Lords Sitting of 12 March 1924

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
COUNTY OF LONDON ELECTRIC SUPPLY COMPANY BILL. [H.L.]
Read 2a.
SUTTON HARBOUR BILL. [H.L.]
Read 2a.

AUXILIARY AIR FORCE AND AIR FORCE RESERVE BILL. [H.L.]
THE SECRETARY OF STATE FOR AIR (LORD THOMSON): My Lords, I beg leave to introduce a Bill to make further provision as to the organisation and conditions of service of the Auxiliary Air Force and Air Force Reserve and for purposes connected therewith, and to move that it be read a first time.
Moved. That the Bill be now read 1a.—(Lord Thomson.)
On Question, Bill read 1a; and to be printed.

TAXATION OF BETTING.
LORD NEWTON LORD NEWTON had given Notice to call attention to the Report of the Select Committee on Betting Duty, and to move that the taxation of betting is both desirable and practicable. The noble Lord said : My Lords, in bringing forward this Motion it is perhaps hardly necessary for me to observe that I am aware that the present Government have announced that they decline to have anything to do with this proposal. But that does not perturb me in the least. No Government—not even this Government—is permanent, and in any case the debate which takes place this afternoon will afford the Government an opportunity to give their reasons for refusing to assent to a proposal which I maintain is founded upon common sense and is in accordance with the general interests of the public.
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I should also like to observe that if the late Government were really anxious—and I presume they were anxious—to carry into effect the taxation of betting, the reference to the Committee was a singularly foolish one. They were asked to report whether the taxation of betting was practicable and whether it was desirable.
Everybody knows how these Committees are constituted. When you are dealing with a highly controversial subject like this the procedure is invariably the same. You appoint a certain number of supporters and a certain number of opponents and you throw in perhaps one or two people as makeweights. The result is that, of course, you do not arrive at unanimity and you get a Majority and a Minority Report. Naturally, that is what took place in the present instance. The Committee arrived unanimously at the decision that a tax was practicable, but when it came to the question of desirability they were divided in opinion. I need hardly point out that the situation was very much complicated by the fact that a General Election was imminent, and no doubt some of these gentlemen had an eye upon the effect that would be produced upon the electorate. Anyhow, the result was that the question of whether it was desirable or not was more or less left in abeyance because it had not been possible to consider the whole of the evidence.
Anybody who reads the Report of this Committee, which I can say with confidence is much better worth reading than most Blue-books are, will inevitably come to the following conclusions—(1), That betting in this country has now spread to an almost incredible extent, and to an extent which must cause considerable misgiving in the minds of anybody who gives any thought to the matter at all ; (2), in accordance with the almost universal opinion expressed by the witnesses, that it is quite impossible to stop betting under the present law ; and (3), as many people have realised before now, that the present law as regards betting, which is founded upon two Statutes passed fifty or sixty years ago, is archaic, chaotic and ineffective.
Let me point out a few of the anomalies which stare us in the face in connection with the law of betting. In the first place, betting is not an illegal act, but, as we

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all know, a bet is not recoverable at law, although on the other hand, if I understand the law correctly, you can prosecute a welsher who has defrauded you on a race-course. Ready-money betting, which is after all the safest way of betting, is illegal. Credit betting, as everybody is also aware, is legal. Ready-money betting is legal upon a race-course because a race-course, owing to some legal jugglery which, I believe, owes its inception to the late Mr. Justice Hawkins, is not a "place" within the meaning of the Act. And so long as you confine yourself to ready-money betting upon a race-course, and so long apparently as you do not stick an umbrella permanently in the ground, or stand too long upon a soap box, or whatever your apparatus may be, you are not breaking the law ; but if you infringe these two provisions then "imagine that you can be proceeded against.
You can, apparently, bet on credit with a minor but you are not allowed to send a circular to a minor. And a bookmaker's office is legal so long as you do not resort to it. That is to say, you may correspond with a bookmaker, you can telephone to him, and you are doing nothing wrong ; but, if you want to back a horse and go to an office with a sovereign or a five pound note in your pocket for the purpose, you are committing an illegal action. Another grotesque anomaly is that, although it is illegal to go to a betting office with the money in your pocket, it is not illegal to go there and draw your winnings, if you have been fortunate enough to win.
Talking about anomalies, there is another kind of anomaly which also strikes me. I hesitate to say anything disparaging about the Jockey Club, because the Jockey Club is far and away the most powerful body in this country, and if they disapproved of what I say they might warn me off all the race-courses under their control. The attitude of the Jockey Club with regard to betting always seems to me a very singular one. They come before the Committee and say it is quite impossible for racing to go on without betting, but at the same time they decline to have anything to do with it. The Jockey Club were represented on this Committee by various members, and, perhaps in accordance with the tradition that betting is a low sort of thing with
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which the Jockey Club ought to have nothing to do, these gentlemen—among whom were, stewards of the Jockey Club—took a very small part in the proceedings. And I observe, to my amazement, that one of them, who, I believe, was—I am not sure he is not now—a steward of the Jockey Club, actually voted against the motion that the taxation of betting was a desirable thing. This gentleman, if he is of a logical turn of mind, has, in my opinion, only one course to adopt, and that is to get rid of his horses as quickly as possible, and to join the Anti-Gambling League.
I pass from the Jockey Club and the anomalies of the law to another question—namely, the magnitude of betting at the present day. Perhaps it will give the House some idea of the magnitude of the betting that goes on at the present time when I say that, according to the findings of the Committee, the betting turnover in the year is no less than £200,000,000. In Glasgow alone, during the fiat racing season, which I think occupies eight months in the year, a sum of no less than £30,000 a day goes in betting. One bookmaker alone contributes £3,300 a year in telephone fees, and another one—I am not sure whether it is not the same man—gave evidence that his turnover was no less than £1,500,000 in the year.
Ninety per cent. of this betting is done away from the course and, as it is just as well to grasp essential facts, I should like to point out that bookmakers may be divided into three sections. There is the credit bookmaker with an office, who, of course, is legal. There is the bookmaker who books ready money upon the race-course, who is also legal. In the third place, there is the street bookmaker who is illegal, and the illegal bookmaker makes, apparently, a much better thing out of his business than his legal colleagues. It is the most profitable kind of betting and, although these men are infringing the law almost every day in the year, the curious thing is that the Blue-book gives them the highest possible character for honesty. They leave the Blue-book, so to say, without a stain on their character.
Nothing is more remarkable in the Report of this Committee than the evidence of the police. The police were represented by very important officials—

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by Mr. Bigham, who, as everybody knows, is the Assistant Police Commissioner at Scotland Yard, by the head of the City Detective Force, by the chief constables of big towns like Liverpool and Sheffield, and the chief constable of Glamorganshire. All these police officials gave it in evidence that in their opinion it was perfectly impossible to stop what is known as street betting under the present law. They further added that to attempt to render the penalties greater and to make the law more stringent would be productive of extreme difficulty, because the popular sympathy is entirely on the side of the street bookmaker.
And it is no wonder. It appears to them to be a case of class legislation, and so it, is. Presumably, it is perfectly open to anybody in this House who wishes to do so to bet upon credit. But the working classes are not in the same position. They bet in small sums in ready money. They all deal with the street bookmaker and are, therefore, committing an illegal action. But the sympathy with the street bookmaker is so great that, if anybody will study the evidence of these police officials, they will recognise that it makes the difficulty of obtaining a conviction against these men practically impossible. I do not wish to elaborate this point too much, but the fact is, to put it quite shortly, that the street bookmaker has organised his business, his illegal business, in such a skilful way that it is almost impossible to catch him. Therefore, these police officials whom I have quoted have come to the conclusion, to which I came long ago without having their experience, that the only thins to be done is to establish some form of State control.
I pass from the evidence of the police officials to that of the bookmakers. The evidence of the bookmakers was largely given with a view to showing that the fabulous profits which the public attributes to the bookmaking profession do not exist. They endeavoured at great length to show that the profits on credit betting were really very small, and what is especially interesting to me to note about their evidence is that, whereas some years ago they were positively clamouring to be taxed and to be licensed, now that there is some indefinite prospect of that taking place many of them are strongly opposed to it. What they say, in effect. is this : "Our profits
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will not bear a tax, and if you tax us we shall do very much less business.'' I do not know what may be the general view upon that opinion, but my own view is that it is a decided argument for introducing some form of State control and licensing. I need hardly add that the illegal bookmakers—that is to say, the street bookmakers—are strongly in favour of being licensed for the obvious reason that at the present moment they have to spend a great deal of money in defeating the police and in dodging the law, and they say, quite reasonably, that they would far sooner spend that money in "laying a tax than in evading the police.
Now I leave the bookmakers and come to the official witnesses who appeared before the Committee. The first of the official witnesses were the Home Office officials. Those officials offered no objection to a system of licensing or of registration. They admitted openly that the law was completely chaotic and in-effective, as I have already stated, and they added an interesting piece of information—that a great deal of betting goes on at the present moment amongst people who are receiving what is known as the dole. The Home Office officials were followed by gentlemen representing the Customs and Inland Revenue Departments. Here again I notice a somewhat surprising feature. My experience of permanent officials and of officials generally is that when you go to them and suggest some new departure they invariably reply that it cannot be done, and if I were a permanent official I should do exactly the same thing myself, because I should know that it would mean extra trouble. But in this case these particular officials raised no obstacles at all. They accepted the idea with enthusiasm and they brought forward a scheme, the basis of which was that ready money betting should be legalised, that bookmakers should either be registered or licensed, and that there should be an ad valorem tax. According to their calculations, there would be no trouble at all in collecting a sum of £10,000,000 a year from a tax on a ten per cent. basis. I am not in the least exaggerating when I say that all these official witnesses produced no opposition. I think I am correct in saying that they offered no opposition whatever to taxation in principle.
I turn now to another party—namely, the opponents of taxation. I need hardly state that the opponents of the taxation of betting who appeared before the Committee were either members of the Anti-Gambling League or representatives of various Churches. Their objections really amount to a whole-hearted condemnation of betting in principle and a determination to stamp it out at all costs. It is now twenty-two years since I sat upon a Committee of the same character. There was a House of Lords Committee appointed to consider and report upon betting. That Committee was formed in the usual way, which I have already explained. There were various Lords who may be identified as recent pillars of the there were prominent anti-gamblers headed by the late Bishop of Hereford, and including my noble friend, whom I do not sec present this afternoon, Lord Aberdeen, and other persons of the same way of thinking. In that particular Committee I happened to be the make-weight, a person who is supposed to have no views upon the subject at all. Parenthetically I should like to say this ill justification, that twenty-two years ago I did my best to persuade the distinguished noblemen, these members of the Jockey Club, these pillars of the turf, to advocate the principle of State control of betting, and they would, not listen to me. They said, in effect, that "betting is n vulgar kind of thing with which we have nothing whatever to do and we decline to touch it.'' In those days I was too modest to produce a Minority Report of my own, a fact which I have always regretted.
The result was that we agreed upon a Report which was of a very unsatisfactory nature, and which only resulted in a very ineffective piece of legislation—namely, the Street Betting Act of 1910—but we did lay down one very important principle to which I wish to draw the attention of the House. We laid down the principle that betting is not a crime in itself. That principle, laid down by a Bishop, is one which ought to carry weight everywhere, and were I a bookmaker it is certainly the motto which I should adopt. Betting is not a crime when pursued in moderation. There is, in fact, something to be said in favour of it. Betting is sometimes the only method by which you can arrive at the truth. People will make the most astounding assertions upon occasion, and
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if they were called upon to back them with their money they would in all probability decline to do so. I am not, in the least ashamed to say that I occasionally bet myself frequently, in fact, if I see a good opportunity of winning, and if, furthermore, I see a good prospect of being paid.
There is nothing unusual in that. I should think that probably everybody in this House has bet at some time or other. I do not even except the right rev. Prelates whom I see opposite. The most rev. Primate, when he was a young man, shot pigeons, and I dare say when he was a young man he had odds of three or four to one on the gun like any of his fellow undergraduate. I do not sup pose he has suffered what the late President Kruger would have called "moral or intellectual damage" in consequence. I am quite satisfied that I have never suffered any moral or intellectual damage, nor do I think I suffered any material damage, because I believe, if I were to calculate carefully, I should find upon the whole that I had not lost any money by my bets. We all bet. I assume everybody here bets, or has done so. Men bet, women bet. It came out, or as the reporters say "it transpired," in the Blue-book that even half the boys at an elementary school in London had bets upon the Lincoln handicap. I believe it is the case that even the blameless Nonconformists is in Wales occasionally bet upon the number of the hymns given out in chapel and conventicle. We are none of us free from this so-called vice. But there is no harm whatever in it in moderation. What all reasonable people feel is that betting only becomes a crime when it is carried to excess, when it becomes the great obsession in life, and when people bet who cannot afford to do so.
I am not going to expatiate upon this particular point. Of one thing I am certain, and that is that you are not going to stop it by merely harrying street book makers and subjecting them to increased penalties. When the anti-gambling zealots press for a remedy and are asked what ought to be done, judging from my study of the Blue-book, their recommendations are extremely vague. I only came across one definite suggestion, and that was from a clerical gentleman, Canon Peter Green, who incidentally remarked that his anti-gambling activities were largely hampered by the fact that the illustrated

