Sitting of 3 July 1907

Preamble
The House met at a quarter before Three of the Clock.

PRIVATE BILL BUSINESS.
Heywood and Middleton Water Board Bill [Lords].—As amended, considered; to be read the third time.
Land Drainage Provisional Order (No. 1) Bill; Land Drainage Provisional Order (No. 2) Bill.—Lords' Amendments considered, and agreed to.
Lights on Vehicles Bill.—Consideration, as amended (by the Standing Committee), upon Monday next.
Sheffield Corporation Bill [Lords].—Reported from the Police and Sanitary Committee, with Amendments; Report to lie upon the Table, and to be printed.
Leeds (South Parade Chapel) Charity Bill.—Reported, without Amendment, from Standing Committee A.
Report to lie upon the Table, and to be printed. [No. 234.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 234.]
Bill to be taken into consideration To-morrow.
Kingswood (Whitfield Tabernacle, Schoolroom, etc.) Charity Bill.—Reported without Amendment, from Standing Committee A.
Report to lie upon the Table, and to be printed. [No. 235.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 235.]
Bill to be taken into consideration To-morrow.
Longton (Caroline Street Chapel) Charity Bill.—Reported, without Amendment, from Standing Committee A.
Report to lie upon the Table, and to be printed. [No. 236.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 236.]
Bill to be taken into consideration To-morrow.
Board of Education Scheme (Hulme Trust Estates Educational) Confirmation Bill.—Reported, without Amendment, from Standing Committee A.
Report to lie upon the Table, and to be printed. [No. 237.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 237.]
Bill to be taken into consideration To-morrow.
Tees Valley Water (Consolidation) Bill [Lords].—Reported, with Amendments; Report to lie upon the Table, and to be printed.

PRIVATE BILLS (GROUP J).
Major SEELY reported from the Committee on Group J of Private Bills; That, for the convenience of parties, the Committee had adjourned till Friday, at half-past Eleven of the Clock.
Report to lie upon the Table.
Local Government Provisional Orders (No. 8) Bill.—Reported, with Amendments [Provisional Orders confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered To-morrow.

PETITIONS.
  EDUCATION (SCOTLAND) BILL.
  Petition from Beath, for alteration; to lie upon the Table.
  VACCINATION ACTS.
  Petition from Margate, for repeal; to lie upon the Table.
  WEEKLY REST-DAY BILL.
  Petition from Harringay and other places, in favour; to lie upon the Table.
RETURNS, REPORTS, ETC.
  SEA FISHERIES REGULATION ACT, 1888.
  Copy presented, of Order made by the Board of Agriculture and Fisheries, under the provisions of the said Act, for the variation of an Order for creating the Eastern Sea Fisheries District, together with Report by Inspector on Inquiry [by Act]; to lie upon the Table, and to be printed. [No. 233.]
  EAST AFRICA PROTECTORATE.
  Copy presented, of Correspondence relating to the Flogging of Natives by certain Europeans at Nairobi [by Command]; to lie upon the Table.
  SHOP HOURS ACT, 1904.
  Copy presented, of Order made by the. Council of the County of Somerset, and confirmed by the Secretary of State for the. Home Department, fixing the Hours of Closing for certain classes of Shops within the parish of Twerton [by Act]; to lie upon the Table.
  TRADE REPORTS (ANNUAL SERIES).
  Copies presented, of Diplomatic and Consular Reports, Annual Series, Nos. 3846 and 3847 [by Command]; to lie upon the Table.
QUESTIONS AND ANSWERS CIRCULATED WITH THE VOTES.

  Payment by County Authorities for Supervising Slaughter of Animals.
  MR. WATT: To ask the Secretary for Scotland if he will state what sums the following county local authorities paid in 1906, or 1905 if the later date is not available, for inspecting and supervising the slaughter of animals within their jurisdiction; whether, and in what cases, these sums were paid to veterinary surgeons or to medical practitioners; and what number of carcases, if any, were condemned in these various counties as unfit for human

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  food, viz., Renfrew, Dumbarton, Stirling, Ayr, Linlithgow, Lanark, and Peebles.
  (Answered by Mr. Sinclair.) It is impossible to state for any of the counties named the sums paid in any year for Inspecting and supervising the slaughter of animals. Such inspection and super vision as a rule forms part of the duties of the officers of the public health department, more especially the sanitary inspectors. Such officers are paid inclusive salaries, and it is impossible to state exactly the amount paid in respect of the above-mentioned duty. As regards the last part of the hon. Member's Question, thirty-five carcases were wholly condemned and internal organs and parts of 367 other carcases were condemned during 1906; of these carcases one was condemned in Dumbartonshire, one in Stirlingshire, and the remainder in the upper and middle wards of Lanark shire. None were condemned in Renfrew, Linlithgow, Ayr, or Peebles. I may explain that in the counties other than the upper and middle wards of Lanarkshire a considerable portion of the meat consumed is supplied from the public slaughter-houses situated within burghs. For example, I am informed that in the lower ward of Lanarkshire almost the whole of the meat is obtained from Glasgow.

  Scots Greys—Stables at Tidworth.
  CAPTAIN FABER: To ask the Secretary of State for War whether the stables for the Scots Greys at Tidworth have yet been commenced; if not, will he say why; and whether be can now name a definite date for their commencement.
  (Answered by Mr. Secretary Haldane.) Building operations have not yet been commenced, but the work in preparing plans, specifications, and quantities is sufficiently advanced to render it possible to call for tenders in a few days time. Until the tenders are received a date cannot be fixed for the commencement of the work.

  Woolwich Discharges—Consideration of Men's Dependents.
  MR. CLAUDE HAY: To ask the Secretary of State
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  for War whether in considering any future discharges of men in the Ordnance Factory at Woolwich he will have special regard to the number of women and children dependent upon the men it is proposed to discharge.
  (Answered by Mr. Secretary Haldane.) As I have already informed the hon. Member on the 26th ultimo, in reply to a somewhat similar Question, every regard is paid, when selecting men for discharge, to all the circumstances of each man's case, including any points concerning his family he may put forward.

  Army Expenditure—Coast Protection.
  MR. COWAN: To ask the Secretary of State for War when he proposes to issue the Return, ordered by the House on 12th March, giving, under different headings of Army Expenditure, the relative amounts devoted to the Expeditionary Force and immobile defences, such as coast protection.
  (Answered by Mr. Secretary Haldane.) This Return, which involves an immense amount of clerical labour, is in course of preparation. I regret that I cannot at present name a date fur its issue.

  War Office Purchase of Land at Kilcreggan.
  MR. WATT: To ask the Secretary of State for War at what date the purchase was effected of the land at Kilcreggan, bought for £14,500; and what is the amount of money since expended on works.
  (Answered by Mr. Secretary Haldane.) As I informed my hon. friend on the 29th ultimo, the purchase was concluded in October, 1901; the amount of money expended on the construction of Portkill battery since that date is approximately £19,560.

  Portadown Post Office Staff.
  MR. SLOAN: To ask the Postmaster-General with regard to the revision of the indoor staff of the Portadown post office, the proposals for which were submitted in February, 1906, and sanctioned in December last, by which provision was made for a chief

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  clerkship and two additional overseers, whether the changes, as provided for under that revision, have yet been given effect to; and, if not, to what cause is the delay to be attributed, and with whom does it rest; is he aware that an overseer is and has been, since the revision was authorised, performing the duties of chief clerk, as also two telegraphists discharging the duties of overseers without the remuneration incident to these respective positions; and whether he will take steps to have this matter terminated, as also to assure that those affected shall receive the emoluments attached to the positions that they now occupy from the date on which the revision was ratified.
  (Answered by Mr. Sydney Buxton.) The promotions in question were settled at the end of April last, but their announcement was delayed for inquiry into certain suggestions of religious bias communicated to me, by the hon. Member for West Belfast. I have now satisfied myself that the recommendations placed before me were influenced by no improper motive; and the promotions will be announced forthwith, taking effect from the 29th April last. I regret that I am unable to carry out the promotion from the date of the revision, as suggested.

  Postman's Route at Mandabawn, County Cavan.
  MR. SAMUEL YOUNG: To ask the Postmaster-General whether he received a memorial from the inhabitants of Mandabawn, near Cootehill, county Cavan, asking a reversal of postman's route; and, if so, can there be a favourable answer given.
  (Answered by Mr. Sydney Buxton.) I have not received such a memorial recently, but about a year ago a memorial was forwarded by nine persons, who stated that they would not object to a reversal of the post in question. It was, however, known that other persons on the post would object, and until a fully representative expression of opinion from the persons affected is forthcoming I should not be justified in carrying out the alteration desired.

  Pay of Board of Trade Tapeholders.
  MR. SUMMERBELL: To ask the President of the Board of Trade if he is aware that the tapeholders in the service of the Board of Trade only receive a maximum salary of £72 10s. per annum; that their work requires considerable skill and a general knowledge of the laws relating to tonnage; that they are exposed to risk in taking the necessary measurements, and, in case of injury, no compensation is paid; that when out of port they are only allowed 2s. for a day of ten hours and 6s. for a day and night of twenty-four hours; and, seeing that these men some time ago petitioned the Board of Trade in regard to the above-mentioned conditions of labour, will he state whether any action is contemplated having for its object an improvement in their working conditions.
  (Answered by Mr. Lloyd-George.) The weekly wage of Board of Trade tape-holders rises to 28s. (£72 16s. per annum), and uniform is provided. Tapeholders perform their duties under the direction of a surveyor, and are not required to have a knowledge of the laws relating to tonnage. In the few instances where tapeholders have been injured whilst discharging their duties they have been granted full pay during their absence, and their medical expenses have been paid by the Department. The petition referred to has been before the Treasury, who, however, have not, so far, been able to sanction any alteration in the terms of employment of tapeholders.

  Erection of Lights at Dowros Bay, County Donegal.
  MR. HUGH LAW: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the Congested Districts Board agreed some years ago to provide leading lights for the guidance of vessels at Dowros Bay, county Donegal, but that, though lamps were actually procured for the purpose some three years ago, they have not yet been erected; whether the Irish Lights Board have raised objections to their erection; and whether, in view of the dangerous nature of the two channels giving access to the harbour, he will urge upon the authorities concerned the urgent

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  necessity of proceeding at once with the erection of the lights.
  (Answered by Mr. Birrell) In 1904 the Congested Districts Board decided to erect leading lights for the western channel of Dowros Bay, which is the channel used by the large majority of the boats which come from other ports to the fishing in that locality. The lights were purchased and were about to be put up when the local fishermen objected to the western channel being lighted, as they wished the lights put up for the eastern channel, which is the one most used by them. The latter channel, being narrow and intricate, is not a safe one for strangers, and the Board never proposed to light it. In consequence of the attitude of the local fishermen the Board decided not to proceed with the erection of the lights for the western channel, but to confine their work to putting up a red light on Rosbeg Pier. The Irish Lights Board sanctioned the erection of the proposed lights.

  Obstruction by Standing Vehicles at Athlone.
  MR. HAYDEN: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether his attention has been called to a resolution passed by the urban council of Athlone protesting against prosecutions at the instance of the local police against persons for allowing their horses and carts to remain outside the doors of business premises, particularly on market and fair days; and whether in this matter he will instruct the police to have regard to the wishes of the local representative body.
  (Answered by Mr. Birrell.) The town clerk of Athlone has recently written asking that the owners of carts standing outside business premises in the town should not be interfered with by the police. The same official, however, had written a short time previously calling attention to the fact that a certain street was habitually obstructed by carts, and asking that the police should take steps in the matter. It is the duty of the police to secure that the thoroughfare is not obstructed, and the Inspector-General informs me that in this case the police have performed the duty with
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  moderation. It has always been the desire of the police to facilitate the public and the traders in every legitimate way, but they cannot permit constant obstruction by carts left in the street without persons in charge of them.

  Irish Evicted Tenants—Case of William Burke, of Ballinagould.
  MR. O'SHAUGHNESSY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland if he can say what action the Estates Commissioners have taken in the case of William Burke, of Ballinagould, evicted tenant, on the estate of Reverend J. T. Waller, of Castle-town, Pallaskenry, in the county of Limerick; and whether their inspector has interviewed the landlord with the view to reinstatement; and, if so, with, what result.
  (Answered by Mr. Birrell.) The Estates Commissioners have investigated this case. The landlord has not consented to the applicant's reinstatement in the farm from which he was evicted. The Commissioners, however, have placed the applicant's name on the list of persons suitable to receive allotments of land if such should be acquired.

  Application for Untenanted Land by Michael Dundon.
  MR. O'SHAUGHNESSY: To ask the Chief Secretary to the Lord-Lieutenant of Ireland if he can say whether the Estates Commissioners have received an application from Michael Dundon, labourer, of Hollywood, Adare, in the county of Limerick, for a portion of untenanted land on the Dickson estate acquired by them; and, if so, whether his application will receive their favourable consideration.
  (Answered by Mr. Birrell.) The Estates Commissioners have received Michael Dundon's application, and will duly consider it when distributing the untenanted land on the estate referred to.

  Trading Licences in Natal.
  MR. GRETTON: To ask the Under-Secretary of State for the Colonies if it is proposed to publish further Papers dealing with trading

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  licences in Natal about which representations have recently been made by the Government of that Colony.
  (Answered by Mr. Churchill.) The correspondence with the Natal Government is not yet complete, and it is not proposed to publish Papers at present.

  Merchant Shipping (Tonnage) Bill and Port Authorities charging Dues on Gross Tonnage.
  SIR THOMAS ESMONDE: To ask the President of the Board of Trade if the Merchant Shipping (Tonnage) Bill will interfere with those port authorities who now have power to charge dues on 50 per cent. of the gross tonnage of ships.
  (Answered by Mr. Lloyd-George.) The Bill would not deprive a port authority of any statutory powers which they at present possess of charging dues on a percentage of the gross tonage.

  Rights for Use of Bass Rock.
  MR. J. D. WHITE: To ask the President of the Board of Trade whether, before the feuing of a portion of the Bass Rock in 1900 by the Northern Lights Commissioners from Sir Walter Dalrymple at an annual feu duty of £40, any public authority had any rights in respect of the use of the Bass Rock for prison purposes, or in any other way; and, if so, whether, in arranging that feu duty, the value of such rights was taken into account.
  (Answered by Mr. Lloyd-George.) I am informed by the Commissioners of Northern Lighthouses that, so far as they are aware, no public authority possesses rights in respect of the use of the Bass Rock "for prison purposes." The Commissioners state that the title in their favour is a feu charter conveying a full feudal right of property, and contains a clause binding the disponer or superior in "absolute warrandice," but, excepting from such warrandice, "the rights reserved to the Crown in the titles to the said Island of the Bass," these rights being the rights to fortify and garrison
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  the island reserved in the Crown Charter to Sir Hugh Dalrymple in 1707. The Commissioners ascertained from the War Office in 1899 that these Crown rights would not be affected by the proposed lighthouse. They state that the value of the Crown rights were duly considered when adjusting terms for the acquisition of the ground.

  Sunday Delivery of Letters at Pidgeons, near Athlone.
  SIR W. R. NUGENT: To ask the Postmaster-General if he will arrange for a Sunday delivery of letters at the Pidgeons post office, near Athlone, in county Westmeath, the cost of which would be trifling, as there is at present a Sunday delivery at Glasson, which is only three miles distant.
  (Answered by Mr. Sydney Buxton.) I have called for a Report on this subject, and on its receipt I will send the hon. Member a reply.

  Increased Wages for Labourers at Kew Gardens.
  MR. SUMMERBELL: To ask the hon. Member for South Somerset, as representing the President of the Board o f Agriculture, whether he can state the date when the increase of wage and the shortening of hours promised to the labourers and others at the Royal Gardens, Kew, will come into operation.
  (Answered by Sir Edward Strachey.) The increased wages sanctioned by the Treasury will be paid as from the 2nd May last. The arrangements to be made for the shortening of the hours of labour are being worked out in detail, and will be carried into effect with the least possible delay.

  Assessment of Borough of Hampstead.
  DR. AMBROSE: To ask the President of the Local Government Board if he will give the annual assessment of the metropolitan borough of Hampstead for the last three quinquennial periods; and can he say how much of this sum arises from the assessment of new

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  property in each period and how much from the increased assessment of old or existing property.

  Quinquennial period.

  Rateable value.

  Increase on previous quinquennial revaluations.

  New property,

  Increased assessment of existing property.

  Total increase.

  £

  £

  £

  £

  1895

  786,908

  84,603

  32,540

  117,143

  1900

  938,542

  113,887

  37,747

  151,634

  1905

  1,067,071

  114,294

  14,235

  128,529

  Agreement between Government and Messrs. Kynoch.
  MR. GRETTON: To ask the Secretary of State for the Home Department if he will lay upon the Table a copy of the agreement recently concluded between Messrs. Kynoch's and His Majesty's Government.
  (Answered by Mr. Secretary Gladstone.) The terms, which I stated to the House on Thursday last, are as follows:—Messrs. Kynoch undertook—

  (1) to withdraw their appeal to the High Court and accept the decision of the Essex Quarter Sessions.

  (2) to write a letter to the Chief Inspector of Explosives undertaking not to use mercuric chloride or any ingredient which has a masking effect on the Abel heat test, and generally to observe the terms of their licences.

  (3) to indicate the explosives now under seizure in magazines which contain mercury, and to hand them over to the inspectors, to be ultimately dealt with as the committee appointed jointly by the War Office and the Home Office may recommend.

  On the other hand I agreed —

  (1) that the cases now pending against Messrs. Kynoch shall be withdrawn.

  (2) that all explosive not containing mercury shall be released.

  (Answered by Mr. John Burns.) The information desired is given in the following Table—
  (3) that the magazines required by Messrs. Kynoch for trade purposes shall be cleared by concentrating the seized explosive in such place or places as may be approved by the Chief Inspector.

  Settlement of Claims for Refund of Income-tax.
  SIR WILLIAM BULL: To ask Mr. Chancellor of the Exchequer whether some steps will be taken to expedite the settlement of claims for refund of income-tax, in view of the fact that claims which have been under consideration for more than six months are still unsettled, no explanation being given by the Board of Inland Revenue of the delay.
  (Answered by Mr. Asquith.) If particulars are furnished of cases in which long and unexplained delay has occurred, inquiry will he made in regard to them. Beyond this the Board of Inland Revenue can only say that every effort has been, and is being, made to deal expeditiously with claims for refund of income-tax.
  SIR WILLIAM BULL: To ask Mr. Chancellor of the Excehquer whether, in the case of securities standing in names other than that of the claimant where the Board of Inland Revenue require documentary evidence in support of a claim for the refund of income-tax, and when there exists no trust deed, will, or settlement, he will give instructions that

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  the particular nature of the document which they would accept should be supplied to the claimant so that he might have the same prepared.
  (Answered by Mr. Asquith.) The nature of the document cannot be prescribed in general terms, but must depend upon the particular circumstances of each case, which, if there be any doubt or difficult' as to what is required, should be represented to the Board, who will then be ready to give any assistance in their power.

  Bills dealing with India.
  MR. GRETTON: To ask the Secretary of State for India if any Bill dealing with India will be introduced during the present session.
  (Answered by Mr. Secretary Morley.) There is no present intention to introduce such a Bill this session, but I cannot say what may prove to be necessary.

  Compensation paid in connection with Athlone Rifle Range Arbitration.
  MR. HAYDEN: To ask the Secretary of State for War whether he will state the names of persons to whom, in the arbitration proceedings over the acquisition of a bog for the Athlone rifle range, compensation was awarded, to whom such compensation has been paid, and the names of the persons who have not received the amount awarded; and whether he will explain the delay in these cases.
  (Answered by Mr. Secretary Haldane.) The names of the persons to whom compensation was awarded are stated below. All have been paid save Malachy Lennon, Catherine and Bernard Rafferty, Richard Lennon, Patrick Heslin, Patrick Dignan, and Luke Dignan. In the case of Bernard and Catherine Rafferty it was judicially decided in proceedings before the Master of the Rolls and subsequently the Court of Appeal, and in Malachy Lennon's case before the Master of the Rolls, that those parties were not entitled to be paid any compensation, notwithstanding the awards made in their favour, they not having legal or equitable claim to compensation. The circumstances of the cases of Richard Lennon,
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  Patrick Heslin, and the Dignans were similar to those thus decided and are ruled by them. There has been no delay. The solicitor for the parties was informed by the chief Crown solicitor that the. War Department would not pay them any compensation.

  William Lloyd

  John Martin.

  David Ramsay.

  Bernard Daly.

  William Ramsay.

  Patrick Fallon.

  Sir E. G. Burke.

  Patrick Dillon.

  Reps John Fitzgerald.

  Patrick Walsh.

  Francis Henihan.

  Bernard Curley.

  Mary M'Whinny.

  John Clogher.

  The Misses Lyster.

  Thomas Finneran.

  Michael Morgan.

  Peter Kelly.

  Hodson Estate.

  M. Dillon.

  Henry Percy.

  Pat Walsh.

  James Keenan.

  John Gallagher.

  John Rhatigan.

  Peter Brennan.

  Denis Fallon.

  Bernard Shine.

  Bernard Butler.

  Malachy Lennon.

  Thomas Shine.

  Richard Lennon.

  John Kelly.

  Patrick Heslin.

  James Cunningham.

  Patrick Dignan.

  Bridget Claffey.

  Luke Dignan.

  M. Kenney.

  Catherine and Bernard Rafferty.

  QUESTIONS IN THE HOUSE.
  MR. FELL: I beg to ask the Secretary to the Admiralty if it is the intention to deepen any of the harbours at the mouth of the Thames or on the East Coast to enable them to take in H.M.S. "Dreadnought" if occasion should require.
  THE SECRETARY TO THE ADMIRALTY (Mr. EDMUND ROBERTSON,): As was stated in reply to a Question by the hon. Member on 24th June, the Sheerness bar is to be dredged. No other dredging in harbours on the East Coast is contemplated. Any harbours on the East Coast which have been habitually used by our battle fleets will admit the "Dreadnought."
  MR. ARTHUR LEEasked whether the bar at Sheer-ness was to be dredged sufficiently to allow the "Dreadnought" to pass over it at all states of the tide.
  MR. EDMUND ROBERTSONasked for notice of that Question.
  MR. FELLasked whether the "Dreadnought" would be able to get into Chatham Dockyard.
  MR. EDMUND ROBERTSONsaid he understood it would.

  Queen's Barracks, Perth.
  MAJOR ANSTRUTHER-GRAY: I beg to ask the Secretary of State for War what steps, if any, have been taken to provide reasonable accommodation in the sergeants' mess at Queen's Barracks, Perth, in view of the fact that there is scarcely standing room when the mess is used by Volunteer sergeant instructors, Militia permanent staff sergeants, and depot sergeants.
  THE FINANCIAL SECRETARY TO THE WAR OFFICE (Mr. BUCHANAN,): Sanction was given in February last for the provision of an additional room of 504 feet superficial area.
  MAJOR ANSTRUTHER-GRAY: On behalf of the hon. Member for the Hoxton Division of Shoreditch, I beg to ask the Secretary of State for War whether the official reports show the officers' quarters at Queen's Barracks, Perth, to be satisfactory; whether representations have been made as to the necessity of extensive repairs; and, if so, when were such representation made.
  On behalf of the same hon. Member, I beg also to ask the Secretary of State for War whether there is a corporals' room in Queen's Barracks, Perth; and whether the corporals in Queen's Barracks, Perth, at present mess with the privates.
  MR. BUCHANAN: I will answer this and the subsequent Question together. No representations have been made as to the necessity of extensive repairs to these officers' quarters at Perth. The repainting of the quarters was the only service specifically referred to the War Office for execution during the present year, and funds are available for that purpose. There is a corporals' room in connection with the canteen at Perth, but the
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  corporals and privates mess together, as is not unusual in the service.

  Maryhill Barracks,
  MR. COCHRANE: I beg to ask the Secretary of State for War if he has now decided whether cavalry will be sent to Maryhill barracks after the Scots Greys have left Scotland.
  MR. BUCHANAN: It is not intended to quarter a cavalry regiment at Maryhill barracks after the Royal Scots Greys have left Scotland.

  Indian Factory Labour Committee.
  *MR. SMEATON: I beg to ask the Secretary of State for India whether the Indian Factory Labour Committee has yet submitted its Report; when he expects to be able to lay it upon the Table of the House; and whether legislation in this country will be necessary to give effect to any of its recommendations.
  THE SECRETARY OF STATE FOR INDIA (Mr. Morley,): I hope to be able to present the Report within ten days. With regard to the rest of the hon. Member's Question I would refer him to the Answer given by me to a similar Question on the 27th June.†

  India and the Sugar Convention.
  SIR GILBERT PARKER: I beg to ask the Secretary of State for India if he will place in the Library for inspection by Members the memorials received at the India Office from public bodies in India concerning the Sugar Convention.
  MR. MORLEY: I will cause them to be placed in the Library as desired.

  Political Officers Equipment in Somaliland.
  *CAPTAIN FABER: I beg to ask the Under-Secretary of State for the Colonies whether assistant political officers serving up the country in Somaliland are allowed furniture or equipment.
  THE UNDER-SECRETARY OF STATE FOR THE COLONIES, (Mr. CHURCHILL,): It is
  †See (4) Debates, clxxvii., 86–7.

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  understood that assistant political officers in Somaliland are provided with tents and articles of camp equipment, but the Secretary of State has no exact information as to the extent of this equipment.
  CAPTAIN FABERasked whether other political officers were not allowed furniture.
  MR. CHURCHILLpointed out that it was obviously impossible to treat officers in a wild country far from civilisation in the same way as those stationed on the coasts.
  CAPTAIN FABER: Did not the Colonial Office write a letter promising that officers going up country should either receive furniture or an equivalent in money? Is it not a fact that that promise has not been carried out?
  MR. CHURCHILL: If any such engagement has been entered into by the Colonial Office I will certainly see that it is fulfilled.

  Sugar Convention Memorials.
  SIR GILBERT PARKER: I beg to ask the Under-Secretary of State for the Colonies if he will place in the Library for inspection by Members the memorials received from public bodies in the United Kingdom and the Colonies concerning the Sugar Convention.
  MR. CHURCHILL: We are considering whether Papers can be laid, and if it is decided to do so, the memorials in question might well be included.

  Transvaal Loan Bill.
  SIR GILBERT PARKER: I beg to ask the Under-Secretary of State for the Colonies if the draft of the Loan Bill to be introduced into the Transvaal Legislature has been or will be submitted to the Home Government for its consideration and approval.
  MR. CHURCHILL: The draft Bill will receive the informal approval of His Majesty's Government.

  The Grand Duchy of Luxemburg
  MR. BOLAND: I beg to ask the Secretary of State for Foreign Affairs whether he is aware that a regency is about to be established in the Grand Duchy of Luxemburg, owing to
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  the precarious state of health of the reigning Grand Duke; and whether, seeing that England was one of the signatory Powers to the Treaty of London of 1867, guaranteeing the neutrality of the Grand Duchy, and that a protest against the proposed regency has been lodged by a claimant to the throne in the eventuality of the death of the present Grand Duke, and that this protest is now under consideration by the Chamber of Representatives of the Duchy, the British Government will use or offer its good offices to effect an amicable solution of the question and to safeguard the interests of the lawful heir, in conformity with the constitution and with the Nassau Family Pact of 1783, in which house the crown of Luxemburg was hereditary.
  THE FINANCIAL SECRETARY TO THE TREASURY (Mr. RUNCIMAN,for Sir EDWARD GREY): It is not, so far as my right hon. friend is aware, proposed to establish a regency during the lifetime of the Grand Duke. The Bill now under the consideration of the Chamber of Deputies of the Grand Duchy of Luxemburg regulates the succession, and the regency during a minority, together with matters relative to the patrimony of the reigning house. No protest has so far been received against the provisions of this Bill, and my right hon. friend is not therefore in a position to anticipate what the effect of one would be.

  Vaccination Exemption Certificate Fees.
  MR. J. D. WHITE: I beg to ask the President of the Local Government Board if he can state what was the aggregate amount of the fees paid in respect of certificates of conscientious objection obtained under Section 2 of the Vaccination Act, 1898, in the last, or any, financial year; and whether all, or what proportion of, such fees were treated as public money.
  THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. GLADSTONE,): My right hon. friend has asked me to answer this Question. It would be impossible to say how much of the total amount of the fees taken by justices' clerks in any year was taken in respect of applications for certificates under the Vaccination Act, 1898. All the fees so received are public moneys

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  to be accounted for by the justices' clerk to the county and borough treasurer; and in London to the Receiver for the Metropolitan Police District.

  Vaccination Exemption—Tilney St. Lawrence Schoolmaster.
  MR. GEORGE WHITE: I beg to ask the President of the Local Government Board whether he is aware that J. F. Allsop, headmaster of Tilney St. Lawrence schools (who has previously obtained certificates of exemption for two of his boys), has been summoned to appear at the Wisbech borough police court, on Thursday next, for failing to have his younger son vaccinated, though he has attempted on three separate occasions to obtain a certificate of exemption from the Terrington police court, and on each application one of the magistrates was prepared to sign; whether he is aware that Allsop will now have to travel seven miles to the court where the summons is made returnable, though the applications were made at the police court of his own district.
  MR. GLADSTONE: My right hon. friend has asked me to answer this Question. I have no knowledge of this case apart from the statements in the Question, but inconveniences of the kind described are due, as I have often said before, to the provisions of the existing law, and I hope that the remedy will soon be found by the passing into law of the Bill which is now before the House. The attention of justices has twice been called by circular to what I am advised is the proper view of the provisions of the existing Act, in many cases I regret to say without any effect whatever; but I have no authority to interfere with the discretion placed in their hands.

  Taximeters for London Cabs.
  *CAPTAIN FABER: I beg to ask the Secretary of State for the Home Department whether he has granted permission to London hansom cabs to be fitted with taximeters.
  MR. GLADSTONE: I may refer the hon. Member to my printed Answer to the hon. Member for Darlington, which was circulated with the votes this morning.† My intention was, and is, to
  †See page 512.
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  enable every cab, whether horse-drawn or motor, to use a taximeter; but a difficulty has arisen in connection with such taximeters for horse-cabs as have hitherto been presented for approval. I am taking steps to remove the difficulty, which I hope to do very shortly; and besides this I am about to introduce legislation to prevent similar inconvenience in future.
  MR. JOHN O'CONNORasked whether the motor-cabs in London were at present running illegally.
  MR. GLADSTONEsaid that that was not the case. No difficulty had arisen under the new order in regard to the motor-cabs.

  Licensing Legislation.
  *CAPTAIN FABER: I beg to ask the Secretary of State for the Home Department whether, in introducing licensing legislation next session, he will bear in mind the fact that the liquor bill of this country is not increasing, as a few years ago used to be the case as trade improved.
  MR. GLADSTONE: I shall certainly take into account any trustworthy information that I can obtain bearing on the operation of the licensing laws, but I ought perhaps to point out that according to Dr. Dawson Burns' annual statement there was an increase in the national liquor bill in 1906.
  *CAPTAIN FABER: Is the right hon. Gentleman aware that the words in the Question are the same as those used by the President of the Board of Trade last week in this House?
  MR. GLADSTONE: I am not.

  Marriage Laws.
  MR. HAY MORGAN: I beg to ask the Secretary of State for the Home Department whether his attention has been called to the case of Amos Patchett, who was on the 7th June, 1907, committed by the magistrates of Nottingham City to take his trial at the assizes for making a declaration, before the registrar of marriages that he believed there was no impediment of kindred or alliance, or other lawful hindrance, to his marriage with a certain

  693
  person who was in fact a sister of his deceased wife; and whether, in view of the fact that the demand for this declaration has been the means of bringing disgrace upon a respectable but unlettered man, and also in view of the fact that such a declaration is not demanded from persons who are married in a chinch or chapel, he will take steps to secure the discontinuance of the practice of demanding such a declaration as a preliminary to marriage at a registrar's office.
  MR. GLADSTONE: I had not heard of the case until my attention was called to it by my hon. friend's Question. While the trial is pending, it is manifestly undesirable that I should discuss the circumstances of the case; but I must not be understood as in any way assenting to my hon. friend's suggestion that the law should be altered.

  British Light Ships and Submarine Bell Signals.
  MR. MITCHELL-THOMSON: I beg to ask the President of the Board of Trade whether he can give any information as to the success in aiding navigation of the submarine bell signals at Flushing West harbour and the Haaks lightship; whether he is aware that similar apparatus is being installed in several other Dutch lightships; and whether His Majesty's Government have considered the question of the installation of similar signals in British lightships.
  THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE,): I have no information as to the success of the submarine signalling apparatus at the places mentioned, but the Admiralty and the Trinity House have been favourably impressed by experiments which they have carried out with the apparatus, and the question of installing it on certain light vessels off the coast of this country is under consideration. I would refer the hon. Member to the Answer given to a Question on this subject by the hon. Member for West Cavan on 27th June last.‡
  ‡See (4) Debates, clxxvii.,99.

  Railway Compensation and Insurance.
  MR. WATT: I beg to ask the President of the Board of Trade if he is aware that railway companies in England, when paying compensation for injury or death on their railways, deduct from the amount of compensation any sum which the claimants may have received from an accident assurance company; that the privilege does not exist in Scotland; and if he will rectify, by legislation or otherwise, this preferential treatment.
  MR. LLOYD-GEORGE: I am aware that railway companies in England in paying compensation for death on their railways in respect of claims arising under Lord Campbell's Act are entitled to deduct from the amount of compensation any sum which the claimant may have received from an accident insurance company, and that this state of things does not exist in Scotland. It is my desire at a convenient opportunity to bring in legislation to prevent such deductions.

  Census of Production.
  *MR. SMEATON: I beg to ask the President of the Board of Trade whether there is any prospect of the first Census of Production being-ready before the end of 1908; and whether he can see his way to show, in juxtaposition with the analysis of Home production, a similar analysis, under corresponding heads, of the production of the United States, Germany, and any other European countries.
  MR. LLOYD-GEORGE: It will not be possible for the results of the first Census of Production to be ready before the end of 1908. I will consider when the results of our own census are available how far it may be possible to make a comparison with the results of the United States Census, but I am advised that no comparison will be possible with Germany, or with any other European country, as no corresponding Census of Production has been instituted in those countries.
  SIR GILBERT PARKER: Are the arrangements now proceeding?
  MR. LLOYD-GEORGE: Yes; a Committee is sitting and preparing the forms and schedules.

  Local Government Board Medical Inspectors.
  MR. WEIR: I beg to ask the President of the Local Government Board, in view of the fact that the Estimates show that, under sub-head R of the Local Government Board Vote, a salary of £500 per annum is paid to a temporary medical inspector, will he explain how long this temporary appointment has been in existence.
  THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. JOHN BURNS,): The appointment has been in existence since June, 1905. It was made because one of the permanent medical inspectors is at present acting as inspector for the purposes of the administration of the Sale of Food and Drugs Acts.

  Royal Commission on Whisky.
  *MR. WILES: I beg to ask the President of the Local Government Board whether, having regard to the litigation that has taken place on the question of whisky between the metropolitan borough council of Islington and various manufacturers, and the difficulties and deadlock which have arisen there from, he will take action, either by inquiry or legislation, so that the whole question may be permanently settled.
  MR. JOHN BURNS: The Government have had this matter under consideration, and they propose that a Royal Commission should be issued to make inquiry with regard to it.
  *MR. WILES: Can the right hon. Gentleman state the terms of reference?
  MR. JOHN BURNS: They are in draft, but I am not yet in a position to state them to the House.

