HL Deb 12 April 1916 vol 21 cc670-5

LORD LEIGH rose to ask His Majesty's Government whether they have considered the question of placing a tax on advertisements in newspapers, on hoardings and elsewhere, on, bicycles, and on clubs, as is done in France.

The noble Lord said: My Lords, though the decision as to the levying of taxes rests with another place, there would seem to be no reason why the members of your Lordships' House should not express an opinion or make suggestions concerning them. I have therefore ventured to put down the Question that stands in my name. A suggestion as to levying a tax on tickets for places of entertainment was originally included in my list, but that is now about to be carried out by the Budget, so I need not refer to it. My next suggestion is a tax on advertisements. As regards those in newspapers, such a tax might possibly be inadvisable; but as to advertisements on hoardings, there would seem to be no reason why such a tax should not be levied. In France the Laws of December, 1895, and April, 1910, were passed levying taxes on advertisements, and they are divided into different categories—judicial advertisements, ordinary advertisements, affiches peintes or painted advertisements, and luminous advertisements.

I will not weary your Lordships by entering into full details as to the different advertisements, but, generally speaking, the tax in France varies according to the dimension of the advertisement, and ranges from 5 francs to 100 francs a year per square metre for luminous advertisements which are flashed intermittently. Advertisements printed on paper which has been through a process to make it durable are more heavily taxed than those on paper which has not been so prepared. Ordinary advertisements bear a stamp which the printer is responsible for having affixed. For luminous advertisements a special licence has to be taken out bearing a number, of which a corresponding number has to appear on the advertisement. The same system is adopted on what are called affieltes peintes—all which are not on paper. The following are exempt: Notices emanating from a public authority, signs on public-houses, shops, and so on, electioneering notices during the period of elections, advertisements or notices calling attention to objects to be sold in the house so advertising, and notices with respect to employment.

As regards bicycles, by the Budget now before the House of Commons a tax is levied on motor-bicycles but not on ordinary bicycles propelled otherwise than by mechanical means. There would seem to be no mason why a small annual tax should not be levied on such bicycles. In France, by a Law passed in April, 1893, a tax of 10 francs was levied, but by a Law' passed in January, 1907, this was modified. Every bicycle now has to carry a small plate provided by the Administration of Indirect Taxes, such plate being renewable each year and costing 3 francs. The plate is sufficiently large to be seen as the bicycle goes by, so that a rider can be stopped and questioned should he fail to carry one on his machine. In this way the cost of collection of the tax is practically avoided, thereby obviating the objection brought against proposals made in this country to the levying of such a tax that it would cost more to collect than it would bring in.

In France a tax on clubs was originally levied of 20 per cent. of the subscriptions by a Law passed in September, 1871; but a Law of August, 1890, still in force, altered this and divided clubs into three categories calculated on the amount of the subscription and the rent paid for the premises. The tax now varies from 20 per cent. on the amount of the subscription and 8 per cent. on the rental in the first category, to 10 per cent. in the second, and 2 per cent. in the third. Exemption from this tax is granted to benevolent and friendly societies and to those which are exclusively scientific, literary, agricultural, or musical, and to those clubs which are only open occasionally. The managers, secretaries, or treasurers are responsible for reports, on which their clubs are rated for taxation, and their reports are verified by the tax collector. There can be no doubt that taxes such as I have indicated would bring in a large revenue without causing undue hardship. I beg to ask the Question which stands in my name.


My Lords, before 'His Majesty's Government give any reply to the Question which has been put to them, there are one or two points in the proposals made by my noble friend to which I should like to call their attention. As regards bicycles, I would remind your Lordships that they are by no means a luxury. In the part of the country in which I live there is now a very large use of bicycles by agricultural and other outdoor labourers in order to get to their work. In that part of the country, thirty-five miles from London—and I have no reason to think that it is at all different from most parts of rural England—there is at present a serious scarcity of outdoor labour for agricultural and garden purposes. That is to some extent met by the use of bicycles, by which people who live in villages at a distance are able to get to their work with far less fatigue than would be involved in walking—in fact, a good deal of the men's power would be taken away in walking the three or four miles, whereas unless the country is hilly the distance can be covered in a very short time and with extremely little fatigue on a bicycle. Indeed, the bicycle has now come so largely to be used by agricultural and other outdoor labourers that I think it would be a serious thing if a tax such as suggested were to be imposed.

As regards advertisements, there is a very great difference—and this is the difficulty of dealing with the subject—between the various classes of advertisements. In the first place, there are the advertisements in newspapers. There would be, of course, immense opposition to taxing such advertisements. There are, on the other hand, the advertisements on hoardings, on railway stations, and so on. Advertisements on railway stations have gone so far that often you really cannot discover what the name of the station is on account of the advertisements in every direction being much more conspicuous than the station's name. As for hoardings, they are in the country a defacement, perfectly hideous, and, one might say, a disgrace to our civilisation. Therefore anything that could be done to check them would be well done.