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papers published pictures of the ex-Lord Chancellor, Lord Birkenhead, being paid his winnings for a bet. This divine had his own remedy. It was that the Government should at once spend no less than £10,000,000 in anti-gambling propaganda.
At the bottom of all these objections to the taxation of betting is, I think, the delusion that if the Government recognise betting many people would bet who now refrain from doing so. I always think that this is the most extraordinary hallucination that possesses the human mind. I absolutely decline to believe that any private person is influenced by the line that the State takes upon, or what the State thinks about, a particular question. For instance, the man who is going to drink a glass of beer is not considering whether the Government taxes beer, or whether they profit by his drinking. He drinks because be is thirsty. A man does not go to a cinema because he thinks that by doing so he is contributing to the Government's Entertainment Tax, and a man is not going to back a horse because he thinks the Government would approve of his doing so. If he backs it, he will do so because he thinks it is going to win, or because someone has told him it is going to win. Nevertheless, this hallucination does undoubtedly prevail.
Years ago I had a relative who occupied a high legal position. He was Recorder of a big town. This legal gentleman was a convinced Liberal. I remember meeting him not very long after there had been a General Election, and he said : "I have just been down to the town for which I act as Recorder, and the diminution in crime since the present Government came into office is perfectly astounding." This man obviously thought that the pick-pocket before picking some one's pocket, or the burglar before cracking a crib, or the forger before imitating some one's signature, reflected within himself and said : "No, that great and good man Mr. Gladstone is in office, and I will do nothing which might bring the blush of shame to his Administration.''
I recommend the people who hold those extraordinary views to study the evidence of two of the best witnesses who appeared before this Committee, Canon Edward Lyttelton and Bishop Welldon of Durham. Both those two men are highly respected by all classes. They were, in their day,
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distinguished athletes, and would, therefore, come within the category of sportsmen. More than that, they have always taken an intense interest in this question of gambling, and both of them have been, I think, either chairman or vice-chairman of the Anti-Gambling League. Both these gentlemen appeared before the Committee, and openly admitted that all their efforts up to now had been vain, and that there was nothing for it but State control. What they said, put shortly, was this—that for years the Churches, the police and the magistrates had all been endeavouring to suppress betting without ; any success, and that they had both come to the same conclusion—a conclusion which infuriates their former colleagues of the Anti-Gambling League—that the only thing to be done now was to have State control, and to institute a system of taxation.
I am not in the least afraid to contend that if you establish a system of licensing or registration with taxation, you will not increase betting, but will diminish it. Take, for instance, the case of the street bookmaker, which is really the bad case. At the present moment he is acting illegally. He has his agents everywhere, not only in the workshop and factory, but also in private houses, and he is so successful in his endeavours that he has succeeded in getting boys of an average age of eleven years to bet regularly with him. He has succeeded in bringing the law into contempt, and, according to the evidence of the police witnesses, there is no real remedy against him. Does it not stand to reason that if you license this man he will be much more careful as to how he proceeds—careful not to bet with minors or in any way infringe the law? You will have complete control over him, and he will be extremely careful not to do anything which would forfeit his licence.
Let me point out another trifling advantage which may be secured if betting offices are licensed. The Anti-Gambling League, reinforced by the Churches, might picket these establishments, and, combined, they might exercise their powers of peaceful persuasion upon people who were anxious to bet and persuade them from the course they were taking. But the real and substantial advantage is that if you impose a tax it is clear that the person who will have to

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pay it will be the bookmaker himself. If he pays the tax he will take it out of the backer, and, consequently, the odds will be shortened ; and the prospect of shortened odds will act as a greater deterrent than all the propaganda that can be organised.
As a nation we have frequently, and with some injustice, been accused of hypocrisy, but there is no matter on which our national hypocrisy is so clearly revealed as on this question of betting. I except from that criticism the Churches, because I know theirs are genuine objections. But let me take the case of the trade unions. They profess themselves to be strictly averse from betting and control of betting, but on the Committee which has just reported there were four Labour members who pride themselves on the fact that they voted for the proposal. Whoever heard of a man being turned out of a trade union because of betting ? And can anyone quote a single instance when a Trades Union Congress passed a resolution against betting? Take their Press. The advanced democratic Press is constantly denouncing betting. I looked at it this morning in order to refresh my knowledge. I looked at the Daily Herald, which is supposed to purvey the pure milk of democracy, and I find a whole page given up to racing and betting intelligence. Take the Star, which is another paper supposed to cater for the democracy. Take the early edition of the Star—I wonder if anybody ever saw the first edition of an evening paper—and the early editions of similar papers ; they are really nothing but glorified racing programmes and racing sheets. There is no other information in them at all. The one paper which is faithful amongst the journals is the Manchester Guardian. That paper is the only one which is honest enough to suppress information about betting.
The attitude of the Jockey Club towards betting is, to put it mildly, anomalous. The attitude of the trade unions and the Press is rather more than anomalous. But the real hypocrisy is shown by the State itself. The State, as represented by the present Government, is going to oppose this project. The State denounces betting and all its evils; but, on the other hand, by indirect means the Government makes all that it possibly can out of racing. The bookmaker is taxed, he
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pays income Tax and Super-Tax. The people who go to races pay the Entertainment Tax. The Post Office provides all the facilities that are asked for. When a race meeting takes place, the Post Office is delighted to send down any number of telephone operators and to make all possible facilities for the despatch of telegrams. The Home Office, not to be behind hand, provides as many police as the managers of a race meeting choose to ask for. Even when the strike was on—I happened to be abroad at the time—I noticed with some interest that arrangements were to be made if the strike continued for the public to attend a race meeting at Leicester, and surely the difficulty that was experienced in suppressing or limiting racing during the war is within the recollection of everybody. It was with the utmost difficulty that the number of meetings "as reduced, and any reduction was looked upon as little short of an outrage.
It is time that the Government dropped what I term this hypocrisy. As is pointed out in the admirable draft Report written by the Chairman, Sir Henry Cautley, one of the most convincing documents that I ever read, three courses are open. First, to leave things as they are; second, to increase the penalties—I hope from what I have said that I have convinced your Lordships that the increase of penalties is quite impracticable—and, thirdly, to control and tax betting. I should like to say this in conclusion. I believe this House, which is more especially concerned with non-political questions, is a more faithful interpreter of public opinion than the House of Commons, and it is for that reason that I attach considerable importance to the Motion on the Paper to-day. I sincerely trust it will be passed. I fully intend to take a Division upon it, and I believe that the Resolution, if adopted, will meet with the approval of all reasonable and impartial people who have given any attention to the subject.
Moved to resolve, That the taxation of betting is both desirable and practicable.—(Lord Newton.)
THE UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD ARNOLD): My Lords, the noble Lord has based the case for his Motion on two grounds—that it is desirable and practicable. I will deal first with the question of desirability. He