  Indian Mail Contract.
  *MR. SMEATON: I beg to ask the Postmaster-General whether the new contract with the Peninsular and Oriental Company for the mail service between India and this country provides for a total acceleration of only eight hours; if so, seeing that this acceleration
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  represents little more than a quickening of the Suez Canal transit, whether it is still possible to require an accelerated ocean voyage between Bombay and Aden; and for how many years the contract is to be in force.
  THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON,, Poplar): I beg leave to refer the hon. Member to the reply to a Question asked in this House on 27th May, in which I stated that the new contract with the Peninsular and Oriental Steam Navigation Company would be for a period of seven years, and would provide for an acceleration on the Indian section of eight hours in each direction, as compared with the present service. It was not found practicable to obtain any further acceleration at the present time.
  *MR. SMEATON: In view of the growing rates of speed in all the great lines from year to year, would it not be possible still to insert in the contract a stipulation that the speed rate should be revised after a break of three or four years?
  MR. SYDNEY BUXTONsuggested that the hon. Member should speak to him on the subject privately.
  MR. AUSTEN CHAMBERLAIN: Is the eight hours' acceleration the only alteration?
  MR. SYDNEY BUXTON: There will be acceleration in other respects.

  Education Report.
  MR. BOLAND: I beg to ask the President of the Board of Education whether he is aware that on the 17th of June there was issued by the Board of Education a page of Volume 17 of the Special Reports on Educational Subjects in substitution for the corresponding page of the volume issued on 10th June, and that this was done in order to omit two words; and whether similar steps will now be taken to correct the unwarranted reflection on Irish educational efforts which appears on another page of the same volume.
  THE PRESIDENT OF THE BOARD OF EDUCATION (Mr. MCKENNA,): The correction to

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  which the hon. Member refers occurs in the prefatory note, for the accuracy of which the Board of Education are responsible. As I have already stated, the responsibility for the opinions expressed in the Report is the author's, and it does not, therefore, rest with the Board to make any correction in it.
  MR. BOLAND: Has the writer been informed that his statements have been challenged?
  MR. MCKENNA: I have directed that a copy of all Questions and Answers on the subject shall be sent to him.
  MR. KETTLE: And is he still unrepentant?
  MR. MCKENNA: I have not heard.

  Sheriff Clerks in Scotland.
  MR. WATT: I beg to ask the Lord-Advocate whether he is aware that some sheriff clerks in Scotland are engaged in other pursuits, commercial or professional; whether this is in accordance with the views of his Department; and, if not, whether he will take steps to have the practice discontinued.
  THE LORD-ADVOCATE (Mr. THOMAS SHAW,): The usual restriction attached to such appointments is that the sheriff clerk shall not practice as a solicitor or law agent, or be a partner of any firm of solicitors or law agents. This form was adopted in 1883, and has been followed except in a few special cases. While it is impossible to go back upon the terms of past appointments, I may say that I am in favour, as a general rule, of the practice settled as above being followed.
  MR. WATT: Is it not the fact that holders of many of these appointments are engaged in commercial pursuits?
  [No Answer was returned.]

  Dr. Bulstrode's Report on Phthisis.
  MR. WEIR: I beg to ask the Secretary for Scotland, in view of the fact that a Report by Dr. Bulstrode in regard to phthisis in England and Wales is about to be published, will he reconsider the expediency of publishing a Memorandum
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  on this subject by the Local Government Board's medical inspector.
  THE SECRETARY FOR SCOTLAND (Mr. SINCLAIR,): The Board has not prepared any special Memorandum on phthisis, but they are considering what further measures are necessary to assist the local authorities in carrying out the recommendations contained in the Circular of March, 1906.

  School Water Supplies in the Island of Lewis.
  MR. WEIR: I beg to ask the Secretary for Scotland, if he will state the number of public schools in the Island of Lewis to which a water supply is not now laid on, and the names of such schools.
  MR. SINCLAIR: So far as I am informed the number of schools not provided with a laid-on water supply is fifteen, and the names of the schools are as follows: —Balallan, Cromore, Fidigarry, Graver, Grimshader, Carishader, Knockanthu, Leumerava, Lurebost, Planasker, Airidhbhruach, Barvas, Borve, Lionel and Skigersta.

  Cromore-Gravir Road, Lewis.
  MR. WEIR: I beg to ask the Secretary for Scotland if he will state what progress has been made with the Cromore-Gravir road, Island of Lewis; and when the work of constructing the road is expected to be finished.
  MR. SINCLAIR: I am informed that the District Committee are doing all they can to complete the construction of this road with the use of local labour only, and that they expect the work will be finished about the end of July if the required number of men are available.

  Beauly and Ness Rivers Estuary.
  MR. WEIR: I beg to ask the Secretary for Scotland in view of the fact that at pages 30 and 32 of the First Report of the Fishery Board for Scotland the opinion is expressed that the estuary of the Beauly and Ness rivers has been too far extended, and that there is no sufficient ground for extending the estuary beyond a line from Chanonry Point to Fort George, will he consider the expediency of calling for a Report on the subject, especially having regard to the fact that the estuary at present extends

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  into the open sea four miles beyond the point recommended in the Fishery Board Report.
  MR. SINCLAIR: The point shall be considered.

  Highland Joint Tenancies.
  MR. WEIR: I beg to ask the Secretary for Scotland, in view of the number of joint tenancies in the Highland crofting counties, will arrangements be made to deal with such cases in the Small Landholders (Scotland) Bill now. before Parliament.
  MR. SINCLAIR: The point is under consideration.

  Flags on Scottish Public Buildings.
  MR. C. E. PRICE: I beg to ask the Secretary for Scotland whether it is permissible to use a flag on public and other buildings in Scotland having a similar coat-of-arms to that placed in the courtyard at Holyrood Palace showing the unicorn on the dexter side and the lion on the sinister side of the shield, with the Scottish lion rampant in the first and fourth quarterings; and, if not, on what ground are the objections taken.
  MR. SINCLAIR: I can only refer my hon. friend to the recent Circular issued to police authorities in Scotland, of which I will send him a copy.
  MR. C. E. PRICE: Does not that Circular merely refer to the Royal Arms?
  MR. SINCLAIR: And to the Royal Standard also.

  Trials in Ireland.
  MR. SLOAN: I beg to ask Mr. Attorney-General for Ireland if he is aware that the Dungiven magistrates, in the recent case of Mr. John Harrington, national school teacher, had either permitted Mr. E. F. Bannon, inspector of national schools, to act as justice of the peace, or had taken evidence in secret without oath or opportunity to the defendant's solicitor to cross-examine him; and, seeing that, in consequence of these proceedings, the case was quashed by the King's Bench after Harrington had suffered a week's imprisonment, what action, if any, he
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  proposes to take in order to avoid such proceedings in future.
  *THE SOLICITOR-GENERAL FOR IRELAND (Mr. REDMOND BARRY,): My right hon. friend the Chief Secretary has fully stated the facts of this case in reply to a Question put by the hon. Member. The action of the magistrates in questioning the inspector in their private room instead of in open Court appears to have been due merely to an error of judgment. In any event, however, my right hon. friend the Attorney-General has no jurisdiction over magistrates in regard to the exercise of their judicial functions.
  MR. SLOAN: Has the Attorney-General no jurisdiction?
  MR. REDMOND BARRY: Not over the magistrates. A communication is, I believe, to be addressed to the National Board on the subject.
  MR. LONSDALE: I beg to ask Mr. Attorney-General for Ireland whether he intends to apply for a change of venue in the case of Mr. Peter J. Kelly, J.P., who has been committed for trial at the Galway assizes on a charge of inciting to murder Lord Ashtown.
  I beg also to ask Mr. Attorney-General for Ireland whether he intends to move for a change of venue in the case of Mr. D. Beirne, J.P., and others, who have been sent for trial by the Hill street magistrates on charges of unlawful and riotous assembly and assaulting the police on the 28th May last.
  MR. REDMOND BARRY: My right hon. friend has asked me to answer these two Questions. No application with a view to having the venue changed in these cases could be made until after indictment found by the grand jury at the approaching assizes. In the meantime my right hon. friend is not prepared to make any definite statement upon the subject.

  Housing of Urban Working Classes in Ireland.
  MR. O'SHAUGHNESSY: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland if he can

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  say whether he intends to take any action to amend The Housing of the Working Classes Act, 1890, whereby local authorities may acquire larger powers than they have hitherto enjoyed under that Act, and so that they may be able to borrow money for the purpose of providing dwelling accommodation for the working classes in the cities and towns in Ireland on the same terms as are provided under the Labourers' (Ireland) Acts for the housing of the working classes in the rural districts.
  I beg also to ask the Chief Secretary to the Lord-Lieutenant of Ireland if he will take steps to secure for the workers in cities and urban districts in Ireland facilities for the building of artisans' dwellings on the same terms as were given to the labourers in the rural districts in Ireland under the Labourers' Act of 1906, by enabling the local authorities to acquire money for the purpose at 3¼ per cent., principal and interest repayable in 68½ years.
  THE CHIEF SECRETARY FOR IRELAND (Mr. BIRRELL,): A In reply to these two Questions I can only refer to my Answer to the Question on this subject which was put to me yesterday by the hon. Member for North Westmeath. I am not in a position to promise legislation in the matter.
  MR. O'SHAUGHNESSY: Will the right hon. Gentleman do his best to see that legislation on behalf of the working classes in the towns is brought in next year?
  MR. BIRRELL: I will do my best. I recognise the importance of the subject.

  Labourers' Cottage Schemes.
  MR. HALPIN: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether the Local Government Board inspector has power, when making his inquiry as to the applicants for labourers' cottages, to allow applicants for cottages that the guardians rejected for personal motives to be included in the scheme; and, if the inspector has no power to amend the scheme as he thinks proper, will he take steps for the amendment of the Act so as to give
  †See page 341.
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  the inspector power to do justice to the labourers.
  MR. BIRRELL: The Local Government Board's inspector has power to take action in any case in which the rural district council may have neglected to consider a representation for a labourer's cottage, but it would be entirely contrary to the recognised principle of local responsibility in these matters that the inspector should be given power to override the decision of the council in a case to which they have given full consideration.

  Reinstated Tenants—Alleged Sales of Stocks.
  CAPTAIN CRAIG: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland how many cases have been brought to the notice of the authorities of reinstated evicted tenants selling the farm or stock, for the purchase of which money was advanced them by the Estates Commissioners, in order to discharge civil debts incurred prior to reinstatement or other claims; and whether such tenants, reinstated at the public expense, are at liberty to dispose of their holding and stock, retain the proceeds, and move to another part of the country or go abroad.
  MR. BIRRELL: The Estates Commissioners are not aware of any cases in which reinstated evicted tenants have, in order to discharge debts incurred prior to reinstatement, sold their farms or stock for the purchase of which the Commissioners made advances. The Commissioner shave no power to interfere with the sale by a tenant purchaser of his interest in the purchased holding, but it is the Commissioners' present practice to require a purchaser who obtains a grant to sign a bond charging the holding with the repayment of the grant if he should transfer the holding within five years without the Commissioners' consent.
  MR. MOORE: How long has that practice been enforced?
  MR. BIRRELL: I will inquire. I know it is the present practice.

  No Boycotting at Dromahair.
  CAPTAIN CRAIG: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland how many persons in the neighbourhood of Dromahair, county Leitrim, are boycotted; how many miles have they to travel to obtain the bare necessaries of life, have their horses shod, and dispose of their stock; can he give the reasons why they are boycotted, and state the number of police employed for their protection.
  MR. BIRRELL: The police authorities inform me that no persons in the neighbourhood of Dromahair or within ten miles of it are boycotted.
  CAPTAIN CRAIG: I am glad to hear it.

  Case of Patrick McBride, of Toomaline.
  CAPTAIN CRAIG: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland if he will state the date on which Patrick McBride, of Toomaline, Doon, county Limerick, was made a free grant of £180 for stock and £20 for buildings; whether the inspector who examined the holding and recommended the grant is a near relative of Patrick McBride; whether an uncle of the inspector has taken possession of the stock purchased with the free grant made by the Estates Commissioners for a debt of his own; and whether the further sum of £20 granted has been expended for building purposes.
  MR. BIRRELL: The Estates Commissioners inform me that the grant of £180 to Patrick Kilbride for the purchase of stock was made in February last. The grant of £20 for buildings, though sanctioned, has not yet been made. The Commissioners are informed that the inspector in question is not a near relative of Kilbride, and that the stock has not been seized by an uncle of the inspector.

  Dungiven School Teacher's Case.
  MR. SLOAN: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland if his attenton has been called to the case of Mr. John Harrington, who was recently imprisoned by the Dungiven magistrates, and whose judgment has been quashed by the King's Bench; if he is aware that the district
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  inspector of the National Board entered the magistrates' room when they retired from the bench to consult on the case; did the magistrates convict Harrington at the instance of the Board's inspector; and, if so, what action, if any, has been taken in the matter; and whether, in view of the treatment of Harrington, the Board will consider the advisability of directing their inspectors that any evidence they have to give in court against teachers shall be given on oath, so as to afford an opportunity for cross-examination.
  MR. BIRRELL: In this case Mr. Harrington, who is a national school teacher, was convicted by the magistrates of an assault on a pupil, and the King's Bench Division subsequently quashed the conviction. It appears that the National Board's inspector attended to watch the case before the magistrates, and that after the evidence had boon heard and the magistrates had retired to consult as to their decision they called the inspector to their room and asked him to state the Board's rules in regard to corporal punishment, which he did. The inspector was not a witness in the case, and he was not asked nor did he offer any opinion upon the facts or merits of the case. Having regard to these facts, the Commissioners do not consider it necessary to issue any instructions to their inspectors in the matter.
  MR. SLOANasked if it was not the case that it was on the advice of this inspector that the magistrates gave a decision which was quashed by King's Bench, and would the right hon. Gentleman instruct the National Board to prevent their inspectors consulting with the magistrates in such a fashion that they could not be subjected to cross examination.
  ME. BIRRELL: Probably the magistrates were ill-advised in not getting the information from the Inspector in open court. I will communicate with the Commissioners.

  Kanturk Police.
  MR. FLYNN: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether the constabulary authorities can explain why

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  two district inspectors are now stationed in Kanturk, Newmarket district of the East Riding of the Cork County, within four miles of each other; and whether, in view of the fact that the Recorder for this riding has frequently and recently referred to the peaceable state of the district, the police authorities will continue to retain the services of two highly-paid inspectors in this part of the county.
  MR. BIRRELL: I am informed that for many years past Kanturk and Newmarket have been the head-quarters of separate and distinct police districts, each of which is necessarily in charge of a district inspector. The police authorities inform me that the present state of these districts would not warrant their amalgamation for police purposes. So far as I can ascertain the Recorder has not made any recent statement as regards the condition of these districts.
  MR. FLYNN: Seeing that the district councillors in this district have protested against the extra police and the consequent police tax, are not their views to have any weight with the Irish Government?
  MR. BIRRELL: We have to consider the reports of the police. There are several special protection posts in this district, and I do not, therefore, see my way to override those views.

  Irish Evicted Tenants.
  CAPTAIN CRAIG: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether, as would appear from the special Report of the Estates Commissioners, 8,401 applications for reinstatement have been received from evicted tenants, and of those 5,368 have been ruled out upon various grounds; if so, whether in the case of these 5,368 disappointed applicants any intimation of the decision of the Estates Commissioners in each case has been communicated to them; and, if not, will such intimation, with the grounds of the decision, be communicated prior to the Second Reading of the Bill, if that stage is ever reached.
  MR. BIRRELL: If the hon. and gallant Member will refer to the 20th paragraph of the Estates Commissioners' Special
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  Report on Evicted Tenants he will find that the number of applications rejected by the Commissioners is 2,945, and not 5,368 as stated in the Question. In cases in which the Commissioners have rejected the 'applications, it has been their practice to inform the applicant of the fact.

  Kenny Estate, County Galway.
  MR. MOONEY: On behalf of the hon. Member for East Galway, I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he can state when may the tenants upon the Kenny estate, Longford, county Galway, expect to have the lands purchased by the Congested Districts Board divided.
  MR. BIRRELL:The Congested Districts Board anticipate that they will be in a position to divide the untenanted land on the Kenny estate towards the end of the present year. The Board propose to enlarge the holdings of the few existing tenants on the estate, and the remainder of the untenanted land will be otherwise disposed of.

  Irish Training Colleges and the Irish Language.
  MR. FLYNN: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ire-land whether he has yet been furnished with a copy of the statement of the President of the Board of Education, made on the 26th instant, to the effect that regulations had been issued requiring that in training colleges in Wales provision should be made for the teaching of Welsh, and there must be on the staff of every training college in Wales at least one person competent to teach Welsh; and, if so, whether he will forward it to the Commissioners of National Education in Ireland, suggesting that a similar regulation should be made in respect to training colleges in Ireland.
  MR. BIRRELL: I have received a copy of my right hon. friend's statement. I have referred the Question to the Commissioners of National Education, who inform me that in the training college which is under their direct control provision is already made for the teaching of Irish, and that similar provision is also made in most of the training colleges which are under local management. The

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  Commissioners do not consider that any further regulations on the subject are necessary.

  Alleged Outrages at Ballyclog, Stewartstown.
  MR. HUGH LAW: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether his attention has been called to a letter of the Protestant rector of Ballyclog, Stewartstown, in which that gentleman states that for the past ten years his church and himself have been boycotted all round, the church windows being broken on two occasions, his sheep and cattle chased and killed, his crops ruined, and himself made the victim of many other persecutions too numerous to mention, and this because he has refused to join the Orange Society; and whether he proposes to take any action in the matter?
  MR. BIRRELL: My attention has been called to the letter in question, which was published in a newspaper. The police authorities inform me that the outrages of which the letter complains are purely imaginary.
  MR. KETTLE: Is the right hon. Gentleman aware of other letters from this Protestant clergyman, in which he charges the local police with being under the control of the local Orange Lodge?
  MR. BIRRELL: I have looked into this matter, and I can assure the hon. Gentleman I do not think any advantage is to be obtained by pursuing the subject any further.

  Cattle Raid at Borrisokane.
  MR. LONSDALE: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the cattle were driven off two farms in the neighbourhood of Borrisokane, county Tipperary, early on Friday morning; whether the police had previous knowledge of the intentions of the crowd, and why they were not present in sufficient force to prevent the drives; and whether, seeing that other drives in this neighbourhood are threatened, he will increase the police force in the locality to a sufficient number to prevent further lawlessness.
  MR. BIRRELL: I am informed that a few hours before this cattle drive occurred the police received information that it was likely to take place. Steps were at once taken to assemble all the available force, and eleven policemen were present when the crowd arrived. The crowd numbered about 250, and the police force was not strong enough to prevent them from driving off the cattle. Many of the offenders, however, were identified, and the evidence against them is being considered with a view to instituting a prosecution. The police will continue to take all possible measures to prevent the commission of these offences, but, as I have already stated, it would be impossible to station a sufficiently large force of police on every one of the numerous grazing farms in the country which may be threatened in this way.
  MR. MOORE: Is it not the fact-that the only farmers whose cattle are driven off in this neighbourhood are Protestants, and that no such drives take place on the farms of Catholics?
  MR. BIRRELL: I do not know.
  MR. MOORE: Perhaps the right hon. Gentleman will inquire.

  Birr Disturbances —Attack on Major Dease. R.M.
  MR. LONSDALE: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether his attention has been called to the attack made upon Major Dease, R.M., at Birr, on Friday night; and what steps he proposes to take to protect from violence magistrates who discharge the obligations of their office.
  VISCOUNT TURNOUR: At the same time may I ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that Major Dease, resident magistrate, was struck by a stone when returning from the court-house at Birr, on Friday last; and whether in future he will take steps to ensure the safety of magistrates re-turning from the performance of their duty.
  MR. BIRRELL: It is the fact that Major Dease was struck by a stone at Birr on Friday last, but I am glad to say that he was not hurt. He was not

  709
  returning from the court-house at the time, the proceedings in court having concluded more than an hour before. The police were escorting prisoners to the station; Major Dease happened to be passing along the street when stones were thrown at the police, and he was unfortunately struck by one of the stones. The police were not aware that he would be there at the time. In the event of any further proceedings at Birr, the police will make full arrangements to secure the safety of the magistrates.
  MR. KETTLE: Is the right hon. Gentleman aware that this Resident Magistrate is a Catholic?
  [No Answer was returned.]

  Constable O'Halloran, Royal Irish Constabulary
  MR. LONSDALE: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether his attention has been called to the claim of Constable William O'Halloran, Royal Irish Constabulary, for compensation for being maimed by shot while protecting Colonel Lopdell, at Rockmore, county Galway, on 9th October; whether any person was brought to justice for shooting this officer; and whether, seeing that Judge Anderson, while refusing the application, expressed the hope that an appeal would be lodged, the officer will have facilities for appealing to a higher tribunal.
  MR. CHARLES CRAIG: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that a constable named O'Halloran was engaged in protecting the house of Colonel Lopdell, near Athenry, shot at on the 9th October last, grievously wounded, and maimed for life; is he aware that the Recorder of Galway has decided that O'Halloran is not entitled to compensation against the county; will he state what was O'Halloran's annual pay and emoluments at the date of the outrage; was ho then qualified for promotion; what pension is he entitled to now, and will any, and what, addition be made to his normal pension by reason of his being maimed in the discharge of his duty; and has any person been made amenable to justice for shooting Constable O'Halloran.
  MR. BIRRELL: I will Answer these two Questions together. It is the fact that Constable O'Halloran received a gun-shot wound while on duty on 9th October last. The Recorder of Galway has decided that the constable is not entitled to compensation from the county for malicious injury. In so deciding the Recorder said that if his decision should be reversed on appeal no one would be better pleased than he, but he pointed out that his decision was based upon a judgment of the Court of Appeal in a similar case. If, however, the constable should desire to appeal the Inspector-General will permit him to do so at his own risk and expense. Three men were arrested for shooting the constable, but were discharged for want of evidence. The facts as to the constable's pay and possible pension are fully stated in my reply to a Question put by the hon. Member for North Londonderry on 16th April. † If it should be determined that ho has been incapacitated for further service, his case will receive full consideration when his pension comes to be fixed.

  Birr Disturbances.
  MR. LONSDALE: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he has received a report of the riotous proceedings at Birr on Friday night last; whether he will state the cause of the disturbance and how many casualties occurred among the constabulary; and whether any arrests were made.
  MR. BIRRELL: On Friday last thirteen prisoners were being taken to the railway station at Birr for conveyance to prison, when stones were thrown at the police. About twenty policemen were struck with stones, but none were seriously injured. The assailants were at once dispersed by a baton charge, but no arrests were possible. The crowd who threw stones were strangers in the town, and the police who were stoned did not belong to the local force. As a result one offender only was identified, and particulars of the evidence against him are being obtained with a view to a prosecution.
  MR. SLOAN: What has been the cost of these disturbances?
  †See (4) Debates, clxxii.,774.
  MR. BIRRELL: I do not know.
  MR. LONSDALE: How many police are there there now?
  MR. BIRRELL: I will inquire.

  Insanitary Dwellings in Ireland.
  MR. O'SHAUGHNESSY: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland if he will take steps to amend the present sanitary laws in Ireland by giving the local sanitary authorities power to enter into possession of unsanitary dwellings or unsanitary areas, and cause such areas or dwellings to be put into a proper sanitary condition, and to retain such property in their possession until the receipts from such property shall have paid all the expenses incurred by such local authorities in the carrying out of the necessary sanitary improvements.
  MR. BIRRELL: The Housing of the Working Classes Act, 1890, confers full powers on local authorities to take proceedings with the object of having in-sanitary dwellings put into proper condition, and, in the event of default, to secure the demolition of the insanitary buildings. The local authorities have no power to enter into possession of such dwellings or areas and retain the receipts of the property in order to pay for repairs, and it is not proposed to undertake legislation with that end.
  MR. O'SHAUGHNESSY: Have the local authority no power to enter into possession of insanitary dwellings?
  MR. BIRRELL: I do not think they have.

  Irish School House Grants.
  MR. O'SHAUGHNESSY: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland if he can state what are the grounds on which the Government and the Lords of the Treasury have refused to sanction the proposal of the Commissioners of National Education, made in January, 1906, so to alter rule 194 of the Commissioners' rules and regulations that they may be empowered to award grants towards building school houses for separate boys' and girls' schools where, as at Kilmeedy, in the county of Limerick, an average attendance of
  712
  thirty-five pupils is maintained in each school.
  MR. BIRRELL: The proposed alteration in rule 194 was not sanctioned because it would tend to the multiplication of small schools. It has been strongly urged that the amalgamation rather than the multiplication of such schools is needed in Ireland.
  MR. O'SHAUGHNESSY: Will the right hon. Gentleman act as a peacemaker and bring about a settlement so as to avoid friction in this district? The parents and managers are determined not to have amalgamation.
  MR. BIRRELL: I am aware there are difficulties, but I do not see my way to alter the rule.

  Belmullet Railway.
  MR. CONOR O'KELLY: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is in a position to make any announcement as to the construction of a line of railway to Belmullet.
  MR. BIRRELL: I am not yet in a position to make any statement in this matter. The negotiations with the Midland Great Western Railway Company are still proceeding.
  MR. CONOR O'KELLYasked whether pressure could not be exercised to secure a settlement.
  MR. BIRRELLSaid no one was more anxious for a settlement than he was. An offer had been made to the Railway Company, and it was for that body to say whether or not they would accept it.

  Wexford Land Sales
  MR. FFRENCH: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether, as fully three-fourths of the land of Wexford County has now been sold out, and as many tenants are paying 3½ or 4 instead of 3¼ per cent., an inspector will be sent down in order that the sales may be completed.
  MR. BIRRELL: I am not in a position to add anything to the reply which

  713
  I gave to the hon. Member's similar Question on 24th April, namely, that the Estates Commissioners deal with cases of land purchase in order of priority of application, and it would be unfair to other counties that Wexford cases should be taken before their proper turn.
  MR. FFRENCH: Is the right hon. Gentleman aware there are a large number of cases awaiting settlement?
  MR. BIRRELL: Yes, I know there is a great block.

  Boxwell Evicted Tenants
  MR. FFRENCH: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware the Boxwell evicted tenants have not yet been restored to their homes, although the inspector visited the estate last January; and whether he can hold out any hope of an immediate settlement.
  MR. BIRRELL: The owner of the estate referred to has intimated to the Estates Commissioners that he will only deal with the question of reinstating the evicted tenants upon the sale of the estate as a whole. The Commissioners are at present making inquiries with a view to the purchase of the estate, and if they should acquire it they will consider the cases of the evicted tenants.

  Agrarian Outrages.
  VISCOUNT TURNOUR: I beg to ask the Chief Secretary to the Lord-Lieutenant of Ireland if he can state the number of cases of agrarian outrage which have occurred between 1st June, 1906, and 1st June, 1907; and in how many of those cases arrests have been made.
  MR. BIRRELL: The number of cases of agrarian outrages which occurred during the period mentioned was 271. In twenty-nine of these cases arrests were made, the number of persons arrested being 121. In six other cases, proceedings by summons were taken against thirty-one persons.
  MR. FLYNN: Do these figures include threatening notices, a number of which are known to be written by the persons receiving them?
  *MR. SPEAKER: Order, order! Notice should be given of that Question.

  Damage of Cables by Trawlers on the Kerry Coast.
  MR. BOLAND: I beg to ask the Postmaster-General whether he is aware that there are thirteen cables between the Blaskett Islands and Scariff Island on the Kerry coast, and that in the outer Ballinskelligs Bay of these cables ten are laid to America, two to England, and one to France, that a Commission was appointed to protect these cables in time of war, and that the capital sunk in the working of these cables amounts to about,£20,000,000; and whether, seeing that these cables are frequently broken by steam trawlers, which come in at night and trawl in the shallow water where these cables overhang, and that on a recent occasion a cable steamer spent fourteen days grappling for a cable which was broken by a trawler, he will represent to the proper authorities that this portion of the coast should be protected from the illegal trawling indulged in by these boats.
  MR. SYDNEY BUXTON: No re-presentations as to damage having been caused by trawlers to the cables referred to in the hon. Member's question have reached me until quite recently, when one of the companies concerned made complaint on the subject. Inquiries are being made, and if it should prove that the circumstances warrant it, I will make representations to the proper authorities with a view to any steps which may be practicable being taken for the protection of these cables.

  Russia and the Sugar Convention.
  SIR GILBERT PARKER: I beg to ask the Prime Minister whether any representations have been made to this Government by Russia as to any disadvantages they may have suffered from the Sugar Convention.
  THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Sir H. CAMPBELL-BANNERMAN,): Yes, Sir, representations were made by Russia and were followed up by the surtax on Indian and Ceylon teas.
  MR. AUSTEN CHAMBERLAIN: Was this surtax general, or did it only

  715
  apply to tea carried over the Manchurian railway?
  SIR H. CAMPBELL-BANNERMAN: I must ask for notice of that Question.

  Sugar Convention.
  SIR GILBERT PARKER: I beg to ask the Prime Minister whether the delegates from this country will proceed to the meeting of the Sugar Convention at Brussels; and, if so, when.
  SIR H. CAMPBELL-BANNERMAN: The Answer to the first part of the Question is in the affirmative, provided all the Powers concerned agree to the meeting; with regard to the second part no date has yet been fixed for the meeting of the Sugar Commission.

PROCEDURE IN GRAND COMMITTEES.
MR. A. J. BALFOURsaid he desired to call the attention of Mr. Speaker to a point of some importance in regard to procedure in Grand Committee. He understood that in Standing Committee A, when discussing the Public Health Bill, a large number of clauses were passed when a quorum was not present. Under the Standing Orders regulating the proceedings in Grand Committee it was the duty of the clerk of the Committee to call the Chairman's attention to the fact that there was not a quorum present, and thereupon it was the duty of the Chairman to adjourn the Committee or suspend the sitting until a quorum had been obtained. He was informed that in Standing Committee A the clerk did call the Chairman's attention to the absence of a quorum. Nevertheless, the Chairman decided to go on with the business; and in these circumstances the greater portion of the Bill was passed through the Committee stage. He wished to ask what course the House ought now to pursue in the matter.
*MR. SPEAKER: The hon. Baronet who was Chairman of the Committee is present, and perhaps he would like to make a statement before I say anything.
*SIR WILLIAM HOLLAND:said that under the strict interpretation of the Standing Order he must confess himself at fault
716
and bow to the Speaker's will. But his offence might appear less grave if he were permitted a word of personal explanation. He was in a dilemma in regard to the Bill, and took the course he did take with a full sense of his responsibility under the special circumstances of the case. Here was a Bill of 142 clauses of the utmost possible importance in the interest of the public health; and questions of public health brooked no delay. It embodied the experience and the wishes of the Police and Sanitary Committee. There were thirty-three pages of Amendments, and after a short discussion last Monday it was apparent that the whole of those Amendments were about to be accepted by the promoters of the Bill; so that practically he regarded the measure as an agreed Bill. A quorum was present when there was anything to be discussed; but when there was nothing left but the mechanical work of putting a large number of agreed clauses he confessed the quorum was not throughout fully maintained. In his judgment, an adjournment at that particular stage, after so much work had been done, might have been fatal to the chances of the Bill passing during the present session, because he thought there would have been difficulties in getting a quorum together on a subsequent occasion. He founded himself on the precedent of the Speaker, who does not instantly suspend the House when fewer than forty Members are present. He waits until some Member notices it. And if any member of the Committee had called his attention to the fact that the quorum was not maintained he should instantly have suspended the proceedings; but, as every Member of the Committee was very anxious to have the Bill passed, none of thorn were likely to call his attention to that circumstance. With this explanation, he submitted himself with the utmost respect to the judgment of the House.
*MR. SPEAKER: After the explanation which has been given by the hon. Baronet, the House will probably be inclined, under the special circumstances of the case, to condone any irregularity which may have occurred. At the same time, I think, for future guidance it would be just as well that I should observe to the House that Standing

717
Order 62 is very particular. It says that if at any time during the sitting of a Select Committee the quorum fixed by the House shall not be present, the clerk of the Committee shall call the attention of the Chairman to the fact, and the Chairman shall thereupon suspend the proceedings until a quorum be present or adjourn the Committee to some future day. By Standing Order 47 the procedure of Select Committees is made applicable to Standing Committees. Therefore, I take it that under the Standing Orders of the House, for the future, it will always be the duty of the clerk to call the attention of the Chairman to the absence of a quorum, and the Chairman must take action thereupon. The right hon. Gentleman has asked me what would happen supposing any irregularity were committed in Grand Committee. It is rather difficult to deal with hypothetical cases, but on the assumption that the Committee met and proceeded without a quorum, I should be of opinion that the Committee, properly speaking, was never constituted and did not meet, and that none of the work done could be accepted as being the work of that particular Committee. If there is a quorum when a Committee begins its work and that quorum melts away, it will be for the House, I think, in each case to determine whether it would be necessary to recommit the Bill. I do not think that I have vested in me any power to strike out the Amendments made by that Committee, for I should have no knowledge of the exact moment when a quorum was or was not present. Therefore, I could not undertake any such duty. But in each case where an irregularity of that sort has been committed, the House would desire, on the facts being brought to its attention, to consider whether it would be necessary or desirable to recommit the Bill.
MR. A. J. BALFOURpointed out that most important functions of the House had now been relegated to Grand Committee; and therefore he desired to ask the Speaker or the Prime Minister how they were to deal with cases in which they had reason to believe that a Committee had not obeyed the Standing Orders. The original difficulty arose from there being no authentic record of what took place in the Committee. But, apart from that, there was the more
718
serious difficulty that a breach of the rules having been alleged and a Motion being put down on the Paper in consequence, that Motion could only be dealt with in the ordinary way unless the Government gave time for its discussion or it could be raised as a question of privilege. There might be the extremely embarrassing position of a Bill coming on for the Report Stage, Members being conscious of the Bill having passed through Committee by irregular procedure. He asked whether a Motion regarding the regularity or irregularity of the Committee procedure would be a matter of privilege.
*MR, SPEAKER: I am afraid my answer to that question must be no. But I may perhaps make this observation. There are particular irregularities committed by Committees, for instance, in connection with financial arrangements, the insertion of a clause involving a charge upon the people without the previous assent of the House—irregularities of that kind I should be prepared to deal with, and I think I am the proper person to do so. But an irregularity such as was the subject matter of the first question put to me in connection with the Public Health Bill, that is a subject for the House to deal with, not for me. Difficulty really arises from the fact that the House is discussing a hypothetical case, and it is a little difficult to have in mind all cases of irregularity that may arise.
MR. A. J. BALFOURasked if an undoubted irregularity arose requiring the attention of the House, could that be brought forward as a matter of privilege.
*MR. SPEAKER: No, that would not be a matter of privilege; the proper course would be to make a Motion to recommit the Bill, and such a Motion would have precedence on the Report stage, and the Member making it could state the grounds for recommittal.
MR. A. J. BALFOURasked the Prime Minister whether, seeing that in substance the ruling of the Speaker was that a breach of the Standing Orders being committed a Motion condoning the action of the Chairman could be carried by a Party majority, the procedure in Standing Committees did not deserve careful attention.
MR. SWIFT MACNEILLasked whether it was not usual for anything that occurred in Committee to be reported by the Chairman or some Member who was present? Was it not most irregular for a Member who was not present to raise the question?
*MR. SPEAKER: When the matter was brought to the attention of the House, I first asked the Chairman of the Committee if he had any observations to offer, and I think the House has heard from him what took place in Committee.
THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Sir H. CAMPBELL-BANNERMAN,)said a formal irregularity had been committed in regard to the Public Health Bill. All the business, as he understood, that was transacted while the Committee was short of a quorum was the arrangement of agreed matter, and therefore no harm had been done. What reason was there to expect that the irregularity would be followed in other Committees? Standing Committees had been in operation for many years, and they were transacting now the same sort of business with the exception that the Chairman had power to apply the closure. Therefore, until they heard of some flagrant iniquity being committed by a Standing Committee, such as had not occurred yet, he thought they might be content to leave matters as they stood. The fears of the right hon. Gentleman appeared to be entirely conjectural.
SIR F. BANBURY:said that in the Scottish Standing Committee there had been similar attempts to carry on business without the presence of a quorum of Members.
*MR. SPEAKER: After what has occurred to-day, those who now sit and those who will sit as Chairmen will be well aware of the duties of the position.
MR. AUSTEN CHAMBERLAINasked if it could be made a rule that the absence of a quorum should be entered on the record of a Committee's proceedings.
*MR. SPEAKER: I think if everything had been done that ought to have been done there would be a record that, attention
720
being called to the absence of a quorum, the Committee adjourned; but, owing to the fact that something was done that ought not to have been done, the record was imperfect.