But there is this difference between advertisements. There are many which are extremely valuable to us all. There are things that we learn by advertisements that we could not learn in any other way, and there are many kinds of businesses, public amusements and so forth, which could not go on without advertisements. On the other hand, advertisements on hoardings and those that are posted on boards in the country are of no use to anybody. In fact, they involve enormous economic waste. I should hope that my noble friend would put the point that this kind of advertisement, which does not meet a public need but is merely directed to telling the public that they may get better goods from one dealer than from another, is absolute waste from an economic point of view. It does not increase the wealth of the country in any way. The people who are employed in printing the posters and those who stick them up receive wages, but the wealth of the country is in no way increased. The only people benefited are the men who, by advertising most, succeed in diverting most custom to themselves; but it is of no advantage to the public that certain traders should receive increased custom at the expense of other traders. I should think, therefore, that economists would regard such advertisements as worthy objects of taxation; and if the tax did not bring in much revenue it would save an economic waste, which would be good. So far, therefore, I venture to say that I think there is a great deal in the suggestion which has been made by the noble Lord. As he has said, this tax has for a long time been a considerable source of revenue in France. There it is levied in a comparatively easy way, because every poster bears a stamp on the corner which indicates that the tax has been paid.

The only objection which I have ever heard taken to this tax by Chancellors of Exchequer—and I have talked to many Chancellors in the other House on the subject—was that this tax would hardly bring in enough to be worth the trouble of collecting. It is, of course, for the Treasury authorities to decide how much force there is in that argument. But now that we are looking about in all directions and trying everywhere to lay our hands upon some new source of revenue, perhaps the Chancellor of the Exchequer will take a somewhat different view of this proposition from the view taken in the past, when it was perfectly easy to put another penny or two on the Income Tax without any prospect of serious opposition. I hope, therefore, that the Government will consider whether there are not, at any rate, some classes of advertisements which would be properly the subject for taxation.


My Lords, I think the House will join in congratulating the noble Lord who put this Question on the fact that the Chancellor of the Exchequer has thought proper to adopt his suggestion with regard to a tax on tickets for places of entertainment, which tax is included in the Finance Bill now before the House of Commons. As regards my noble friend's suggestion that advertisements might be a good subject for taxation, I may inform him that the Treasury was asked to consider the practicability of this proposal, and in December last submitted a report on the subject. This dealt both with newspaper advertisements and with those displayed on hoardings. The Chancellor of the Exchequer was inclined to favour the idea of imposing a stamp duty on advertisements on hoardings, railway stations, and so forth, which, as the two noble Lords have truly observed, are taxed in many other countries.

A conference on the subject was held at the Treasury on February 25 last, when representatives of large bill-posting firms, together with the President and the Secretary of the Local Government Board, and Sir Hedley Le Bas, who I believe is an expert in advertising, and others were present. The statements made by the trade representatives then and in a letter of February 29 were to the effect that displayed advertisements—namely, those on paper, for they were not concerned at the time with advertisements on enamel, iron, and so on—had decreased by about 40 per cent. since the war began, a number of the largest firms having ceased to use them, and that the total amount now spent on such advertisements was less than £500,000 a year and would be much smaller if a tax were imposed. Moreover, a good deal of this sum, it was pointed out, is already paid to local authorities, as hoardings are rated; whilst the reduction of paper supplies owing to restriction of imports would increase the price of posters and so diminish their use. In view of this evidence, the Chancellor of the Exchequer considered that it would not be worth while to impose the proposed duty.

As regards bicycles, my noble friend will remember that such a tax has often been suggested, but the great objection to it is that which has already been stated by the noble Viscount, Lord Bryce—namely, that bicycles are largely used by working-men and others with small incomes in going to and returning from their work. Especially is this the case in country districts where no trains or other public conveyances are available. I read to-day in the newspapers an account of a tram strike at Croydon, and I imagine that there are a great many working-men there who would otherwise travel by tram who now have to use the bicycle. As a means of recreation also bicycles are mainly used by the poorer classes, especially by boys employed in business, who are thus enabled to get into the country on Saturdays and Sundays. It is the opinion of the Treasury that any duty imposed on bicycles would have to be a very small one, and that the total yield would probably be insignificant.

With regard to the noble Lord's last suggestion, that of placing a tax on clubs, there is no information in the possession of the Treasury as to the taxation of clubs in other countries. Clubs in this country are not taxed as such, but they pay a special duty on intoxicating liquor bought for sale to their members. I do not know whether my noble friend will be altogether satisfied with the reply which I have given. At ail events, as regards the tax on tickets for entertainments which he suggested some weeks ago in his Question as it then stood on the Paper, I do not know whether I am entitled to say it is propter hoc, but at all events post hoc his suggestion has been adopted.