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has urged that a betting tax should be imposed because he thinks that such a tax, together with the control which it would involve, would restrict betting and thus reduce this great national evil. I agree that betting has become a great evil, but I strongly disagree with the proposition that a tax on betting is the best way to deal with that evil.
Let me remind your Lordships very shortly of the history of this betting tax proposal. The first that: was heard of it in any important quarter was a little less than a year ago. Mr. Stanley Baldwin, who was then Chancellor of the Exchequer, and who anticipated increasing difficulties in balancing his Budget as years went on, stated that he was greatly attracted by a tax on betting, and he proposed to move for a Select Committee to consider the question in all its aspects. Accordingly a Select Committee was set up. It sat for six months, had a great number of sittings and, after most exhaustive investigation, decided against the proposal that a tax on betting was desirable. This Committee was composed of members of all Parties and, on the Motion of a Conservative Member, it specifically decided to omit the word "desirable" from its Report. Nevertheless, the noble Lord comes forward to-day and asks your Lordships for a verdict contrary to that which was arrived at by the Committee, which, as I have said, gave months of careful investigation to this matter and had before it a large number of expert witnesses of all kinds.
The argument of the noble Lord, in so far as it relates to desirability, is, as J have indicated, based mainly on the ground that a betting tax would, in his opinion, tend to decrease betting, and would thus help to deal with this evil. That is the contention. Such being the case. I should have supposed that the first thing he would do would be to take the example of other countries—
LORD NEWTON: They all do it.
LORD ARNOLD:—and to show that, after a tax has been imposed there, it has reduced the volume of betting. He did not make the slightest attempt to do anything of the sort. If I went into this matter, I could produce certain figures which appear to demonstrate the opposite conclusion, and it is, at any rate, most
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unfortunate for the noble Lord that some members of the Select Committee did arrive at a different conclusion. So far from agreeing with him that a tax on betting would decrease betting, they formed precisely the contrary opinion, and held that it would increase betting. Why did they take that view ? They took it because they considered that the machinery and control of betting which would be necessary for a tax would increase the facilities for betting.
Consider what would happen. The betting tax. if it is to be at all properly levied, would, amongst other things, require, as the noble Lord has said, the licensing of bookmakers and the setting up of what might be termed licensed betting offices. These latter would be instituted in great numbers, and street betting, which, as he has pointed out. is at present illegal, but which is nevertheless very prevalent in our large towns and in the great centres of industry would in future be carried on in perfect safety in licensed betting offices, which at present do not exist. I feel that, in those circumstances, it is not surprising that many people hold that a fax on betting would increase betting.
Street betting is, for the most part, confined to large towns and the great centres of industry. There is no substantial amount of it in the smaller towns and in the rural districts. But if licensed betting offices are to be set up all over the country it seems highly probable that, quite apart from what will happen in the larger towns, betting will increase considerably in the smaller towns and villages. When, therefore, the noble Lord contends that a tax on betting would decrease the evil, he must, I think, recognise in fairness that those who take a different view can at any rate build up a strong case for that view, and he must concede that the matter is at least one which admits of much difference of opinion. I really do not think, therefore, that the noble Lord is on strong mound in bringing forward a betting tax proposal as being a good method of reducing the evils of betting, and I think his case is all the weaker because other methods have been suggested for this purpose, and he has not, I contend, adequately discussed those alternative proposals, some of which were brought to the notice of the Select Committee.

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I noticed in an evening paper of Monday that the noble Lord, in an interview, suggested that there in an analogy between the proposed tax on betting and the control of betting involved therein and the taxation of drink, which means some control of the drink trade. I want to say a word about that, because at first sight there would appeal to be something in common between these two problems. I am convinced, however, that, if all the relevant considerations are properly raised and rightly estimated, there is no real analogy between the taxation of drink and the taxation of betting. The attitude of the State towards drink has always been different from attitude towards betting. The State as such has never by its enactments regarded drink in the same category as betting. The drink trade has been regarded by the State as legitimate up to a point, though requiring a certain amount of regulation and restriction, but the drink trade has been given a quite definite legal status, and in that sense it has been given recognition by the State. The attitude of the State towards betting has been quite different. The Stale has never regarded betting as being fit for legal recognition in the same mariner as it has regarded the drink trade. This Motion of the noble Lord, as he will admit, does necessarily involve a somewhat similar recognition, and therefore the proposal is fundamental; and I can assure him that there is a large and important section of the community which is, and will be consistently and persistently, opposed to any such recognition.
I notice also that, in the same interview which the noble Lord gave to this paper on Monday evening, he asked this question: "Supposing there were no State control of drink, what would the position be ? "I should like to deal with that point. Apparently, the noble Lord does not realise that the control of the drink trade is of a different kind from the control which would be set up for the imposition of a betting tax. The control of the drink trade is, for the most part, conducted under a series of laws which are of a restrictive and even penal character—the limitation of hours, imprisonment for drunkenness, and so on. These things have really nothing whatever to do with the taxation of drink. The control of the drink trade is essential in
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the interests of the State, whether that trade is taxed or not, and I submit that the noble Lord is really mixing up two entirely different things. if he will support a control of betting which is purely restrictive and. in certain instances, even penal in its character, then he should have indicated that view in his Motion. If that is his position he should really co-operate with those members of the Select Committee who were opposed to the betting tax altogether. I submit that the noble Lord is not entitled to use an argument for proposals which, next day, he omits from the Motion, because on lines of that sort you cannot conduct any very well ordered controversy.
I submit that on the point of desirability the noble Lord has not made good his case. He has not proved that this tax would decrease betting. He has not said anything to satisfy those who have strong moral objection to the control which it would be necessary to set up to levy the tax, and he has not considered adequately the methods for combating these objections. Perhaps it is not surprising that he has not made good his ease, because, after all, this tax was not originally put forward for that reason at all, but for a totally different reason. As I have said it was suggested by Mr. Stanley Baldwin as a possible fiscal instrument. That brings me to the second part of the Motion, and that is whether a tax on betting is practicable.
I admit at once that the Select Committee, though only by a majority, reported that such a tax was practicable. But let me emphasise this, that a tax on betting cannot be imposed without a degree of State control, and therefore it is not possible to discuss this matter solely from the point of view of finance, because before arriving at that stage certain machinery has to be set up which arouses strong moral opposition. The governing fact of this proposal as a fiscal instrument is that, without control, there can be no tax. However, many persons who do not share the moral objections of which I have been speaking and who look upon the tax simply as a fiscal instrument, will hold very naturally that it. is as a fiscal instrument and as a fiscal instrument alone that it must stand or fall.
The Select Committee gave a good deal of attention, as of course, it was bound

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to do, to the question of the tax purely as a fiscal instrument, but it is a simple truth to say that the result of its investigations from the point of view of revenue was profoundly disappointing to those who want revenue from this tax. Let me show your Lordships, so far as it can be estimated, what a tax would mean in actual cash. Let us see what money there is in it. The Committee naturally had great difficulty in obtaining sufficiently reliable data upon which to base anything like definite estimates of the probable yield of a betting tax, but they did investigate the proposal very closely. I want to make it clear at this stage that, whereas much evidence was taken on these problems and, as a result, the Chairman of the Committee, in his comprehensive draft Report, dealt with the probable yield of a betting tax, yet the Committee itself did not report on this part of the Chairman's conclusions because, owing to the Dissolution, its labours were perforce cut short. Therefore, in the figures which I shall give, and they are not many, I want to make it perfectly plain that I am dealing with the Chairman's draft Report and not with the actual Report of the Committee.
The noble Lord said that the Chairman came to the conclusion that the most likely figure for the annual turnover of betting in this country was £200,000,000, and that he was strongly of opinion that the rate of the tax should be 2½ per cent. Now 2½ per cent. on £200,000,000 is £5,000,000. Therefore, on this basis, there would appear to be a revenue in sight from the tax of about £5,000,000. But that figure is subject to certain qualifications which the Chairman either did not make, or made wrongly. In particular, a large allowance must be made from the annual turnover of £200,000,000, when you come to deal with it for taxable purposes, for evasions, and when that is taken into account, as well as certain other things, it is probable that the turnover of £200,000,000 would be reduced for taxable purposes to £150,000,000. Now 2½ per cent. on that is only £3,750,000, so the yield is getting smaller. But another considerable item has to be brought into account, and that is the cost of collection, which, according to the evidence of the Board of Customs and Excise, would probably amount to £150,000. So, taking everything into consideration, it would
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seem that probably the net yield of the tax would be only somewhere about £3,500,000. Thus, this loudly-trumpeted fiscal instrument shrinks in practice down to a niggardly sum of somewhere about £3,500,000.
The expenditure of this country for the current financial year is estimated to be £816,616,000 and £3,500,000 is less than one-half of one per cent. of this expenditure. It is distinctly loss than one penny on the Income Tax—less than ¾d. So I say that this proposal, when you go into it and really see what is likely to happen, comes to this—that the Government is asked to set up elaborate ; machinery and to arouse the strongest moral opposition in many quarters in order, when all has been done, if it can be done, to obtain the sum of about £3,500,000. Leaving all moral considerations out of account, I say that the tax is not a business proposition. There is not enough money in it.
There are three principles of a sound tax. It should be equitable, it should be economically sound, and it should be productive. If a tax conforms to those three principles, it is a good tax. If it does not, it is not a good tax. If I test the betting tax by those three principles, I say it is not a good tax. It may be equitable, it is extremely arguable whether it is economically sound, but it is not in the proper sense of the word productive. The fact is that this betting tax comes into that category known as "fancy taxes," which hitherto have never formed part of the tax system of this country, and I cannot think that Sir Henry Cautley's commendation of this kind of taxation should count for a great deal. It is true that in his Report he gives good grounds and reasons for his main figures, but as soon as he makes use of them he falls into certain errors. I have already said that in giving estimates of the probable yield of a betting tax he leaves out of account altogether the important factor that there would be a great deal of evasion. Also he appears to think that the cost of collecting varies with the rate and yield of the tax. Of course that is not so, because the machinery would be very much the same whatever the rate of tax.
Lastly, and this is the last point in his Report to which I will call attention, he suggests in his draft Report that this