BALLOT ACT (1872) AMENDMENT BILL,
*MR. DUNNasked leave to introduce a Bill to amend the Ballot Act of 1872, and to provide for the taking of a second ballot at Parliamentary and other elections. He did not think there was any apology needed for his action in view of the fact that they were on the eve of a very interesting election, which in itself demonstrated the necessity for some such amendment of the law as he was proposing. The mischief with which he sought to deal was a growing one. At one time there were only two-Parties—historic Parties—in the State—the Liberal and the Conservative. Then there grew up the Nationalist Party, confined, no doubt, to Ireland; and now they had a fourth Party the Labour Party, and the result in the pending election would undoubtedly be that the candidate who was elected would not represent the majority of the electors voting at the election. The other day there was a contest at Cockermouth, the result of which was proclaimed a great victory for the Tariff Reform Party, yet the successful candidate at such election did not poll a majority of the electors who voted. Even the Conservative Party were divided between Free Traders and Tariff Reformers, and these differences would eventually break through the walls of the caucus and claim a settlement at the polls. That was the mischief which this Bill sought to remedy, During the last twenty years several attempts had been made in that House to remedy this-matter. Five Bills had been introduced. A Bill for the provision of second ballots was introduced in 1894, and in 1895 the same Bill was reintroduced. This Bill provided for a second ballot to be taken between the two candidates obtaining the highest number of votes where the first of such candidates had not an absolute majority. In 1898 another attempt was made, and he noticed that the Bill was presented by the President of the Board of Trade and the President of the Board of Education; therefore, he asked for their sympathetic

721
consideration of this present attempt. The Bill of 1898 provided for a second election. If the top candidate had not an absolute majority, all the candidates had to go to the second poll. He must mention a Bill introduced by the hon. Member for Tyneside last session dealing with transferable votes—a most excellent and useful attempt to alter the existing system. The great objection to the schemes of the previous Bills to which he had just referred, with the notable exception of that of the hon. Member for Tyneside, was that a second election was necessitated with all the turmoil and expense connected therewith. That had always proved a great objection to the adoption of any system of second ballot. The Bill of the hon. Member for Tyneside obviated the second election, but the method adopted therein was not of voting by cross, but of voting by numbers. It would be difficult probably to induce the House to abandon the system of voting by cross, a system which had become rooted in this country, in favour of other systems, however advantageous they might be in theory. The present Bill retained the system of voting by cross and also obviated the necessity of a second election. The mode adopted was exceedingly simple. The voter would be provided with a ballot paper, but such ballot paper would have upon it two copies of the ballot form, one copy headed "First ballot" and the other headed " Second ballot." There would be but one paper, not two papers. When a voter bad recorded his vote, exactly as at present, upon that portion of his "ballot paper entitled "First ballot" he could, if he desired—the matter was quite optional—vote upon that portion of his paper entitled " Second ballot," for the purpose of indicating which candidate he would desire elected if the candidate for whom he had already voted was unfortunate enough to find 'himself at the bottom of the poll. This procedure was an exceedingly simple one, and its adoption would in no way place upon the voters any complicated or difficult system of voting. They next came to the count. The procedure here might be a little more difficult but it would be undertaken by experts, and consequently they need have but little fear of difficulties or complications arising. In order to explain matters they would
722
assume an election in a single Member constituency where there were three candidates. They would suppose that the three candidates were Brown, Smith and Robinson—he would not define their politics, but leave hon. Members to do that. When the voting papers were unfolded the count would proceed in exactly the same way as at present, the votes given in the first instance upon that portion of the ballot paper entitled "First ballot" being counted first. The result he would assume to be as follows:—

Brown

2,642

Smith

2,800

Robinson

2,000

It would thus be observed that 8,442 effective votes have been recorded. There would be, of course, a few spoilt papers, but no heed need be taken of them. An absolute majority of those who had effectively voted would be 4,222, that was half, 4,221, plus 1. If Brown had obtained an absolute majority he would be declared elected and there would be an end of the matter, but as would be seen, Brown had not obtained an absolute majority. As a consequence, Robinson would be excluded from the poll under the operation of this Bill. His papers would be examined, and the votes given thereon in the alternative would be added to Brown and Smith, as the case might be. For instance, one voter would have voted for Robinson on his first ballot, and Brown on his second. This would now be counted as a vote for Brown. Another voter would have done quite the opposite, namely, for Robinson in the first instance, and Smith in the second. This would be counted as a vote for Smith. A good many voters would probably not have taken the trouble to fill up their second ballot at all, and these would be treated as blank. Of the 2,000 votes, however, given to Robinson in the first instance, they found that the second ballot gave votes as follows: for Smith, 1,000; for Brown, 500; blank or spoilt, 500. These 1,000 votes added to the original votes given to Smith made his total 3,800, and the 500 votes thus given to Brown with the votes already counted for him make his total 3,142, the final poll therefore being:

Smith

3,800

Brown

3,142

Smith thus being declared elected by a majority over Brown of 658 votes. Under the present system Smith would not have

723
been elected at all, but Brown would have been elected. And if he had been a member of the Tariff Reform League it was presumable that his election would have been treated as a great Tariff Reform victory. It might be said that giving a voter two ballot forms was likely to enhance the number of spoilt papers, but provisions were contained in the Bill to render these chances as remote as possible. Although the procedure, both for voting and counting, was a simple one in practice it was a difficult one to put into legal language, and he would therefore urge hon. Members to forgive any apparent intricacy in the wording of the Bill should the House sanction its introduction. He was not so sanguine as to believe that the Bill would become law this session. Ho only hoped that before long the House would seriously take into consideration the question of a second ballot. The present was certainly a time when the House should speak the will of the country, and if there were any Members present elected by minorities instead of majorities the usefulness of the House as a means of ' expressing the popular will would be impaired.
Question, "That leave be given to bring in a Bill to amend the Ballot Act, 1872, and to provide for the taking of a second ballot at Parliamentary and other elections," put, and agreed to.
Ordered to be brought in by Mr. Edward Dunn, Mr. Fenwick, Mr. Rowlands, Mr. Glendinning, Mr. George Nicholls, and Mr. Arthur Richardson.;

BALLOT ACT (1872) AMENDMENT BILL.
"To amend The Ballot Act, 1872, and ', to provide for the taking of a second ballot at Parliamentary and other elections," presented accordingly, and read the first time; to be read a second time j upon Wednesday next, and to be printed. [Bill 265.]

CRIMINAL APPEAL BILL.
Reported, with Amendments, from Standing Committee B.
Report to lie upon the Table, and to be printed. [No. 238.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 238.]
Bill, as amended (in the Standing Committee), to be taken into consideration upon Monday next, and to be printed. [Bill 264.]

FINANCE BILL.
Considered in Committee.
(In the Committee.)
Clause 17: —
[Mr. EMMOTT (Oldham) in the Chair.]
*MR. CHIOZZA MONEYon a point of order, said the Amendment which he had on the Paper in regard to graduating the income-tax, had been ruled out of order. He respectfully desired to point out that the matter had its origin in the Ways and Means Resolution, that the income-tax should be charged on 16th April, 1907, at the rate of 1s. in the pound. The Chancellor of the Exchequer had taken that rate of income-tax and had modelled and moulded it.
*THE CHAIRMANsaid he had ruled the Amendment out of order on the previous night, and had called upon the hon. Member for Windsor. The Amendment had been taken oft' the White Paper, so he could not now go into the question of his ruling. He called upon the hon. Member for Windsor.
MR. J. F. MASON:, in. proposing an Amendment reducing the income-tax from Is. to 11d., said his object in moving it was to protest against the view that Is. income-tax was to be looked upon as part of our fiscal system. He protested on two grounds, first, that the income-tax was the tax on which we had to rely in a case of national emergency; and, secondly, that one-third of the tax was war tax imposed for a temporary reason, and not intended to be permanent. As regarded the first of those grounds, he maintained that the elasticity which the income-tax had in a case of national emergency became of greater importance from the fact that the Chancellor of the Exchequer had told

725
them that he intended to keep the other war taxes permanently. It was quite evident that the great bulk of our indirect taxes had about reached a point at which they would not allow of any material increase. The income-tax was the one tax capable of being increased on short notice with the minimum derangement of the general trade and business of the country, because its effect was less direct than the sudden increase of indirect taxes on articles of consumption. The Chancellor of the Exchequer had told them that the tax was very easy of evasion, and that no doubt was particularly true of two classes of income-tax payers. In the case of small tradesmen there was no doubt a very considerable amount of evasion, owing to their accounts being kept in an imperfect, he might say muddled, fashion. The other class who could easily evade the tax were the very rich people who held large amounts of property in the form of securities. It was very easy indeed for a rich man to avoid a large proportion of his income-tax without in the least putting himself in an illegal position. Ho did not think it was at all in the interest of the community that he should enter into the details of how that could be done. The fact remained that there were these two classes of evasion. No one would dispute the fact that the higher the tax the greater would be the inducement to evasion. It followed that there must necessarily be a point at which that inducement to evasion would be so great that the loss would counteract the amount of the increased tax. The income-tax at 1s. produced £32,000,000, but it did not follow that a 2s. tax would produce £64,000,000. The point at which evasion would become highly operative was difficult to estimate, but even assuming that a 2s. income-tax would produce £64,000,000 no one would contend that a 3s. or a 4s. tax would produce a proportionately larger sum, and there must be a limit beyond which any further increase would be fruitless. It would be generally agreed that the higher the tax the less room there would be for expansion, and that was of the utmost importance in view of the fact that there was no other tax in our system which was capable of any expansion at all. One-third of the income-tax—namely, 4d. out of a shilling, was imposed as a war tax,
726
and that yielded about £10,000,000. The Chancellor of the Exchequer, in his Budget statement, said that these war taxes must be maintained so long as the war debt existed. He acknowledged that the argument was good so long as the results of the war tax were applied to the extinction of the war debt. The war debt amounted to about £138,000,000, and the war taxes to about £17,000,000, but out of that sum only £10,000,000 went to reduce the debt, the other £7,000,000 being applied to objects totally different and utterly disconnected from the war itself. Therefore the argument that the war taxes should remain as long as the war debt existed must necessarily break down, and the right hon. Gentleman must see that that was not a good reason to give for the maintenance. At a later stage the right hon. Gentleman said the war taxes must be looked upon more in the nature of permanent taxes because times had changed. It was quite true that times and circumstances had changed. The right hon. gentleman was now Chancellor of the Exchequer, and they had a Radical Government in power, but the point arose as to why these changed times should be put forward as a reason for keeping on war taxes permanently. Some few years ago before the right hon. Gentleman was Chancellor of the Exchequer he held a very strong view regarding the maintenance of these war taxes, for he then seemed to think that under no circumstances ought they to be maintained. In 1903 when the late Government were in power the right hon. Gentleman stated that the war taxes were no part of the permanent fiscal machinery of the country, but were temporary taxes imposed for the purposes of the war, and he assured the House that at the earliest possible moment they would be removed. He further stated that it was the duty of any Chancellor of the Exchequer at once to effect such reductions in the expenditure of the country as would enable him to withdraw with the shortest possible delay what were always intended to be temporary burdens. The Chancellor of the Exchequer had evidently changed his opinion since that time.
MR. ASQUITH: I have not changed my opinion at all.
MR. J. F. MASONsaid in that case they would have to seek for a reason why the right hon. Gentleman could not now effect what he previously stated was the duty of the Chancellor of the Exchequer of any Government at any time. They would probably find the reason in the fact that the right hon. Gentleman found that in his present position it was not so easy to make such reductions in general expenditure as he thought it to be before he took office. In addition to that, the right hon. Gentleman had probably been affected by considerable pressure from the hon. Gentlemen below the gangway to provide for social legislation of a very expensive nature in the future. Probably the strongest reason of all for the attitude which the right hon. Gentleman had been driven to take up was the fact that he had absolutely made up his mind to adhere to the narrow basis of taxation which, even if maintained for a few more years, would eventually have to be abandoned.
Amendment proposed—
"In page 6, line 31, to leave out the words 'one shilling' and insert the words 'eleven pence.' "—(Mr. J. F. Mason.)
Question proposed, "That the words ' one shilling ' stand part of the clause."
THE CHANCELLOR OR THE EXCHEQUER, (Mr. ASQUITH,)said the hon. Member had stated his case with great temperateness and brevity, and he would endeavour to follow his example. The Amendment he had proposed substituted " eleven pence " for " one shilling," and the first part of his argument as far as he understood it was based upon the assumption that a high income-tax tended to evasion, j and therefore, in the long run would defeat the object of the Chancellor of the Exchequer who imposed it. But assuming that to be a sound argument it could not apply to the difference between Is. and 11d. Did the hon. Member really think that that difference would lead to evasion? If he did not think so, what possible remedy was his Amendment? So far from the rise in the income-tax during the last few years having encouraged evasion it had done nothing of the kind. The yield per penny now with the income-tax at 1s. was
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substantially greater than it was a few years ago when the tax was 8d.; and even when the tax rose to 1s. 3d. during the war the growth in the yield per penny still went on. They had had some experience of a 2s. income-tax during the Napoleonic war, and one of the most striking circumstances connected with that high tax was that the yield per penny steadily rose and during the last year when that 2s. tax was imposed there was a larger yield than in any previous year.
SIR GILBERT PARKER:asked whether the increased yield was not due to improved methods of collection and greater stringency?
MR. ASQUITHsaid that by the improved methods they were only making those pay who ought to pay and thus perform their duty to the State; and that had no doubt tended to improve the yield. What he wished to show was that so far as past experience went even an income-tax raised to such a high figure as 2s. had not in practice led to the evasion referred to by the hon. Member. He quite agreed that there was a point—be did not say what it was and nobody knew what it was—at which the raising of the income-tax would have the unfortunate results to the revenue which the hon. Member very properly deplored, but he could not agree that that consideration had any direct bearing upon a proposal to reduce the income-tax by one penny. The hon. Member had stated that the difference between 8d. and 1s. ought to be regarded as a war tax and treated as such. Undoubtedly it was the case that before the war the income-tax was 8d. and now it was 1s. The war had been over five years, and although during those five years the present Government had only been in office about two years the income-tax remained at the point at which it was left by their predecessors. He adhered to the principle which he laid down in his Budget speech. He had been reminded that he expressed similar views in 1903, and no doubt it was refreshing to hon. Gentlemen opposite to find at least one Member whose opinions did not vary with the quarter of the House in which he sat. His first proposition was that the necessity for the continuance of a war tax did not cease with the discontinuance of hostilities; and his second was that by the reduction of

729
expenditure, and, when they were able to do so by the reduction of expenditure, they should aim at getting back to the state of things that prevailed before the war. Even with the considerable efforts that the present Government had made in the last two years to reduce the Debt there was still an addition to the National Debt, as compared with the state of the Debt before the war, of nearly £140,000,000. Until they had got back to the position which prevailed before the war he did not think they would be in a position to review taxation in the sense in which the hon. Member desired. In the next clause of the Bill he was giving substantial relief to income-tax payers, because he was reducing the tax on earned incomes which did not exceed £2,000 a year from 1s. to 9d. That was a substantial relief to the very class of income-tax payers upon whom the 1s. duty had pressed most heavily. He could not see any prospect of going further than that in the immediate future. He had never laid it down that the income-tax must be permanently maintained at 1s. He had been represented as saying so, although he had denied it a dozen times. He had never said anything of the kind. All he said was that, having regard to the condition of our indebtedness and to the large expenditure of the country, reduced though it had been since the present Government came into office, ho could not now assent to the reduction of this tax below 1s.
MR. AUSTEN CHAMBERLAINsaid the right hon. Gentleman congratulated himself and the House on his own consistency. He laid down when in Opposition that the war taxes should cease at the earliest possible moment, but it was only a couple of days ago that he held that certain war taxes should not cease under any circumstances whatever. He had made them permanent taxes instead of annual taxes requiring to be reimposed from year to year.
MR. ASQUITH: That is on their own merits.
MR. AUSTEN CHAMBERLAIN:said the right hon. Gentleman did not make any distinction as to their own merits when he was in Opposition. The right
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hon. Gentleman had replied to his hon. friend on the subject of evasion by asking whether anyone supposed that the difference between 1s. and 11d. would make any difference in the desire of the income-taxpayers throughout the country to evade the tax. He did not understand that to be the suggestion which was made. His hon. friend spoke of the income-tax as one of the great reserves for war, and pointed out that the higher it was kept the less it served the purpose of a reserve for war. He was looking forward, as wise men must do, to the time which might possibly occur, though they all hoped it would not, when the country would be exposed to the enormous financial strain which a modern war involved. If they started with the income-tax at 1s., to what point would they have to raise it in order to finance the war I Would they not be forced to raise it to a point at which evasion would become certain? It was no answer to say that during the recent war when great rises in the tax took place the yield per 1d. went on increasing, and equally did he think it was no answer to say that from the days of Mr. Pitt and his successors the produce of the income-tax from the moment it was placed on the present system of collection at the source had shown an increase in the yield per 1d. That was no answer for two reasons. In spite of what the Chancellor of the Exchequer had said, and not in contradiction of it, there was progressive efficiency of collection in the days of Mr. Pitt and his successors, but that efficiency was nothing like the efficiency at the present day. He spoke with the knowledge that these things were hardly capable of proof. In the time of Mr. Pitt and his successors the income-tax was regarded as hateful, and it was owing to the action of a Conservative House of Commons about that time that all records of it were destroyed. If he wanted to show how hateful the tax was to a section of the Liberal Party, he had only to refer to Mr. Gladstone's election manifesto in 1874, when he offered the country the repeal of the income-tax if they again returned him to power. The destruction of the records made it very difficult to say what was done in earlier years. What they could prove was that during the late war there was not an increase of evasion, but an increase of activity on

731
the part of people entitled to secure abatements. That was perfectly legitimate, as no Chancellor of the Exchequer wished to take a tax from people who ought not to be asked to bear the burden. He did not, therefore, make any complaint of people who were entitled to abatements making an effort to secure them, but he said that the very motive which actuated those people to take the trouble to secure abatements which they had never thought it worth while to take before would be effectual in actuating others to see whether, by making new arrangements, they could not avoid paying some portion of the higher tax, and in making others who were not very scrupulous try to avoid it, not only by legitimate means, but possibly by illegitimate means. The fact that the yield per penny went on growing did not show that that motive was not acting concurrently. In the first place, it might be assumed that the work of the country was growing, and that there was a greater amount of wealth on which to levy the tax. In the second place, there was the constant process of transferring private businesses into limited companies, and that enormously aided the accurate collection of income-tax at the source. The Chancellor of the Exchequer, though no doubt right in saying that it was not a penny one way or another that would make a difference in the efforts to evade the tax, had not proved that a considerable rise in the income-tax would not cause a very considerable growth of evasion and avoidance. He could cite in favour of his argument the Chairman of the Board of Inland Revenue, who, in giving evidence before the Income-tax Committee, spoke of the danger of evasion and avoidance which would arise if any considerable increase took place in the tax. The question of the penny was to a great extent beside the issue. It was not a question whether or not the normal rate of the tax ought to be at 1s. in time of peace. He was one of those who held that it ought not, one reason being that it left an insufficient reserve in the limit to which it could be carried as a war tax. He thought that in time of peace it was an undue burden on trade. The Chancellor of the Exchequer himself had recognised the claim, as indeed every thoughtful man must, that the income-tax was a burden on trade, and that, in
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its indirect if not its direct effects, it touched people who were not themselves payers of the tax. It affected the amount of money available for the carrying on of business; it affected the expenditure of a great number of people, and might cause them to limit their expenditure. Indirectly, therefore, the tax had a great effect on wages and employment, and it reacted on the Exchequer, because any limitation of wages and of the activities of trade reacted on the other taxes which the-Exchequer received. A high income-tax had a bad effect on the stamp duties and on the Customs and Excise duties. The Chancellor of the Exchequer said that he had never laid it down that the normal rate of income-tax should be permanently fixed at a 1s. in the £. No, he did not think the right hon. Gentleman had, but what he had done was to say that he could not afford to sacrifice the revenue from the 1s. tax as at present imposed. Was not that the very same thing as if he had said that he could not see his way to lower the income-tax below 1s.? The right hon. Gentleman had spoken of the great growth of expenditure on the Army and Navy, and concurrently with that the growth of expenditure on education; he had also stated that he would endeavour to persuade the House of Commons to pass a scheme of old-age pensions. He thought that the scheme of the right hon. Gentleman in regard to the income-tax was unsound, and therefore, under the circumstances, he would vote for the Amendment—not that he thought there was any substantial difference between 11d. and 1s., but because he felt that Is. was too high a rate to maintain.
*MR. MCCRAEsaid that the right hon. Gentleman had given the Committee a very interesting exposition of the merits of the income-tax, but had said little in support of the Amendment of the hon. Member for Windsor. He would point out that the right hon. Gentleman the late Chancellor of the Exchequer had not given a fair account of what took place when quoting from the evidence of Sir Henry Primrose. No doubt Sir Henry Primrose said that they could increase the income-tax to such an extent as to lead to evasion. Sir Henry Primrose, however, did not say that that would happen

733
if the tax wore fixed at 1s. 3d. or 1s. 6d. in the £ he was only speaking of a super-tax of about 2s. in the £. The late Chancellor of the Exchequer said that when the income-tax had been increased to 1s. 3d. there were many more claims for abatement than when the tax was lower. But these claims were made by people who were entitled by right to abatement, and Sir Henry Primrose did not say that they would evade the increased tax unless it were oppressive in amount. The Committee, in fact, were impressed by the fact of the honesty of the British tax-payer.
MR. AUSTEN CHAMBERLAINadmitted that he had used the words "evasion" and "avoidance," and there was a technical difference between them. Evasion was an illegitimate denial of the tax, and avoidance was a legitimate denial of the imposition of the tax. The hon. Gentleman spoke of avoidance as if it were a refusal to recognise a moral obligation. He did not think there was any moral obligation on the part of any taxpayer to pay more taxes than he was legally liable to pay. There was no question of morality if his income did not come within the limits laid down by law. But, as the Chairman of the Inland Revenue Board had pointed out, there was a great power on the part of rich people to remove their income beyond the limits of the income-tax, in which case there would be no legal liability.
*MR. MCCRAEsaid he quite agreed as to the distinction which the right hon. Gentleman had made between "evasion" and "avoidance" But he thought that anyone who had gone carefully into the subject would admit that the rich man could not avoid a suggested increase to a very large extent. The evidence went to show that if the rich man evaded or avoided the increased charge on the income-tux ho eventually had to pay in one way or another. This was no question, in his opinion, of a war tax. The particular penny between 11d. and 1s. was not in the nature of a war tax. The right hon. Gentleman himself was responsible for it. After the South African War was over the income-tax was reduced by his predecessor; but the right hon. Gentleman when he came into office found that the general expenditure of the county had increased to such an
734
extent that he had to meet it by increasing the income-tax by an extra penny. The right hon. Gentleman had, therefore, the credit or the discredit of putting on an income-tax, not for war purposes, but for ordinary expenditure. He thought that his right hon. friend the Chancellor of the Exchequer had shown that he had considered the claims of the income-taxpayers. If the Amendment of the hon. Member for Windsor were carried the income-taxpayer would receive a relief of £2,600,000; but the Chancellor of the Exchequer was not at present prepared to sacrifice that amount, although he was prepared to give relief to the extent of £1,250,000. He hoped that, after the explanation of the Chancellor of the Exchequer, his hon. friend would withdraw his Amendment and allow the Committee to proceed to the much more interesting subject of differentiation raised by the next Amendment.
SIR GILBERT PARKER: urged that the income-tax was intolerably high. He pointed out that although the income-tax was suddenly raised after the Crimean War from 7d. to 1s. 2d. and afterwards to 1s. 4d., it was subsequently lowered to 7d. within three years. At that time Mr. Gladstone expressed the opinion that a high income-tax bore very heavily indeed upon the expansion of trade and the general operations of trade, and therefore had an influence on labour and unemployment. Mr. Gladstone admitted that a high income-tax bore more heavily on the direct tax-payer than on the indirect tax-payer, for the reason that it was easier for a person to pay a tax over a considerable number of articles of consumption than to pay it in a lump sum at the end of the year. There was no doubt that our national expenditure had gone on increasing since the income-tax had varied from 2d. to 1s. 4d. in the £. The Chancellor of the Exchequer had not applied the whole of the extra income-tax the abatement of the war debt, and therefore he insisted that to maintain the tax at 1s. was improper. A shilling income-tax was a very considerable item to people of moderate incomes, and although the Chancellor of the Exchequer was making a concession, Members on that side, and he supposed Members on the other side also, would press the reduction in. the hope that another year the right

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hon. Gentleman would do what past Chancellors of the Exchequer had done in similar circumstances after a great war, and make a reduction of at least 2d. in the £. In view of the circumstances of trade, labour, employment, and wages, which this heavy income tax affected, he strongly supported the Amendment.
MR. CHIOZZA MONEYsaid the hon. Gentleman who had just sat down had drawn a rather pitiful picture of the small income-tax-payer, but the far larger number of income-taxpayers under the scheme of the Chancellor of the Exchequer did not pay a rate of 1s. or even of 9d. in the £At the same time, in view of the wording of the Bill and of the form in which they passed this legislation, he could not blame anyone for forgetting that the rate was subject to certain abatements and exemptions. He pleaded with the Chancellor of the Exchequer to make once and for all a clean sweep of the system of affecting to charge a certain rate of income-tax, and afterwards moulding the normal rate, as it was called, into something entirely different. He believed the term "normal" was used by the late Chancellor of the Exchequer, but he ventured to question the use of the word in this connection. What was a normal rate? Surely a rate which was submitted to so many subsequent changes that it disappeared in the larger number of cases ought not to be called a normal rate. The better term would be "nominal" or "maximum." He was surprised to find that intelligent persons often were entirely ignorant of the real rate of income-tax they paid. He had talked to a minor official of the British Government who was ignorant of the fact that he paid only a few pence in the £ upon his income. He protested once more against the idea that the income-tax was the war reserve of the country. There was only one war reserve, and that was the income of the British people. That reserve was diminished just as much by a tax on motor cars, which was an income-tax of a capricious nature, as by an income-tax proper. It took money from some people because they indulged in a certain amusement, and it did not take money from other people, who were just as rich, because they indulged in a different amusement. It was the taxable
736
capacity of the British people that had to be considered, and it was a simple thing to show, even if they only had regard to incomes above, £160 a year, that the taxable capacity of the people was rising. It was a fortunate thing for the nation and also for the Chancellor of the Exchequer. As a matter of fact, the income-tax of the upper 5,000,000 of people was rising by a sum which could not be less than £30,000,000 per annum. The burden of income-tax on trade had been referred to. Granted that any tax must in some sense be a burden upon the individual, whether he be a trader or otherwise, it could not be urged that traders in this country were subject to a greater burden than those in Germany. Not only was the big trader in Germany subject to a State income-tax of 1s., but he had to pay also a civic income-tax, which in many towns amounted to 1s. 3d. or 1s. 6d. in the £. Such a man in one of our towns would merely have to pay a rate which would be assessed on the rental value of his house, and would probably not amount to more than £60 to £80 per annum. When they compared that with the man in Germany who had to contribute for civic purposes from £200 to £400 per annum, it would be seen that the position of the trader in this country, so far from being worse than the position of the trader in Germany, was certainly more favourable in point of taxation. The right hon. Gentleman opposite raised the income-tax by 1d. in time of peace, but the present Chancellor of the Exchequer had lowered, also in time of peace, the maximum rate by 3d. for a large number of income-tax payers, and yet he was assailed as if he were a sinner in this matter.
MR. SAMUEL ROBERTSsaid he would like to make a final appeal to the Chancellor of the Exchequer with regard to the income-tax, and to give the right hon. Gentleman an opportunity of replying to the extraordinary remark made yesterday in Committee by the President of the Board of Education, who said he was in favour of abolishing all indirect taxation. Was he aware that if that position was taken up the income-tax and death duties would have to be trebled to meet the deficiency? He could not think the Chancellor of the Exchequer wished to associate himself with that view,

737
and he hoped the right hon. Gentleman would satisfy the Committee on the point. He appealed to the right hon. Gentleman on three grounds. In the first place he and his predecessors had promised the country from time to time that the income-taxpayer should receive relief in the first instance. The late Chancellor of the Exchequer in 1904, when he had to raise the tax from 11d. to 1s., said that in his opinion the income-taxpayer would have the first claim to relief, and that he hoped the sacrifice ho was then asking of him would not endure for long. It had endured for three years, and the present Chancellor of the Exchequer when he made his Budget statement last year associated himself with the remark of his predecessor that a uniform rate of 1s. in the £ in time of peace was impossible to justify and difficult to collect. The right hon. Gentlemen said he did not regard an income-tax of a shilling as permanent. If that were so, could he give income-taxpayers some hope that when he made his next Budget statement, if the present Government were in office another year, he would take their claim seriously into consideration? His second point was that the direct taxes wore a burden upon the trade and industry of the country, affecting not only profits but ultimately the wage-earners. The Chancellor of the Exchequer himself had admitted this. Thirdly, the income-tax was the great reserve in time of emergency. The hon. Member for North Paddington had said that the reserve fund was the income of the country, but in practice the reserve fund was twofold, consisting as it did in the suspension of the Sinking Fund and the imposition of the income-tax. On the three grounds he had mentioned he appealed to the Chancellor of the Exchequer to reconsider his decision with reference to the shilling income-tax. If he would not grant any reduction this year, would ho give some hope to income-tax-payers, who had borne this burden for a long time with patience and in a patriotic spirit, that he would consider their claims on the next occasion?
MR. VICTOR CAVENDISHsaid the impression he gathered on the Income-tax Committee was that there were a number of means available for people to avoid the income tax which were not generally known, but that if a heavy and
738
abnormal income-tax was to become a permanent part of our fiscal system, avoidance would be much more resorted to in the future than at the present moment. He was perfectly prepared to accept literally, and in the sense in which he believed he meant it, the statement of the Chancellor of the Exchequer that it was not his wish to make a shilling income-tax an integral and permanent part of our fiscal system. A deliberate statement was made yesterday by the right hon. Gentleman that the increased duties put for war purposes on tobacco, beer, and spirits were to remain at any rate at the figure at which they now stood, and possibly some of them might be increased. With the obligations now resting upon the Chancellor of the Exchequer, and the demands which were bound to be made upon him in the future, was there any reasonable hope that the income-tax of Is. in the £ would be reduced by a single penny during the existence of the present Government? He felt sure that the somewhat startling disclosure of the state of mind of the Minister for Education was but an unguarded expression of opinion, and did not represent the policy of the Government; and he was glad that the suggestions of the hon. Member for North Paddington did not meet with acceptance from the Chancellor of the Exchequer. The hon. Member had endeavoured to combat the statement that one of the objections to a high income-tax was the need of a war reserve. When they talked of the tax as a war reserve they meant that we should have a tax for which all the machinery was available, and which tax being low in time of peace could be put on rapidly in war time with as little dislocation as possible. It was understood that the Budget for the year was one of a series, and was framed, not for the purposes of the year only, but with a view to enabling the right hon. Gentleman to meet future demands. But he objected to the holding back of relief to income-taxpayers for some ulterior purpose. It was not as though means would not be available in future years by which the right hon. Gentleman could find funds for his purposes, and they were entitled to make their protest by supporting this Amendment.
THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON, Poplar)said that hon. Gentlemen opposite did not appear to appreciate fully the financial position. They had to consider on what taxes relief should be given when relief was possible. The mover of the Amendment founded his argument on two grounds—that the high rate of the tax led to evasions, and that the addition was a war tax and should be removed in time of peace. The first of these had been dealt with by the Chancellor of the Exchequer, and he would only remind the Committee that experience in the last few years had not shown that evasions increased with the increase of the tax. The reduction to 11d. would not have any effect on the evasion difficulty. It was said that the tax had boon made much more productive of late years because of the conversion of private firms into limited companies. But that was an effect which was experienced during only two or three years. The income-tax return had increased, and they were satisfied that the Amendment of the hon. Gentleman would in no sense affect the question of evasion, and they would get just as much at a shilling as they would get at 11d. It was also argued that this penny ought to be taken off because it had been put on for war purposes; but this was an entire fallacy as regarded the penny. During the war something like £33,000,000 of taxation was imposed, and it was mostly described as for war purposes, but as a matter of fact it was not j all applied to war purposes, some of it going to meet increased expenditure. In the year following the war, Mr. Ritchie took off £12,000,000, having a greatly improved revenue and the expenditure being reduced, but his successor had found it necessary again to put on the penny which had been taken off the income-tax. He, therefore, did not think that it could be claimed that this particular penny could be regarded as having been put on for war purposes. In regard to the whole, question of the war expenditure, while it was true that the income-tax was increased nominally for war purposes, at the same time the taxes on articles of consumption j —tea, corn, sugar, and other articles—were also increased. While income-tax had been relieved of 3d., the corn duty had gone, and the tea duty had been reduced by a penny. ["Coal."] He had not; mentioned coal, because it was denied on
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the other side of the House that it was indirect taxation. In regard to indirect taxation there had been some relief, while the income-taxpayer was) still suffering, not from the war expenditure but from the extravagance in expenditure of the late Government, which raised the ordinary expenditure of the country from £90,000,000 to £140,000,000*. While the income-tax had had some relief since the war, and while indirect taxation had also had some relief, there still remained a lot of heavy burdens on both classes of taxation. What alternative was offered to the proposal of the Government? The Amendment proposed that his right hon. friend should lose over £2,500,000, but no means had been suggested of filling that void. The hon. Member for Gravesend had suggested a tax on corn and meat, but that would involve a change of our fiscal system, and that question had been settled and disposed of by the House. The Committee well knew that his right hon. friend, looking to the future and the schemes he had in hand, had not the money available to meet demands for a reduction of taxation. He for one would like to see the income-tax and other taxes reduced, but taxation was an evil which the country must accept; and much as he would like to see a reduction of taxes, he certainly would not support the reduction of the income-tax if it was to be accompanied by an increase of the taxes on articles of consumption.
*MR. H. H. MARKSsaid he should certainly support the Amendment of his hon. friend. They had heard that afternoon the affirmation by the right hon. Gentleman of his opinion that the taxes which had been described as war taxes should be the first to be repealed or reduced; and they had heard from him, whatever they might have heard from other authorities, that 4d. of the existing income-tax was by him regarded as war tax. It was true, as the right hon. Gentleman had pointed out, that the late Government had not reduced this particular war tax; but they had not had the advantages and the opportunities which had fallen to the Chancellor of the Exchequer, and the fact that they had not had those advantages and opportunities might possibly be

741
deemed an explanation of their failure to reduce the income-tax. But in addition to that the war had only ended two years during the time they were in office, and two years had elapsed since then The right hon. Gentleman had said that he could hold out no hope, either now or hereafter, of going further than he was going at present; but he had left them to understand that it was not that he was not willing to do it, but that it was not in Ms power. He would venture to remind him that the amount which had been lost to the Exchequer by the repeal of the export duty on coal would have more than sufficed to allow of this 1d. reduction in the income-tax. Might he further remind the right hon. Gentleman that the export duty on coal was repealed at the time when it was steadily increasing its return without any burden on the general interests of the country? But even if they had not had the export duty on coal to rely upon, the right hon. Gentleman might by a little prevision have provided by this time a very substantial part of the amount which was asked for reduction of the income-tax. If it had occurred to him a year ago to do as he had done this year, and if he might say so, speaking for himself personally, what he thought the right hon. Gentleman had wisely done this year, namely, increased the death duties, he would have had enough by this time for a reduction of the income-tax. It was true, as the Chancellor of the Exchequer had said, that lie had made some remission in regard to a certain class of incomes, a very indefinite and as yet undetermined class of incomes, which were to have a rebate of 3d. in the £. But the 1s. income-tax was a burden on the trade of the country and was a danger to the wages received in the country. The remission now proposed would not affect the large employers of labour, and, therefore, would not influence the question of wages. A reduction of income-tax which would affect the general business of the community, benefit the large employers of labour, and in that way ultimately affect wages also, would be of substantial benefit, and it was such a benefit as was proposed by the Amendment of his hon. friend.
*MR. GEORGE D. FABERsaid
742
the Postmaster-General had pointed out that if the Amendment were carried it would be necessary to provide for £2,500.000, and that the Chancellor of the Exchequer could not find any source from which he could provide for that amount. Hon. Members on his side had been asked to reply to that. He had his own answer ready. It could be done by indulging in a small, an almost infinitesimal, measure of fiscal reform. If the Chancellor of the Exchequer could get over the fundamental objection which he had to any operation of the kind, he would find that many of his difficulties would melt away as by the stroke of the enchanter's wand. The right hon. Gentleman had told them that the income-tax was to be regarded as an integral portion of the fiscal system. He supposed they were all aware of this, although no Chancellor of the Exchequer had ever said it in terms before. The Chancellor had also stated that it must be his duty to budget, not for one year only, but for several years; and there again he did not believe any Chancellor of the Exchequer had ever given utterance to such a proposition before. Most Chancellors had considered that sufficient for the year was the Budget thereof. There was no doubt, however, that it was this statement of the Chancellor's which had caused many Members to think that 1s. income-tax was intended to be permanent, but the Chancellor of the Exchequer had not said that; he had only said that it was the duty of a Chancellor to budget for several years, and that the 1s. must be the income-tax for the series. The right hon. Gentleman had further stated that the war taxes did not come to an end when the war was over. He agreed, but there again no Chancellor of the Exchequer had ever before laid down such a proposition. He believed that after the Crimean War all the great statesmen and economists of that time took the view that the end of the war should end the extra financial burdens imposed upon the people. The Chancellor of the Exchequer had founded the whole of his financial policy upon the assumption that the war taxes must continue until the whole of the £130,000,000 war debt was paid off. The direct war taxation of 4d. in the on the income-tax represented £10,000,000, and the indirect war taxes produced another £10,000,000.

