proposal to impose the duty they clear all their goods out of bond so as to avoid the duty for that year. This Bill does not apply to new taxes, but it is perfectly obvious that the loss to the State by that practice is far greater in the case of the imposition of any new indirect taxes than in the case merely of an increase of Customs or Excise duties or of the Income Tax. The noble Lord has said that a Committee is to be appointed to inquire into the whole subject. They will have to consider that, and I cannot imagine that their inquiry will be limited by what obviously affected the views of a good many Members of the House of Commons who are supporters of the Government, and perhaps the Government themselves, in this matter. They obviously did not want to facilitate any new indirect taxes that may be proposed by some subsequent Government who adopt the policy of Tariff Reform. I am not myself, as noble Lords know very well, in accord with the policy of the Tariff Reform League, but I do hold very strongly indeed that our present system of taxation is most imperfect, and every year becomes more imperfect as a fair system of taxation, and in view of the enormously increasing expenditure, which no one seems perhaps disposed to check, the time must come before long when new indirect taxes of some sort must be imposed to enable the country to bear the great burdens which are every year being imposed upon it. Then, of course, it will be necessary to apply something of the new proposals which are made in this Bill to those new taxes.

The Bill is rather a complicated measure, and it is one which, I think, is susceptible of a good many legal questions, and its working, if anyone chooses to question it, may not be found quite so smooth as its authors predict. If my opposition could have any effect on the Bill I should not wish to give that opposition. So far as the Bill goes, I believe it is necessary in the circumstances of the case; but I believe that the real authors of the difficulty which this Bill is intended to meet sit upon the Ministerial Bench in the House of Commons.


It will seem rather bold for one who has never had the privilege of—indeed, who has never even been eligible for—a seat in the other House of Parliament to venture to express an opinion upon a Bill of this kind. I need hardly say that with the main part of what the noble Viscount has said I venture most respectfully to agree. If I may say so, one thing which struck me in the speech of the noble Lord who introduced this Bill was the studious way in which he minimised this Bill. He spoke at length upon the limitations, and said there was to be a Select Committee which would find a real solution, he hoped, of the difficulties, and that, after all, this Bid was only to meet a temporary difficulty. But it is a very different proposal now from that which was put before the other House of Parliament when the first Resolutions were put on the Table. It was then intended to apply to all new taxes, and I venture to say without fear of contradiction that if any provision of the kind had been proposed to be put into a permanent Statute it would have been—I do not go too far when I say—the greatest evasion which history would have shown of what we know as the Bill of Rights.

It is all very well to talk about this being a legalisation of a custom, but the custom, as the noble Viscount has said, was one of obvious convenience. It was purely temporary. The Budget was passed within a very few weeks at the most, and for the convenience of all concerned that was allowed; but the financial provisions for the year took precedence of a great deal of legislation, and if you are going to give legislation precedence of the financial provisions of the year in another place it raises a very different set of considerations. There have been two instances in comparatively recent times of taxes proposed and pressed with sonic force by a Chancellor of the Exchequer which were refused. There was the Wheel and Van Tax of Lord Goschen, and the Match Tax of Mr. Lowe; and I venture to say that if the proposals of the Government as they were first tabled had been enforced under the conditions now existing any extravagant proposals like those I have mentioned could be carried into effect without any power of resistance on the part of the House of Commons.

The circumstances are changing day by day, and every change seems to me to tend in the same direction—to diminish the real power of the House of Commons as the representatives of the people, and to make the power of the Executive Government more and more into a tyranny. It is a combination of circumstances for which, perhaps, no Party is responsible, for which no individual, perhaps, is responsible, more than another. I do not go into that because I do not want to make a Party matter of it; but beyond all question the Constitution is undergoing a serious change, and the cumulative effect of it is that the people have less power than they had before in matters of this kind. The Executive Government has much greater power over the house of Commons than it had, and the people have less power of having their will given effect to. In addition to that, this proposal of the Government as first intended seemed to me to be a continuation of what they have been doing during the whole course of their tenure of office in the last few years, the tendency—I am only going to use it as an illustration—to substitute Departmental power for the power of the Law Courts, and to impose general restraint. In the Budget Bill there were something like forty cases where the power of the Law Courts was superseded by Departmental administration under that Statute. In the Insurance Act there are more than a hundred, and even where there is a qualified power of appeal to the Law Courts—in Section 67, I think—the Lord Chancellor of the day, who is a Government official, is allowed to choose the Judge who is to try the case. I have no doubt that that discretion will be exercised as all other discretions in that high office are exercised, but that seems to me in itself to be a precedent which shows how far the idea of constitutional freedom is being relaxed.

I know perfectly well that even if one were inclined to move the rejection of this Bill this House could only delay it for a month, and after what the noble Viscount has said it would be obviously useless to make such a Motion, although I am not quite certain we might not delay it for a day or two. That, however, I believe would cause an amount of inconvenience, because the Budget Resolutions in another place are waiting for this Bill to receive the Royal Assent. I do not wish to cause any inconvenience of that kind, and would be the last person to take such a step. The Bill as it stands, as the noble Lord has said, is a purely temporary measure. We must wait for the Report of the Select Committee and the decision of the Government and the other House of Parliament upon it. But I want to sound this note of warning. I think this is a sort of thing which requires careful scrutiny, and I hope when the time comes it will get that scrutiny, not from one Party alone but a scrutiny on account of the large constitutional issues involved, which in my opinion it really deserves.


I am sure the Government may congratulate themselves upon the fact that this Bill has received at all events a modified approval from the two noble Lords who have spoken, for they realise, I think, as readily as any member of the Government the temporary necessity which exists for the passage of this measure. We share the regret which was expressed by the noble Viscount at the introduction of this measure, and I shall not detain your Lordships on this occasion by arguing with him as to where the responsibility really rests—whether it rests more immediately with the gentleman who brought the action, or with my right hon. friends who sit on the Treasury Bench in another place. At any rate, the fact remains that there is the necessity for this Bill, and it comes up to your Lordships, as we have been told already, under a certificate from the Speaker. But although that is so, I think we may congratulate ourselves none the less upon the fact that it has given an opportunity to members of your. Lordships' House well versed in the financial system of this country to say something upon the subject, and it does show that, although the Parliament Act limits the financial powers of your Lordships' House, it will not prevent in the future interesting and perhaps even very valuable discussions upon financial questions. For the moment it remains for me to thank your Lordships for the reception which has been given to the Bill, and to say to the noble Lord who has just sat down that I welcome his readiness to expedite the passage of this Bill. It is perfectly true that we did not think it necessary to deal with the new taxes which might be imposed, because we look upon this as a temporary measure until some better means of dealing with the difficulty has been found. It is, we think, for the public convenience, and being for the public convenience we have been careful in this measure to make no extension at all of the present practice, but rather the reverse. We have made statutory provision by which part of the present practice becomes the law of the land. In these circumstances I am glad to think that your Lordships' House will put no difficulties in the way of the passage of the Bill.

On Question, Bill read 2a: Committee negatived, and Bill to be read 3a To-morrow.