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sum of £5,000,000, if it were used for the purpose of relieving the Food Taxes, or other taxes, would mean a substantial alleviation of the burden on the mass of the people. The Food Taxes alone in this country bring in £50,000,000 so that even if this £5,000,000 were obtained, and it were all used for the reduction of the Food Taxes, you could only reduce them by one-tenth. And can you, by any sort of proper use of words, say that one-tenth is a substantial alleviation? It would therefore appear, I submit with all respect to Sir Henry Cautley, that he is not the safest of guides in financial matters.
There is another consideration. I would put before your Lordships in closing. I say that the noble Lord and those who are pressing for this tax are unmindful of certain important issues affecting the financial credit of the country. I emphasise what I said before, that in this country we have never had a tax of this kind : at least, not in modern times. The tax systems of other countries are, for the most part, very different from that of Great Britain, and I say without fear of contradiction that any small revenue which might be got from a betting tax-would be more than counterbalanced by the damage done to the financial credit of the country when it was known that at last Great Britain had instituted a betting tax.
LORD NEWTON: Everybody else does it.
LORD ARNOLD: I have pointed out that the financial system of Great Britain is in most respects totally different from the financial systems of other countries. Personally I am not anxious to imitate the financial systems of other countries. I believe that ours is the best and I want to keep it so.
A NOBLE LORD: What about the Dominions ?
LORD ARNOLD: The Dominions have their own problems which they must settle in their own way. I am not criticising the Dominions. They were newer countries and they had different problems. I maintain that the tax system of this country is different. It is the best tax system in the world, as the history of the past few years has proved. In certain financial circles there was appre-
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hension as the prospect of a Labour Government got nearer and nearer, but, as a matter of fact, the accession of the Government to office was followed by a steady rise in securities. And I would say in conclusion that, whatever then-opponents may say, the Labour Government is mindful of the financial credit of the country, and it will not be responsible for the damage to the nation's financial prestige which would follow if the Chancellor of the Exchequer were for the first time to institute this tax which your Lordships in this Motion are asked to support. The Government, therefore, will not accept the Motion.
THE EARL OF LIVERPOOL: My Lords, I should like to add one or two words to what the noble Lord, Lord Newton, has said in support of this proposal. I think it is singularly unfortunate that the chief Minister to represent the Government on this question should have insisted upon speaking second. I cannot quite understand why he should attack the noble Lord, Lord Newton, for not giving an example of a place where this tax is found to be most efficacious. Lord Arnold might have said—and I think most of your Lordships would have agreed if he had said—" Well, this is a minority Government ; we do not like facing the difficulties of all the problems of this tax." But he attacked Lord Newton, and, as I understood, what Lord Newton said was not that this proposed tax would decrease the amount of betting in the country, but that it would provide some control over the evils of betting. That is the interpretation that I put on what the noble Lord said.
The noble Lord, Lord Arnold, spoke almost with heat of the effect of a betting tax on the credit of this country. I suppose there is no one in your Lordships' House who does not consider, or who would not like to consider, that our credit is the best in the world, but at the same time there are instances of our great Dominions which have attempted to face this problem, and have faced it most efficaciously. When I heard that the noble Lord, Lord Newton, was going to speak on the subject, I asked him whether I might come down and say something about it, because after I left office in 1920 there were a large number of our oversea friends, as well as people in this

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country, who were very anxious, when it was a question of increasing the revenue of this country, to see whether something could not be done in the way of instituting a betting tax similar to the tax that exists in our great Dominions. I see that the First Lord of the Admiralty has left the Ministerial Bench. I am sorry for it, because I think he knows as well as I do what was the result on the Revenue of New South Wales. But I will only speak for the Dominion with which I was associated, about which the noble Lord, Lord Arnold, is inclined to speak rather slightingly, because I suppose he considers that none of the Dominion financiers are as good as the financiers over here.
I will take the year 1922–23. I have the figures for 1924, but they are not quite complete. I would explain, in the first instance, that in the Dominion of New Zealand at present there is only a totalisator in use. Your Lordships will say that that is rather different from the system in this country, where we have to deal with bookmakers. All I can say is that in the Act of 1908 the then New Zealand Government dealt with the betting tax to-day as they were in totalisator and as regards the bookmakers. I am not quite certain that the permanent officials of the Treasury are so much averse from this betting tax to-day as they were in 1920. The Blue-book certainly does not indicate it. And perhaps the virility of the young minds of the Dominions has done something to show that the solution of this question is possible. I know perfectly well that there are some parties who genuinely object to the tax, the chief among them being some—perhaps most—of the Churches. But, at the same time, the Churches are not altogether free from the desire to get a quid pro quo. I recollect that there was a dignitary who was a kind of equivalent to the most rev. Primate, who came out to New Zealand while I was there. I had to perform some function for him, and afterwards he came to luncheon with me. I had noticed that he took a large number of tickets in a lottery at an entertainment to which I went, and I asked him at luncheon what he thought of the country. He was full of admiration for the people, but he said they were dreadful gamblers. I said : "Are they worse gamblers than you, because you took a large number of
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tickets in the lottery?" and I am not sure whether it had the approval of the Minister of Internal Affairs.
I will now give the figures, showing what New Zealand achieved by means of the Betting Tax last year. Her total expenditure was £26,263,760. Out of that sum she got approximately £6,000,000 from Customs Revenue, £1,500,000 from Land Tax, £3,800,000 from Income Tax. £1,300,000 from Death Duties, and £607,656 from the Betting Tax. I will tell you how it is worked. From November 1, 1915, there was a tax of one per cent. imposed on the value of all stakes, and a tax of 2½ per cent. on totalisator dividends, in addition to the tax on individual investments in the totalisator. From December 22, 1921—and I may say that the racing people asked for it to be done because the finances of the country were at that time low—the tax on stakes was increased to 10 per cent., and on the dividends to 5 per cent. ; but from April 1 this year the tax on stakes will be reduced again to 5 per cent. They wanted to show their patriotism at the time when there was a good deal of unemployment, and they suggested to the Government an increase in this direction which the Government took.
I cannot think that, with a population of just under 1,300,000, £610,778 is a bad figure to get from an individual tax of this kind. I would not like to say that I am one of those optimistic people who will assert that the figures which the noble Lord, Lord Arnold, has produced are totally erroneous; but I will say that the yield of a betting tax would be far nearer £25,000,000 than.£3,500,000 if the figures for this country are as good as those for the country overseas. You have only to take these particular figures, which show that from a population of 1,300,000 you get over half a million, and you will see that it will be the best part of £25,000,000 from our population here. Certainly, if the noble Lord goes to a Division, he will find me in the Lobby with him.
LORD SHANDON: My Lords, I had not intended to intervene in this debate because my views with regard to the matter are not very strong one way or the other, and I am quite capable of con-version to either side. I came here to listen to the argument which would be put forward by the noble Lord who is

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moving and the objections to the proposition which he asks your Lordships to affirm. I have done that. I have listened very carefully, and I find, I confess—and I am sure the noble Lord who replied on behalf of the Government will pardon me for saying this that any difficulties which I had entertained as to the advisability of imposing such a tax have been indirectly resolved on the other side by the arguments which he put forward. I do not say that in any captious spirit or as trying to catch at an expression here or there. I say it with absolute sincerity.
I thought that there might be some cogent reason for objecting (it seemed to me prima facie to be a reasonable thing) to the taxation of bets or the regulation of bets in order to obtain a money result for the Exchequer ; but I confess that I have not seen it. Speaking with all humility and respect, I think there is a slight contradiction between the arguments of the noble Lord on the Treasury Bench in regard to the first part of the Mot ion and the argument he used in reference to the second part. On the first part he suggested that his view was that any form of State regulation or taxation of betting would result in an increase—a tremendous increase, as I understood—of betting. If it had that result the figures which he brought forward to show that the results in money would be small would not be substantiated, because if the amount of betting is increased the yield will be increased. We have seen in regard to other taxes, the Entertainment Tax, for example, how the revenue has increased, apparently because the cinema habit grew a great deal from the time when the Tax was first imposed. The amount suggested by the noble Lord, when you look at it fairly and from every point of view, would not produce more than the equivalent of a penny in the.£ on the Income Tax.
LORD ARNOLD: Less than that.
LORD SHANDON: I would even take it at a halfpenny. I am a man who deals in small sums. My income is small and a halfpenny in the £ on the Income Tax would be an appreciable thing to me personally. People think in big figures nowadays, though I have to think in small figures which, put together, do not produce a very large sum. There are a whole lot of small taxes which produce
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comparatively little. We have, or at least I know that we used to have, a tax on playing cards which did not produce a very large sum. Then there is a tax on privately kept vehicles which does not produce very much and which goes to the local authorities. The idea that because a tax will not produce something resulting in millions it should, not be considered, does not appeal to me, and, with the greatest respect, I do not think it will appeal to many people in this poor country : for it is a poor country now.
The next difficulty that is always put forward is one for which I feel very little toleration. It is said: "Oh : the difficulty of the thing and the awful trouble of it !" There never was a tax suggested about which those who might have trouble in regard to it without any increased remuneration were not disposed to say that its collection would be impossible. We heard that with regard to the tax on motor ears. We heard about the difficulty of collecting that tax in the only reasonable and fair way in which it could be collected—namely, as a tax on the oil. We were told it would be a terribly difficult thing to collect any form of that tax. The answer is as plain as that two and two make four. What one person or one nation can do another person or nation can do. We have been hearing about New Zealand. Their views of finance may be absurd, though I do not think they are; but even if they are ridiculous, the Betting Tax there has produced pounds, shillings and pence. So that there is no use in saying that this method of collection is an impossible one.
It reminds me very much of what happened in connection with a small railway undertaking in Ireland. This is an absolute fact; it is not merely a yarn. The trains on that railway were not keeping time ; the stations were in a filthy condition : the revenue had disappeared, and there was nothing for it, apparently, but to wind it up in 6ome way or another or to sell it. It was paying no dividends. A managing director was appointed who was not, I believe, very much of a railway man, but on the first day he entered his managerial office he sent for the people who had charge of the trains and he said to them : "The, trains of this line are not keeping time.'' They answered: "It is absolutely impossible. This is a single