743
or £20,000,000 in all of war taxation. Surely the Chancellor of the Exchequer ought to apply the whole of that £20,000,000 to reducing the war debt. But he was doing nothing of the kind.
*THE CHAIRMAN: The reduction of the national debt hardly arises on this Amendment.
*MR. GEORGE D. FABERsaid the 1s. income-tax was directly connected with it, because 4d. of it was alleged to be kept on in order to pay off some of the war debt, but the Chancellor of the Exchequer was not doing this.
MR. ASQUITHsaid this was not a question of a war tax at all. They were discussing now the difference between 11d. and 1s. The tax was reduced to 11d. after the war, and then another 1d. was put on after the war for peace purposes.
*MR. GEORGE D. FABERsaid the right hon. Gentleman stated in his Budget speech that so long as the extra war burdens remained the claim of a war tax to be removed was, in his opinion, inadmissible.
MR. ASQUITHsaid that during the war the income-tax was raised from 8d. to 1s. 3d. Certainly 3d. of the present tax was a war tax, but that argument did not apply to the present Amendment.
*MR. GEORGE D. FABERsaid the Chancellor of the Exchequer stated definitely in his Budget speech that he would not remove the £20,000,000 of war taxes until the £130,000,000 of war debt had been paid off.
MR. EVANSsaid he wished to call attention to the most extraordinary decision recently given in the House of Lords, which decided a point that nobody had thought j of since 1854. The House of Lords had just decided that all sewers vested in public authorities were assessable to the income-tax. Under the recent decision every sewer in the country was now assessable to income-tax unless the law was changed. The effect of that would be that whereas now exemption
744
was being given to all small incomes-under £160, if sewers were assessed it followed that a good many smaller ratepayer would be assessed. [An HON. MEMBER: "Is this in order? "] He thought it was quite in order, because if all sewers were assessed they could reduce the income-tax from 1s. to 11d.
MR. AUSTEN CHAMBERLAIN,on a point of order, said the subject the hon. Member was raising was very important and must be discussed at some time or other; but he wished to know whether they were entitled to discuss subjects of this kind upon an Amendment to reduce the income-tax from 1s. to 11d.
*THE CHAIRMAN: I think the hon. Member is raising a subject which ought to be discussed on the question that the clause stand part of the Bill.
MR. EVANSsaid he would of course bow to the Chairman's ruling, although it would necessitate his repeating some of his remarks later on.
*MR. GEORGE D. FABER (in continuation of his speech)said his argument was that the income-tax as it now remained at 1s. was a war tax, and he founded his argument upon that fact. If, however, the right hon. Gentleman assured him that the income-tax did not fall within the war taxes. of course his argument fell to the ground. If, on the other hand, it was held that the income-tax was one of the war taxes, then his remarks were entirely in order. He thought the Chancellor of the Exchequer had come to an insufficient conclusion on his premises, because he had contended that these war taxes of £20,000,000, most of which consisted of the income-tax at 1s. in the £, were levied for the purpose of paying off war debt, but as a matter of fact he was not doing that. All he paid off last year on this score was £500,000 and all he proposed to pay off this year was £1,500,000, whereas the whole of the £20,000,000 should have been applied to this purpose, in each year.
*THE CHAIRMAN: Really the hon. Member's remarks are not in order on this Amendment. They are more appropriate to a later clause.
Question put.
The Committee divided:-Ayes,265; Noes,95. (Division List No. 265.)

AYES

Abraham, William (Rbondda)

Elibank, Master of

Leese,SirJosephF.(Accrington

Alden, Percy

Ellis, Rt. Hon. John Edward

Lever, A. Levy(Essex,Harwich

Allen, Charles P. (Stroud)

Erskine, David C.

Lever, W. H.(Cheshire,Wirral)

Asquith,Rt.Hon.HerbertHenry

Essex, R. W.

Levy, Sir Maurice

Astbury, John Meir

Evans, Samuel T.

Lewis, John Herbert

Baker, Sir John (Portsmouth)

Everett, R. Lacey

Lloyd-George, Rt. Hon. David

Balfour, Robert (Lanark)

Faber, G. H. (Boston)

Lough, Thomas

Baring,Godfrey(Isle of Wight)

Fenwick, Charles

Lupton, Arnold

Barlow, Sir John E. (Somerset)

Ferens, T. R,

Luttrell, Hugh Fownes

Barlow, Percy (Bedford)

Ferguson, R. C. Munro

Lyell, Charles Henry

Barnes, G N.

Fiennes, Hon. Eustace

Macdonald, J. R. (Leicester)

Barry, RedmondJ.(Tyrone,N.)

Findlay, Alexander

Macdonald,J.M.(FalkirkB' ghs

Beale, W. P.

Fowler, Rt. Hon. Sir Henry

M'Callum, John M.

Beauchamp, E.

Fuller, John Michael F.

M'Crae, George

Beck, A. Cecil

Fullerton, Hugh

M'Kenna, Rt. Hon. Reginald

Bell, Richard

Gill, A. H.

M'Laren,H. D. (Stafford, W.)

Bellairs;, Carlyon

Gladstone,Rt. Hn. HerbertJohn John

M'Micking, Major G.

Benn,W.(T'w'rHamlets,S.Geo.

Glendinning, R. G.

Mallet, Charles E.

Berridge, T. H. D.

Glover, Thomas

Markham, Arthur Basil

Bethell,SirJ.H.(Essex,Romf'rd

Goddard, Daniel Ford

Mason, A. E. W. (Coventry)

Billson, Sir Alfred

Gooch, George Peabody

Massie, J.

Birrell, Rt. Hon. Augustine

Grant, Corrie

Masterman, C. F. G.

Black, Arthur W.

Greenwood, G. (Peterborough)

Menzies, Walter

Boulton, A. C. F.

Grey, Rt. Hon. Sir Edward

Micklem, Nathaniel

Brace, William

Guest, Hon. Ivor Churchill

Molteno, Percy Alport

Bramsdon, T. A.

Gulland, John W.

Mond, A.

Brigg, John

Gurdon, Sir W. Brampton

Money, L. G. Chiozza

Bright, J. A.

Hall, Frederick

Montagu, E. S.

Brocklehurst, W. B.

Harcourt, Rt. Hon. Lewis

Montgomery, H. G.

Brooke, Stopford

Hardy, George A. (Suffolk)

Morley, Rt. Hon. John

Bryce, J. Annan

Hart-Davies, T.

Morrell, Philip

Buchanan, Thomas Ryburn

Harvey, A. G. C. (Rochdale)

Morse, L. L.

Burns, Rt. Hon. John

Harvey, W.E. (Derbyshire,N. E.

Morton, Alpheus Cleophas

Burt, Rt. Hon. Thomas

Haslam, Lewis (Monmouth)

Murray, James

Buxton, Rt.Hn.SydneyCharles

Haworth, Arthur A.

Myer, Horatio

Byles, William Pollard

Hazel, Dr. A. E.

Nicholls, George

Cairns, Thomas

Hedges, A. Paget

Nicholson, CharlesN.(Doncast'r

Cameron, Robert

Helme, Norval Watson

Norton, Capt. Cecil William

Campbell-Bannerman, Sir H.

Henry, Charles S.

Nussey, Thomas Willans

Carr-Gomm, H. W.

Herbert,Col.Sir Ivor(Mon.,S.)

O'Donnell, C. J. (Walworth)

Cawley, Sir Frederick

Herbert, T. Arnold (Wycombe)

Parker, James (Halifax,)

Clough, William

Holland, Sir William Henry

Pearce, Robert (Staffs, Leek)

Coats,SirT. Glen(Renfrew, W.)

Holt, Richard Durning

Pearce, William (Limehouse)

Cobbold, Felix Thornley

Hope,JohnDeans (Fife, West)

Philipps, Owen C. (Pembroke)

Collins, Stephen (Lambeth)

Hope,W.Bateman(Somerset,N.

Price, C. E. (Edinb'gh.Central

Collins,SirWm.J.(S.Pancras,W

Horniman, Emslie John

Price, RobertJohn(Norfolk, E.)

Cooper, G. J.

Horridge, Thomas Gardner

Pullar, Sir Robert

Cory, Clifford John

Howard, Hon. Geoffrey

Radford, G. H.

Cotton, Sir H. J. S.

Hutton, Alfred Eddison

Rees, J. D.

Cowan, W. H.

Idris, T. H. W.

Renton, Major Leslie

Crombie, John William

Illingworth, Percy H.

Richardson, A.

Crosfield, A. H.

Jackson, R. S.

Roberts, Charles H. (Lincoln)

Davies, David(Montgomery Co.

Jacoby, Sir James Alfred

Roberts, John H. (Denbighs.)

Davies, Ellis William (Eifion)

Johnson, John (Gateshead)

Robertson,Rt.Hn.E. (Dundee)

Davies, Timothy (Fulham)

Johnson, W. (Nuneaton)

Robertson,SirG.Scott(Bradf' rd

Davies, W. Howell (Bristol, S.)

Jones, Leif (Appleby)

Robinson, S.

Dewar, Arthur (Edinburgh.S.)

Jones, William(Carnarvonshire

Robson, Sir William Snowdon

Dewar,SirJ.A.(Inverness-sh.)

Jowett, F. W.

Roe, Sir Thomas

Dickinson, W.H.(St.Pancras,N.

Kearley, Hudson E.

Rogers, F. E. Newman

Dickson-Poynder, Sir John P.

Kekewich, Sir George

Runciman, Walter

Dilke, Rt. Hon. Sir Charles

Kincaid-Smith, Captain

Rutherford, V. H. (Brentford)

Dobson, Thomas W.

King, Alfred John (Knutsford)

Schwann, C. Duncan (Hyde)

Duckworth, James

Laidlaw, Robert

Schwann, Sir C.E.(Manchester)

Dunn, A. Edward (Camborne)

Lamb, Edmund G. (Leominster)

Scott, A.H.(Ashton-under-Lyne

Dunne, Major E. Martin(Walsall)

Lambert, George

Seaverns, J. H.

Edwards, Enoch (Hanley)

Lamont, Norman

Shaw, Charles Edw. (Stafford,

Edwards, Sir Francis (Radnor)

Layland-Barratt, Francis

Shipman, Dr. John G.

Silcock, Thomas Ball

Thompson,J.W.H.(Somerset,E.

White, J. D. (Dumbartonshire

Sinclair, Rt. Hon. John

Tomkinson, James

White, Luke (York, E. R.)

Smeaton, Donald Mackenzie

Torrance, Sir A. M.

Whitehead, Rowland

Soames, Arthur Wellesley

Toulmin, George

Whiteley, JohnHenry (Halifax)

Soares, Ernest J.

Trevelyan, Charles Philips

Wiles, Thomas

Spicer, Sir Albert

Ure, Alexander

Willams, J. (Glamorgan)

Stanger, H. Y.

Verney, F. W.

Williamson, A

Stanley, Hn. A. Lyulph(Chesh.)

Wadsworth, J.

Wills, Arthur Walters

Steadman, W. C.

Walker, H. De R. (Leicester)

Wilson, Hon. C.H.W.(Hull, W.)

Stewart, Halley (Greenock)

Walters, John Tudor

Wilson, Henry J.(York, W.R.)

Strachey, Sir Edward

Walton, SirJohn L.(Leeds, S.)

Wilson, John (Durham, Mid.)

Strauss, E. A. (Abingdon)

Walton, Joseph (Barnsley)

Wilson, J. W.(Worcestersh. N.)

Stuart, James (Sunderland)

Waring, Walter

Wilson, P. W. (St. Pancras,S.)

Sutherland, J. E.

Warner, Thomas Courtenay T.

Wilson, W. T. (Westhoughton)

Taylor, Theodore C. (Radcliffe)

Wason, Eugene(Clackmannan)

Wood, T. M'Kinnon

Tennant, H. J. (Berwickshire)

Wason, JohnCathcart(Orkney)

Thomas, Abel(Carmarthen, E.)

Waterlow, D. S.

TELLERS FOR THE AYES—Mr.

Thomas, SirA.(Glamorgan, E.)

Watt, Henry A.

Whiteley and Mr. J. A.

Thomas, David Alfred(Merthyr

Weir, James Galloway

Pease.

Thomasson, Franklin

White, George (Norfolk)

NOES.

Acland-Hood,Rt.Hn.SirAlexF

Dalrymple, Viscount

Mildmay, Francis Bingham

Anstruther-Gray, Major

Dixon-Hartland.SirFredDixon

Moore, William

Ashley, W. W.

Douglas, Rt. Hon. A. Akers-

Morpeth, Viscount

Aubrey-Fletcher,Rt.Hon.SirH.

Duncan,Robert(Lanark,Govan

Muntz, Sir Philip A.

Balcarres, Lord

Faber, George Denison (York)

Nield, Herbert

Baldwin, Alfred

Faber, Capt. W. V. (Hants, W.)

O'Neil,Hon. Robert Torrens

Balfour,RtHn.A. J.(CityLond.)

Fell, Arthur

Parker, SirGilbert (Gravesend)

Banbury,SirFrederick George

Fletcher, J. S.

Percy, Earl

Barrie, H. T. (Londonderry N.

Forster, Henry William

Powell, Sir Francis Sharp

Beach, Hn. MichaelHughHicks

Gardner, Ernest (Berks, East)

Ratcliff, Major R. F.

Beckett, Hon. Gervase

Gordon, J.

Ronaldshay, Earl of

Bignold, Sir Arthur

Haddock, George R.

Rutherford, W. W. (Liverpool)

Boyle, Sir Edward

Harrison-Broadley, H. B.

Sheffield. Sir Berkeley George D.

Bridgeman, W. Clive

Hay, Hon. Claude George

Sloan, Thomas Henry

Brotherton, Edward Allen

Helmsley, Viscount

Smith, AbelH. (Hertford, East)

Bull, Sir William James

Hervey, F.W.F.(Bury S. Edm'ds

Smith, F.E.(Liverpool, Walton)

Burdett-Coutts, W.

Hill, Sir Clement (Shrewsbury)

Starkey, John R.

Butcher, Samuel Henry

Hornby, Sir William Henry

Stone, Sir Benjamin

Carlile, E. Hildred

Houston, Robert Paterson

Thomson, W. Mitchell-(Lanark)

Carson, Rt. Hon. Sir Edw. H.

Hunt, Rowland

Thornton, Percy M.

Castlereagh, Viscount

Kennaway, Rt. Hon. Sir John H.

Valentia, Viscount

Cavendish, Rt. Hon. Victor C.W.

Kenyon-Slaney, Rt. Hon. Col. W.

Walker, Col. W.H.(Lancashire)

Cecil, Evelyn (Aston Manor)

King, Sir Henry Seymour(Hull)

Walrond, Hon. Lionel

Cecil, Lord John P. Joicey-

Lambton, Hon. Frederick Wm.

Willoughby de Eresby, Lord

Cecil, Lord R. (Marylebone. E.)

Lane-Fox, G. R.

Wilson, A. Stanley(York, E.R.)

Chamberlain, Rt Hn J.A.(Wore.

Lee, ArthurH.(Hants., Fareham

Wolff, Gustav Wilhelm

Coates, E. Feetham (Lewisham)

Liddell, Henry

Wortley, Rt. Hon. C.B. Stuart-

Cochrane, Hon. Thos. H.A.E.

Lockwood, Rt. Hn. Lt. -Col. A. R.

Wyndham, Rt. Hon. George

Collings, Rt. Hn. J.(Birmingh'm

Long, Rt. Hn. Walter (Dublin, S.

Younger, George

Corbett, T. L. (Down, North)

Lonsdale, John Brownlee

Craig, Charles Curtis(Antrim, S.

Lowe, Sir Francis William

TELLERS FOR THE NOES— Mr.

Craig, Captain James(Down, E.)

Lyttelton, Rt. Hon. Alfred

James Mason and Mr.

Craik, Sir Henry

Marks, H. H. (Kent)

Samuel Roberts.

*MR. ANNAN BRYCEmoved to insert at the end of Sub-section (2) words to provide that, in the case of companies with limited liability registered under the Companies' Acts, income-tax should be charged on the amount distributed as dividend. He said the subject to which he wished to direct the attention of the Committee was one mentioned last year in the course of the Second-Reading debate on the Finance Bill. The Chancellor of the
748
Exchequer at that time expressed certain sympathy with the idea embodied in this Amendment. Income-tax, theoretically, was chargeable upon net profits, but in the case of a great many companies the present method of assessment bore with extreme hardship, because instead of being charged on the net profits it was charged upon imaginary profits which were the result of arbitration by the Inland Revenue itself. In this Amendment he proposed that the method of

749
assessment on limited companies should be by a charge on the dividends paid to their shareholders. He could give a good many illustrations of the unfair way in which the present method of assessment bore upon certain companies. He would take the case of a petroleum company. It started by spending a certain amount of money on wells and machinery. It afterwards found that these wells ceased to give the amount of oil they gave at the beginning, and the company consequently had to spend out of its profits—unless they raised fresh capital—the money required to dig new wells, and the result was that in a great many cases they had to pay double or three times what they really ought to pay if the tax were levied upon their net profits. He knew a company which had only been in existence for a few years. That company had paid £39,000 in dividends, and if it had been assessed on the dividends at the rate of 1s. or 1s. 2d. —the rates in operation at the time when the dividends were paid—it would have paid only £2,000 in income-tax, whereas as a matter of fact it had paid no less than £5,500. At the same time it had lost half of its capital and had written off a large sum for depreciation and renewals. He knew another case where a company had paid £1,000 income-tax in the course of a few years, though it had never paid any dividend at all, and its capital account at present showed a debit balance. But it was really not necessary to elaborate this, because the Chancellor of the Exchequer was aware of the nature of the hardship. The Income-tax Commissioners would not suffer in the long run if they permitted the change now proposed to be carried out, because if a company only paid income-tax on net profit it would thereby become every year more solid, its life would be longer, and so the Inland Revenue would in the long run benefit. In some countries this principle had been recognised. In Belgium, for instance, income-tax was paid only on the dividends distributed to shareholders. In regard to mining companies generally in Australia and New Zealand the same principle was recognised. In New Zealand the mining companies were charged income-tax upon dividends, and not upon an arbitrary determination of what the net profits
750
were, and besides that they were allowed to make large reductions for depreciation and renewals. One objection to hit proposal was that it was supposed there might be a danger to the Inland Revenue in allowing reserves to be piled up through the non-payment of dividends, but he would point out that that could not be done beyond a certain point. Moreover it was perfectly simple to provide that if any company was liquidated for the purpose of distributing its reserves income-tax could be charged on the amounts put from time to time to reserve. He trusted that the Chancellor of the Exchequer would see his way to make the change which he had suggested, and so give some relief in the cases that he had mentioned.
Amendment proposed—
"In page 6, line 35, at the end, to insert the words "Provided that, in the case of companies with limited liability registered under the Companies' Acts, income-tax shall be charged on the amount distributed as dividend.' "—(Mr. Annan Bryce.)
Question proposed, "That those words be there inserted."
THE PRESIDENT OF THE BOARD OR EDUCATION (MR. MCKENNA,)said that his hon. friend had stated that certain companies did not always divide their profits in dividends each year, but sometimes distributed them over a series of years Not long ago they had heard of public companies subscribing out of reserve to the Municipal Reform League. As a matter of fact, the proposal of his hon. friend would work very unfairly, because the profits of one year might be reserved for the purpose of equalising dividends in future years, and the operation of the Amendment of his hon. friend would in certain cases be to increase the charge on the taxpayers of the country. The tax should be levied on the profits of the year in which they were made. The real fact was that under the present law companies, like individuals, were taxed upon the profits which they had made during the current year, and that principle ought to be applied all round. The law took no cognisance of the particular purpose to which the profits were devoted; and the Amendment of the hon. Gentleman

751
would introduce a change in dealing with a company as distinguished from an individual.
MR. AUSTEN CHAMBERLAINsaid that the right hon. Gentleman had said that there was no reason why they should afford to a company a right which was not conceded to a private individual. But he had a good deal of sympathy with the intention of the hon. Gentleman who had moved the Amendment, although he admitted that the subject was very difficult to deal with. It would have a bad effect on the financial Budget of the year, but he did not see why it should be unjust to the State in the long run. Let them take the case of a capitalist who had paid a large sum of money for a patent right which was to run for fourteen years. He would not consider that he had earned any profit until after he had paid off the money which he had expended in securing the patent right, although he had made considerable profits in the meantime. For his part he would be glad if the right hon. Gentleman was able to meet such a case, and he did not think that he would lose revenue in the long run.
Sir F. BANBURYdid not think that the right hon. Gentleman had met the case presented by the hon. Member for Inverness Burghs as to the equalisation of dividends. The shareholders would not allow any large sum to be set aside for that purpose or to be paid out of reserve for any other purpose. It seemed to him ridiculous that the same rule should apply to public companies as to private individuals. He instanced the case of the Nitrate Company; the capital was £1,000,000. The gross revenue for the last seven years was £1,097,574, and allowing 5 per cent. for depreciation of machinery, £33,721, the seven years' assessment for income-tax would be £1,063,853. But that company was a wasting company. The depreciation fund for exhaustion of raw material as the grounds were worked out and depreciation of buildings, etc., would amount to £457,479. The amount available for dividend would be £606,374 and on that income-tax ought to be charged, instead of on the 1,063,853 on which it
752
had been charged. The shareholders had thus been taxed on profits to the extent of £457,459 which they had never seen and which they never would except in the fact that the capital had been maintained on which they would have to pay death duties. When he presented this case to the Chancellor of the Exchequer all the reply that the right hon. Gentleman made was that it had been the custom for sixty years to make this charge to the income-tax, and he considered that that was a sufficient answer. He quite admitted the difficulty which the right hon. Gentleman had to encounter, but there was substance in the Amendment of the hon. Member for the Inverness Burghs, and if it had been the practice for sixty years it was the duty of the House of Commons to put it right.
Sir E. CARSONsaid that when he was Solicitor-General he had a great deal to do with the administration of the Income-tax Act, and he could assure the Committee that it was exceedingly difficult to collect that tax on the basis of income earned and income derived from investments. Of course, it was very easy to say that there-was something attractive in the Amendment brought forward by the hon. Member for Inverness Burghs. To take the case which was put by his hon. friend of a wasting security, why should not that nitrate company be charged income-tax? He, as a private individual, was charged in respect of the house of which he had purchased the lease and that lease ran out year by year until at the end nothing was left. As a prudent man he might put by so much each year to provide for that, but if the company was given this concession that concession must also be given to him. Or they might take the case of a hard working man like himself, whose capital was his health and his length of life. As a prudent man he must put by something every year because he might not be able always to make an income. Was he to pay upon that and the company go free? If they once departed from the sound principle laid down by the Income-tax Acts and examined what was done by the profits he believed they would raise such a confusion that it would be

753
impossible to allay it. He thought they ought to allow certain deductions. He thought the deductions were rather narrow, and, what was more, he believed they were laid down at a time when business was carried on under different conditions and that there were many things which might be allowed as legitimate outgoings which were not allowed now. He thought they might extend the deductions, but however attractive the Amendment might seem he did not think it would be possible to carry it into effect.
MR. ASQUITHsaid his right hon. friend had answered far more ably than he was able to the argument of the hon. Baronet the Member for the City of London. The real truth was that when they began to deal with these wasting securities they found themselves drawn into inextricable confusion. He quite agreed that the case stated was a one of apparent hardship at first sight, but the hardship, as his right hon. friend had pointed out, came on at an earlier stage, at the stage of the ascertainment of what was profit. This question, if it was raised at all, ought to be raised on a proposal to amend the rules of the Income-tax Acts, as to what ought or ought not to be allowed in determining income. It was, he thought, foreign to this Amendment and foreign to this clause. But once they had determined what the profits of a business were, and they should determine that on rules which were uniform, for income-tax purposes it was quite irrelevant to inquire as to what was done with them. What was done with them depended entirely on the will or caprice of the person who made them, and for income-tax proposes it did not matter what he did with them. As his right hon. friend stated they could not discriminate between a company and an individual. On these grounds it was impossible for him to accept the Amendment.
MR. FELLsaid he wished to raise a point which he could best explain by giving a concrete case. He believed he would have the sympathy of the Chancellor of the Exchequer in the matter. Supposing a company made a profit of, say. £100,000, but did not
754
divide that money amongst the shareholders, employing it instead to write down losses incurred in business. If that £100,000 had been distributed among the shareholders as profits, the smaller shareholders would be entitled to recover that portion of the income-tax accruing to them by way of abatement. But the company being assessed on the whole amount at Is. in the £, there was no possibility of the shareholders ever getting back that portion of their abatement. He thought some remedy for this might be found in the Amendment. It was a distinct hardship on these people that they should not get the abatement to which they were entitled.
Sir F. BANBURYsaid he would just point out in reply to the right hon. Gentleman that depreciation was already allowed to the extent of 5 per cent., and if that deduction was allowed there could be no reason why the property tax should not be deducted. When once the principle was admitted that under certain conditions deductions could be allowed for depreciation, it must be also admitted that in some cases the depreciation might be larger than in others and that larger deductions must be allowed. He could not see that the argument of his right hon. and learned friend of the man with a house had any relevancy to this point, and he certainly hoped the right hon. Gentleman would consider next year whether or not he could increase the amount allowed for depreciation.
*Mr. ANNAN BRYCEsaid he would be perfectly willing to accept the suggestion of the hon. Member for the City of London. If the right hon. Gentleman the Chancellor of the Exchequer would consent to that it would meet his view. He quite appreciated the difficulty of making a distinction between companies and individuals. But having in view the fact that it was done in other countries he failed to see why it should not be done here. What he wanted to emphasise was the hardship inflicted on a great number of shareholders n companies with a diminishing capital. He happened to know that the Income-tax Commissioners deplored the fact

755
that they were at the present time so tied by the rules that they were not able to do as they would like to do in these matters. He hoped the right hon. Gentleman would consider this matter next year. He begged to withdraw his Amendment.
Amendment, by leave, withdrawn.
Question proposed, "That the Clause stand part of the Bill."
*MR. CHIOZZA MONEYtrusted he would be forgiven for speaking again on this particular clause, but his reason for so doing was that the issue involved was so very great. He referred to the issue of a graduated income-tax. He had himself prepared, at some trouble, an Amendment with reference to a graduated income-tax which had been ruled out of order, but had it been adopted it would have brought in another£6,000,000 to the Exchequer. It was not so much, however, on the ground of gaining additional revenue, although that was an exceedingly important point in this connection, that he desired to raise the subject, as on the ground that more justice needed to be done between the various orders of income-taxpayers. No matter what amount the Chancellor of the Exchequer desired to raise, whether it was £32,500,000 as in the present year, or £20,000,000, or £50,000,000, regard should be had to the means possessed by the various class, of the income-taxpayers. The present rough system of graduation as left by the Conservative Government some years ago was effected by a series of abatements, and they were so crude that he doubted whether any hon. Member could write down a rough idea of the graduation arrived at. Under that system nobody knew exactly where he was, and no man could say without inquiry and calculation what amount of income-tax was paid by the lower class of income-taxpayers. A man who under the present system of abatements only paid a few pence in the £was under the impression that he paid a large amount of income-tax. And that fact was impressed upon his mind because of the Party capital made by both sides, and
756
also by newspapers, out of this tax. There was no more popular appeal to the public than to tell them that the Government in power was taxing them very heavily. That was the reason that the small income-taxpayer laboured under the impression that he was more oppressed than any other class. But while the impression of hardship was exaggerated, there was undoubtedly too rapid a rise in the scale at the lower end, Between the figures of £250 and £300 a year lay hundreds of thousands of income-taxpayers who depended entirely on their health for their incomes. If inquiries were made into the position of the lower middle class, it would be found that the position of many of them in society was exceedingly insecure and that they were subject to terms of unemployment quite as serious as those which were suffered by the labouring classes. He held that considerable relief could be given to this class by a proper system of graduation. The principle of graduation had been gradually admitted, not only by statesmen, but academic economists. It was not so long ago that he heard Professor Marshall say that a graduated income-tax was the ideal form of taxation. What had stood in the way was the want of knowledge of the taxable incomes. It was impossible to give proper graduation unless there was some idea of the different incomes of the different taxpayers. That was a very strong argument indeed for taking measures to ascertain the actual income of the income-taxpayer. How did the matter stand? Until this Budget was framed the position was that two-thirds or three-fourths of the income-taxpayers were called upon to declare their income. His right hon. friend, by introducing a new step in graduation, would now ascertain the individual incomes of some 950,000 out of 1,100,000 taxpayers. It was argued that because the abatement, like the differentiation, was something in which there was an advantage to the taxpayer, therefore the taxpayer made the declaration in the hope of getting something, and that it was a very powerful engine for obtaining a declaration from that class. But that argument fell to the ground for the reason that in a large number of cases

757
the income-taxpayer did not declare his income in order to obtain an abatement, but had it declared for him by a third person, his employer.
THE FINANCIAL SECRETARY TO THE TREASURY (MR. RUNCIMAN,): Is all the income declared by the employer or the amount paid by the employer?
MR. CHIOZZA MONEYsaid that in nineteen cases out of twenty, in the case of clerks and travellers and income-taxpayers of that description, the amount declared by the employer was the entire income of the taxpayer. That was inquisition with a vengeance, for we actually made inquiry not from the poor man but from the poor man's employer. Yet the employer himself had not to declare his entire income. To pass to the other end of the scale, such rich men as made their incomes entirely from their own business now declared their entire income under Schedule D, and he failed to see why there should be any difference in the inquisition between the man who gained his sole income from his trade and the man who derived his income from a number of rents and investments and who had not to make under our present system any return whatever. The next point that had been urged against graduation of income-tax was that it was not practicable, but there had not been much heard of that argument since the appointment of the Income-tax Committee. If it was thought advisable to graduate only small and moderate incomes then the Committee declared that it was practicable to do so by "degression." If it was thought advisable to graduate the income-tax to obtain higher revenue, then it was possible, the Committee declared, to use the method of a super tax. He did not favour a super tax in the form of arranging a second tax to clap on top of the existing tax. He thought, rather, that the arrangement should be in the form of a plain and simple scale rising from the lower incomes to the highest. The scale could be symmetrically arranged in a way that would appeal to the common sense of the income-taxpayers. If that were done—and the same system was already in
758
existence in the world—he was perfectly sure that the income-tax would be placed on a much more equitable basis than at present, and it would be popularised so far as it was possible to popularise any tax whatever. The idea of justice would attach to it which did not attach to it now. But it was said that even if a scale were arranged it would not be worth doing, because there was. not a great deal to be got from it. He doubted that. There could be no doubt that the net income of the income-taxpaying classes in the present year would not be less than £800,000,000. If they made allowance for non-personal incomes, they would have not much under £750,000,000 net as the income of the tax-paying classes taxable under a graduated scale. He regarded that as a most conservative estimate. What could they do to obtain increased revenue from such an income as that? Could they do it without injuring the trade of the country and without trenching upon capital savings, to which, in the present order of society, they must have regard? Of the £750,000,000 roughly about £250,000,000 represented incomes below £700 a year, and £500,000,000 the incomes over £700 a year. Looking to the expenditure of the rich, the extraordinary development of luxuries and of the trades which ministered to those luxuries, it was not surprising that statistical inquiries showed that of the £500,000,000 probably £200,000,000 was the aggregate of incomes over £5,000 a year. That deduction did not surprise them in view of the condition of society, as they knew it to-day. If they assumed that there was an income of £250,000,000 up to £700, £300,000,000 between £700 and £5,000, and £200,000,000 over £5,000, then it was a simple matter to show that by an income-tax graduated not above Is. 6d. in the pound they could produce an income larger than would be produced by the scheme of his right hon. friend, certainly not smaller. They could further show that by a tax which did not exceed 2s. in the pound at the highest point and which only averaged 6½ Per cent. they could easily raise a sum of over £50,000,000 if they required it. He urged that these considerations should have weight with the Chancellor of the Exchequer in framing

759
his Budget. Another argument advanced was that the trouble involved was too great. He could not admit that for a single moment. After all, the total number of assessments did not exceed 1,100,000. It was easy to name a country where they had to deal with 3,500,000 assessments in a single year. If in a foreign country that number could be successfully dealt with, and a practical plan of graduation carried out, reaching up to £5,000 a year, why should not this country be able to deal with a scheme of graduation with only 1,100,000 assessments? The argument about trouble, at least, ought not to be used. The House was now sitting as a single Chamber, for they were treating of matters with regard to which there was no House of Lords. There was nothing which stood between his right hon. friend and the prosecution of his financial proposals. If it was the case that a very large number of social measures were simply at a standstill for want of ways and means, and when they had Members on the other side continually preaching that they had a method of raising revenue—
*THE CHAIRMAN: Order, order. The hon. Gentleman is allowing himself great latitude.
*MR. CHIOZZA MONEYsaid he at once bowed to the Chairman's ruling, but he would conclude by observing that at any rate there was an opportunity for dealing with this matter which could not be frustrated, and he trusted, therefore, that the considerations which he had ventured to urge would receive careful attention.
MR. EVANShoped that the answer to be made to his hon. friend on this occasion would not close the door against the proposal for graduation of the income-tax. But he felt that it came rather late, though it had been discussed in the Budget debate, and also on the Second Reading of the Bill. He was not quite sure what the Chancellor of the Exchequer had said in those debates, but he trusted that nothing he said now would make it difficult for him to travel along this road and to carry out the recommendations of the Committee, which, appointed by him last session,
760
had reported unanimously in favour of graduation. He desired to call the attention of the Chancellor of the Exchequer to one other small matter. This clause, and the income-tax which it authorised, would touch, according to the recent decision of the House of Lords, a species of property which had never been touched before. Since the Act of 1853 was passed it had never dawned on anybody until last year, when it occurred to someone living in the Celtic fringe between Monmouthshire and Glamorgan, that the income-tax should be levied on the public property of local authorities, which they were bound by Act of Parliament to provide. He did not think the decision was necessarily confined to a sewer vesting in a public authority, as liable to income-tax. It was a most extraordinary decision. He would call attention to one phase of the matter. Assuming that it was right to assess these public properties to income-tax, the result was they that brought as contributors to the income- tax small ratepayers of less than £160 a year, a limit of income which did not contribute at all. The cost of providing and maintaining public works like sewers came out of the rates, paid to a large extent by ratepayers whose incomes were under £160 a year. The assessment being under- Schedule A, the income-tax which the property had to bear was Is. in the £, so that the small ratepayers had to bear the burden on the higher scale. He ventured, therefore, to bring this decision to the attention of the Treasury and of his right hon. friend the President of the Local Government Board, who was also concerned in the matter.
MR. ASQUITHsaid he did not propose to add anything to what he had already said in his Budget speech on the subject of graduation. He must, however, refer to the point which had been raised by the hon. and learned Member for Mid. Glamorganshire. The decision he referred to had only recently been brought to his notice. It had come upon him as an old practitioner in these matters with some degree of surprise. As he happened to be Chancellor of the Exchequer he should be the last to complain if the sewers of the country, which had so

761
long been exempt, now contributed to the income-tax. His hon. and learned friend had suggested that the decision would impose upon the small ratepayer for the first time the burden of contributing to the income-tax. He imagined that the indirect contribution of the small ratepayer under this head was almost infinitesimal. He supposed there were very few of our great municipal bodies some part of whose undertaking was not at present assessable for income-tax in respect of the profits they were making, and, therefore, the grievance was no new one. He would, of course, carefully scrutinise the development of the matter, and note whether the gloomy anticipations of his hon. and learned friend were realised, but he did not think the additional burden on the small ratepayer was likely to be serious. He appealed to the Committee to pass the clause in order that they might devote the remainder of the evening to the important questions which remained to be considered.
Clause agreed to.
Clause 18: —
*Mr. JOWETTmoved an Amendment, the object of which he explained was to confine the special relief proposed to be given under the clause to those who enjoy incomes of not more than £1,000 a year. The Bill provided that in cases where the total income did not. exceed £2,000 a year, the tax on earned incomes should be at the rate of 9d. in the £ instead In his opinion, which was shared by many hon. Members and by a very large number of people outside the House, the relief given to persons whose incomes ran up to £2,000 a year was not justified, in view of the poverty which existed among other sections of the community. During the debate which followed the introduction of the Budget it was pointed out by another Member of the Labour Party that there were no fewer than 2,000,000 families in the country who were in receipt of incomes of £1 per week, and that in many cases 15s. of that £had probably to be spent upon food alone. The Chancellor of the Exchequer had declined to give any relief to those taxpayers. He declined to reduce indirect
762
taxation; the sugar tax was still to remain, and there was to be no reduction in the tea duty. That being the case, it-appeared to him to be exceedingly un-reasonable that relief should be given to those whose incomes amounted to more than £1,000. The Chancellor of the Exchequer could have given the relief of Id. per £ reduction on tea at a cost of £1,000,000 per annum, and if his Amendment were adopted the amount yielded to the Exchequer would have defrayed this expanse. The Chancellor was anxious to create a fund for old age pensions. Here was £1,000,000 a year that he could add to a nest egg which was so much spoken of. He asked hon. Members to register by their vote whether they thought with him that it was a most improper proceeding to offer relief to every individual in the community with an income of £2,000, while refusing everything except promises—given, he admitted, in good faith—to those un-fortunate persons by whom the payment of every single penny was separately felt. He begged to move his Amendment.
Amendment proposed—
"In page 7, line 11, to leave out the word 'two,' and insert the word 'one'." —(Mr Jowett)
Question proposed, "That the word 'two' stand part of the clause."
MR ASQUITHsaid he had listened attentively to the speech of the hon. Member, and as far as he could follow his argument, it meant that they were giving too much relief to the income-tax payer and too little relief to the consumer in the shape of remission of indirect taxation. The hon. Gentleman had not argued his case on its merits. The Select Committee which reported on the subject were, he believed, unanimously in favour of £3,000 as the limit.
*SIR CHARLES DILKEsaid the Committee was unanimous in regard to £2,000, but not £3,000. But, even the differentiation below £2,000 was only assented to by himself in connection with the adoption, of graduation.
MR. ASQUITHsaid that, at any rate, the Report recommended £3,000, and he gathered that they were unanimous as regarded £2,000. To draw an arbitrary line in a matter of this kind was extremely difficult. It was impossible, perhaps, in one sense, to justify the exclusion of a man who had £2,001 a year while another with £1,999 was included, but that was a common feature of all systems of graduation. To use an old phrase, "you must draw the line somewhere." In drawing the line there might be undue benefit on one side, and undue hardship on the other. He had been asked why he had made the limit £2,000. He had done so because it was the only practical way of bringing relief to a class of income-tax payers who were eminently entitled to come within the scope of his ameliorative measure of differentiation. Who were they? They were the smaller business class and professional men whose incomes ranged from £700 to £2,000 a year. He did not speak of the class with incomes up to £700, because they had already relief in the shape of abatements. He wished to bring in for relief the smaller business men, and also employees who, no doubt, were in positions of considerable responsibility, and, above all, the professional men of the country on whom the present scale of income-tax bore very hardly. To confine the limit to incomes of £1,000 would be to leave out of the scope of the remedial measure, a large number of persons who were entitled to it. A country doctor might be earning £1,500 a year, and if they took into consideration his necessary expenses in order to maintain his position as a professional man among his neighbours—the expenses of his house, the bringing up of children, and the maintaining of the standard of external comfort and appearance, and it should be remembered that that was all contingent upon the maintenance of his health and the duration of his life, for when health failed or life ceased, all those dependent upon him were left entirely at the mercy of fortune—if they compared that man's income with a corresponding income which a man derived from investments, it was impossible for anybody to argue that the tax fell with equal weight upon both men.
764
By maintaining the tax at an equal rate as between those different classes, a grievance was inflicted upon the middle classes of the country who earned their incomes, and that was what made the tax so unpopular among them and so difficult to collect. The hon. Gentleman opposite had brought before the notice of the House the position of those who were specially called the labouring class. The hon. Member and his friends in their legitimate and most proper desire to remove avoidable hardship from their own class, when they were dealing with a tax which did not directly affect that class—although he believed that in the long run it did affect them if it did not do so directly—should not forget the grievance and injustice which the income-tax in its higher scales inflicted on those who were subject to it. He was perfectly certain that it was the duty of the Government to retain the tax, and he could not imagine any Chancellor of the Exchequer contemplating our financial future in the absence of the income-tax, and, he would say, the income-tax at a substantial figure. He would say that the incorporation of the income-tax as a permanent part of the financial machinery of the country was incumbent on them, but they should see that as among the classes on whom it fell its incidence was as fair and equitable as possible. Now that they had come to the conclusion that it was not a temporary but a permanent tax, their first duty it seemed to him was to see how far they could make it fair among those upon whom it fell. If the Government were to accept the terms of the Amendment of the hon. Member, there would be left out of the remedial operation of the scheme a very large number of people who, in his judgment, were specially deserving of differential and equitable treatment. He earnestly appealed to hon. Members to look at this matter on its own merits, and to consider it as it affected the different classes of income-tax payers. If they agreed with him that the income-tax must be treated as part of our financial system, he asked them to assist in making it as just as possible to those sections of the community upon whom it had hitherto pressed with undue severity.
Question put.
The Committee divided: —Ayes, 237; Noes, 45. (Division List No. 266.)

AYES.

Acland, Francis Dyke

Dickinson, W.H.(St.Pancras, N.

Lloyd-George, Rt. Hon. David

Alden, Percy

Dobson, Thomas W.

Lough, Thomas

Allen, A. Acland(Christchurch)

Duckworth, James

Luttrell, Hugh Fownes

Allen, Charles P. (Stroud)

Dunn, A. Edward (Camborne)

Lyell, Charles Henry

Anson, Sir William Reynell

Edwards, Clement (Denbigh)

M'Callum, John M.

Ashley, W. W.

Edwards, Sir Francis (Radnor)

M'Calmont, Colonel James

Asquith, Rt. Hon. Herbert Henry

Elibank, Master of

M'Crae, George

Astbury, John Meir

Erskine, David C.

M'Kenna, Rt. Hon. Reginald

Baker, Sir John (Portsmouth)

Essex, R. W.

M'Laren, Sir C. B. (Leicester)

Balcarres, Lord

Esslemont, George Birnie

M'Micking, Major G.

Balfour, Robert (Lanark)

Evans, Samuel T.

Magnus, Sir Philip

Banbury, Sir Frederick George

Eve, Harry Trelawney

Manfield, Harry (Northants)

Banner, John S. Harmood-

Everett, R. Lacey

Markham, Arthur Basil

Baring, Godfrey(Isle of Wight)

Faber, G. H. (Boston)

Marks, G. Croydon(Launceston)

Baring, Capt. Hn. G.(Winchester

Fell, Arthur

Massie, J.

Barker, John

Ferens, T. R.

Menzies, Waiter

Barlow, Percy (Bedford)

Ferguson, R. C. Munro

Meysey-Thompson, E. C.

Barrie, H. T. (Londonderry. N.

Fiennes, Hon. Eustace

Mildmay, Francis Bingham

Barry, Redmond J. (Tyrone, N.

Findlay, Alexander

Montagu, E. S.

Beale, W. P.

Fletcher, J. S.

Moore William

Beauchamp), E.

Fuller, John Michael F.

Morgan, G. Hay (Cornwall)

Beckett, Hon. Gervase

Furness, Sir Christopher

Morrell, Philip

Bell, Richard

Gladstone, Rt. Hn. Herbert John

Morse, L. L.

Bellairs, Carlyon

Glendinning, R. G.

Morton, Alpheus Cleophas

Benn, Sir J. Williams(Devonp'rt

Goddard, Daniel Ford

Newnes, F. (Notts, Bassetlaw)

Benn, W.(Tw'rHamlets, S. Geo.

Gooch, George Peabody

Newnes, Sir George (Swansea)

Berridge, T. H. D.

Gordon, J.

Nicholls, George

Bethell, Sir J. H.(Essex, Romf'rd

Grant, Corrie

Nicholson, C'harles N. (Doncast'r

Billson, Sir Alfred

Greenwood, G. (Peterborough)

Nield, Herbert

Birrell, Rt. Hon. Augustine

Gretton, John

Norton, Capt. Cecil William

Boulton, A. C. F.

Grey, Rt. Hon. Sir Edward

Partington, Oswald

Boyle, Sir Edward

Gulland, John W.

Pearce, William (Limehouse)

Bramsdon, T. A.

Gurdon, Sir W. Brampton

Philipps. Col. Ivor(S'thampton)

Brigg, John

Haddock, George R.

Price, RobertJolm (Norfolk,E.)

Brocklehurst, W. B.

Hardy, George A. (Suffolk)

Priessley, Arthur (Grantham)

Brooke, Stopford

Harrison-Broadley, H. B.

Priestley, W.E. B. (Bradford,E.)

Bryce, J. Annan

Hart-Davies, T.

Pullar, Sir Robert

Buchanan, Thomas Ryburn

Harvey, A. G. C. (Rochdale)

Radford, G. H.

Buckmaster, Stanley O.

Haworth, Arthur A.

Rawlinson, John Frederick Peel

Burns, Rt. Hn. John

Hedges, A. Paget

Remnant, James Farquharson

Burt, Rt. Hon. Thomas

Helme, Norval Watson

Renton, Major Leslie

Butcher, Samuel Henry

Henderson, J.M.(Aberdeen, W.)

Ridsdale, E. A.

Buxton, Rt. Hn. Sydney Charles

Herbert, Col. Sir Ivor(Mon., S.)

Roberts, John H. (Denbighs.)

Byles, William Pollard

Herbert,T. Arnold (Wycombe)

Roberts, S. (Sheffield, Ecclesall)

Cameron, Robert

Hervey, F.W.F.(Bury S. Edm'ds

Robinson, S.

Carlile, E. Hildred

Hill, Sir Clement. (Shrewsbury)

Robson, Sir William Snowdon

Causton, Rt. Hn. Richard Knight

Holland, Sir William Henry

Ronaldshay, Earl of

Cave, George

Holt, Richard Durning

Rutherford, V. H. (Brentford)

Cecil, Evelyn (Aston Manor)

Hope, W. Bateman(Somerset, N.

Sandys, Lieut.- Col. Thos. Myles

Cecil, Lord John P. Joicey-

Jackson, R. S.

Schwann, C. Duncan (Hyde)

Cecil, Lord R. (Marylebone, E.)

Jardine, Sir J.

Schwann, Sir C. E. (Manchester)

Chance, Frederick William

Jones, Leif (Appleby)

Scott, A.H.(Ashton under Lyne

Chaplin, Rt. Hon. Henry

Jones, William (Carnarvonshire

Scott, Sir S. (Marylebone, W.)

Clough, William

Kearley. Hudson E.

Shipman, Dr. John G.

Coates, E. Feetham(Lewisham)

Kekewich, Sir George

Sinclair, Rt. Hon. John

Coats, Sir T. Glen(Renfrew, W.)

King, Alfred John (Knutsford)

Smeaton, Donald Mackenzie

Collins, Stephen (Lambeth)

King, Sir Henry Seymour(Hull)

Smith. F.E. (Liverpool, Walton

Collins, Sir Wm. J.(S. Pancras, W.

Laidlaw. Robert

Soares, Ernest J

Cory, Clifford John

Lambert, George

Stanger, H. Y.

Cotton, Sir H. J. S.

Lamont, Norman

Stanley, Hn. A. Lyulph (Chesh.)

Cowan, W. H.

Layland-Barratt, Francis

Stewart, Halley (Greenock)

Craig, Charles Curtis(Antrim, S.)

Leese, Sir Joseph F.(Accrington)

Strachey, Sir Edward

Craik, Sir Henry

Lever, A. Levy(Essex, Harwich)

Strauss, E. A. (Abingdon)

Dalrymple, Viscount

Lever, W. H. (Cheshire, Wirral)

Stuart, James (Sunderland)

Davies, W. Howell (Bristol, S.)

Levy, Sir Maurice

Sutherland, J. E.

Dewar, Arthur (Edinburgh, S.)

Lewis, John Herbert

Taylor, Theodore C. (Radcliffe)

Dewar, Sir J.A.(Inverness-sh.)

Liddell. Henry

Tennant, Sir Edward(Salisbury,

Thomas, Sir A. (Glamorgan, E.)

Wason, John Cathcart (Orkney)

Wilson. Henry J. (York, W.R.)

Thomasson, Frankin

Waterlow, D. S.

Wilson, John (Durham, Mid)

Thompson. J.W.H. (Somerset. E

Watt, Henry A.

Wilson. J. W. (Worcestersh, N.)

Thomson, W. Mitchell- (Lanark)

Weir, James Galloway

Wilson, P. W. (St. Pancras, S.)

Torrance, Sir A. M.

White, J. D. (Dumbartonshire

Winfrey. R.

Toulmin, George

White, Luke (York, E.R.)

Wortley. Rt. Hon. C. B. Stuart-

Ure, Alexander

Whitehead, Rowland

Yoxall, James Henry

Walrond, Hon. Lionel

Whitley, John Henry (Halifax)

Walters. John Tudor

Whittaker, Sir Thomas Palmer

TELLERS FOR THE AYES— Mr.

Walton, Sir John L. (Leeds, S.)

Wiles, Thomas

Whiteley and Mr. J. A.

Waring, Walter

Williams, Col. R. (Dorset, W.-

Pease.

Wraner, Thomas Courtenay T.

Wilson. A. Stanley(York, E.R.)

Wason, Eugene (Clackmannan)

Wilson. Hon. C.H.W. (Hull, W.)

NOES.

Abraham, William (Rhondda)

Hall, Frederick

Richardson, A.

Barnes, G. N;

Harvey. W.E. (Derbyshire, N.E.

Samuel, S. M. (Whitechapel)

Black, Arthur W.

Hazel, Dr. A. E.

Shaw. Charles Edw. (Stafford)

Brace, William

Henry, Charles S

Steadman. W. C.

Bridgeman, W. Clive

Houston, Robert Paterson

Wadsworth, J.

Brotherton. Edward Allen

Johnson, John (Gateshead)

Walker, H. De R, (Leicester)

Cleland, J. W.

Johnson, W. (Nuneaton)

Walton, Joseph ((Barnsley)

Cobbold. Felix Thornley

Lamb, Edmund G. (Leominster

Wardle, George J.

Davies. Ellis William (Eifion)

Macdonald, J. R. (Leicester)

White, George (Norfolk)

Davies. Timothy (Fulham)

Macdonald, T.M.(Falkirk B'ghs)

Williams, J. (Glamorgan)

Duncan. Robert(Lanark, Govan

Masterman, C. F. G.

Wilson. W. T. (Westhoughton)

Edwards, Enoth (Hanley)

Money. L. G. Chiozza

Fen wick, Charles

Morpeth, Viscount

TELLERS FOR THE NOES— Mr.

Fullerton. Hugh

O'Donnell, C. J. (Walworth)

Jowett and Mr. Charles

Gardner, Ernest (Berks, East)

Parker, James (Halifax)

Duncan.

Gill, A. H.

Pearce, Robert (Staffs., Leek)

Glover, Thomas

Raphael, Herbert H.

MR. VICTOR CAVENDISHasked whether after the Committee had passed certain words it was in the power of the Committee to raise the question of the interpretation of those words.
*The CHAIRMANsaid he did not think there would be any difficulty in this case; because Subsection (7) gave the definitions and the question would properly arise then.
MR. J. F. MASONmoved to leave out the words "the rate of ninepence," in order to insert "three-fourths of the normal rate. "He proposed this Amendment in no spirit of antagonism, but with a view to throwing out a suggestion which might be useful to the Chancellor of the Exchequer in dealing with this subject in the future. It would simplify his work and make the intention clear in regard to the two classes of income-tax payers. As the Bill stood at present the two classes were dealt with in two clauses of the Bill. On the question of a decrease or increase in the normal rate the case of the 9d. tax-payers would have to be considered by itself, but his suggestion was that some ratio between the two
768
classes should be established, so that if the normal tax was increased the special tax should be increased also. He was quite aware that this might be a difficult thing to do, and might mean calculations going into farthings, but after all that was not serious. Since he put down the Amendment it had occurred to him that it might be easier instead of a ratio to-establish a difference, and say that the rate in one class should be so many pence less than the other. His desire was that something should indicate that it was not the intention to increase or decrease the rate in one class, and leave the other fixed for all time.
Amendment proposed—
"In page 7, line 16, to leave out the words 'the rate of ninepence,' and insert the words 'three-fourths of the normal rate.'" — (Mr. J. Mason)
Question proposed. "That the word proposed to be left out stand part of the clause."
MR. McKENNAsaid that the hon. Gentleman had admitted the difficulty of applying his Amendment in practice. His real objection to the proposal was that it

769
would be unwise to indicate any desire to bind the action of future Parliaments as to the relation between the two classes of income-tax payers. Special circumstances might arise which would have to be dealt with in the arrangements for a particular year.
Sir F. BANBURYsaid he agreed with the right hon. Gentleman that it would be unwise to fix a ratio between the two classes of income-tax payers. As he understood the position, the reason for the difference of abatement was that the Chancellor of the Exchequer found he was unable to reduce the income-tax which at present stood at Is., and the right hon. Gentleman had also told the Committee that he did not mean that that shilling tax should be imposed for ever—that it was impossible to reduce it this year, but that perhaps it might be possible to reduce it in the next three or four years. The right hon. Gentleman had admitted that it was a heavy charge on those who had earned income only, and therefore earned incomes under £2,000 were to be charged at the rate of 9d. personally he did not approve of one of, say, £2,100, and another tax for a man who had an income of £2,000. However, he agreed that the proposal of the right hon. Gentleman the Chancellor of the Exchequer was the best solution of a very difficult case.
MR. MYERsaid that, as to the abatement on incomes of £2,000 and under, he failed to see the difference between earned and unearned income. There were many persons, particularly women, who were in receipt of a certain income from private property, and they were deserving of a good deal of consideration on the part of the Government.
MR. ASQUITHsaid that that question arose on another Amendment.
MR. AUSTEN CHAMBERLAINsaid that the hon. [Member for the City of London was of a very sanguine nature, if he expected that the whole income-tax would be shortly collected at 9d. He did not think that the Chancellor of the Exchequer had even expressed a pious opinion that he would be able to reduce the income-
770
tax soon. It must be remembered that if the House sanctioned the right hon. Gentleman's attempt at differentiation between the two classes of income-tax payers, a step would be taken on which there was no going back. He wished to ask the Chancellor of the Exchequer what was in his mind when he stated in the course of the debate that the normal course should be to maintain the difference between the two classes at 3d., or whether in speaking of elasticity he only referred to incomes on a higher scale.
MR. ASQUITHsaid that when he spoke of the greater elasticity which in his view would be given to the tax by this differentiation he had in his mind primarily the tax as a whole. He thought it much easier in a case of emergency to raise the tax as a whole. Every Chancellor of the Exchequer, however, had to consider the question for himself.
MR. J. F. MASONasked leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
MR. HICKS BEACH:moved to leave out from Sub-section 2 of Clause 18 words which provided that relief under this section should only be given in respect of such earned income, if any, as remained after deducting the amount on which a person was relieved of the tax under Section 8 of the Finance Act, 1898, and Section 54 of the Income Tax Act, 1853. He said it appeared from the sub-section under consideration that a man with, say, £300 a year, of which £160 was earned and £140 unearned, would get no more relief than the man with £300 a year the whole of which was unearned. If the Chancellor of the Exchequer wished to grant relief to persons whose income was earned he ought to do it all through.
Amendment proposed—
"In page 7, line 19, to leave out all the words after ' Acts ' to end of sub-section."—(Mr. Hicks Beach,)
Question proposed, "That the words proposed to be left out stand part of the clause."
MR. SYDNEY BUXTONsaid that under the Bill as it stood no one would be worse off than before; that was to say, all the relief given was in addition to existing relief, and therefore in no case was any injury done. The reason why the abatement would be taken off the earned income in the first place rather than from the unearned portion was a question of administration as well as one of revenue. The real difficulty was in respect of administration.
MR. T. L. CORBETTcalled attention to the fact that forty Members were not present.
MR. CONOR O'KELLYasked the Deputy-Chairman whether, when an objection of this kind was taken, it was customary to take account of the number of Members in the House at the time, because he contended there were forty in the House though they might not have been visible to the hon. Member for North Down.
House counted; and forty Members being found present—
MR. SYDNEY BUXTONsaid the administrative difficulty in the way of meeting the proposal of the hon. Member for Tewkesbury was that the whole of the abatement and questions arising in connection therewith would have to stand over until later in the year. At the present moment, in the large majority of cases, the abatement was given at once and without question on the information supplied by the applicant. As regarded the unearned portion of income, in the vast majority of cases the tax was recovered at the source and had to be claimed back by the individual at a later stage. It must be obvious, therefore, that if the abatement was to be taken from both kinds of income combined, instead of from one, the whole of the abatement would have to be claimed at a later stage. From the point of view of both convenience and expense the proposal in the Bill was much better. Another disadvantage which would accrue to the applicants if the Amendment was accepted was that they would have to return the whole
772
of their incomes, to which people somewhat objected. Under the Bill they would only have to return the earned income and the abatement would be granted at once. The proposal would also cause a very considerable loss of revenue, and on the whole the conclusion come to was that the method proposed under the Bill was the better and fairer way.
MR. AUSTEN CHAMBERLAINsaid the point was one of such great importance that he regretted they had to discuss it at that hour and in a very thin House. It affected an enormous number of people, and those among the poorest of income-tax payers, who by the inclusion of the words which his hon. friend had moved to leave out were refused the relief which was given to other people in like circumstances. Before he treated the question on its merits he would like to say a few words on the statement made by the Postmaster-General in his defence of this clause as to the administrative difficulties. His refusal to give the proposed relief was based on the fact that the administrative difficulties in the way of the Amendment were too great. He did not think that was so, and he did not think that ought to be made an objection. He viewed with distrust the whole of this attempt at differentiation, because there was no doubt that the administrative difficulties were extremely great, and whatever solution was applied an injustice would be done to a great number of people. But if the Chancellor of the Exchequer was going to carry out this principle of differentiation he must be prepared to face administrative difficulties in order that he might deal out even-handed justice. Another objection taken to his hon. friend's proposal was that if it were adopted it would be necessary for applicants for relief to disclose the whole of their incomes— a thing which the taxpayer very much disliked doing. But he would have to do that under the Finance Bill. The Postmaster-General did not appear to have read the Bill he was attempting to defend. How was a man to prove that his income was below, say, £2,000 from all sources, without making such a disclosure?
MR. SYDNEY BUXTON: He does not get any benefit.
MR. AUSTEN CHAMBERLAIN: Did the right hon. Gentleman seriously put that forward as the reason? That was an argument against the whole clause. If the right hon. Gentleman said it was so distasteful to the taxpayer then these administrative difficulties would not hold water for a moment. There might be administrative difficulties in the eyes of the Chancellor of the Exchequer, but he had not heard them. So far as they were stated by the Postmaster-General, he thought he had proved that they would not hold water. As to the merits of the case, they had long agreed that in regard to incomes up to £700 a year income-tax should not be collected on the whole, but that certain abatements should be allowed. The Chancellor of the Exchequer had now introduced an entirely new principle —namely, that incomes dependent on personal exertion should be charged at a lower rate than those which arose from investment, and he made a qualification that the relief should only be given in the case of incomes which did not exceed a certain sum. From the fact that a limit was fixed it might logically be deduced that the smaller the income the greater was the claim to relief. But the right hon. Gentleman was refusing the benefit of the new relief to the poorest people in many cases. In the case of a man with an income of £300, £160 derived from his own exertions and £140 unearned, by the words they were now discussing the Chancellor of the Exchequer would exclude him from relief, his first ground being that he left the man no worse off than before. That was true, but the only reason for putting the clause into the Bill was that people in such a position should have some relief. The second ground was that of administrative difficulty. No doubt it would cost the right hon. Gentleman a certain amount of money if he gave way, but if he did not he would create a sense of injustice in the minds of the people deprived of relief. Supposing a man earned £300 a year, £1(30 of that would be exempt from tax under the old abatement, and on the remaining £140 he would pay tax at 9d. What possible justification was there for
774
treating the old abatement in the first case in such a way as to reduce the new relief? It was unjust and illogical, and the injustice became the greater in the case of the smallest incomes.
MR. ASQUITH: said the argument put forward by the right hon. Gentleman was just the kind of argument that he expected to receive. The Government gave relief, and in the Bill made that relief as wide as possible, consistently with administrative convenience and the purposes of revenue, and then hon. and right hon. Gentlemen opposite-selected the case of a person who did not get any benefit, because he was just outside the changes put forward by the Government, and argued that case as a reason for not giving any relief whatever. He would take the case of two men with £300 a year. Under the existing law they got the usual abatement. In the one case the whole income was derived from earnings, while in the other £140 a year came from investments and £160 from earnings. Which of those two men was the better off and less entitled to relief? Surely the man who had £140' a year from investments. In other words, the man who ought rather to be relieved was the man whose whole income was derived from his earnings. He would be-the man who got relief, the other man would not. And if any other concrete case were taken, it would work out in the same way. They could not have a better illustration of the essential justice of the Government's proposal. The point only arose in regard to that class of cases which were already within the abatement lines. The income-tax payer who was getting less than £700 a year, already under the present system received considerable relief, and he was not sure whether the hardest case was not the case of the man with just over £700 a year, who got no relief at all. With regard to those who were under £700 they had provided that the new form of relief should not be in substitution for, but in addition to, that which they already received; but when they came within that class it was perfectly fair that the discrimination, so far as they made it, should be in proportion to, and according as, the income was derived wholly or mainly from investments-

775
They took the income and taxed it as it was, and if the man wanted abatement or relief, he could claim it just as now, and from the administrative point of view the plan of the Government was obviously much simpler than that suggested by the right hon. Gentleman opposite, for it combined the existing arrangement with the new arrangement which it was the intention of this Bill to establish.
MR. AUSTEN CHAMBERLAINsaid it did not seem to him that it was justice to a man with an earned income of £1,999 that he should pay at the rate of 9d. because the income was earned, and that a man who had £160 of earned income and £140 of unearned should be denied that relief on his unearned income.
MR. ASQUITH: He pays no income-tax at all on his earned income.
MR. AUSTEN CHAMBERLAINsaid the man with such an income got no advantage. He was refused the advantage which the man of £1,999 got. He did not follow the administrative difficulty to which reference had been made. A man could make a return under either system. If he claimed under the Chancellor of the Exchequer's clause he had got to show his whole income yearly. If he was entitled to any abatement under the old Act he had got to get that back from the Inland Revenue who had previously collected it. He would have to do that under any circumstances, and what the Chancellor of the Exchequer was trying to do was to save the administration some trouble by making the taxpayers pay a higher rate. He was perfectly frank about these matters; he did not pretend to think that these changes were good, and, for the very reasons he had stated, these difficulties would arise, and they would implant a great sense of injustice in the minds of a large number of people, and he thought that that sense of injustice would be well founded unless the Chancellor of the Exchequer made some concession in these matters.
*Mr. GEORGE D. FABERsaid that a man with £300 a year earned income was at present entitled
776
to abatement in regard to £160 of it, and therefore he was taxed on £140 a year. Would he be entitled to the differentiation of 3d on the whole of his £300 or only on the £140 after deducting the. £160? Let them take the case of an income of £700 or over; that got no abatement at all because it was above the abatement line, but if a man had above £700 and under £2,000 a year earned income he was to be entitled to the differential relief of 3d. in the £. Surely that was very hard when they compared it with the poorer class of incomes which had been referred to. They were telling the whole country that everybody under £2,000 was to pay a rate of 9d. if his income was earned, and therefore if a man had an income of £300, he should have the benefit of the differentiation of 3d. upon the whole of the £300 and not merely on £140, the balance remaining after deducting the abatement. Therefore the man with an income of under £700 would not get the benefit of the full differentiation which was to be given to the man with £700 up to £2,000. It was quite clear to his mind that incomes under £700 were going to suffer very serious injustice.
MR. HICKS BEACHsaid the Chancellor of the Exchequer had drawn the analogy of a man with an income of. £300 a year all earned. He ventured to draw the analogy of a man with an income of £300 of which £160 was earned and £140 unearned. It was quite true that the man whose income of £300 was all earned ought to have the preference over the man who only earned £160 of his £300 a year, but the man of £160 earned and £140 unearned was no better off and in no better position than the man with an unearned income of £300 a year. That was a point which the Chancellor of the Exchequer had not taken up. The Postmaster-General had told them that nobody would suffer. It was true that nobody would be worse off under this section than before. The whole point of the clause was to give the people relief in respect of earned income; but under the section as it stood they were not going to give relief to the people with small incomes, though they were entitled to it. The right hon. Gentleman had used another argument which lad reference to the loss of revenue, but

777
that was no reason why the Government should not give the advantage to the people with small incomes instead of to the people with large incomes. If it was the case that they would lose a considerable amount of revenue, then the only thins; they ought to do was to reduce the limit of £2,000 a year to £1,500. It was not the people with higher incomes who ought to get so much relief; it was the people with smaller incomes. The right hon. Gentleman had made a great point of the administrative difficulty in regard to the question of claiming abatements, and of the hardship of claimants who had to lose control over a sum of money for a considerable time; but he had heard people who were entitled to claim abatement declare that they found the system of repayment very pleasant, and even went so far as to assert that they preferred to have the income-tax at a higher figure because they got back a larger sum of money at the time they got their abatement.
*Mr. LUPTONasked the Committee to consider, by way of illustration, the case of a man with an income of £800 a year, and another man with £300 a year. If there were no abatement at all, one of them would pay £15 a year and the other £40. Under the system of abatement which existed before this Bill the man with £300 a year had an abatement of £8, whilst the £800 a year man got no abatement at all. Under the new Act the £300 a year man got an abatement of 3d. on £140 so that he was allowed £9 15s., whilst the other man got 3d. on his £800 which amounted to £10. The man with an income of £800 a year paid £30, and the £300 a year man paid £4 5s. It seemed to him that the £300 a year man had nothing to complain about whatever.
SIR F. BANBURYsaid that although the hon. Member for Sleaford had given his illustration very clearly he was afraid the hon. Member had not grasped the meaning of this proposal. The hon. Member had apparently founded his case upon the assumption that the whole of the £800 a year was earned and the whole of the £300 as well. The case cited by
his hon. friend was one in which part o f the income was earned and part unearned.
MR. T. L. CORBETT: regretted that hon. Members opposite did not oftener endeavour to assist the Government in shaping these financial proposals in the way they attempted to do on the Opposition side of the House. The real truth of the matter was that all sources of income were being so rapidly diminished under this Government that less and less interest was being taken in the income-tax. There were still a few small incomes left, and he thought the Government, through the solitary Undersecretary who was now sitting on the Treasury Bench might endeavour to say something in defence of those who were earning small incomes. No reply had been advanced by the Government, and he hoped the Financial Secretary to the Treasury would explain to the Committee how these small incomes would be protected under these proposals.
MR. E. GARDNER: asked the Committee to consider the case of two persons, one with an income of £300 a year all earned, and another with £160 earned and £140 unearned. Under the existing system the man with £300 a year got an abatement of £160, leaving him £140 on which he had now to pay £7. Under the new system on that £140 he would have to pay 9d. instead of Is., and so he would get off with paying £5 5s. The saving fellow, however, who had £160 earned, and £140 unearned which he had saved, would get his abatement on the £160, but he would have to pay Is. on the £140. That supported the view which had been expressed that this allowance of 3d. was in the nature of a fugitive sum of money. [Opposition cries of "Reply."]
MR. RUNCIMANsaid that all these matters had been fully dealt with by the Chancellor of the Exchequer and the Postmaster-General, and any further reply would only be repetition.
Question put.
The Committee divided: —Ayes, 232; Noes, 39. (Division List No. 267.)