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line and the Board of Trade regulations with regard to staffs, and all the rest of it, make it utterly impossible for us to get the trains to keep time" "I have not known anything about trains up to this," he said, "but if those trains do not keep time I am afraid, gentlemen, that I shall have to dispense with your services." That is what happens in reference to taxes. We are told that this and that cannot be done; but where there is a will there is a way, and it is an extraordinary proposition that if our Treasury has the duty of imposing a tax, it will not be able to find the means of doing it and of doing it profitably to the Treasury, as it has done in other cases.
Those are the quite unsophisticated views which I take who do not understand high finance. But I understood from the speech of the noble Lord that those who think as I do are, perhaps, on the verge of some awful gulf by which we would be swallowed if a tax of this kind were adopted. I understand that there is some vital principle at the basis of taxation in this country which is antagonistic to such a tax. In other countries, in France especially, they run much more, no doubt, to indirect taxation than we do. We prefer to levy taxation on the unfortunate Income Tax payer. It is simpler and it is cheaper. But we have never abandoned the view that any other form of taxation which will bring in revenue, and is reasonable and proper, might be adopted. All we have to do is to look at the Estimates in order to see that this principle has been adopted. We have adopted every principle of taxation which will raise revenue, not always in the same degree as other countries but in principle. So I do not see how we should be abandoning, or endangering, the present financial system of this country, or endangering the future finances of the country, if we added another to those forms of taxation which we have already adopted.
I say nothing as to the method of taxation. I agree with what I have heard from the noble Lord who made this Motion and who instructed me on matters as to which I was absolutely ignorant before, but I am certainly disposed to think that it would be a very good thing in the interest of public morality if some system of State arrangement and taxation were carried out. I say nothing as to
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the method ; it may be by the introduction of the totalisator, or something of that kind ; or it may be by taxing the unfortunate bookmaker. It is all the same to me. But that it can produce money I am persuaded, and that it ought to produce money I am equally persuaded.
LORD DARLING: My Lords, the reason I venture to intervene on this occasion is that I take perhaps a somewhat different view of this matter from any which has been hitherto expressed. I certainly would not vote against this tax on one of the grounds put forward—the chief ground, I think—by the noble Lord who spoke on behalf of the Government. The fact that this tax would bring in little is not, to my mind, a sufficient reason for condemning it, especially having regard to the present state of the finances of this country. It sounds to me strange to hear any one say at the present moment : "This country can very well do without a niggardly £5,000,000 a year." It seems to me, the way things are going, that we shall be lucky if we have £5,000,000. Before saying that this tax should be imposed or not, I think one should make up one's mind whether wagering or betting, especially as now carried on, is a vice or not. It is not a crime. The noble Lord, Lord Newton, who obviously has been studying the "lawless science of our law," gave an excellent exposition of a good deal of it. He truly said that betting is not a crime, although it has been regarded as a crime to win as much as £10, and people have been sent to prison for doing it. But it is not a crime now to make a bet.
I cannot help being very well aware of the great evil to this country which betting is, as at present carried on, and we should make up our minds whether betting is a vice or not. I think it is, and that was the view of the law when it decided that money won on a wager should not be recoverable in the Law Courts. Although it is not a crime, it has been recognised by the law as a vice, and those Statutes to which my noble friend alluded, which made it unlawful to keep a place to which people could resort for betting, were passed not in order to make money for the State but in order to stop betting by putting down the gaming house. And to a great extent they did it. They would have continued to do it had there not come along modern

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inventions. After those Statutes were passed there came the invention of the telegraph and the telephone, and it has been held that to use the telegraph or the telephone at the places kept for the purpose of accepting bets is not to resort to a place for the purpose of betting. I think it might have been decided the other way. "Resort" is a word of vague meaning, and I should not have been ashamed (if I myself had had the opportunity) to say that to use the means put at the disposal of these places by the Post Office was to resort to the place. If the House of Lords had also said that it was that would have been final, and could not have been contradicted, whether right or wrong.
It is said by the law : "This really is a vice ;" thereupon my noble friend, Lord Newton, says: "Well, the law is the greatest of hypocrites : the law deals with this matter hypocritically." I cannot deny it. I do not, but I would remind your Lordships of what La Rochefoucauld wrote : "L'hypocrisie est l'hommage que If vice rend à la certu." I wish the law rendered a little more homage to virtue, even at the risk of being called more hypocritical. I do not think it is the law that is to blame ; it is the law-makers who are to blame. Your Lordships do not have so much to do with the making of the laws as some other people. The fault in this matter, to my mind, is that the State has not clean hands. The State cannot say to my noble friend : "You are proposing what is immoral." The State must know very well—I know it from cases I have tried—that betting could not be carried on by the starting price credit bookmaker, and those huge sums that he deals with could not be dealt with, if the Post Office, for money, did not put into the palatial offices occupied by these people telephones and private telegraph wires, and did not forward telegram after telegram, handed in hundreds at a time at the Post Office, knowing perfectly well that they themselves were carrying on the business of the bookmaker.
It is not only the man who writes the telegram and hands it in who bets. Is it not the man who takes money to send the telegram making a bet, is it not the Postmaster-General who is keeping a betting office? Although I admit the law is open to the charge of hypocrisy, I have
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no sympathy with those who would say, as I suppose the Postmaster-General says, and as was said on another occasion : Pecunia non olet. I think, first of all, we should make up our minds whether this is to be regarded as a vice to be put down, or not. I am afraid a great many people would say of it, as was said by a noble and learned Lord who once occupied the place of the noble and learned Viscount now on the Woolsack, that it is one of the redeeming vices. If I remember aright, that noble and learned Lord complained of two others who once sat on the Woolsack that they had no vices. Although this vice is not so bad as many others, my experience is that it does a vast amount of harm. That is incontrovertible ; you will find evidence of it in the Report, where chapter and verse are given for it. There is page after page of evidence, and there are the conclusions and Report of the Committee. All say this is a vice which is eating into the body politic of this country, and bringing people into criminal courts. More than that, it brings many people to ruin, because we all know that in the long run the people who bet with bookmakers do not win.
LORD NEWTON: I have not lost.
LORD DARLING: The noble Lord says he has not lost, but he will if he persists. I hope he will reform. What I desire to say is this, that while I should not support this proposal I should not vote against it for any of the reasons given from the Front Bench opposite. I do not think they were worthy of the occasion. I should oppose it because, recognising that the attitude of the law upon this matter does lay it open to the charge of hypocrisy, I should desire to render less homage to virtue in that particular form. If I were asked what can one do, I would say : Would it not be the straightforward thing not to oppose a tax upon the mere ground that it would not be worth collecting, but, if you want to put an end to betting, to prevent the publication of the odds upon anything. Our ancestors did their best to put down betting. It then went on in gaming houses, not in the streets or by means of telephones and telegraphs. They did their best to put it down, and, if our people were really in earnest, they could take adequate

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means to put a stop to that which some people think should be stopped by means of a tax, while others think it should continue so that money could be made out of it.
THE LORD CHANCELLOR (VISCOUNT HALDANE): My Lords, the discussion to which we have listened has been in many ways illuminating. In the first place, it ha" brought out the fact that as a revenue proposal this is not a very large matter. Nor is it a point on which a great deal of reliance has been placed, because it is plain that the machinery which would have to be instituted is of quite a new order. It would not be an easy tax to collect, and, at any rate, when you have paid all the expenses you will not get a very large sum by way of revenue. But I think the noble and learned Lord who has just spoken was well justified in saying that we should discuss it on much wider grounds than that, that we should discuss it from the point of view as to how such a proposal would affect our standards of society. When a great change is proposed we have to look at our standards of society, see what they are, and not depart from them without a good case being made out for the change.
This proposal does involve a great change. It is a proposal to legalise betting. The Report says one or two things on which all sections of the Committee were at one. It says that private betting cannot be touched, and the Committee therefore confine themselves to the profession of betting. With regard to this they say that on the question as to whether a tax can be imposed, properly supervised and regulated, they are very much divided. I think nine members of the Committee took the general view embodied in the draft Report of the Chairman, Sir Henry Cautley, while seven members took the other view. The division turned upon the issue which the noble and learned Lord has just raised—on the question as to whether this ought to be done—and the seven who dissented were obviously not at all satisfied that a case had been made out for the legislation proposed. That legislation would recognise and legalise betting.
Betting is not, according to the common law of this country. illegal. On the contrary, years ago there was not only
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an enormous amount of betting, but in many cases a wager was made as the most convenient way of getting the issue taken into the law court. So often was this done that the Judges put these cases at the bottom of the list in order to show their disapprobation of them. But by degrees, and very steadily, the practice of wagering, or betting, began to be restricted, and it began to be restricted concurrently with the restriction of other forms of gambling, games of chance, which were put on the same footing as wagering and betting. Some were dealt with severely and others less severely. But the whole tendency of our legislation for the last eighty years has been to show that the law does not favour wagering, does not favour betting, and there has been a progressive restriction on anything like betting in the open and a progressive desire to discourage it whenever an opportunity arose.
In view of that tendency, is it right that we should take a step which entirely reverses this practice ? You cannot pass immediately from a state of things in which the law forbids a great deal of betting and then leaves a certain amount more which it does not touch. There is a great gap between that state of things and the state of things in which we say that we recognise the profession of a bookmaker and encourage it by saying that we will give a licence in consideration of his paying the duty. It is a great step from one thing to the other. Your Lordships are invited to bridge that gap and take a step which will declare in the affirmative, and for the future, that the State proposes to recognise and legalise the profession of betting. In that condition of things, what is there to guide us ? Certainly very little from the Committee, because the Committee are not unanimous : certainly very little from public opinion, because public opinion is violently divided. In those circumstances one must come to the conclusion that we are not justified in transferring ourseives from one side to the other.
The Motion of the noble Lord proposes to ask your Lordships to affirm that betting should be legalised, regulated, and put upon the footing of a profession. The opposition to the Motion was based on the view that it is not justified in the present state of public opinion and of the standards of life which ought to