AYES.

Abraham, William (Rhondda)

Allen,A. Acland (Christchurch)

Asquith,Rt.Hon.HerbertHenry

Acland, Francis Dyke

Allen, Charles P. (Stroud)

Astbury, John Meir

Baker, Sir John (Portsmouth)

Glendinning, R. G.

Morton, Alpheus Cleophas

Baker, Joseph A. (Finsbury, E.)

Glover, Thomas

Murray. James

Balfour, Robert (Lanark)

Goddard, Daniel Ford

Myer. Horatio

Barker, John

Gooch, George Peabody

Newnes. F. (Notts, Basset law)

Barlow, Percy (Bedford)

Grant, Corrie

Newnes, Sir George (Swansea)-

Barry, Redmond J. (Tyrone, N.)

Greenwood, G. (Peterborough)

Nicholls, George

Beale, W. P.

Gulland, John W.

Nicholson, Charles N. (Donc'r.)

Beauchamp, E.

Gurdon, Sir W. Brampton

Norton, Capt. Cecil William

Beck, A. Cecil

Hall, Frederick

Parker, James (Halifax)

Bell, Richard

Hardy, George A. (Suffolk)

Partington. Oswald

Bellairs, Carlyon

Hart-Davies, T.

Pearce, Robert (Staffs., Leek)

Benn, W.(T'w'r Hamlets, S. Geo.

Harvey, A. G. C. (Rochdale)

Pearce, William (Limehouse)

Berridge, T. H. D.

Harvey, W.E.(Derbyshire, N. E.

Price, Robert John(Norfolk, E.)

Bethell, Sir J.H. (Essex, Romf''rd)

Haslam, Lewis (Monmouth)

Priestley. Arthur (Grantham)

Billson, Sir Alfred

Haworth, Arthur A.

Priestley, W.E.B. (Bradford, E.)

Birrell, Rt. Hon. Augustine

Hazel, Dr. A. E.

Pullar, Sir Robert

Black, Arthur W.

Hedges, A. Paget

Radford, G. H.

Boulton, A. C. F.

Helme, Norval Watson

Raphael. Herbert H.

Brace, William

Henderson, J. M. (Aberdeen, W.)

Rees, J. D.

Bramsdon, T. A.

Henry, Charles S.

Rendall, Athelstan

Brigg, John

Herbert, Col. Sir Ivor (Mon, S.)

Richardson. A.

Brocklehurst, W. B.

Herbert, T. Arnold (Wycombe)

Ridsdale, E. A.

Brodie, H. C.

Hobart, Sir Robert

Roberts, Charles H. (Lincoln)

Brooke, Stopford

Holden. E. Hopkinson

Robertson, Sir G. Scott (Bradf'd

Bryce, J. Annan

Holland, Sir William Henry

Robinson. S.

Buckmaster, Stanley O.

Holt, Richard Durning

Rogers, F. E. Newman

Burns, Rt. Hon. John

Hope, W. Bateman(Somerset, N.

Rowlands, J.

Burt, Rt. Hon. Thomas

Horridge, Thomas Gardner

Runciman. Walter

Buxton, Rt. Hn. Sydney Charles

Isaacs, Rufus Daniel

Rutherford. V. H. (Brentford)

Cairns, Thomas

Jackson, R. S.

Samuel S.M. (Whitechapel)

Cameron, Robert

Jardine, Sir J.

Schwann. C. Duncan (Hyde)

Carr-Gomm, H. W.

Johnson, John (Gateshead)

Scott, A.H.(Ashton underLyne

Causton, Rt. Hn. Richard Knight

Johnson, W. (Nuneaton)

Seaverns, J. H.

Chance, Frederick William

Jones, Sir D. Brynmor(Swansea

Shipman. Dr. John G.

Cleland, J. W.

Jones, Leif (Appleby)

Smeaton. Donald Mackenzie

Clough, William

Jones, William (Carnarvonshire

Soares, Ernest J.

Clynes, J. R.

Jowett. F. W.

Stanger. H. Y.

Coats, Sir T. Glen(Renfrew, W.)

Kekewich, Sir George

Stanley. Hn. A. Lyulph (Chesh.)

Collins, Stephen (Lambeth)

King. Alfred John (Knutsford)

Steadman. W. C.

Collins, Sir Wm. J.(S. Pancras, W.

Laidlaw, Robert

Stewart. Halley (Greenock)

Cornwall, Sir Edwin A.

Lamb, Edmund G. (Leominster

Strachey. Sir Edward

Cory, Clifford John

Lament. Norman

Strauss, E. A. (Abingdon)

Cotton, Sir H. J. S.

Layland-Barratt, Francis

Stuart, James (Sunderland)

Cowan, W. H.

Leese, Sir Joseph F. (Accrington

Sutherland. J. E.

Cremer, Sir William Randal

Lever, A. Levy (Essex. Harwich

Taylor, Theodore C. (Radcliffe)

Dalziel, James Henry

Lever, W.H. (Cheshire, Wirral)

Thomas, Sir A.(Glamorgan, E.)

Davies, David (Montgomery Co.

Lewis, John Herbert

Thomas, David Alfred (Merthyr

Davies. Ellis Wiliam (Eifion)

Lloyd-George, Rt. Hon. David

Thomasson, Franklin

Davies, Timothy (Fulham)

Lupton, Arnold

Thompson, J.W.H. (Somerset. E

Davies, W. Howell (Bristol, S.)

Luttrell, Hugh Fownes

Torrance. Sir A. M.

Dewar, Arthur (Edinburgh, S.)

Lyell. Charles Henry

Toulmin, George

Dickinson, W.H. (St. Pancras,N.

Macdonald, J.M.(Falkirk Bg'hs)

Trevelyan. Charles Philips

Dobson, Thomas W

M'Callum, John M.

Wadsworth. J.

Duckworth. James

M'Crae. George

Walker. H. De R. (Leicester)

Dunn, A. Edward (Camborne)

M'Kenna, Rt. Hon. Reginald

Walters, John Tudor

Dunne, Major E. Martin(Walsall

M'Laren, Sir C. B. (Leicester)

Walton. Sir John L. (Leeds. S.)

Edwards, Enoch (Hanley)

M'Laren, H. D. (Stafford, W.)

Walton. Joseph (Barnsley)

Edwards, Sir Francis (Radnor)

M' Micking. Major G.

Wardle. George J.

Elibank, Master of

Mallet. Charles E.

Waring. Walter

Essex, R. W.

Manfield. Harry (Northants)

Wason, Eugene (Clackmannan

Esslemont, George Birnie

Markham, Arthur Basil

Waterlow. D. S.

Eve, Harry Trelawney

Marks, G. Croydon (Launceston)

Watt, Henry A.

Everett, R. Lacey

Mason. A. E." W. (Coventry)

Weir. James Galloway

Faber, G. H. (Boston)

Massie, J.

White. George (Norfolk)

Fenwick, Charles

Masterman, C. F. O

White. J.D. (Dumbartonshire)

Ferens, T. R.

Menzies. Walter

White. Luke (York, E.R.)

Fiennes, Hon. Eustace

Mond. A.

Whitehead. Rowland

Findlay, Alexander P

Money, L. G. Chiozza

Whitley, John Henry (Halifax)

Fuller, John Michael F.

Montagu, E. S.

Whittaker. Sir Thomas Palmer

Fullerton, Hugh M

Montgomery, H. G.

Wiles, Thomas

Furness, Sir Christopher

Morgan, G. Hay (Cornwall)

Williams. J. (Glamorgan)

Gibb, James (Harrow)

Morrell, Philip

Williamson. A.

Gill, A. H.

Morse, L. L.

Wilson, Henry J. (York, W.R.)

Wilson, John (Durham, Mid.)

Wilson, W. T. (Westhoughton)

TELLERS FOR THE AYES—Mr.

Wilson, J.W. (Worcestersh.N.)

Winfrey, R.

Whiteley and Mr. J. A.

Wilson, P. W. (St. Pancras, S.)

Wood, T. M'Kinnon

Pease.

NOES.

Acland, Hood, Ht. Hn. Sir Alex.F

Chamberlain, Rt Hn. J.A.(Worc.

Moore, William

Balcarres, Lord

Collings. Rt. Hn. J. (Birmingh'm

Nield, Herbert

Banbury, Sir Frederick George

Corbett, T. L. (Down, North)

Powell, Sir Francis Sharp

Banner, John. S. Harmood-

Craig, Charles Curtis (Antrim,S.

Rawlinson, John Frederick Peel

Barrie, H. T. (Londonderry, N.)

Duncan, Robert(Lanark, Govan

Remnant, James Farquharson

Bignold. Sir Arthur

Faber, George Denison (York)

Thomson, W, Mitchell-(Lanark;

Bowles, G. Stewart

Fell, Arthur

Turnour, Viscount

Boyle, Sir Edward

Forster, Henry William

Walrond, Hon. Lionel

Bridgeman, W. Clive

Gordon, J.

Younger, George

Brotherton, Edward Allen

Haddock, George R.

Campbell, Rt. Hon. J. H. M.

Hill, Sir Clement (Shrewsbury)

TELLERS FOR THE NOES—Mr.

Carlile, E. Hildred

Houston, Robert Paterson

Hicks Beach and Mr. Ernest

Cave, George

King, Sir Henry Seymour(Hull)

Gardner.

Cavendish, Rt. Hn. Victor C. W.

M'Calmont, Colonel James

Cecil, Evelyn (Aston Manor)

Magnus, Sir Philip

Question, "That those words be there inserted," put, and agreed to.

*Mr. HICKS BEACHmoved to substitute 31st January for 30th September as the date in the year before which claims for relief under this section must be made. It appeared to him that 30th September was an unnecessarily early date to require a person to make a claim for relief in respect of earned income. He submitted that it was impossible for anybody to say for certain at that date what his income was likely to be before 31st March. It was quite possible that at 30th September a man might have an investment in funds of a rather precarious nature, and, although he might hope to receive a dividend in January or February of the ensuing year, some act. of nature might happen which would prevent the concern from producing the dividend at the time expected. It was obvious that a man who thought on September 30th that he was in receipt of an income of over £2,000 a year would not claim the abatement on the earned portion; but he might find before 31st March that his total income was below £2,000, and that he was therefore entitled to relief on his earned income which he would not be able to receive as he had failed to send in a claim. There was an alternative case in which a man might send in a return before 31st September, and claim abatement in the full belief that his income would not rise above £2,000, but something might happen which would give him an income above that figure before 31st March in the following year. That man would make a claim that he was entitled to an abatement on the earned portion of his
782
income, but at the end of the financial year he would not be entitled to have that abatement. He would like to get an explanation as to the necessity for fixing a date which seemed unnecessarily early.
Amendment proposed—
"In page 7, line 39, to leave out the words ' thirtieth day of September,' and insert the words ' thirty-first day of January.' "—(Mr. Hicks Beach.)
Question proposed, "That the words proposed to be left out stand part of the Question."
MR. RUNCIMANsaid the hon. Gentleman had quite rightly described the dilemma in which they were placed in regard to the date. The arrangement of the claims and returns sent in must of necessity involve a great deal of work on the Inland Revenue Department. At present there were 700,000 claims for abatements, and 600,000 of these were dealt with at the time of assessment. All that the clause required was that a claim should be made before 31st September. The special administrative reason was this. If a claim was made after the Commissioners had commenced their sittings in October there would be an enormous addition to the work of the Inland Revenue officials. The Government could not see their way to make the date for sending in claims later than 31st September. The position which would arise in the special cases mentioned by the hon. Gentleman were natural and unavoidable. It was quite true that a

783
man might find, contrary to expectation, that his income fell to under £2,000 after sending in his return. That was a case for which he did not see any way of providing. The other suggestion was that a man might get a windfall which would give him an income of over £2,000, and that he would get relief to which he was not entitled. The one case must be set off against the other, and they would balance each other so far as the Revenue was concerned.
MR. AUSTEN CHAMBERLAINsaid he appreciated the administrative difficulty to which the Financial Secretary had alluded. The hon. Gentleman admitted, as he was obliged to do, that cases might arise where one man would be charged more and another less than he ought to pay. The hon. Gentleman said that such cases could not be prevented, and that, from the point of view of the Revenue, the one case might be set off against the other. The man who had paid too little would not be inclined to complain, and he might be inclined to contribute "conscience money" to the Exchequer as many people did now. The case of the other man who had paid too much was one of real hardship. He did not wish to press for an immediate decision on the point, but he thought it was worthy of the consideration of the ' Government to see whether they could not grant an opportunity to an individual to make an amended return where he could show that new facts had arisen which entitled him to make the claim for relief after the date when his statement ought to have been made. He asked the hon. Gentleman to convey that suggestion to the Chancellor of the Exchequer with a view to its being considered.
MR. RUNCIMANsaid he would do that, but at the same time the right hon. Gentleman must see how dangerous it would be to give relief in all cases under the circumstances which had been indicated.
MR. AUSTEN CHAMBERLAINsaid the onus of proof would rest on the man who claimed to make an amended return.
MR. RUNCIMAN: We will take that into consideration.
SIR F. BANBURY,in supporting the Amendment, maintained that the case mentioned by his hon. friend, in which a man unexpectedly found that his income did not come up to the amount stated in his return, was one where something should be done to give relief. The difficulty would, in some measure, be met by changing the date as proposed by the Amendment. He hoped the right hon. Gentleman would consider the point which had been raised by the Amendment of the hon. Member for Tewkesbury. This was only another instance of the great difficulty which lay at the root of any attempt to graduate the income-tax.
SIR F. BANBURY (on behalf of Lord R. Cecil)moved to insert after the words "earned income." the words "whether by way of salary or share of profits for any office, or employment of profit in the year of assessment." The reason for moving the Amendment was very simple. His noble friend had had a case brought before him of certain partners in a business who, for private reasons, formed the business into a limited liability company, and they decided that their remuneration should be by way of dividends paid to the shareholders by the company, and not by way of salary. It was extremely doubtful whether in such a case these persons would be entitled to the abatement of 3d. in the pound, because it might be held that they were not receiving an earned income, but a share in the dividends of the company. He believed that the Chancellor of the Exchequer had told his noble friend that such a case was provided for, but his noble friend disagreed with the right hon. Gentleman.
MR. ASQUITH: I do not think he does.
SIR F. BANBURYsaid that his noble friend had told him that in his opinion the Chancellor of the Exchequer was mistaken, and that that was the reason why he had requested him to move this Amendment. If the Chancellor of the

785
Exchequer admitted the justice of its principle, he might accept the Amendment or insert words giving effect to it.
Amendment proposed—
"In page 7, line 12, after the second word ' income,' to insert the words ' whether by way of salary or share of profits for any office, or employment of profit in the year of assessment.' "—(Sir F. Banbury.)
Question proposed, "That those words be there inserted."
MR. ASQUITHsaid he quite agreed that this was a case which ought to come within the definition, and he thought it did. He had pointed out to the noble Lord the Member for Marylebone that his Amendment were limiting words. The word "remuneration" was carefully selected after a great deal of consideration, and any form of remuneration, whether by way of direct payment of salary, or the more indirect methods of commission or share of profits, was certainly covered. The real objection to the Amendment was that it would limit, according to the principles of legal construction, the wide sense of the term "remuneration" standing alone. The Amendment would be held by the Court to exclude, for example, remuneration by way of commission, and to apply only to cases of salary or share of profits. Wherever it could be shown that the whole of a man's income or a specific part, in whatever form it was received, was received by him in the way of remuneration, it. would fall within "earned income." and therefore would come within the abatement.
SIR F. BANBURYasked whether it would not suffice to satisfy the Income- tax Commissioners for such persons as he. had described to say: " We receive no, salary for the work we do, but we do receive a share of the dividends, and we claim that that is our remuneration."
MR. ASQUITHsaid that if the contract between them and the company was that they should not be paid a salary but a share of the profits, undoubtedly it would.
SIR F. BANBURYsaid that under these circumstances he asked leave to withdraw the Amendment, on the under-
786
standing that if his noble friend was not satisfied he would be able to raise the question on the Report stage.
MR. AUSTEN CHAMBERLAINasked if the whole of the profits of a private company would be treated as earned income.
MR. ASQUITHsaid that where a partnership was transferred to a company, composed of the same people, and carrying on the business in the same way, and not offering their shares for public subscription, it was the clear intention of the Government that that should not make any difference at all. The remuneration in that case as provided for by the articles of association would still be treated. as earned income.
Amendment, by leave, withdrawn.
SIR SEYMOUR KINGmoved an Amendment to bring within the definition of earned income "any pension or superannuation allowance not paid out of funds contributed by the recipient, received by the individual by reason of his holding, or having held" any office or employment of profit. The cases he had in his mind were of various sorts. There was the case of clerks in banks and mercantile firms, whose pensions were only granted after years of good service. During the whole of the time no rights accrued until the employee arrived at a certain age. The clerks themselves subscribed nothing for their pensions, and they could not enforce their claims to pensions. It was not a question of a contract entered into at the time they engaged, but was a free gift on the part of the employers. In a case like that there could be no question that the pension came directly within the limitation of an earned income. He would next take the case of the military and civil services. All the regulations affecting those services began by saying that the amount of pension might be determined by the length of service. The full pension admissible was not to be given as a matter of course, or unless the service rendered had been really approved. In other words, there was no absolute claim or right to the pension, which depended on faithful service. Future good conduct was an implied condition of every kind of

787
pension. The Government reserved to itself the right of withdrawing or withholding the pension if the pensioner were guilty of serious crime or gross misdemeanour, and in the case of the Army the regulations were still more stringent. It was impossible to argue that the pension was an acquired property like savings which a man had laid by, or an annuity he had bought which could not be taken from him. There was a further point. An income derived from any source of property could be attached at law. There was a class of pension which presented some difficulty, namely, that in which half the pension was due to a deduction of 4 per cent. of the salary. He admitted the difficulties in which no doubt the Government found themselves owing to the new position of affairs created by the report of the Income-tax Committee. He was entirely in sympathy with them in the course they had taken, and he quite approved of the limitation. They had met a demand in particular cases of barristers, doctors, journalists, and artists, and they would be doing a fair, just, and exceedingly popular act if they accepted his Amendment. He was perfectly prepared to accept any other words the Government suggested if they came to the same conclusion.
Amendment proposed—
"In page 8, line 21, to leave, out the word ' from,' and insert the words ' and any pension or superannuation allowance not paid out of funds contributed by the recipient received by the individual by reason of his holding or having held.' "—(Sir Seymour King.)
Question proposed, " That the word ' from ' stand part of the clause."
MR. ASQUITHsaid he must confess that this question had given him cause for anxious consideration. He was anxious to include within the scope of the clause all those cases which were cognate to it, but on the other hand he was quite as anxious not to accept expressly or by implication an Amendment which would admit to the benefit of the clause classes of income which they had deliberately excepted from it. The real question was whether a pension ought to be regarded in some form or another as remuneration or as a form of investment. He had not been able
788
to reconcile the decision at which he had arrived with any strict and logical rule, but after giving full consideration to the matter, in consultation with his colleagues, he had come to the conclusion that the pensioner, speaking in broad and general terms, came in reason and equity, and in point of policy, upon the side of the line to which relief ought to be given. He had not tome to that conclusion without a great deal of heart-searching and doubt. Broadly speaking, the exceptions were so small as to be hardly worth special treatment—a pension might be regarded as part of the stipulated remuneration for the service which the holder of the office actually rendered to his employer. It was part of the remuneration, not immediately paid, and formed part of the consideration of the bargain when the contract was made. In that respect it seemed to him to stand on an entirely different footing from savings voluntarily and spontaneously made quite outside the contract of employment. In the next place, so far as the individual pensioner was concerned—he was not now dealing with the case of widows and children— the pension ended with the pensioner's life. That was also the case with a life annuity. But a life annuity was an investment which a man purchased for the sake of securing a larger income during his life. He might, if he pleased, have invested the purchase money in a form of security which would have endured after his life. In the case of a pension there was no such option. A third and an important point was that a pension, or the expectation or possibility of receiving a pension, was not a form of property in the ordinary sense. It could not be bought and sold, nor could it be bequeathed to children. Even while the pensioner was alive it could not be dealt with like any other investment as a form of property that could be put on the market to be realised at the best price. Consequently, after much hesitation and having reviewed the whole case, it seemed to him that those three considerations justified him in assenting to the principle that the income of a pensioner should be treated as an earned income for the purposes of this clause. He believed that was a conclusion which would lead to general

789
satisfaction. Lest ho should be supposed to exaggerate his virtue in the matter or his amenity to argument, he would say that from a Revenue point of view it was a matter of very slight importance. As a matter of fact there were very few pensions in this country which did not fall within the abatement limit of £700 a year. The additional relief that would now be given to pensioners, though substantial, was not so great as it was in the case of the class above the £700 limit. But that had not actually influenced his determination in the matter, which was based on the general interest and grounds of justice. If the Committee was disposed to concur in this solution of the question, he would suggest that the hon. Member should withdraw his Amendment, whose limitation he was not disposed to accept, in order that he might move an Amendment embodying his proposal.
SIR SEYMOUR KINGasked leave to withdraw his Amendment.
Amendment, by leave, withdrawn.
Amendment proposed—
"'To leave out in line 22 the words, ' in the year of assessment' in order to insert' including any pension, superannuation allowance, or deferred pay in respect of past services in that office or employment.' "—(Mr. Asquith.)
Question, "That the words proposed to be left out stand part" put, and negatived.
Question proposed, " That those words be there inserted."
MR. AUSTEN CHAMBERLAINsaid he was sure the concession which the right hon. Gentleman had made met with the general approbation of the Committee. Extreme hardship would have been involved in treating as unearned incomes pensions which, in fact, could only be earned by long and faithful service of a meritorious kind. He did not want to criticise the distinction which the Chancellor of the Exchequer had drawn between these pensions and other sources of income more or less cognate. He asked the Chancellor of the Exchequer whether the words of his Amendment would cover
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a common case in the Civil Service, that of a man who had earned his pension partly by service in one Department and partly by service in another.
MR. ASQUITHsaid he would consider the point, and if necessary propose words to cover such a case on Report.
*MR. LUPTON: expressed his regret that the Chancellor of the Exchequer had made this concession. There had now begun an appeal ad misericordiam [cries of "No"] The original Amendment was not proposed on that ground, but on the ground that a man or woman earned a precarious income which terminated as soon as their life and vigour terminated. But in the case of a pensioner the question of precarious income did not arise. There were many men and women trying to push their way in life by some trade or profession and who found it difficult to bring up a family. But this concession the House would agree would go to pensioners who had fought the fight and won, because they had secured ample pensions. They were doing no work whatever for their country and were simply vegetating upon an ample pension—he said ample pension because in the case of a pensioner with £320 a year there was already an abatement of one half of his income. These pensioners voted generally for very large expenditure on bloated armaments and were ready to vote for a war on every possible opportunity. There was no reason whatever for making an additional allowance to them. The abatement of £160 was quite enough in their case. The Chancellor of the Exchequer had opened a very wide door. The concession could not be for the good of the community. People who voted for great national expenditure should be made to pay for it. If money were deducted from wages each Week, persons would be very careful how they embarked on war. In the case of richer people who were doing nothing, but were simply eating and drinking and wearing good clothes, he saw no reason whatever why they should be relieved from taxation which had to be paid by working people.
*MR. FORSTERsaid he wished to ask one question under the

791
Amendment. There was no question that retired pay would be covered, but was it intended that good service pay should be included? He thought that the name itself implied that it had been earned. He did not know whether this point had occurred to the Chancellor of the Exchequer, but he was sure that he would consider it in order to see whether it could be included. He thought that pensions for wounds were clearly included.
MR. ASQUITH: I will see what can be done. I intended to include it, but I will see whether other words are necessary.
*MR. SMEATONsaid he rose to congratulate the right hon. Gentleman, and he was sure that hundreds of pensioners would be very grateful to him for the concession which he had so gracefully made. Still he agreed with many hon. Members of the House that it was not in reality a concession at all but a matter of strict justice, and legally as well as morally the concession was justified. It was in fact unanimously admitted both by the givers and the recipients that pension was neither more nor less than deferred pay; and after all that was the best criterion of what a pension meant. It was the wages or salary that had been kept back by the employer and preserved for the employee against the time when he ceased to work. The right hon. Gentleman in discussing this matter had said that the distinction between the pensioner and the person who ac- cumulated savings was very thin, but he would venture to say that it was a very important one. The man who voluntarily saved money established a capital sum which he could set aside for his family, whereas the sum compulsorily accumulated by the employer in order to provide for his employee's pension, savings and pension both vanished, or rather—parodox as it might appear—the employer had the reversion of both on the death of the pensioner. That was a very substantial difference. In the case of family pensions it was a little difficult, for technical reasons, to place the case on very strong grounds. Under the Finance Act of 1894, Clause 15, Subsection 3, all family pensions granted by the
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Government of India were expressly ex-empted from estate duty, notwithstanding that those were contributed to by the deceased officers themselves. The point was this: The savings which had been contributed by the deceased officers and which formed a. part of the pension fund were regarded as earnings., and he thought that would be a very strong precedent now. At that time there was no distinction between earned and unearned income, and what struck him as a remarkable fact- about this particular exemption was that the money saved and accumulated at the end of the officer's life was regarded, not as capital yielding an income, but as an earned sum of money. He took it that now that earnings were to be exempt from a certain part of the income-tax, this precedent to which he had referred ought to be taken advantage of, and the family pensions considered in the same light as they were considered under the Act of 1894. The right hon. Gentleman himself had quoted the case of the poor widow referred to by Mr. Gladstone—a widow with £300 a year derived from investments. But in this case the pension was not derived from investments, but from compulsory deductions from the bread-winner's pay, and the widow had to bring up a family: yet she would (unless the lower rate were applied to her allowance) be taxed at a higher rate than the small grocer who supplied her with goods, and who would pay only 9d. in the £ while she would have to pay Is. He hoped that this comparison, by Mr. Gladstone might, in this case, be considered, even if it approached to something like the plea ad misericordiam of which so much had been jauntily made by the hon. Member for Sleaford. Although that might be so, still the comparison was such, he thought, that it ought to weigh with the right hon. Gentleman in considering whether it was not common justice to give to the widow, who had a family to support, under very great stress, often in ill-health and in circumstances of great difficulty, the exemption which her grocer was to enjoy. He hoped the Chancellor would adopt the-view taken by Mr. Gladstone and by Sir William Harcourt in 1894. and extend the concession of the reduced rate of income-tax to the widows' pension.
*MR. REESsaid the hon. Member for Sleaford had said that pensioners ate and drank, wore good clothes, and were always in favour of war and voted for it. To eat and drink was necessary to the preservation of life, to wear good clothes was a comfort not only to the wearer, but to the company he frequented, and it was true that pensioners were not as a rule peace at any price men. He might inform the hon. Member that pensioners who had spent their lives in responsible situations were not likely to adopt the views he had expressed on that subject or on vaccination, or on any other subject, and it was extraordinary that the hon. Member, who regarded it as an intolerable hardship that parents should have to carry their children for a mile or two in order to obtain exemption certificates, should speak in this hard-hearted manner of men who had served their country well. It was simply trifling with a serious subject to describe a class of men who had earned pensions by hard work and a zealous performance of their duty in the terms used by the hon. Member for Sleaford. When he brought this matter forward on a previous occasion hon. Members below the gangway appeared to indulge in ironical cheers, as much as to say, " This man is speaking on behalf of his own pension." He might mention that the concession of the lower rate for which he pleaded would not affect himself, but although he would not profit by these proposals the vast majority of pensioners would profit, and they were a class of people who stood greatly in need of the relief which the Chancellor of the Exchequer had announced. The hon. Member for Sleaford had alluded to the great pensions drawn by public servants. He would remind the hon. Member that there were public servants and public servants, and that men who had represented their country abroad were not extravagantly rich on what he believed to be the largest pension drawn, viz. £1,750 a year. Indian civil servants with families were poor men on £1,000. This was a very serious question, and both the House and the country were to be congratulated upon. the decision which the Chancellor of the Exchequer had just announced in regard to the matter. As the hon. Member for
794
Hull had withdrawn his proposal, it would not now be necessary for him to move the Amendment to it which stood in his name on the Paper. Otherwise the hon. Member's proposal would have been open to serious objection from the point of view of the Indian pensioners. Nor would it now be necessary for him to move the substantive Amendment standing in his name. As regarded the widows and children, the Indian case was quite distinct from any other, because the pension which went to the widow was literally drawn from sums contributed by the pensioner during his life, such sums being earned income at the time they were devoted to this purpose by the deceased husband. In that respect he was in complete agreement with the hon. Member for Stirlingshire. It frequently happened that such pensions were the sole support of these widows. He submitted that the case of the widows was an exceedingly strong one, and as the right hon. Gentleman was now proceeding on entirely right and satisfactory lines, perhaps he would be able to extend the same measure of justice to the widows which he had extended to the pensioners.
MR. MEYSEY-THOMPSONsaid the hon. Member for Sleaford had spoken of pensioners as a class who lived a life of eating and drinking, but he seemed to ignore the fact that a great many of them devoted the remainder of their lives to the service of their country, some of them in Parliament. If a man accumulated wealth in business he was able to end his life in comfort, and if they desired to secure the best men for the service of the State they were bound to see that at the end of their faithful service they were not placed in any worse position than those who had spent their lives in business. He thought the Chancellor of the Exchequer had taken a very wise course in the line he had adopted, and one which would tend to induce the best men in the country to devote their services to the State.
*Sir J. JARDINEasked if the concession which the Chancellor of the Exchequer had announced would apply to those cases where a servant had been employed for a great many years without any

795
promise of a pension, and in which in consideration of, his excellent services his employers awarded him a pension at the end of that service. As to the widows and children, being himself interested as an Indian pensioner, it would not be becoming for him to advance any arguments on that subject. He might, however, inform the Committee what was the practice of the Bombay Civil Service Fund, of which he was once the Secretary. When a man entered that service as a bachelor 2 per cent. of his earnings would be stopped, and that was raised to 3 per cent. the moment he married. Extra subscriptions based on actuarial calculations had to be paid for each son and daughter. He would add that the Government of India, which had vast experience of pension arrangements, treated pension as in essence salary deferred.
MR. MORTONasked the Chancellor of the Exchequer whether the Amendment covered the case of all who were entitled to pensions for services rendered. He had had many communications on this subject from persons in the city of London, and he was satisfied that the concession now announced would give great satisfaction to a large class who otherwise would have felt aggrieved.
MR. YOXALLsaid there was the case of joint income of husband and wife—the former who was still in harness earning his income, and the latter drawing a pension to which she was entitled in respect of her having been connected with some service from which she had retired. The husband would be charged at the 9d. rate, but he wished to be assured that the tax on the wife's pension would also be calculated at the lower rate.
MR. ASQUITHsaid he would consider that question. In connection with the concession in regard to pensions which he had just made, he did not propose to state the form of words now; he would like to have more time to consider the exact form which the Amendment should take. He would bring up the Amendment on the Report Stage.
Amendment proposed—
"In page 8, line 28, after ' 1853,' to insert the words ' or the rules prescribed by Schedule D in the Income-tax Act, 1842.' "—(Mr. Asquith.)
Question put, and agreed to, "That those words be there inserted."
MR. ASQUITHmoved an Amendment providing that where an income is derived from the carrying on or exercise of a profession, trade, or vocation, it shall be regarded as earned if the individual carries on the vocation "either as an individual, or, in the case of a partnership, as a partner personally acting therein." He said the object of this addition was to get rid of cases in which the person who was claiming relief had really no active concern in the earning of the income at all. There were cases in which certain companies, which were not incorporated, consisted of as many as 200 or 300 persons, who were technically partners, though in all other respects they were exactly like shareholders in a joint stock company, receiving profits, but taking no part in the management of the business.
Amendment proposed —
"In page 8, line 30, after the word vocation,' to insert the words,' either as an individual, or, in the case of a partnership, as a partner personally acting therein.' "—(Mr. Asquith.)
MR. HICKS BEACHmoved to add, after the words last inserted, "or any income derived by a landowner from farming his own land." He said that if a tradesman invested a certain amount of money in a business, and was allowed to be charged on the whole of his income as being earned, it was only fair and just that a man who chose to invest his money in the purchase of a small holding and farmed it himself should come within the classes whose incomes were regarded as earned. It was obvious that a man who invested money in land, and farmed the land himself, devoted the whole of his energies to that work, just as much as a man in any other form of business devoted his energies to the work in connection

797
therewith. The probability was that if he did not devote his whole energies to the cultivation of the land he would come to grief; but the man who devoted his energies to develop a small estate was deserving of encouragement. The Chancellor of the Exchequer was in favour of enlarging small holdings, and if he accepted this Amendment he would be doing a service to agriculture in this country, and would encourage the investment of money in the development of the land. He begged to move.
Amendment proposed—
" In page 8, line 30, to insert the words, ' or any income derived by a landowner from farming his own land.' "—(Mr. Hicks Bench.)
Question proposed, " That those words be there inserted."
MR. ASQUITHsaid he did not think the Amendment would, if carried, have any effect at all. As he understood, the hon. Gentleman's point was that a landlord who farmed his own land ought to be put in a better position than the landlord who let his land to somebody else. He did not think that was a sound contention. So far as he was an occupier farming his own land he came under Schedule B, and under that schedule he was exactly the same as any other farmer under Schedule B. His income would be earned income, and it would be assessed on the lower rate, and already farmers were extremely lightly—in his opinion most inequitably -treated as regarded the general body of taxpayers for the purpose of income-tax. [Opposition cries of "Oh."] They were, because they only paid on one-third of their annual value. He should be glad to see Schedule B wiped out of the income-tax altogether. The landowner was taxed under Schedule B at a lower rate than any other payer of income-tax, and the hon. Member wanted him to get off Schedule A as well. Why should a man be put in a better position because he let his land to himself instead of letting it to someone else?
MR. HICKS BEACH: He pays more income-tax than the man who invests the same money in business.
MR. ASQUITHsaid that that was to raise another question—whether land
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was fairly assessed. But the Amendment drew a distinction between the man who farmed his own land and the man who let his land to someone else. That distinction he was not prepared to recognise.
MR. AUSTEN CHAMBERLAINsaid that the question was whether the land owner was treated as favourably in respect of this concession as the man of business. The capital invested in a business was in the same position as a landlord's land. There was a perfect analogy between the active partner in a business and the man who farmed his own land.
MR. ASQUITHsaid that the ownership of land had always been treated in a category by itself, and for very good reasons. Every landowner came under Schedule A, but when he farmed the land as well as owned it then he came under Schedule B as well. Under that schedule the occupier was put in a special class of his own, and in that respect he was entitled to the lower rate. Whether he owned the land or hired it, he equally brought in his capital. At this time of day he was certainly not going to make a departure from the settled practice of the Legislature.
MR. A. J. BALFOURsaid that the right hon. Gentleman tried to shelter himself behind the practice of the Legislature, instead of facing the arguments of the case. The right hon. Gentleman said that the income-tax was full of anomalies and injustices. They were tolerable as long as it was believed by successive Chancellors of the Exchequer that the income-tax was not a permanent part of the revenue system. Now that it was recognised on both sides of the House that the income-tax at some level was probably to be a permanent portion of our fiscal system, they should try to make it equitable. Let the Chancellor of the Exchequer try to apply the principles he had laid before the Committee to all parts of the tax which he desired to revise from top to bottom. But what was the case as to the small holder, whose interests, when the House was not discussing the Budget, occupied so large a part of the attention of the Government?
MR. ASQUITHsaid the Amendment applied to every holder of land, and not to the small holder alone.
MR. A. J. BALFOURsaid it did not touch anyone whose income was more than £2,000 a year. It did not touch that unfortunate class who were regarded as the legitimate object of taxation by all sections of hon. Gentlemen opposite. It affected only the relatively poor man, and, for the most part, the small holder. The whole stock-in-trade of the man who put his money into some kind of business had some chance of relief, but the stock-in-trade of the small landowner was divided into two sections, one part of the produce receiving relief and one part not. The right hon. Gentleman had not succeeded in justifying that difference of treatment. Why should the right hon. Gentleman refuse to make a concession in a case and in places where he desired to see industry flourish in order that the greater vigour of the Anglo-Saxon race might be preserved? If there was any class which deserved consideration from the right hon. Gentleman it was the particular class whose interests he now refused to consider.
MR. A. L. STANLEY:reminded the Committee that small holders under this Bill would be tenant small holders whose income-tax would be assessed at one-third of their rent. Holdings under the Bill would not exceed fifty acres.
MR. A. J. BALFOURsaid he did not use the words "small holder" in the technical sense in which they were used in the Bill not yet passed. In common parlance the owners of farms 200 or 300 acres in extent might be regarded as small owners.
MR. A. L. STANLEYsaid that small owners were defined in the Bill of 1892. The right hon. Gentleman would admit that when he spoke and somewhat chaffed those on that side with the interest they took in small holders that interest clearly referred to the Bill now before Parliament. The small holders who excited the sympathy of the right hon. Gentleman would be extremely small in number, inasmuch as they would have to be making a profit of
800
£10 an acre or £480 a year for their small holdings. Sympathy for such holders was not very much required.
VISCOUNT HELMSLEY:supported the Amendment on the ground that it did something to relieve a very deserving class of men who were far too few in numbers at the present time, namely, the class of yeomen farmers. He was disappointed that the right hon. Gentleman had treated the Amendment in so unsympathetic a manner. More opposition was levelled against that class, though they were pursuing this industry, than any other in the country. The right hon. Gentleman and hon. Gentlemen opposite must carry their antipathy to such an extent that it even took effect when those men were farming their own land. He saw no objection to this Amendment and he certainly hoped it would be carried to a division.
*Mr. LUPTONsaid that the senior Member for the City of London had said that the Chancellor of the Exchequer had not given any reason why, if he were starting the income-tax ab initio, no concession should be made to a landowner farming his own land under Schedule A. He (Mr. Lupton) would endeavour to give him such a reason. Suppose that in the same parish there were two men, one a landowner fanning his own land and making a gross profit of £1,000 a year, the other a manufacturer working his own factory and also making a gross profit of £1,000 a year. In each case the gross profit might be divided into two equal figures, £500 a year rent, £500 a year profit. The factory owner might take the whole of the gross profit as wages of management, and in that case would get a reduction on his income-tax of 3d. in the £, or £12 10s. The landowner, on the other hand, would only get a reduction of 3d. in the £ on half the gross income, the full tax being payable on the other half, which was rent. Therefore the rebate in his case would only be £6 5s. But if they take the total taxation, they must take into account the rates. The rates in this case were 5s. in the £, and the factory owner would pay on his £500 a year rateable value £125 in rates. The landowner, on his £500 a year rateable

801
value, would, as a result of the Agricultural Hating Act, only pay half the amount, or £62 10s., therefore the landowner gained ten times as much on the rates as the factory owner gained on the income-tax. He thought that would be generally admitted to be a sufficient answer to the demand for a rebate under Schedule A. At the same time, he could not sympathise with the Chancellor of the Exchequer, who had opened the
door for similar demands by his concession in regard to pensioners.
*The CHAIRMANsaid the right hon. Gentleman was not in order in discussing a matter that had already been decided.
Question put.
The Committee divided:—Ayes, 85 Noes, 263. (Division List No. 268.)

AYES.

Anson, Sir William Reynell

Corbett, T. L. (Down, North)

M'Calmont, Colonel James

Anstruther-Gray. Major

Craig, Charles Curtis(Antrim, S.

Magnus, Sir Philip

Arkwright. John Stanhope

Craik, Sir Henry

Mason, Sames F. (Windsor)

Aubrey- Flitcher, Rt. Hon. Sir H

Dalrymple, Viscount

Meysey-Thompson, E. C.

Balcarres, Lord

Davies, David (Montgomery Co.

Moore, William

Balfour, Rt Hn. A.J.(City Lond.)

Doughty, Sir George

Morpeth, Viscount

Banbury, Sir Frederick George

Douglas, Rt. Hon. A. Akers-

Muntz, Sir Philip A.

Banner, John S. Harmood-

Duncan, Robert (Lanark, Govan

Nield, Herbert

Baring, Capt. Hn. G (Winchester

Faber, George Denison (York)

Rawlinson, John Frederick Pee]

Barrie, H. T. (Londonderry, N.)

Faber, Capt. W. V. (Hants, W.)

Roberts, S. (Sheffield, Ecclesall)

Beach, Hn. Michael Hugh Hicks

Fell, Arthur

Ronaldshay, Earl of

Beckett, Hon. Gervase

Fletcher, J. S.

Rutherford, John (Lancashire]

Bignold, Sir Arthur

Forster, Henry William

Rutherford, W. W. (Liverpool)

Bowles, G. Stewart

Gardner, Ernest (Berks, East)

Scott, Sir S. (Marylebone, W.)

Boyle, Sir Edward

Gordon, J.

Smith, F.E. (Liverpool, Walton]

Bridgeman, W. Clive

Gretton, John

Talbot, Lord E. (Chichester)

Brotherton, Edward Allen

Hardy, Laurence (Kent, Ashford

Thomson. W.Mitchell-(Lanark;

Burdett-Coutts, W.

Harrison-Broadley, H. B.

Thornton, Percy M.

Campbell, Rt. Hon. J. H. M.

Hay, Hon. Claude George

Turnour, Viscount

Carlile, E. Hildred

Helmsley, Viscount

Walker, Col W. H.(Lancashire

Cave, George

Hervey, F.W.F.(Bury S. Edm'ds

Walrond, Hon. Lionel

Cavendish. Rt. Hon. Victor C.W.

Hill, Sir Clement (Shrewsbury)

Warde, Col. C. E. (Kent, Mid.)

Cecil, Evelyn (Aston Manor)

Houston. Robert Paterson

Wilson. A. Stanley (York, E.R)

Cecil, Lord John P. Joicey-

King, Sir Henry Seymour (Hull)

Wortley. Rt. Hon. C. B. Stuart-

Cecil, Lord R. (Marylebone, E.)

Lane-Fox, G. R.

Younger, George

Chamberlain, Rt. Hn. J.A. (Worc

Lee, Arthur H. (Hants, Fareham

Chaplin, Rt. Hon. Henry

Lockwood, Rt. Hn. Lt.-Col. A.R.

TELLERS FOR THE AYES— Sir

Coates, E. Feetham (Lewisham

Long, Rt. Hn. Walter(Dublin, S)

Alexander Acland-Hood and

Cochrane, Hon. Thos. H. A. E.

Lonsdale, John Brownlee

Viscount Valentia.

Collings.Rt. Hn.J.(Birmingh'm

Lyttelton, Rt. Hon. Alfred

NOES.

Abraham, William (Rhondda)

Billson, Sir Alfred

Clynes, J. R.

Acland, Francis Dyke

Birrell, Rt. Hon. Augustine

Coats, Sir T. Glen (Renfrew, W.)

Allen, A. Acland (Christchurch)

Black, Arthur W.

Cobbold, Felix Thornley

Allen, Charles P. (Stroud)

Boulton, A. C. F.

Collins, Stephen (Lambeth)

Armitage, R.

Brace, William

Collins, Sir Wm, J (S. Pancras, W.

Ashton, Thomas Gair

Bramsdon, T. A.

Cooper, G. J.

Asquith, Rt. Hn. Herbert Henry

Branch. James

Corbett, A. Cameron (Glasgow)

Astbury John Meir

Brigg. John

Corbett, C.H (Sussex. E. Grinst'd

Baker. Joseph A. (Finsbury, E.)

Brocklehurst. W. B.

Cornwall, Sir Edwin A.

Balfour, Robert. (Lanark)

Brooke. Stopford

Cory, Clifford John

Baring, Godfrey (Isle of Wight)

Bryce, J. Annan

Cotton, Sir H. J. S.

Barker, John

Buckmaster. Stanley

Cowan, W. H.

Barlow, Percy (Bedford)

Burns, Rt. Hon. John

Cremer, Sir William Randal

Barnes, G. NT.

Burt, Rt. Hon. Thomas

Crosfield, A. H.

Barry, Redmond J. (Tyrone, N.)

Buxton, Rt. Hn. Sydney Charles

Dalziel, James Henry

Beale W. P.

Byles, William Pollard

Davies, Ellis William (Eifion)

Beauchamp, E.

Carr Gomm, H. W.

Davies, Timothy (Fulham)

Beaumont. Hon. Hubert

Causton, Rt. Hn. Richard Knight

Davies, W. Howell (Bristol, S.)

Beck, A. Cecil

Cawley, Sir Frederick

Dewar, Arthur (Edinburgh, S.)

Bell, Richard

Chance, Frederick William

Dickinson, W.H. (St.Pancras. N.

Bellairs, Carlyon

Cheetham, John Frederick

Dobson, Thomas W.

Benn, W.(T'w'r Hamlets, S.Geo.

Cleland, J. W.

Duckworth, James

Berridge, T. H. D.

Clough, William

Dunn, A. Edward (Camborne)

Dunne, Major E. Martin(Walsall

Lamont, Norman

Rose, Charles Day

Edwards, Clement (Denbigh)

Layland-Barratt, Francis

Rowlands, J.

Edwards, Enoch (Hanley)

Leese, Sir Joseph F. (Accrington

Runciman, Walter

Edwards, Sir Francis (Radnor)

Lever, A. Levy (Essex, Harwich

Samuel. S. M. (Whitechapel)

Elibank, Master of

Levy, Sir Maurice

Scarisbrick, T. T. L.

Erskine, David C.

Lewis, John Herbert

Schwann, C. Duncan (Hyde)

Essex, R, W.

Lloyd-George, Rt. Hon. David

Scott, A.H.(Ashton under Lyne

Esslemont, George Birnie

Lough, Thomas

Seaverns, J. H.

Evans, Samuel T.

Lupton, Arnold

Seely, Major J. B.

Eve, Harry Trelawney

Luttrell, Hugh Fownes

Shaw. Charles Edw. (Stafford)

Everett, R. Lacey

Lyell, Charles Henry

Shipman. Dr. John G.

Fenwick, Charles

Lynch, H. B.

Sinclair, Rt. Hon. John

Ferens, T. R.

Macdonald, J. R. (Leicester)

Sloan. Thomas Henry

Fiennes, Hon. Eustace

Macdonald, J.M.(Falkirk B'ghs

Smeaton, Donald Mackenzie

Findlay, Alexander

M'Callum, John M.

Soares, Ernest J.

Fuller, John Michael F.

M'Crae, George

Spicer, Sir Albert

Fullerton, Hugh

M'Kenna, Rt. Hon. Reginald

Stanger, H. Y.

Gill, A. H.

M'Laren, Sir C. B. (Leicester)

Steadman. W.C.

Gladstone, Rt. Hn. Herbert John

M'Micking, Major G.

Stewart. Halley (Greenock)

Glendinning, R. G.

Mallet, Charles E.

Strachey, Sir Edward

Glover, Thomas

Manfield, Harry (Northants)

Strauss. E. A. (Abingdon)

Goddard, Daniel Ford

Markham, Arthur Basil

Stuart, James (Sunderland)

Gooch, George Peabody

Marks, G. Croydon (Launceston)

Sutherland. J. E.

Grant, Corrie

Mason, A. E. W. (Coventry)

Taylor. Theodore C. (Radcliffe)

Greenwood, G. (Peterborough)

Massie, J.

Tennant, Sir Edward (Salisbury

Grey, Rt. Hon. Sir Edward

Menzies, Walter

Tennant, H. J. (Berwickshire)

Gulland, John W.

Micklem, Nathaniel

Thomas, Abel (Carmarthen, E.)

Gurdon. Sir W. Brampton

Mond, A.

Thomas, Sir A. (Glamorgan. E.)

Hall, Frederick

Money, L. G. Chiozza

Thomas. David Alfred(Merthyr)

Harcourt, Rt. Hon. Lewis

Montagu, E. S.

Thomasson. Franklin

Harvey, A. G. C. (Rochdale)

Montgomery. H. G.

Thornpson, J.W.H.(Somerset. E.

Harvey, W.E. (Derbyshire, N.E.

Morgan, G. Hay (Cornwall)

Torrance. Sir A. M.

Harwood, George

Morrell, Philip

Toulmin, George

Haslam, Lewis (Monmouth)

Morse, L. L.

Trevelyan, Charles Philips

Haworth, Arthur A.

Morton, Alpheus Cleophas

Ure, Alexander

Hazel, Dr. A. E.

Murray, James

Wadsworth. J.

Hedges, A. Paget

Myer, Horatio

Walker, H. De R. (Leicester)

Helme, Norval Watson

Napier, T. B.

Walton, Sir John L. (Leeds. S.)

Hemmerde. Edward George

Newnes, F. (Notts, Bassetlaw)

Walton, Joseph (Barnsley)

Henderson, J.M. (Aberdeen, W.)

Newnes, Sir George (Swansea)

Ward, W. Dudley (Southampton

Henry, Charles S.

Nicholls, George

Wardle, George J.

Herbert, Col. Sir Ivor (Mon., S.)

Nicholson, Charles N. (Doncast'r

Waring, Walter

Herbert, T. Arnold (Wycombe)

Norton, Capt. Cecil William

Wason, Eugene (Clackmannan)

Hobart, Sir Robert

Nussey, Thomas Willans

Waterlow, D. S.

Holden. E. Hopkinson

O'Donnell, C. J. (Walworth)

Watt, Henry A.

Holland, Sir William Henry

Parker, James (Halifax)

Weir, James Galloway

Holt, Richard Durning

Partington, Oswald

White, George (Norfolk)

Hope, John Deans (Fife, West)

Pearce, Robert (Staffs., Leek)

White, J. D. (Dumbartonshire)

Hope, W. Bateman(Somerset, N.

Pearson, W.H.M. (Suffolk, Eye)

White, Luke (York. E.R.)

Horniman, Emslie John

Philipps, Col. Ivor (S'thampton)

Whitehead, Rowland

Horridge, Thomas Gardner

Price, Robert John (Norfolk, E.)

Whitley. John Henry (Halifax)

Hutton. Alfred Eddison

Priestley, W.E.B. (Bradford, E.)

Whittaker, Sir Thomas Palmer

Hyde, Clarendon

Radford, G. H.

Wiles, Thomas

Illingworth. Percy H.

Raphael, Herbert H.

Williams, J. (Glamorgan)

Jackson, R. S.

Ratcliff, Major R. F.

Williamson, A.

Jardine, Sir J.

Rees, J. D.

Wills, Arthur Walters

Johnson. John (Gateshead)

Kendall, Athelstan

Wilson, Hon. C.H.W.(Hull. W.)

Johnson, W. (Nuncaton)

Richardson, A.

Wilson, John (Durham, Mid.)

Jones, Leif (Appleby)

Ridsdale, K. A.

Wilson, P. W. (St. Pancras, S.)

Jones, William(Carnarvonshire)

Roberts, Charles H. (Lincoln)

Wilson. W. T. (Westhoughton)

Jowett, F. W. '

Roberts, John H. (Denbighs.)

Winfrey. R.

Kearley, Hudson E.

Robertson, Sir G. Scott(Bradf'rd

Wood. T. M Kinnon

Kekewich, Sir George

Robinson, S.

King, Alfred John (Knutsford)

Robson, Sir William Snowdon

TELLERS FOR THE NOES— Mr.

Laidlaw, Robert

Roe, Sir Thomas

Whiteley and Mr. J. A.

Lambert, George

Rogers, F. E. Newman

Pease.

MR. BRIDGEMAN: moved to insert a proviso in regard to income derived from patent rights or copyright, and said his proposal
804
was on behalf of a class of people who were deserving of great consideration and who did not seem to him to be provided for under the Bill as it stood.

805
It was perfectly certain that their income was precarious and not permanent, and be could not help thinking that the right hon. Gentleman might be prepared to accept his Amendment, at any rate as far as the sense of it went.
Amendment proposed—
" In page 8, line 30, at the end to insert the words ' (d) any income arising from patent rights or copyrights which is immediately derived by the inventor or author of the works in respect of which the rights are held.' "—(Mr. Bridgeman.)
Question proposed, " That those words be there inserted."
MR. ASQUITHsaid that his belief was that incomes derived from the avocation of author or patentee already came within the operation of the clause; but he would have the point carefully considered by the Report stage in order that it might be made perfectly clear.
MR. AUSTEN CHAMBERLAINsaid he had heard the right hon. Gentleman's announcement with great satisfaction. He was rather surprised to hear him state that the Bill in his opinion already covered the point. He thought he was the first person to raise this particular question in the House—[Ministerial cries of " Oh "]—and the answer given by the right hon. Gentleman was not the same as that given to him by the President of the Board of Education, who contended not only that it was not in the Bill, but that it ought not to be in the Bill.
MR. BRIDGEMANasked leave to withdraw his Amendment.
Amendment, by leave, withdrawn.
MR. FELLmoved to add at the end of the clause, "(d) any income arising from investments which have been made out of savings from income derived from the exercise of any trade, profession, or vocation; (e) any annuity which has been purchased out of savings from income derived as in the last subsection." He could see no distinction between the case of a man who received a pension provided out of compulsory savings and that of a man who purchased an annuity out of his savings. He begged to move.
Amendment proposed—
"In page 8, line 30, at end, to insert the words (d) any income arising from investments
806
which have been made out of savings from income derived from the exercise of any trade, profession, or vocation; (e) any annuity which has been purchased out of savings from income derived as in the last sub-section."— (Mr. Fell.)
Question proposed, " That those words be there inserted."
MR. ASQUITHsaid that in dealing with pensions he laid down the distinction. The income derived from investments was clearly not earned income in any sense in which the term could be fairly applied. He could not accept the Amendment, for it would destroy the whole foundation of the clause. As regarded annuities purchased out of savings, the same considerations applied as to other annuities, and they were nothing more than investments, whether they wore made out of savings or not.
MR. HICKS BEACHsaid the Chancellor of the Exchequer had put himself in an absolutely illogical position. Why should a man who had saved out of his income to create a pension for himself in his old age be in a worse position than an officer, naval or military, or a civil servant who enjoyed a pension as deferred pay? By resisting this Amendment the right hon. Gentleman was putting a direct encouragement upon extravagance, because he was encouraging the professional man not to put aside any of his income, but to spend the whole of it. The right hon. Gentleman told them that it was very difficult to ascertain what investments were derived from savings. He would remind him that the whole machinery of this differentiation clause depended upon a return which the claimant had to sign himself. He had to sign a return declaring that his total income fell below a certain amount, and if he could be trusted to do that, surely they could trust him to declare which part was derived from investments, and which were direct savings out of his own pocket. He believed this proposal on the part of the Chancellor of the Exchequer was a feeble attempt to get himself out of a very difficult position. He hoped his hon. friend would press this Amendment to a division.
SIR F. BANBURYsaid the right hon. Gentleman had asked how it was possible to tell whether investments were derived from savings or not. Upon that point

807
his hon. friend who preceded him had anticipated his explanation, and had explained the point quite clearly. The whole foundation of this Budget rested upon the acceptance by the Chancellor of the Exchequer of the statements made by people who claimed exemption. There was no means of proving those statements, and they had to be accepted. If they were not accepted he could hardly conceive the immense number of officials who would be required to make investigations. In that matter they must take a man's word. He would like to point out to the Chancellor of the Exchequer the position in which he was putting a deserving class. The right hon. Gentleman had rightly said that pensions were deferred pay, and that those who were entitled to them would be exempted under the new Amendment. But if an Indian Civil servant who earned, say, £1,500 a year, and was compelled to put by a certain
amount to provide himself with a pension, was only to be charged on the lower scale on his pension, the business man who earned the same amount and voluntarily put by to provide for old age should be treated equally well. A man in business who avoided the temptation which was much too prevalent among Englishmen of all classes to spend too much—[laughter] well, it was so—if the people of this country followed the example of the French, they would be in a very much better position, and the Chancellor of the Exchequer would be in a more comfortable position than now. It was really the right hon. Gentleman's own interest that he should encourage men to be thrifty, and have some regard to the responsibilities which would be incurred in the future.
Question put.
The Committee divided:—Ayes, 78; Noes, 252. (Division List Xo. "269.)

AYES.

Acland-Hood,Rt.Hn.SirAlex.F.

Dalrymple, Viscount

Moore, William

Anson, Sir William Reynell

Doughty, Sir George

Morpeth, Viscount

Arkwright, John Stanhope

Douglas, Rt. Hon. A. Akers-

Muntz, Sir Philip A.

Ashley, W. W.

Faber, George Denison (York)

Nield. Herbert,

Balcarres, Lord

Faber, Capt. W. V. (Hants, W.)

Ratcliff, Major R. F.

Banner, John S. Harmood-

Fletcher, J. S.

Rawlinson, JohnFrederickPeel

Baring,Capt.Hn.G.(Winchester

Forster, Henry William

Roberts,S.(Sheffield,Ecclesall)

Barrie, H.T. (Londonderry.N.)

Gardner, Ernest (Berks, East)

Ronaldshay, Earl of

Beach,Hn.Michael Hugh Hicks

Gordon, J.

Rutherford. John (Lancashire)

Beckett, Hon. Gervase

Gretton, John

Rutherford, \W.(Liverpool)

Bignold, Sir Arthur

Hardy.Laurence (Kent,Ashf'rd

Scott, Sir S. (Marylebone, W.)

Bowles, G. Stewart

Harris, Frederick Leverton

Smith,F.E.(Liverpool, Walton)

Boyle, Sir Edward

Harrison-Broadley, H. B.

Talbot, Lord E. (Chichester)

Bridgeman, W. Clive

Hay, Hon. Claude George

Thomson, W.Mitchell-(Lanark)

Brotherton, Edward Allen

Helmsley, Viscount

Thornton, Percy M.

Butcher, Samuel Henry

Hervey,F.W.F.(BuryS.Edm'ds

Valentia, Viscount

Campbell, Rt. Hon. J. H. M.

Hill, Sir Clement (Shrewsbury)

Walker,Col.W.H.(Lancashire)

Carlile, E. Hildred

Houston, Robert Paterson

Walrond. Hon. Lionel

Cave, George

King,SirHenry Seymour (Hull)

Warde, Col. C. E. (Kent, Mid)

Cavendish, Rt. Hon. VietorC. W.

Lane-Fox, G. R.

Williams. Col. R. (Dorset, W.)

Cecil, Evelyn (Aston Manor)

Lockwood.Rt.Hn.Lt.-Col.A.R.

Wortley, Rt. Hon. C. B. Stuart-

Cecil, Lord John P. Joicey-

Long,Rt.Hon.Walter(Dublin,S.

Younger, George

Cecil, Lord R. (Marylebone, E.)

Lonsdale, John Brownlee

Chaplin, Rt. Hon. Henry

Lyttelton, Rt. Hon. Alfred

TELLERS FOR THE AYES—Mr.

Coates,E.Feetham (Lewisham)

M'Calmont, Colonel James

Fell and Sir Frederick Ban-

Cochrane, Hon. Thos, H. A. E.

Magnus, Sir Philip

bury.

Craig, CharlesCurtis (Antrim, S.)

Mason, James F. (Windsor)

Craik, Sir Henry,

Meysey-Thompson, E. C.

NOES.

Abraham, William (Rhondda)

Balfour, Robert (Lanark)

Beck, A. Cecil

Acland, Francis Dyke

Baring,Godfrey (Isle of Wight)

Bellairs, Carlyon

Allen,A.Acland (Christchurch)

Barker, John

Benn,W.(T'w'rHamlets,S.Geo.

Allen, Charles P. (Stroud)

Barlow, Percy (Bedford)

Berridge, T. H. D.

Armitage, R.

Barnes, G. N.

Billson, Sir Alfred

Ashton, Thomas Gair

Barry, Redmond J.(Tyrone,N.

Birrell, Rt. Hon. Augustine

Asquith.Rt.Hon.HerbertHenry

Beale, W. P.

Black, Arthur W.

Astbury, John Meir

Beauchamp, E.

Boulton, A. C. F.

Baker,Joseph A.(Finsbury,E.)

Beaumont, Hon. Hubert

Brace, William

Bramsdon, T. A.

Harwood, George

Partington, Oswald

Branch, James

Haslam, Lewis (Monmouth)

Pearce, Robert (Staffs., Leek)

Brigg, John

Haworth, Arthur A.

Pearson,W.H.M.(Suffolk,Eye)

Brocklehurst, W. B.

Hazel, Dr. A. E.

Philipps,Col.Ivor(S'thampton)

Brooke, Stopford

Hedges, A. Paget

Price, C. E. (Edinb'gh,Central)

Bryce, J. Annan

Helme, Norval Watson

Price, Robert John (Norfolk.E.)

Buckmaster, Stanley O.

Hemmerde, Edward George

Priestley, W.E. B. (Bradford,E.)

Burns, Rt. Hon. John

Henderson,J.M.(Aberdeen,W.)

Radford, G. H.

Buxton, R t. Hn. SydneyCharles

Henry, Charles S.

Raphael, Herbert H.

Byles, William Pollard

Herbert,Col.SirIvor (Mon, S.)

Rees, J. D.

Carr-Gomm, H. W.

Hobart, Sir Robert

Rendall, Athelstan

Causton, Et. Hn. Richard Knight

Holland, Sir William Henry

Richardson, A.

Cawley, Sir Frederick

Holt, Richard Durning

Ridsdale, E. A.

Chance, Frederick William

Hope, John Deans (Fife, West)

Roberts,Charles H. (Lincoln)

Cheetham, John Frederick

Hope, W. Bateman(Somerset, N.

Roberts,John H. (Denbighs.)

Clcland, J.W.

Horniman, Emslie. John

Robertson,SirG.Scott(Bradf'rd

Clough, William

Horridge, Thomas Gardner

Robinson, S.

Clynes, J. R.

Hutton, Alfred Eddison

Robson, Sir William Snowdon

Coats,SirT.Glen (Renfrew,W.)

Hyde, Clarendon

Roe, Sir Thomas

Cobbold, Felix Thornley

Illingworth, Percy H.

Rogers, F. E. Newman

Collins, Stephen (Lambeth)

Jackson, R. S.

Rose, Charles Day

Collins,SirWm.J.(S.Pancras,W.

Jardine, Sir J.

Rowland, J.

Cooper, G. J.

Johnson, John (Gateshead)

Runciman, Walter

Corbett, A. Cameron (Glasgow)

Johnson, W. (Nuneaton)

Samuel, S. M. (Whitechapel)

Corbett,C.H.(Sussex,E.Grinst'd

Jones, Leif (Appleby)

Scarisbrick, T. T. L.

Cornwall, Sir Edwin A.

Jones, William(Carnarvonshire

Schwann, C. Duncan (Hyde)

Cory, Clifford John

Jowett, F. W.

Scott,A.H. (Ashton under Lyne

Cotton, Sir H. J. S.

Kearley, Hudson E.

Seaverns, J. H.

Cowan, W. H.

Kekewich, Sir George

Seely, Major J. B.

Cremer, Sir William Randal

King, Alfred John (Knutsford)

Shaw, Charles Edw. (Stafford)

Crosfield, A. H.

Laidlaw, Robert

Shipman, Dr. John G.

Dalziel, James Henry

Lambert, George

Silcock, Thomas Ball

Davies. David (MontgomeryCo.

Lamont, Norman

Sinclair, Rt. Hon. John

Davies, Ellis William (Eifion)

Layland-Barratt, Francis

Sloan, Thomas Henry

Davies, Timothy (Fulham)

Leese,SirJosephF (Accrington)

Smeaton, Donald Mackenzie

Davies, W.Howell (Bristol,S.)

Lever,A.Levy(Essex,Harwich)

Soares, Ernest J.

Dewar, Arthur (Edinburgh,S.)

Levy, Sir Maurice

Spicer, Sir Albert

Dickinson, W.H.(St.Pancras,N.

Lewis, John Herbert

Stanger, H. Y.

Dobson, Thomas W.

Lough, Thomas

Stanley,Hn.A.Lyulph (Chesh.)

Duckworth, James

Lupton, Arnold

Steadman, W. C.

Dunn, A. Edward (Camborne)

Luttrell, Hugh Fownes

Stewart, Halley (Greenock)

Dunne,MajorE.Martin (Walsall

Lyell, Charles Henry

Strachey, Sir Edward

Edwards, Clement (Denbigh)

Lynch, H. B.

Strauss, E. A. (Abingdon)

Edwards, Enoch (Hanley)

Macdonald, J. R. (Leicester)

Stuart, James (Sunderland)

Edwards,Sir Francis (Radnor)

M'Callum, John M.

Sutherland, J. E.

Elibank. Waster of

M'Crae, George

Taylor, Theodore C. (Radcliffe)

Essex, R. W.

M'Kenna, Rt. Hon. Reginald

Tennant,SirEdward(Salisbury)

Esslemont, George Birnie

M Laren, Sir C. B. (Leicester)

Tennant, H. J. (Berwickshire)

Evans, Samuel T.

M'Micking, Major G.

Thomas,DavidAlfred(Merthyr)

Eve, Harry Trelawney

Mallet, Charles E.

Thompson, J.W.H(Somerset,E.

Everett, R. Lacey

Manfield, Harry (Northants)

Toulmin, George

Fenwick. Charles

Markham, Arthur Basil

Trevelyan, Charles Philips

Kerens, T. R.

Marks,G.Croydon (Launceston)

Ure, Alexander

Ferguson, R. C. Munro

Mason, A. E. W. (Coventry)

Wadsworth, J.

Fiennes, Hon. Eustace

Massie, J.

Walker, H. De R. (Leicester)

Findlay, Alexander

Menzies, Walter

Walters, John Tudor

Fuller,John Michael F.

Micklem' Nathaniel

Walton, SirJohn L.(Leeds,S.)

Fullerton. Hugh

Mond, A.

Ward,W.Dudley(Southampton

Gill, A. H.

Montagu, E. S.

Wardle, George J.

Gladstone,Rt.Hn.Herbert John

Montgomery, H. G.

Waring, Walter

Glendinning, R. G.

Morgan, G. Hay (Cornwall)

Warner,Thomas Courtenay T.

Glover, Thomas

Morrell, Philip

Wason, Eugene (Clackmannan)

Goddard, Daniel Ford

Morse, L. L.

Waterlow, D. S.

Gooch, George Peabody

Morton, Alpheus Cleophas

Watt, Henry A.

Grant, Corrie

Murray, James

Weir, James Galloway

Greenwood, G. (Peterborough)

Napier, T. B.

White, George (Norfolk)

Grey, Rt. Hon. Sir Edward

Newnes, F. (Notts, Bassetlaw)

White, J. D. (Dumbartonshire)

Gulland, John W.

Nicholls, George

White, Luke (York., E.R.)

Gurdon, Sir W. Brampton

Nicholson,C'harlesN.(Doncaster

Whitley, John Henry (Halifax)

Hall, Frederick

Norton, Capt. Cecil William

Whittaker, Sir Thomas Palmer

Harcourt, Rt. Hon. Lewis

Nussey, Thomas Willans

Williams, J. (Glamorgan)

Harvey, A. G. C. (Rochdale)

O'Donnell, C. J. (Walworth)

Williamson, A.

Harvey,W.E.(Derbyshire,N.E.

Parker, James (Halifax)

Wills, Arthur Walters

Wilson,Hn. C. H.W.(Hull,W.)

Wilson, W. T. (Westhoughton)

TELLERS FOR THE NOES—Mr.

Wilson, John (Durham, Mid)

Winfrey, R.

Whiteley and Mr. J. A.

Wilson, P. V. (St. Pancras, S.)

Wood,T. M'Kinnon

Pease.

Question, " That those words be there added," put, and agreed to.

Amendment proposed—
"In page 8, line 33, at the end, to add the words ' (8) Section thirty-four of The Finance Act, 1894, shall cease to have effect so far as it gives relief or abatement to persons who are entitled to relief under Section eight of The Finance Act, 1898.' "—(Mr. Asquith.)
Question proposed, " That the Clause, as amended, stand part of the Bill."
MR. AUSTEN CHAMBERLAINsaid he did not propose to travel over the ground already traversed during the debate, but he wished to ask the Chancellor of the Exchequer as to what he estimated would be the cost of the concessions he had made. The right hon. Gentleman estimated the cost of the differentiation at £1,250,000, that was to say that the incomes which would have returned £5,000,000 if the tax had applied all round would now only return £3,750,000. The right hon. Gentleman had estimated that the abatement would apply only to £100,000,000. Last week in reply to the hon. Member for Leicester the Chancellor of the Exchequer stated that the earned incomes between £160 and £2,000, which was the limit to receive the abatement, amounted to £200,000,000, and now it was admitted that the differentiation would cost £2,500,000 instead of £1,250,000. How could the two figures be reconciled? The abatement in the last year in which he was in office applied to £108,000,000. Obviously a great part of these abatements must apply to other than earned incomes. His own belief was that the right hon. Gentleman had under-estimated the cost of the concessions by about £625,000.
MR. ASQUITH:said he would consider the point raised by the right hon. Gentleman. He did not think there was any discrepancy between the figures ho had quoted last week and this; but the whole thing was largely conjectural, and they could not make anything but a rather rough estimate. There might be a great many unearned incomes under £2,000.
MR. AUSTEN CHAMBERLAINsaid that that would not explain the discrepancy, because the right hon. Gentleman had already excluded the earned portion of incomes which were over £2,000.
MR. ASQUITHsaid that that did not follow at all; but if the right hon. Gentleman put down a Question he would, give him the fullest information. He did not suppose that the original estimate of £1,250,000 would be largely exceeded.
MR. AUSTEN CHAMBERLAINsaid that if he was not satisfied with the Answer to the Question which he would put on the Paper, he would raise the matter again on the Report stage.
Clause, as amended, agreed to.
Committee report Progress; to sit again upon Monday next.