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obtain. Looking at the history of the law, looking at the tendency of the time, looking at the condition of public opinion, I, for my part, find myself unhesitatingly adverse to the Motion of the noble Lord.
LORD CARSON: My Lords, this is such an important matter that I will not apologise, even at this hour, for venturing to say a few words upon the Motion of the noble Lord who introduced it in a speech which was well worthy of the consideration or your Lordships' House. I am bound to say that I find great difficulty in following the answer that has been given on behalf of His Majesty's Government, either by the noble Lord who sits opposite or by the noble and learned Viscount on the Woolsack. As I understand these noble Lords, they say that it would be a shocking thing to legalise betting. To use a phrase like that is merely to show the depth of hypocrisy in which we live in relation to subjects of this kind. I could understand the noble Lords coming down here with this high attitude of virtue which is opposed to that which the noble Lord, Lord Darling, calls a vice, and telling you that the one thing that this Government were prepared to do was to put an end to betting. But to pretend that the vice has almost no existence or to imagine that there is a great gap, as the noble and learned Viscount on the Woolsack called it, between imposing a tax upon betting and leaving the vice as it at present exists, seems to me to be a most amazing proposition.
The noble and learned Viscount said we should be legalising betting. But is it not legalised now ? Is it not legalising it to charge Income Tax upon the profits of a bookmaker? Is it not legalising it for the Post Office to say that they hold themselves ready to transfer every bet from the man who wants to make the bet to the man who has the office for betting ? Is it not the same as regards the telephone? And is it not the same as regards the moneys charged for Income Tax on page after page of advertisements of the business of those who are carrying on that which you say is a vice, and which you say would be legalised if you charged a tax upon it ? The whole of this is the most arrant hypocrisy which could be placed before this House, and it is idle for any of us to pretend that, however great this vice may be—and I
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do not at all differ from my noble friend Lord Darling as to the extent of the vice—this Government, or any Government, has the remotest idea of interfering with betting as an existing institution in this country.
The general public take far more interest, so far as I can understand, in betting than they take even in the proceedings of a Labour Government. The morning after the fatal Division in the House of Commons which, for the first time, brought minority rule to the democracy of this country, which one would have thought would be an exciting occasion, the first thing I read as I drove down here to administer the law was "Naps from Newmarket. "I did not see a word—this was an early edition of the evening paper—about the salvation of the country that was about to commence. All I saw was "Naps from Newmarket," or it may have been Manchester, I am not sure which, but it was one or the other. In point of fact, I was so interested in finding that this was the only placard I could see as I drove along that I asked a friend what "naps" meant, of which, to make an honest confession, I had not the slightest idea, and it was only the greatness of the occasion that aroused my curiosity to see if in any wise I could connect it with the fateful events that had happened the night before.
As an advocate of some forty-five years' standing in the Courts, and as a Judge now, believe me, you will never improve the condition of the people in relation to anything which you may call a vice by shutting your eyes to the real state of the facts with which you have to deal. The real state of the facts in this case is that you, my Lord Viscount, who shudder at the idea of legalising betting, have not the slightest or remotest intention in your mind of interfering with that somewhat harmful pastime. The institution is there, and the question is whether you will do more harm by putting it under control, as an evil of which you are aware, or by letting it grow, as it continues to grow, and permeate without interference every class of society.
The noble Lord opposite was, I think, somewhat shocked at the suggestion that we should derive revenue from such a tax, but I have already shown him that this Government is deriving revenue from the proceeds of carrying on betting. He.

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also told us, and the noble and learned Viscount told us, that the revenue to be derived would be very small. I do not believe it for a moment. I do not believe that the extent to which betting is carried on is in the slightest degree appreciated by any of us who have been unable to go into the whole question ; nor, indeed, could any Committee do so. But whether the revenue be great or small—and I think it is only a Labour Government who would call £5,000,000 a year a niggardly sum—it would at any rate involve one step towards dealing with that which the noble and learned Viscount called a vice.
Before I sit down may I ask—and this is the only other observation that I desire to make—whether, when noble Lords profess to shudder at legalising by taxation practices of this kind, they have ever calculated or considered what money is brought in by stamps from gambling on the Stock Exchange ? What money is produced by gambling in "futures"? These are great vices. They are probably the vices of wealthier people than those who are subject to the vice of ordinary betting on races or on football matches, and these other matters which seem to amuse people who no doubt could spend their money somewhat better ; but your Lordships never in the least shudder at such a state of gambling as that, amounting to millions in turnover, on which the State collects revenue every year. Nor will the noble Lord opposite say that the credit of the country is being somewhat smirched by levying taxes on gambling transactions on the Stock Exchange, as he says it would be smirched by levying a tax upon what are ordinarily called "betting transactions." May I say that it is not matters of that kind which will ever affect our credit ? There are greater propositions in the minds of noble Lords opposite which are much more likely to pull down the credit of this country, than trying to bring under control, and the levying of a tax upon, betting. If my noble friend goes to a Division I shall certainly support him.
EARL RUSSELL: My Lords, I had not intended to take part in the debate, but I feel I should like to say a word or two in answer to what seemed to me the very mischievous propositions enunciated by the noble and learned Lord who has just sat down. It is easy for us to think of betting rather
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too lightly. We are, perhaps, apt to think of the wager of a pound or two which we make ourselves, or of the money which passes at bridge, which is an insignificant affair ; but I think that we should not lose sight of the fact which Lord Darling stated quite frankly, that betting among the poor, carried on by street bookmakers, is a very great evil and does an enormous amount of harm. You can ask any magistrate, any police court missionary, or anybody who has to work among these people, and indeed any Judge of the High Court, and they will tell you of homes that are ruined by this indulgence in betting—wives starved, children unprovided for, and sometimes homes broken up—and many cases of people who rob their employers in consequence of betting.
These are only, as you might say, the incidental and occasional evils of betting. There is what seems to me a more fundamental and deadly evil, and that is the implanting in the minds of people the idea that there is a way of making money without working for it, depriving them of the idea that one's livelihood should depend upon honest work and not upon betting or gambling. It is for that reason that the State has not supported State lotteries. If your Lordships agree to this Motion there is no reason why the State should not run a lottery. And do not let us pretend that this will make no change in the way in which these things are carried on. As your Lordships have heard, street bookmaking is illegal, and is carried on surreptitiously, under great difficulties. If, however, you are going to make it legal, and to license these street bookmakers, why should not these men, not only in large towns and centres of population but in very small provincial towns, and in every large village, open, as they probably will, shops for betting, where advertisements will be put up, attracting the whole population, and where temptation will be brought to their very doors and before their eyes and ears, and where the amount of betting will be multiplied fivefold or even tenfold? If this is, in fact, an evil, then you are going to multiply it.
I do not deny what the noble Lord said about our hypocrisy in this matter. The country has been hypocritical. It is hypocritical for the Postmaster-General to make revenue out of betting, and for

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Income Tax to be charged upon the profits of bookmakers. If I were challenged about whether I was prepared to go further in dealing with this evil, I should say at once that I should be prepared to do everything that the State can do to discourage this thing, which does more harm than many of your Lordships appear to realise. I do hope that the mere fact that we are hypocritical about it, and in a sense wink at it, because it is in a sense illegal, will not make us bring it into every town and village, and allow it to be advertised upon the walls of shops and factories, and so increase the evil. As Lord Darling truly said, our ancestors did try to deal with the matter by means of legislation directed against gaming and wagering rooms.
Resolved in the affirmative, and Motion agreed to accordingly.

LIMITATION OF HOURS OF LABOUR.
LORD MUSKERRY: My Lords, I beg to ask His Majesty's Government whether they can indicate the nature of the main proposals to be embodied in the new Bill limiting the hours of labour in different industries which it is the intention of the Government shortly to introduce ; and to
and if we carried out their policy we should put down, in exactly the same way, the facilities by which modern science enables people to enjoy and do this thing without resort to betting places. It is not a matter to be dealt with in this rather light and easy way, as if we were talking about something which did not matter at all. It is a definite canker in the public life of this country, and I do not think we should be put on record as supporting and encouraging any measure which would increase that evil.
On Question, whether the Motion shall be agreed to ?—
Their Lordships divided :—Contents, 57 ; Not-Contents, 15.

CONTENTS

Devonshire, D.

Churchill, V.

Monk Bretton, L.

Wellington, D.

FitzAlan of Derwent, V.

Monteagle, L. (M. Sligo.)

Mowbray, L.

Bath, M.

Muskerrv, L.

Curzon of Kedleston, M.

Banbury of Southam, L.

Newton, L. [Teller.]

Biddulph, L.

Oriel, L. (F. Massereene.)

Carson, L.

Oxenfoord, L. (E. Stair.)

Ancaster, E.

Cottesloe, L.

Ponsonby, L. (E. Bessborough.)

Beauchamp, E.

Danesfort, L.

Buxton, E.

Fairfax of Cameron, L.

Raglan, L.

Carlisle, E.

Gage, L. (F. Gage.)

Ritchie of Dundee, L.

Chichester, E.

Hothfield, L.

Sempill, L.

Clarendon, E.

Islington, L.

Shandon, L.

Eldon, E.

Kilmarnock, L. (E. Erroll.)

Sinclair, L.

Liverpool, E. [Teller.]

Kylsant, L.

Southwark, L.

Luean, E.

Lambourne, L.

Stewart of Garlies, L.

Malmesbury, E.

Lawrence, L.

Swansea, L.

Midleton, E.

Leigh, L.

Teynham, L.

Morton, E.

Lilford, L.

Treowen, L.

Northbrook, E.

Lyell, L.

Wavertree, L.

Strange, E. (Atholl D.)

Merthyr, L.

Wharton, L.

NOT-CONTENTS.

Canterbury, L. Abp.

Russell, E.

Darling, L.

de Mauley, L.

Haidane, V. (L. Chancellor.)

Southwark, L. Bp.

Gorell, L.

Hemphill, L.

Muir Mackenzie, L. [Teller.]

Dartmouth, E.

Arnold, L.

Shuttleworth, L.

De La Warr, E. [Teller.]

Clwyd, L.

Southborough, L.

call attention to the existing hours of labour of officers of the merchant service, and to ask whether the Bill referred to will cover their case and that of merchant seafarers generally, especially having regard to the proceedings at the Genoa Conference in June-July, 1920?
EARL DE LA WARR: My Lords, the noble Lord does a very valuable public service in bringing this matter before your Lordships' House from

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time to time, and, if I might venture to do so, I would like to thank him. I often think that we, as a nation who live by the sea, know extremely little of the lives and conditions of those who carry our goods and sail our ships. I have had a very slight experience of this life, and for that reason again I beg to thank the noble Lord. The purpose of the Bill which His Majesty's Government intend to introduce is simply and solely the ratification of the draft Convention on hours which was arrived at at the Washington Labour Conference. The question of merchant seamen was specifically excluded and referred to a later Conference, and this was done because it was recognised that the conditions governing the case of merchant seamen were different from those governing the hours worked by those who are employed in land industries. The Conference to which this matter was referred was held at Genoa, and no sort of agreement could be arrived at.
In view of the purpose of this Bill, it is obviously out of the question, and obviously quite outside the scope of the Bill, that any question relating to merchant seamen should be included in the measure. His Majesty's Government are introducing this Bill, I think, a little in the spirit of setting an example to the rest of the world. The Convention was agreed to almost unanimously—not quite unanimously—by an International Conference, and we are the first of the great Powers who are going to put this agreement on the Statute Book in the form of an Act. It is therefore, as I have said, quite obvious that it would be folly for His Majesty's Government to confuse the issue by introducing into this Bill a completely extraneous matter. The Government are not prepared to introduce separate legislation. Apart from the fact of their programme being so excessively loaded, they feel that, in the present state of the shipping industry, this is not the time for experiments.
It is not necessary to tell your Lord-ships of the state of this industry and the state of depression in which it has been for some time past. The alteration that would be necessary to enable our merchant vessels to increase their crews would involve enormous capital expenditure. The extra accommodation to be
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provided for crews would be given at the expense of the cargo and would be made at the expense of the earning power of these vessels at the very time when we are increasing the expense of running them. I have said that the conditions of labour in ships cannot be regarded in the same way as the conditions of labour employed on land. It is true that our merchant seamen have times of great stress when their work is performed under extraordinarily difficult and even dangerous conditions. It is true that they are separated from their families for long spaces of time. But it is also true that there are times when they are doing little but standing about, and when they are on land there are times when they enjoy comparative comfort.
Do not let me be misunderstood. The Government are not saying that they consider the conditions of labour in any way ideal : far from it. But they feel that the difficulties are enormous. Why did the Washington Conference refer this question to another Conference ? Because they felt that it was a very difficult problem. Why did they not reach a decision at Genoa? Again, because they could not arrive at a decision. Since then the Maritime Board, which corresponds to the Whitley Council to the British Shipping Industry, has taken it up. But there has been no Report ; they have had to drop it. Therefore His Majesty's Government feel that the opinion in the industry itself would not justify them in embarking upon legislation, but they say that with the very deepest regret, and they extend all their sympathy to the cause which has been brought forward by the noble Lord.