PROCEDURE (ANTICIPATORY MOTIONS).
Ordered, That a Select Committee be appointed to consider and report upon the Procedure of the House in relation to Anticipatory Motions and Bills.
Committee accordingly nominated of,— Mr. Chancellor of the Exchequer, Lord Robert Cecil, Mr. Ellis. Mr. Fenwick, Mr. II. W. Forster, Sir Brynmor Jones, Mr. T. P. O'Connor, Major Seely, and Mr. Shackleton.
Ordered, That the Committee have power to send for persons, papers, and records.
Ordered, That Three be the Quorum.— (Mr. Whiteley.)
And, it being after half-past Eleven of the Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the standing Order.
Adjourned at fourteen minutes before Twelve o'clock

PRIVATE BILL BUSINESS.
North Staffordshire Railway Bill.—Moved, That the order made on the 20th day of March last, "That no Private Bill brought from the House of Commons shall be road a second time after the 18th day of June next," be dispensed with, and that the Bill be now read 2a; agreed to: Bill read 2a accordingly, and committed: The Committee to be proposed by the Committee of Selection.
Dundee Corporation Order Confirmation Bill [H.L.].—Read 3a (according to order), and passed, and sent to the Commons.
Gas and Water Orders Confirmation (No. 2) Bill [H.L.]; Tramways Orders Confirmation Bill [H.L.].—House in Committee (according to order): The Amendments proposed by the Committee made: Standing Committee negatived: The Report of Amendments to be received To-morrow.
Local Government (Ireland) Provisional Orders (No. 2) Bill.—House in Committee (according to order): Bill reported without Amendment: Standing Committee negatived; and Bill to be read 3a To-morrow.
Local Government Provisional Orders (No. 13) Bill.—Read la; to be printed, and referred to the Examiners. (No. 92.)

RETURNS, REPORTS, ETC.
  EAST AFRICA PROTECTORATE.
  Correspondence relating to the flogging of natives by certain Europeans at Nairobi.

  TRADE REPORTS: ANNUAL SERIES.
  No. 3846, Spain (Bilbao); No. 3847, Germany (Frankfort).
  Presented (by Command), and ordered to lie on the Table.

  SEA FISHERIES REGULATION ACT, 1888.
  Order made by the Board of Agriculture and Fisheries under the provisions of the above Act, for the variation of an order for the creation of the Eastern Sea Fisheries District, together with Report by inspector on inquiry.

  SHOP HOURS ACT, 1904 (COUNTY OF SOMERSET).
  Order made by the council of the county of Somerset, and confirmed by the Secretary of State for the Home Department, fixing the hours of closing for certain classes of shops within the parish of Tiverton.
  Laid before the House (pursuant to Act), and ordered to lie on the Table.

  PROHIBITION OF MEDICAL PRACTICE BY COMPANIES BILL, [H.L.]
  Bill read 3a according to order.
  *THE LORD PRESIDENT OF THE COUNCIL (The Earl of CREWE): My Lords, I have one or two small Amendments to this Bill. The House may remember that the last time the measure was before your Lordships the noble Lord in charge of the Bill, Lord Hylton, had put down an Amendment to Clause 1, and I suggested then that if he would confer with the Department we might be able to frame some form of words which would be agreeable both to him and to us. The noble Lord was kind enough to carry out that suggestion, and I understand that he agrees to the Amendments which we propose. The point which arose was whether, in the case of a company contravening the provisions of the Bill, all the directors, officers, and others should be made personally liable, and it was suggested that in some cases that provision might operate rather hardly. Consequently, we have proposed that while the company itself should be liable, which, of course, is one of the principal objects of the Bill, the directors and officers of the company should only be liable if they knowingly and wilfully authorised or permitted such contravention. That seems to meet the case of anybody who for some reason or other is really not personally concerned and so ought not to be personally liable. I

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  beg, therefore, to move the first Amendment standing in my name.
  Amendment moved—
  "In Clause 1, page 1, line 8, to leave out from the second word ' company' to the word ' shall' in line 10."—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  Amendment moved—
  "In Clause 1, page 1, line 12, after the word 'happens' to insert the words 'and every director, manager, or other officer of the company who knowingly and wilfully authorises or permits such contravention shall incur the like penalty.' "—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  *THE EARL OF CREWE: There is also a small Amendment to Clause 2 of a drafting character. It is the opinion of the Department that the form of words which we propose to insert carries out the design more fully and completely than do the words in the Bill as it stands. I beg, therefore, to move that this Amendment be agreed to.
  Amendment moved—
  "In Clause 2, page 2, line 5, to leave out from the word "means" to the end of the clause, and to insert the words ' any body corporate wherever established which carries on business in the United Kingdom.'"—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  Bill passed, and sent to the Commons.

  IMPORTED WATCH-CASES BILL.
  Read 1a, and to be printed. (No. 91.)

  SUGAR BEET GROWING IN ENGLAND.
  *THE EARL OF DENBIGH: My Lords, I rise to call attention to the fact that when the policy of His Majesty's Government with regard to the Brussels Convention was announced, provisional contracts had been signed for growing 2,000 acres of sugar beet in the neighbourhood of Sleaford, that financial arrangements were in process of completion for the erection of a local factory to employ 120 men in the winter months, and that it has now been found necessary to abandon the whole project owing
  652
  to the uncertainty created by the action of the Government.
  I do not feel that I need apologise for again bringing this subject before your notice at so early a date, because I know that any practical proposal for the purpose of improving the agriculture of this country meets with great attention from your Lordships. I wish I could say the same with regard to the attitude of His Majesty's present Government towards this particular question. It seems to me that they have got so tied up with the various pledges they gave previous to the general election with regard to the Sugar Convention that it, is very difficult to get them to consider anything on this question if it in any way tells against them.
  I would remind your Lordships, with regard to the Sugar Convention, that it was passed after a great deal of controversy for the purpose of stopping the sugar bounties and suppressing the foreign cartels; and it is very often forgotten that those cartels did just as much harm as the direct bounties themselves. The Convention was very roundly abused by the Party now in power, mainly, I believe, because it was passed by the late Government; and the then Opposition, on the hunt for battle cries, thought the Convention would serve them on many political platforms in this country, and they made it so by laying to the door of the Convention all the blame for the rise in the price of sugar which took place a year and a half after the Convention was passed. I think it is generally admitted by people who regard the matter impartially that this rise in the price of sugar was really caused by the great shortage of the European crop. But the rise afforded too great an opportunity to be lost, and the result was that many Members of His Majesty's Government and a great many of their supporters went about the country saying that it was wholly the result of the Convention.
  I was very glad to see the other day an admission from the noble Lord, Lord Denman, who has dealt with this question before, to the effect that he did now admit that this rise in price was to a large extent due to the short crop. I think it a great pity that the noble Lord

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  did not mention that fact until I rather forced it from him by recalling to his notice some facts which he could not very well controvert. The noble Lord then went on to say that he thought the rise in price was also caused indirectly by the Convention, through the fact of Russian and Argentine sugar not being allowed into this country. Previous to the Convention the amount of Russian sugar that came in was about 15,000 tons. The amount that came from the Argentine was very small indeed, and I believe the Argentine is at the present moment an importing and not an exporting country at all. Considering that the world's crop of sugar is 12,000,000 tons and that the amount consumed in this country is nearly 2,000,000 tons, I think that to contend that the coming or not coming in of 15,000 tons or so of Russian sugar was any factor in the rise in the price is a very bold statement; and if the noble Lord persists in that opinion I can only admire from a distance the hardihood and originality of his ideas.
  On various political platforms throughout the country previous to the general election a great deal of what I can only call most undiluted nonsense was talked on this subject by politicians of every rank, and the people of the country were given an entirely erroneous impression of the facts of the case. The members of the Government then found themselves committed to pledges against the Convention, and they gave no thought or heed as to how their action would affect the agricultural question in this country, and the result is the situation I want to bring before your Lordships to-day. The Government seem to me to have steadily ignored every attempt we have made to call their attention to the practical side of the beet sugar industry, and do not appear to have taken any trouble whatever to make themselves acquainted with the most elementary facts connected with the practical side.
  A year ago I ventured to draw the attention of the House to the question. I was answered by the noble Earl the President of the Board of Agriculture and Fisheries, who informed me that he thought there was only about £3 per acre profit in it to the farmers, and he seemed
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  after that to dismiss it from his mind altogether as not being worthy of consideration. Shortly after, the noble Earl received a deputation of gentlemen from the neighbourhood of Sleaford, in Lincolnshire, who informed him that a movement was on foot there to bring about the starting of the beet sugar industry. They pointed out to him the bearing upon the question which the Brussels Convention had, and asked him what hope there would be of getting some rebate in the matter of excise from His Majesty's Government with a view of starting the industry. The noble Earl turned them down very shortly indeed. He told them they could not hope for anything in the way of rebate, and he refused to discuss the question of the Convention; and these gentlemen went away with feelings of great disappointment at the reception they had received from His Majesty's Government.
  Then recently in this House—in May last—I asked if the Government were now prepared to do anything to encourage the starting of this industry in this country, and, although I think it deeply affects practical agricultural questions, the noble Earl the President of the Board of Agriculture did not see fit to say a word upon the subject. He left it entirely to Lord Denman, who dealt with it partly from the Treasury point of view and partly from the political point of view, and to the noble Lord the Undersecretary of State for Foreign Affairs, who dealt with it from the Foreign Office point of view. The noble Lord Lord Fitzmaurice told us that the Foreign Office had nothing to do with sugar. Well, that is exactly what we complain of. The Foreign Office has to deal with this very important question of the Convention, but they absolutely and totally ignore the bearing which it has on British agricultural interests at home, and that is typical of the whole attitude of the Government with regard to this question. The noble Lord commented in pleasant sarcasm on the remarks which I had made. He spoke of the "sugary" nature of the suggestions I had put forward and the "mysterious benefits" which he said my proposals were going to bring to the agricultural population. All I can say is that it is extremely disappointing to have a perfectly serious

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  business proposition of this sort treated with contempt and indifference, and to be told by Lord Denman that we were simply impracticable enthusiasts, which I can only take as being the polite Parliamentary way of saying we are agricultural cranks and not worthy of notice. The result is that, although we have done our best to call the attention of His Majesty's Government to the great necessity of maintaining the Convention in the interests of this very important question, the agricultural side of it has been^ absolutely ignored.
  The other day we were met with the announcement in the House of Commons that the penal clause was going to be denounced. The penal clause is the one which forbids bounty sugar or cartel sugar being brought into this country, and it is practically the only weapon which we have for compelling respect for the Convention. What is the result? At the time the announcement was made, this movement at Sleaford, to which the attention of the noble Earl the President of the Board of Agriculture had been previously drawn, had made very great progress. The landowners and farmers round Sleaford are of a go-ahead nature—I wish that landowners and farmers in all parts of the country were the same—and they convinced themselves that there was a great deal in this sugar question and they, determined to try a practical experiment on a commercial scale. An eminent German expert was engaged to come over and advise them, and provisional contracts for the cultivation of no less than 2,000 acres of beet sugar in the district were drawn up with the local agriculturists, many of them small occupiers and freeholders, who undertook to grow five, ten, fifteen, or twenty acres apiece. These contracts were completed, signed, and stamped, and very favourable railway rates had also been arranged. The factory site had been chosen, the water supply carefully gone into, and a great deal of financial support promised. The factory was to cost some £50,000 or £60,000, and altogether £90,000 was going to be raised for the enterprise. And to show your Lordships that it was a serious business proposition I would mention that an eminent firm of cattle food makers were prepared to find £30,000 of the
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  capital on condition that they had the handling of the slices for the purpose of cattle food. The factory was going to turn out 7,000 tons of sugar a year, and it would have provided employment for about 120 men in the winter months. That is the first example we have had of the agriculturists of the country really taking hold of this matter as a really serious business proposition.
  I was invited the week before last to meet the promoters of this scheme. I do not know whether they would be called agricultural cranks the same as myself, but at all events they were business men who knew what they were about; and I heard read a report by their committee saying that it was useless now to go further with the matter, because they could not recommend anybody to put up a sum like £90,000 for this enterprise if, through the action of His Majesty's Government, the Convention was going to be endangered with a chance of the whole sugar trade being once more placed under the dominion of the foreign cartels. The result is that the whole scheme has been dropped and the agriculturists, not only of Lincolnshire, but also of Yorkshire, where a similar scheme was in preparation, have been very greatly disappointed.
  I have no doubt that His Majesty's Government will taunt me with respect to the wisdom which they displayed in having steadfastly refused everything in the nature of a rebate of excise, seeing that these gentlemen have been willing to go on with their enterprise without anything in the nature of a rebate. The answer to that is, as I stated at the time I asked for a rebate, that it is purely a question of price. When I first asked for a rebate the price of sugar was somewhere about 8s. 6d. a cwt., which is considerably below the cost of production. The price is now nearer 10s. a cwt. Then, again, the land round Sleaford is exceptionally suited for this particular industry, and the farmers there believe, from practical experience, that they can grow some twenty tons to the acre, as against twelve tons to the acre, which is the Continental average. The consequence is that they are able to work on a better scale than would be the case on the average land throughout

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  the country. At the same time, I wish to repeat that I believe it will be very difficult to start this industry on average land if some consideration is not given to the factories in the early part of their existence.
  One of the chief arguments brought forward by Lord Denman, in his reply to my request for a rebate, was the loss of revenue that would ensue. The noble Lord was aghast at the prospect of losing a figure which he put at possibly £400,000. That was a purely arbitrary figure which I had mentioned. I said that if the sugar production of the country reached a certain total the rebate might amount to £400,000. Of course, the loss in revenue is naturally a serious question, and I can quite understand that for a Chancellor in extremis the prospect of losing any revenue at all is a very serious matter, particularly when that Chancellor is at his wits' ends and would not know where on earth to turn for a substitute for that revenue. But I would ask the noble Lord and the Treasury whether they have yet considered what the loss of revenue in this way would mean. The rebate which I suggested was £2 10s. a ton, the amount permitted by the Convention. At this rate £400,000 would mean a rebate on 160,000 tons of sugar. On the scale of the factory referred to in my Notice this would mean the output of twenty-three rural factories treating 1,500,000 tons of roots on a four-course system, thus improving the cultivation of some 300,000 acres of land in this country. But this loss of revenue would not occur until this was an accomplished fact and until the industry was practically established, and I respectfully submit to the House that the benefits to be gained by the establishment of this industry would be well worth paying something for, to say nothing of the fact that a considerable amount would come back in income-tax and in the general prosperity of the neighbourhood. But the mere fact of its necessitating a loss of revenue was sufficient for it to be turned down by the Government and not thought of any more.
  It is interesting, however, to note what the attitude of the Government is with regard to small holdings. The other day a Small Holdings Bill was introduced into the other House which no doubt has been
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  looked upon as likely to prove an efficient and useful snowball against your Lordships' House, and that Bill is to be assisted in its career with a grant of £100,000 in the first year, the Chancellor of the Exchequer giving that without turning a hair. Nobody can say whether that project is going to be successful. The Government themselves seem to have so much doubt upon the question that they do not even urge the purchase of land, but want to lease it, so that if it is unsuccessful the landowner and the taxpayer will have to stand the racket. You have only to consider this grant of a large sum for a purely untried scheme and put it against the other project, which would mean a loss of revenue only after an accomplished fact, and I think your Lordships will see how untenable the argument of the Government is.
  I would also draw attention to the fact that this industry ought peculiarly to appeal to all who are interested in the co-operative movement. The greater number of these factories on the Continent are run upon co-operative principles by the farmers and the landowners in the neighbourhood, and if they are successful there I cannot see why they should not be successful here. I suppose we shall be told that all this alarm with regard to the dropping of the penal clause is quite unnecessary and that the Government do not intend to do anything in the nature of reviving bounties. If the Government do not wish to see bounties revived why do they not have the courage of their convictions and leave the Convention alone? I have heard members of the Government say: "We do not approve of bounties ourselves, but if other people are foolish enough to give bounties why should not we profit by them?" This lofty principle is akin to that of the gentleman who said he strongly objected to burglaries on principle, but if other people were foolish enough to commit them he did not see why he should not profit by being the receiver of stolen goods, thereby getting them cheaper.
  The real difficulty we have to contend with in this question is the fact that the general public seems to know very little about the intricacies of it. It is an intricate question, but on the Continent,

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  where the sugar industry is a very important branch of agricultural and of commercial business, people take a much keener interest in and have a far greater knowledge of it than here. The result is that His Majesty's Government seem to be taking advantage of the ignorance which is displayed by the general public in this country to use this question of the Convention purely for political purposes. I sincerely hope that the public will now begin to realise that this question is not one which concerns merely the West Indies, but is applicable to the greater part of the Empire, and I trust that this concrete example from Sleaford of the effect of the action of His Majesty's Government will bring home to the agriculturists of the country that the Convention concerns them to a far greater extent than they have ever thought before.
  *THE UNDER-SECRETARY OF STATE For FOREIGN AFFAIRS (Lord FITZMAURICE): My Lords, I am sure that no Member of your Lordship's House will complain for a single instant of the noble Earl having again called attention to this question. I think we shall all agree that this is a most important question, but it would be well if noble Lords were to recognise that what separates us are really questions of principle and of belief. In any case I certainly can say for noble Lords on this side of the House that we fully recognise the complete sincerity of the noble Earl himself. The whole question of bounties and cartels is one upon which the majority of reasonable men may agree to differ, and upon which there probably always will be differences of opinion. All we ask is that the noble Earl should recognise that in regard to us. I regret, however, if I may say so without offence, that in his speeches and letters on this subject the noble Earl is too much given to introducing allusions about persons being animated by the desire to capture votes on political platforms, and to take advantage of a question like this Convention when a general election is coming on. Personally, I make no charge of that kind, for I recognise that at election times there is always a disposition shown by both Parties to indulge in a certain amount of good-humoured exaggeration. At the same time it will be readily acknowledged that,
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  notwithstanding this, the traditions of public life are high and honourable on the whole.
  When the noble Earl's notice first appeared on the Paper, we were in some doubt as to which Department was particularly aimed at. But in the end we came to the conclusion that we were all included, and the speech of the noble Earl has certainly justified that belief, for he indulged in a good deal of random firing at all the Government offices. First of all he had a shot at my noble friend the President of the Board of Agriculture, then at the Board of Trade-and the Treasury, and finally he delivered an attack upon the office which I have the honour to represent. In the course of that portion of his speech he complained of the Foreign Office because he alleged that we did not in the least care for the interests of agriculture. My Lords, I venture to meet that statement with a positive contradiction. It is true that I did say the other day that the Foreign Office had no direct responsiblity for agriculture. That is, I am afraid, almost a platitude. But it is wholly wrong to say that it either does not care for or underrates the importance of agriculture. The Foreign Office is called upon constantly to negotiate with foreign countries as to a great number of questions, the real care and decision of which rests more with other Departments of the Government than with the Foreign Office. I venture to assert that during the short time we have been in office we have actively shown what we are disposed to do for the agricultural interest. That is, perhaps, a matter which would be more properly developed by my noble friend the President of the Board of Agriculture, who, no doubt, if this debate continues, will be prepared to address your Lordships in regard to that part of the question.
  The present position of the Sugar Convention is fairly well known, because a few days ago a white Paper was laid before Parliament, in which the Secretary of State explained a little more fully than in replies to Questions in the House of Commons what the present attitude of the Government is. As there still appears to be some doubt in the minds of noble Lords, and especially

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  in the mind of the noble Earl who brought forward this question, I would ask your Lordships' permission to read two short extracts from the despatch of Sir Edward Grey to Sir A. Hardinge, His Majesty's Minister at Brussels. The Secretary of State wrote—
  "His Majesty's Government have come to the definite conclusion that the limitation of the sources from which sugar may enter the United Kingdom, whether by prohibition or by the imposition of countervailing duties, is inconsistent with their declared policy, and incompatible with the interests of British consumers and sugar-using manufacturers, and that consequently it will be impossible for them to continue to give effect to the provisions of the Convention requiring them to penalise sugars declared by the Permanent Commission to be bounty-fed."
  The Secretary of State then proceeded—
  "It is, however, possible that, in the special circumstances of the case, the other Contracting States might judge it to be preferable to accord to the United Kingdom, by a Supplementary Protocol, a special exemption from the obligation to enforce the penal provisions of the Convention. They might be the more disposed to take this course, inasmuch as such an exemption would be unlikely, at all events for a considerable period, to have any material effect of a prejudicial character upon the export trade in sugar from any of the Contracting States."
  As that despatch is dated June 1st last it must be quite evident that negotiations upon the particular points mentioned in the second paragraph are continuing at this moment, and until those communications are completed it is impossible for me to make a statement outside the four corners of this despatch. But there is one thing which I would desire at once to point out to the noble Earl—namely, that he is quite mistaken in supposing that, if the policy adumbrated in the second paragraph I have read were carried out, it would immediately, by the abolition of the penal clauses, introduce the mischiefs of cartel sugar in this country. The abolition of the penal clauses by themselves, no doubt, would have the effect of making it easier than it now is for the sugars of non-Convention countries—such as Russia—to come into this country. But that is a different matter from the far larger question of the introduction of cartel sugars, which formerly were introduced here from countries like Germany now within the Convention. These are questions, however, that could be discussed with greater advantage at a later period
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  of the session, when we may be able to make a fuller statement than is now possible as to the exact position in which this country will stand when we have received replies to the suggestions adumbrated by the Secretary of State.
  But as to the broad lines of the policy of the Government I wish to see no misunderstanding. We are not ashamed to acknowledge that we are above all things a free trade Government. We quite admit that many noble Lords opposite do not share those views. We respect their views, and we hope that the same toleration will be extended to our sincerity and consistency of conviction. The Government are convinced that, whatever small advantages might possibly accrue locally by the development of such industries as those for which the noble Lord has pleaded, they would be infinitesimal compared with the loss of those advantages which the absolute freedom of entry of sugar into this country would bring about. The noble Lord told us about 120 men who would have been employed if this factory had come into existence. I remember very well the late Mr. George Palmer, of Reading, telling me about the time the late Baron H. de Worms was engaged in negotiating a sugar convention that if that convention had been ratified the result would have been that he would have been compelled immediately to close a new branch of his works which he had just built in order to develop the making of cakes into which a great quantity of sugar entered; and several hundred men would probably have lost their employment. I put that case, of which I happened to hear by accident, against the noble Lord's.
  *THE EARL OF DENBIGH: My point was that the factories I had in view, being in the rural districts and villages, would be a means of bringing people back to the land, which is a quite different proposition from the case of factories in towns.
  *LORD FITZMAURICE: I quit sympathise with that view. I have represented in Parliament a constituency which was largely rural, and I have always felt that anything which would bring about the establishment of factories in our villages would be a very desirable

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  thing; but there is another side to the question. Looking at employment in the country as a whole, I believe the abolition of the system produced by the Convention and the free introduction of sugar into this country would bring about more employment than the plan proposed by the noble Lord.
  I do not think the noble Earl was quite accurate in regard to the quotation he made of the statement by my noble friend Lord Denman in regard to the rise in the price of sugar. The noble Earl stated that my noble friend had said that the rise in the price of sugar shortly after the Convention was mainly due to the shortage of the crop on the Continent. What my noble friend did say was that it was "in the first instance" so due. That is an important distinction. My noble friend Lord Denman was anxious to be accurate, and I do not think the statement he made in any way went beyond the facts.
  I do not desire in the least to overstate the case in regard to price. The manner in which these artificial arrangements, contrary to the spirit of free trade, work out is altogether unforeseen, and their consequences, and the reasons for them, never admit of exact proof, because in great trade movements the questions of price and value are not the result of one thing only. They depend upon a great number of different circumstances opera- ting at different times, and sometimes operating together. It may fairly be argued that the great rise in the price of sugar which took place very soon after the Convention was very largely due to the shortage of a portion of the crop. But that was not the only reason. It is quite acknowledged by those who have studied this question that the fact that we prohibit Russian, Argentine, and Danish sugar from entering the United Kingdom does not lessen the available supply of sugar in the world, and that sugar which would otherwise have been sent to this country finds its way elsewhere, and thus displaces sugar which, instead of being sent to those destinations, is sent to the United Kingdom. For example, Russian sugar finds its way to Persia, and in consequence a certain amount of Austrian sugar is sent to the United Kingdom instead of to the East.
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  The blank which has been made by the diversion of Russian sugar has very likely been filled up in our markets by a larger importation of French sugar. Although it may be quite truly said that since sugar from Convention countries has taken the place in our markets of sugar from the excluded and non-Convention countries there has been no actual diminution of supply, it may nevertheless be fairly argued that the Convention has brought about a bad result.
  If it were asked how, in view of the fact mentioned, the prohibition of Russian sugar in this country could affect the price we had to pay for our sugar or could really limit our supply, the answer would be that any interference with the natural flow of commodities along the routes which they follow when left to themselves must involve friction and must tend to make them more expensive. A case may easily arise, when sugar prices are unduly inflated by speculation, when it may be desirable for an importer to procure sugar from a special source which may for the moment be the most favourable one, for it is just at such periods of speculation that prices are not, as they are at more stable periods, uniform throughout the world. The penal clause, in shutting out certain sources, even though they are sources of minor importance, may in this case inflict a real injury on purchasers. Such interference with the natural course of trade, and such interference with the right of a purchaser to obtain goods in any market which may accidentally be especially favourable to him, will cease, so far as purchasers in this country are concerned, with the abandonment of the penal clause. It will give the intending purchaser the knowledge that all markets are open, and that fact tends to produce an equalising effect on the market.
  These are the main arguments which have induced the Government to believe that the Sugar Convention is, on the whole, a document which has not had any good effect upon British trade. At the same time, the Secretary of State has recognised that, as this country has set its hand and seal to a document which has brought about great changes in other countries, we must approach

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  those results from the point of view to a certain extent of the effects of our conduct upon foreign countries. That is the main reason why the Secretary of State has attempted to find out whether, without inflicting grievous disturbance upon foreign countries in regard to some of those arrangements which we have ourselves practically encouraged them to enter upon, we cannot relieve our own consumers of sugar by abolishing the penal clauses from the worst consequences of this, as we think, unhappy Convention.
  *THE MARQUESS OF LANSDOWNE: My Lords, this is, perhaps, hardly the occasion for a prolonged debate upon the important question which has been brought before the House to-night. I feel that the more because I gather from my noble friend who has just sat down that negotiations are still in progress, and that before the end of the session we may have a fuller opportunity of considering the position which His Majesty's Government intend to assume.
  But I wish, in the first place, to say that I think that those who believe in the possibility of introducing the cultivation of sugar-beet into these islands—and I am under the impression that the number of those people is increasing—owe a great debt of gratitude to my noble friend for the courage and perseverance which he has shown in bringing this question before the House. I think my noble friend has been well advised in making it clear that the issue he desired to bring forward was not the same that he had raised on previous occasions. On former occasions he pressed His Majesty's Government to encourage the cultivation of sugar-beet by the grant of a rebate. I say, frankly, that I was not very much surprised when I learned from noble Lords opposite that that was a suggestion which they did not see their way to adopt. My noble friend made, however, rather a shrewd point when he suggested to the House that a Government which had shown the splendid audacity displayed in the Land Bills now before Parliament need not have been too timorous when it came to his much more modest proposal.
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  But I do not desire to press that point this evening.
  What my noble friend tells us to-night is that the announcement recently made by His Majesty's Government in regard to what I can only call their withdrawal from the Brussels Convention has had the effect of strangling at its very birth a well thought out movement for the introduction of what might have proved a very important branch of industry in the rural districts of these islands. What is the attitude, then, of His Majesty's Government towards the Convention? I gather from the despatch of the Secretary of State which has been referred to that they do not desire formally to dissociate themselves from the other Powers who have signed the Convention. What they do desire is to intimate to all concerned that they refuse any longer to enforce the clause under which those Powers bound themselves to put certain penalties on bounty-fed sugar. I have a pretty distinct recollection of the negotiations which led to the Brussels Convention, and my recollection is certainly to the effect that the penal clause was the essential element in the whole matter. There had been, as some of your Lordships may be aware, attempts in former years to bring about an international arrangement of this character. Those attempts had always broken down. Why? Because it was always found impossible to obtain the consent of this country to a penal clause. The penal clause, as I have said, was that without which I believe the Brussels Convention could not have been obtained. I understand that so far as that clause is concerned His Majesty's Government have fully made up their minds to extricate themselves from their obligations at the earliest possible opportunity.
  It does not seem to me to be enough to say, as we are saying, that we have no intention of giving bounties ourselves to British sugar products. That is not the point. The point is whether we desire to close our markets to sugar produced under this artificial and, as I shall always believe, most mischievous system. If our markets are, as I suppose they will be, re-opened a few months hence

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  to bounty-fed sugar, it will be difficult to convince me that that will not mean the pulling out of what I would describe as the keystone of the arch of the Brussels Convention. What are the reasons given in the despatch of the Secretary of State? We are told that this penal clause is inconsistent with the declared policy of the Government and incompatible with the interests of British consumers and sugar-using manufacturers. What is the declared policy of His Majesty's Government? It was announced this evening in vigorous terms by my noble friend. He said—
  "We are a free trade Government."
  Well, my Lords, I say there never was a clearer violation of free trade, there never was a more frontal attack on the principles of free trade, than this arrangement of sugar bounties and sugar trusts operating under the shelter of those bounties.
  My noble friend suggested that His Majesty's Government were opposed to what he spoke of as interference with the natural movement of commodities. Could any movement of commodities be more unnatural than the movement of sugar which results from these trusts? As to the interests of the consumers and manufacturers of sugar, I have always been under the impression that what best suited them was that the price should be moderate and steady. It was because the system of bounties led to prices which were neither moderate nor steady that I for one was in favour of a determined attempt to put an end their existence.
  Then as to the interests of the consumer. Is it the case that the Convention had the effect of raising prices against consumers? What it did was to raise the price from the low level at which it once stood, owing to the manner in which the market was flooded with bounty-fed sugar—a level which I think once reached the figure of 5s. 9d. a hundredweight—to a figure corresponding much more closely to the actual cost of producing sugar. Under the system of bounties fluctuations of price took place of the most extraordinary description. In 1889 the price fluctuated between 11s.
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  and 28s. a hundredweight, and in the ten years between 1893 and 1903 it ranged between 6s. and 19s. Now I do not believe fluctuations of that kind are really compatible with steady, honest business, and I should like in that connection to quote a well-known sentence of Mr. Gladstone's upon this subject. Mr. Gladstone once said—
  "I do not think any gain founded on inequality or injustice can bring good to the consumer."
  That was our point of view when this Convention was negotiated. I think we may fairly claim for the Convention that it has had the effect of widening and increasing the sources of supply, and that, to my mind, is a matter of extreme importance. No one can say that since the Convention there has been any sign of a shrinkage of the supply of the world. I shall be corrected if I am wrong, but I believe the sugar crop of the world was larger in 1906 than any previously recorded sugar crop, and the figure for consumption the year before was larger than in any previous year.
  And surely in connection with this question we have a right to take some thought of the interests of our own sugar - producing Colonies. To my mind it is extremely satisfactory that, whereas the imports of sugar produced from other materials than beet were falling steadily between 1890 and 1903, they have shown in the last three years a very considerable rise. Therefore, my Lords, I hope we may claim for the Convention that it has widened the sources of supply, and that it has had, at any rate, some effect in bringing about a revival of the sugar industry in our own Colonies. Of this I am quite sure, that the announcement of His Majesty's Government of their withdrawal from the penal clause has created the profoundest dismay in those Colonies.
  We have heard a great deal about the apprehension with which the manufacturers of sugar products in this country regard the cessation of the occasional supply of cheap bounty-fed sugar. So far as I have been able to ascertain, no real injury whatever has been done to

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  those who are connected with those industries. What has frightened them is that some of them were under the impression—a wholly mistaken impression—that because sugar under the bounty system at one time was sold in this country at 5s. 9d. a cwt., they had a right to look forward to 5s. 9d. sugar in the future as something upon which they could regularly depend. Nothing could be more unlikely than that, under the bounty system, those low prices would continue to prevail. We know how the bounty system works. You have the low prices, you have competition knocked out, and, when a gigantic and carefully organised monopoly has been established, then up go the prices again in the manner in which they used to in former days. As far as the confectioners are concerned—and I wish to speak with the greatest respect of that industry—so far is it the case that they have not been ruined by the Brussels Convention that I see from the published returns that the exports of jam and other kinds of confectionery stand higher for the year 1905 than for the two previous years.
  I have only to say before sitting down that what makes me especially regret the decision at which his Majesty's Government have arrived is this, that it seems to me that our action leaves us open to the imputation that in regard to this important question we are deserting the Powers with whom we acted at the time that the Convention was concluded. It is to me painful to think of the kind of observations which are likely to be made by those Powers upon our conduct in withdrawing from the penal clause. If the Convention breaks down, the responsibility will certainly be laid—and I think rightly laid—at our door. As for the minor matter to which my noble friend behind me has referred, I regret that the particular enterprise in which he takes so much interest should have suffered as it has suffered by the announcement of His Majesty's Government. But the real question is one of infinitely greater magnitude, and in regard to the larger aspects of the case I must say that I greatly regret the decision which His Majesty's Government have intimated.
  THE LORD PRIVY SEAL (The Marquess of RIPON): My Lords, I do not think my noble friend is in the least justified in speaking of our withdrawal from that portion of the Convention from which we propose to withdraw as a case of deserting those countries with whom the Convention has been made, because, as my noble friend knows very well, the Convention contemplated that at a certain date, which is about to arrive, any of the Powers connected with the Convention should have a right to withdraw. That is, of course, a fair announcement to all the Powers concerned that if any one of those countries should at that time not find it to their advantage to continue in the Convention they have a perfect right to give notice of withdrawal. I cannot think that that deserves to be called a desertion of those with whom the Convention was made.
  My noble friend declared that the system of bounties is quite contrary to free trade, and I entirely agree with him. The system of bounties is most objectionable all round, but the system of bounties exists in foreign countries. We are not responsible for them. We think it a bad system, and I think that the evidence that was before the world at the time that the Convention was made showed that it was a bad system for those countries which gave the bounties. But it is not in the least inconsistent with the doctrines of free trade that we should carry out this policy on our side, although it may not be carried out by other countries. My noble friend began by saying that, as he understood that the matter referred to in the last paragraph of the despatch of the Secretary of State was still under consideration and negotiation, he would not enter further for the moment into that question. But he has gone pretty fully into the general considerations of the Convention itself, but I must decline, under the present circumstances, to follow my noble friend in that part of the matter, particularly after the admirable statement which has been made regarding it by my noble friend behind me.

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  With regard to the question of my noble friend opposite, what he has said is a very excellent illustration of one of the most objectionable features of a protectionist system. You cannot have protection in any shape or form without it being quite certain that industries that are founded and grow up under that system will stand in the way of any change; and the longer the protection exists, the greater the number of industrial undertakings that are protected by it, the stronger will be the argument that you ought to continue protection. The evil of taking a first step in that direction is that you are immediately exposed to that argument. If the experiment in which the noble Lord opposite is interested goes on under anything in the nature of a protective arrangement, other undertakings of the same kind will spring up. It is no advantage to a new industry that it should be called into existence by methods of that kind. If it can establish itself in the country that will be a good thing, but if it rests upon artificial arrangements fostering it under circumstances which are not natural to it you are not benefiting at all the people whom you are artificially supporting, but creating a great difficulty in the way of the removal of the protection in the time to come.
  As to the particular case with which we have been dealing to-night, I know that my noble friend opposite, who always takes such a charitable view of the opinions of his political opponents, thinks and believes that the objection which we have always made from the beginning to the Brussels Convention was made for a political purpose. My Lords, it was made in accordance with the principles on which we have always acted, the principles which we have always defended; and if any persons have created an industry under the belief that we made those statements for temporary political or electioneering purposes, and have then founded upon that belief the investment of their money in undertakings of this kind, they have made a very great error.
  House adjourned at Six o'clock till To-morrow, half-past Ten o'clock.