A SOUTHWARK CONTRACT.
LORD BANBURY OF SOUTHAM LORD BANBURY OF SOUTHAM had given Notice to ask His Majesty's Government whether the Southwark Borough Council refused to accept the lowest tender for a printing contract on the ground that some of the employees of the firm tendering were not members of a trade union ; whether they accepted a higher tender, thus causing a loss to the ratepayers of £293; whether the district auditor surcharged the Council in this amount, and whether the Government have cancelled the surcharge.
The noble Lord said : My Lords, I believe that I am right in saying that the present Government are strong supporters of Free Trade and that there is nobody who is a stronger supporter of Free Trade than the noble and learned Viscount who sits on the Woolsack. I see that I have not made a mistake in coming to that conclusion. That being so, I should like to draw your Lordships' attention to what occurred in regard to the Southwark Borough Council some few months ago ; as a matter of fact, I think it was about a year and a half ago. At that time the Southwark Borough Council had a Labour majority. They wanted tenders for printing and they obtained a tender from a certain firm amongst others. That firm had nothing against it. There was no reason why the Council should not accept that tender. There was no suggestion that the firm was not in a position to carry out the tender, or that its financial position was not good.
But before the Borough Council accepted the tender they asked a further question as to whether the whole of the firm's employees were members of a trade union. I may say, in passing, that there was no question as to whether the firm was paying the trade union rate of wages, but merely as to whether the whole of the men employed by this particular firm were members of a trade union. The firm replied that they had two or three old men who were not members of a trade union. As a consequence, the Borough Council gave the contract to another firm thereby causing a loss to the ratepayers of £293. The district auditor surcharged thirteen members of the Council as having illegally paid this money.
The Labour Government came into office, all its members being Free Traders and having gained a very considerable number of votes from that particular fact. The first thing that Mr. Wheatley did was to cancel that surcharge. In another case the excuse advanced by Mr. Wheatley was that he had the power to do it. I appeal to the noble and learned Viscount on the Woolsack, who is a well-known and celebrated lawyer, as to whether the proper course would not have been for Mr. Wheatley to say: "If you think that the district auditor has done anything illegal you must go to a Court of law. There is a Court of law which will decide whether or not your action is illegal."
718
But Mr. Wheatley did not do that. He said that he had some power, I suppose under some administrative act, to cancel the surcharge. Accordingly, he cancelled it. I am, perhaps, rather giving my case away and I do not know what the answer will be, but I believe that he was asked in another place whether he had or had not warned the Borough Council that they must not do this sort of thing again, and I understand that no direct answer was forthcoming.
I am sorry that the chief members of the Labour Government in this House have disappeared ; I presume they do not like to face the Question. A Labour Government comes in on the question of Free Trade and the very first thing it does is arbitrarily to protect its friends. A good many members of the present Government are trade unionists, yet, notwithstanding their Free Trade proclivities, the first thing they do is to protect their own class. I always thought that class legislation was the one thing which was attributed to the wicked Tories, and that when we had a Labour Government in power class legislation would be the last thing which would be introduced.
But that is not all. One would have thought that what Mr. Wheatley had done was, to use a slang phrase, rather a tall order. But he has done a good deal more and again has gone absolutely contrary to the principles of Free Trade. The Middlesbrough Corporation were making a road and they required to purchase 400 tons of cement. They obtained a tender at 43 s. per ton from a foreign firm as against the price of 54 s. that was demanded by the British combine ; whereupon that great exponent of Free Trade, a member of the present Government, told the Middlesbrough Corporation that if they persisted in buying in the cheapest market—which I have always understood was the only advantage of Free Trade— he would refuse to give them a Government grant. Here we have an exponent of Free Trade saying : "I will not have a tax upon a foreign industry, upon anything imported from abroad which might bring in something to revenue, but if I find any corporation over whom I have any power buying in the cheapest market, I shall refuse to give them the subsidy

719
which, according to the Act of Parliament, I am bound to give them, unless they buy from a British maker."
That is not all, either. Another of the great principles of the Labour Government is to do away with trusts and combines. If manufacturers enter into a trust they fill the Labour Government and also all the Labour Members with horror. Now one of the greatest trusts or combines is the cement trust. I have, unfortunately, to buy cement and I had to buy it at a very high price only a short time ago, because of the combination between all the cement people to keep up the price. Here we have a Free Trade Government not only supporting a combination to keep up the price but actually flying in the face of all their Free Trade principles. I have provided myself with the answers given in another place in case any of my statements should be questioned. I should like to ask the noble and learned Viscount this question. When I first had the honour of sitting in this House, I heard from the Lord President of the Council some most excellent and highly moral sentiments The Lord President of the Council said, in effect—I think I am repeating him correctly—" My Lords, I believe in the Socialist Government. I have become a Socialist because I believe in their principles. If they do anything which Is against their principles I shall be the first to leave that Government." I think that the noble and learned Viscount who sits on the Woolsack got up within a few moments and re-echoed those noble sentiments. His Government have broken some of the principles by which they obtained votes, and I ask him to carry out his noble intentions, to resign his position and retire from the Government.
THE LORD CHANCELLOR: My Lords, whether or not we are in all respects in agreement with the views of the noble Lord, there is one thing upon which we all agree. We are all happy to see him back again recovered from his illness and able to put his Question. It adds a new interest to the proceedings of this House to have one so vigilant as the noble Lord has proved himself elsewhere to look out for the shortcomings of the Government. The only observation I have to make is that on this occasion he has got hold of a wrong point, and I do
720
not think that he will find that his Question comes to much when he has heard my answer.
It is perfectly true that the Southwark Borough Council refused to accept the lowest tender for a printing contract. They rejected it on these grounds. Some time previously they had passed a resolution that they would employ only trade union labour, and it seemed to them that that was the same thing as insisting on the observance of the standard rate of wages on the part of any one obtaining a contract. What they failed to realise is that a contractor may be paying the standard rate of wages and yet may not be employing members of trade unions. That was the mistake that the Southwark Borough Council made. But it was a mistake that had nothing to do with Free Trade principles, as the noble Lord seems to think. Some of us hold strongly that you must not sweat, that you must not accept the contract which is the lowest in price merely because the contractor can buy labour in a cheaper market than his competitor. We are under an obligation to see that labour is paid the standard wage, and that the workman is not sweated. That is an obligation not only upon the Government, but also upon the local bodies, and I think that every decent employer of labour also takes that view.
What the Southwark Borough Council intended to do was to observe that obligation, but they acted upon the resolution which they had passed a year before, which defined as the mode of ascertaining whether the standard rate was paid, the employment of trade union labour. That was wrong ; it was a mistake on their part; but it was a bona fide mistake, which they entered into with all earnestness and with the best of intentions. When they came to deal with the contract they found that the contractor—an excellent employer of labour, I believe ; I have not a word to say against him—was not employing trade union labour. He was, however, paying the standard rate of wages, but the Council did not know that. Because the firm did not employ trade union labour the Council assumed that they could not be paying the standard rate of wages.
That was a mistake of the Southwark Borough Council. But it was not a case of improperly rejecting the lowest tender,

721
because it would have boon proper on their part to reject the lowest tender if the contractor was not paying the standard rate of wages. In this case the firm sending in the lower tender was, in fact, paying the standard rate of wages, but the Council thought that they should not be given the contract because they did not employ trade union labour. Consequently, they put a wrong interpretation upon their obligation. The auditors surcharged them. Mr. Wheatley did not review the surcharge in any way. He told them that they had been properly surcharged by the auditor and pointed out to them the mistake they had made, but he said : "In dealing with councils and boards of guardians, where they have made a mistake bona fide and not of malice prepense, where they have merely misinterpreted what their duty is—in such circumstances it is not the practice to force members of councils personally to repay the money." That has been the settled practice of previous Governments including those which the noble Lord has himself supported.
LORD BANBURY OF SOUTHAM: They may have done wrong.
THE LORD CHANCELLOR: All Governments do the same thing. The practice has been, when surcharges have been made in respect of small sums, to remit them in the large proportion of cases. But there was a residuum of cases in which the councillors or guardians contended they had done right and refused to pay the surcharges. In those cases the Minister of the day looked into it, and if it turned out that the authority had been acting contumaciously, then the surcharge would not be remitted. For instance, there was a case of the hiring of a band to play outside a prison. That was surcharged, and the surcharge was not remitted. There was also the case of money paid to miners on strike ; those payments were also disallowed on the ground that they had made a blunder.
There are many cases like this, and I can give the noble Lord instances in which remission was granted. There was the case in which proceedings were taken by three councillors whose scats had been wrongfully declared vacant by the council. It was thought that a mistake had been made, and the late Government granted a remission of the surcharge.
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There was another case in which the guardians granted excessive charges to the returning officer. There again it was thought a mistake had been made, and remission was given. There was another case in which an urban district council overpaid a contractor in respect of wages and materials, and remission was given because it was thought a bona fide mistake had been made. In this case there was no doubt that the Southwark Borough Council made a bona fide mistake; it was not an unnatural mistake for them to make. The Minister was satisfied that they had acted bona fide, and, though he would not enforce the surcharge because he did not think it was wrong, he said he would do exactly what his predecessors in office had done and apply the principle that when a borough council were acting bona fide, under a belief that what they were doing was proper and right, he would not enforce the surcharge. I think I have answered the noble Lord's Question. He said something about Middlesbrough, but he gave me no notice of any such case. I have never heard of it, but if he will give me notice I will do my best to investigate it.
LORD CARSON: My Lords. I cannot say that the answer of the noble and learned Viscount is at all satisfactory. I should like to ask him an additional question. What is the admission the noble and learned Viscount has just made ? It is this, that the Southwark Borough Council rejected a Very proper tender at a lower price on the ground that certain persons employed by the contractor tendering were not trade unionists. That is his answer. It does not appear to me to be a very clear enunciation of the methods of safeguarding the liberty of the subject in this country ; nor does it take away from the charge that has been made, that the Lord Chancellor is giving his approval, apparently, to such a tyrannical action on the part of a local body in the spending of public money. Are we to have it laid down that it is the policy of the Government that non-trade unionists should never be employed in matters which involve the expenditure of public money ? That is what has happened in this case, and it seems to me to be one of the most serious objections that could possibly be made against any public body. For any

723
Minister of the Crown to attempt in any way to support what is called a "mistake "on the part of a public body, who have laid that down as their policy, is certainly alarming to those who have any concern with the liberty of the subject in this country. The Lord Chan cellor seems to think that there is some palliation, because, having passed such a resolution as that, the local body, the Borough Council of Southwark, rejected people who were paying trade union wages, because the workers were not trade unionists.
I do not know what we are coming to. Here is a contractor who has two or three old employees who are not trade unionists, but he says he does not like to get rid of these poor old men, and rather than do that he will keep up the standard of wages ; and, although they are not trade unionists, he gives them trade union wages. And because he does that, when he makes a contract for public printing before the Southwark Borough Council his contract is not accepted, although the acceptance of it would save the ratepayers several hundred pounds. Then, when a Labour Minister comes to look into it, he says he has found a justifiable or excusable mistake, a mistake which enables him to wipe out the surcharge which was properly put on the Borough Council by the auditor—I am beginning to doubt whether auditors are of any use at all under the present Government—on the ground that this Borough Council were under the impression that what they were doing was enforcing the payment of trade union wages by passing the resolution that trade unionists must be employed in relation to any contracts entered into by them. A more lame or ridiculous excuse has seldom been offered to any reasonable body of men. The truth of the matter is this, if this is using the public and political power of a Minister to carry out trade union principles to the benefit of those who are its supporters, then it is class legislation of the worst character. If a democracy gets a power of this kind and is able by roundabout ways to make rules which will only enable its friends and supporters to be employed, you are opening the doors to the worst kind of tyranny that can possibly be practised in any democratic country.
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Like my noble friend who sits below me, I listened to the very Christian sermon, if I may so call it, of the Lord President of the Council upon the first occasion of his speaking from that Bench, and I was greatly affected by much that he said. I remember that he laid down in particular terms that the policy of the present Government was "Peace on earth and goodwill towards men." I fear that we shall rather have to amend that very ancient and Christian saying, and to add to the words "Peace on earth and good will towards men," the words "provided the men are trade unionists and not otherwise." You cannot get away from the facts of this case, and no amount of good humour on the part of the noble and learned Viscount—and I admit that he treats these matters with the most excellent temper and good humour—will get away from hard facts of this kind, unless people are prepared to shut their eyes to the realities of the situation which has arisen when, almost on the acceptance of office, you find the Minister twice, so far as this House, at all events, has heard, remitting these surcharges in order that he may pay a debt and an obligation to those who have been his supporters.
I should like to ask the noble and learned Viscount one question before I sit down. He has spoken of this curious mistake on the part of the Southwark Borough Council, who apparently did not know the difference between employing trade unionists and employing men who were paid trade union rates, and I think the noble and learned Viscount said that they were acting on some previous resolution to that effect. If that is so, I should like to ask whether the Minister who remitted the surcharge took care, before doing so, to see that the Borough Council of Southwark had rescinded and eliminated from their rules this particular resolution under which they professed to act when they were refusing the lowest tender in this case.
THE LORD CHANCELLOR: My Lords, it is only by your Lordships' permission that I can add anything to what I have already said, but I do ask your Lordships' permission to do so. My noble and learned friend, who is usually so accurate as well as so acute, appears to me not to have listened in the least to what I have said. I suppose he was considering the epigrams that he was going to use in

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reply, but he has totally misread what I said in answer to the Question. I did not defend the action of the Southwark Borough Council, nor did Mr. Wheatley.
Mr. Wheatley told them that they had been acting illegally and wrongly. He told them that the resolution to which reference was made by the noble Lord was a wrong one, and that they were properly surcharged. When he did not enforce the surcharge he was acting under the powers conferred by the Poor Law Audit Act, 1848, which gives the most complete discretion to the Minister, a discretion which has been used freely by all his predecessors, in eases where there is no doubt that the mistake was made bona fide and that it is fair and equitable that the surcharge should be remitted. The Council were told that they were acting illegally, and all that happened was that they were not made bankrupt or put in prison ; and that was not only within the power of the Minister, under the Act of 1848, but in accordance with the constant practice—
LORD BANBURY OF SOUTHAM: May I interrupt the noble and learned Viscount for one moment? I have here the actual words used by Mr. Wheatley in another place on March 5. He was asked this Question—
" In what circumstances, and by what authority, he has remitted in August, 1922, against certain members the surcharge made by the district auditor on the last Southwark Borough Council in respect of a printing contract for printing ratebooks, a lower tender being refused because the firm tendering, though paying trade union rate of wages, declined to dismiss one or two employees who had worked for them for many years but did not belong to a trade union ?
MR. WHEATLEY: I would refer the hon. Members to the reply given to a similar question by the hon. Member for the Lincoln Division (Mr. A. T. Davies) on the 18th ultimo.
SIR W. DAVISON: Is the right hon. gentleman aware that in the reply to which he refers me, he merely stated that he had statutory powers to remit surcharges in cases where he considered it fair and equitable to do so, and does he consider it fair and equitable to withdraw a contract from a firm merely because one or two of its men do not belong to a trade union?
MR. WHEATLEY: The hon. Member's quotation of my reply is not strictly complete. May I complete it? I said that in this case I came to the conclusion that the expenditure was incurred in good faith, though under a mistaken view of the law,
726
and that I did not consider that the circumstances demanded that the councillors who were surcharged should be required personally to make good the amount."
It will be seen that Mr. Wheatley refers to a mistaken view of the law, and not to any resolution of the Borough Council. He was then asked the following question by Sir Kingsley Wood :—
" May I ask the right hon. gentleman whether, at the same time as he remitted this surcharge, he informed the board of guardians that he did not propose to do so on another occasion?"
This was the answer:—
"MR. WHEATLEY: The usual statement was made to the board of guardians, warning them.
SIR W. DAVISON: Will the right hon. gentleman answer my question? Does he think it fair and equitable to deprive a firm of a contract merely because one or two of its men do not belong to a trade union ?
HON. MEMBERS: Answer !
MR. WHEATLEY: If I had not considered it fair and equitable, I would not have made that decision."
There is the answer. Mr. Wheatley considered it fair and equitable, and that is why he made the decision.
THE LORD CHANCELLOR: It is obvious that that is so, and if the noble Lord will refer to the previous answer, to which Mr. Wheatley referred in the answer which has just been read, he will see the exact position. Mr. Wheatley then stated :—
" An appeal was made to my Department against the surcharge referred to, and I found that the surcharge was lawfully made. Under Section 4 of the Poor Law Audit Act, 1848, which is applied to the audit of the accounts of a Metropolitan Borough Council, it is provided that if it is found that a disallowance or surcharge has been lawfully made, but that the subject-matter thereof was incurred under such circumstances as make it fair and equitable that the disallowance or surcharge should be remitted, the Minister of Health may direct that the same shall be remitted. In this case I came to the conclusion that the expenditure was incurred in good faith, though under a mistaken view of the law "—
that is the resolution referred to—
" and I did not consider that the circumstances demanded that the councillors who were surcharged should be required personally to make good the amount. I therefore decided to exercise the power of remission in their favour."
That is the whole case.
EARL BEAUCHAMP: My Lords, I confess that I intervene with a great deal

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of reluctance in this most irregular discussion. It is only a short time ago. I think, that a protest was made against questions and answers following one another in your Lordships' House, and I regret to think that in spite of the protest then made by the noble Marquess, the Leader of the Opposition, we should once again have fallen into the custom, and also another practice which is unusual in this House—namely, the reading of long quotations from discussions in another place. A new terror will be added to life if, in future, we should have column-long extracts from the debates in another place read to this House. I hope that it will not be a custom extensively followed in the future.
I do not think that the real question is a very difficult, or a very abstruse one. I join in what has been said by the noble Lord who raised this Question, condemning the stupidity of the mistake made by the Borough Council, but in asserting the principle they did, I think they were not only within their rights but were doing the right thing. Their idea was that they should not give any public money to a firm which was paying less than the trade union rates of wages. It is a well-known principle, and a principle followed not only by Liberal Govern-
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ments, and no doubt by Labour Governments, but also, I think, by Conservative administrations, not only in the Government but also on local bodies. It is a well-known principle, as no doubt the noble Lord knows.
LORD BANBURY OF SOUTHAM: But they were paying—
EARL BEAUCHAMP: The noble Lord must know that interruptions are unusual in this House. They were asserting the principle that trade union rates of wages should be paid. It is obvious that they made a mistake in this matter, and we blame them for it, but having come to the conclusion that it was a bona fide mistake, I do not think it would have been fair to insist upon the surcharge. With regard to the question of Middlesbrough which has been referred to, Viscount St. Davids is, I know, anxious to take part in the discussion, and no discussion would be complete without a speech from him. I therefore venture to hope that the noble Lord, if he puts the Question down, will put it down on a date which will be convenient to the noble Viscount, so that he will be able to take part in the discussion.
House adjourned at five minutes before seven o'clock.