Sitting of 11 December 1911

Preamble
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Lerwick Harbour Order Confirmation Bill [Lords],
Considered; to be read the third time.

GAS UNDERTAKINGS.
Return presented relative thereto [ordered 9th May; Mr. Tennant]; to lie upon the Table, and to be printed.
GAS UNDERTAKINGS (LOCAL AUTHORITIES).
Return presented relative thereto [ordered 9th May; Mr. Tennant]; to lie upon the Table, and to be printed.

MOROCCO, No. 2, 1911.
Copy presented of Despatch from His Majesty's Ambassador at Berlin, forwarding Translation of the Statement made by the Secretary of State of the German Foreign Office before the Budget Commission of the Reichstag, on 17th November, on the Franco-German Morocco Negotiations [by Command]; to lie upon the Table.
Paper laid upon the Table by the Clerk of the House:—

LUNACY.
Copy of report to the Lord Chancellor of the number of visits made, the number of patients seen, and the number of miles travelled by the visitors of lunatics between the 1st April and the 30th September, 1911 [by Act].
ORAL ANSWERS TO QUESTIONS.

  Russia and Persia.
  Mr. WEDGWOODasked whether the demand of the Russian Government, supported by His Majesty's Government, is
  1882
  that future appointments of foreigners to official positions in Persia must be made subject to approval by Russia, in the Russian sphere and by His Majesty's Government in the British sphere; and is this power of veto to extend to the Gulf Region of Persia, and, if so, which Power is to have the veto there?
  Mr. ILLINGWORTH (Lord of the Treasury): The demand is that Persia should not engage foreigners without the previous consent of the British and Russian Legations: there is no mention of spheres of interest in the demand. His Majesty's Government were informed beforehand that this demand would be made and they acquiesced; but they were not asked for their support. In practice until recently the two Governments have been consulted about appointments of foreigners.

  Anglo-Japanese Commercial Treaty.
  Mr. PIKE PEASEasked what precedent there was for the inclusion, without the approval of Parliament, of Article 8 in the Anglo-Japanese Commercial Treaty (1911), limiting the freedom of action of the Imperial Parliament in imposing duties upon goods imported from a foreign country?
  Mr. ILLINGWORTH: I am not aware of any previous Treaty which contains an Article exactly similar to that mentioned, but all Commercial Treaties limit the action of Parliament in one way or another. Moreover, the Article mentioned makes special provision whereby Parliament can, if it pleases, recover its freedom without prejudice to the remainder of the Treaty. As regards the present Treaty it will be remembered that it was laid as a White Paper one month before it was ratified, a course which gave Members full opportunity for considering its provisions before they came into force.

  War in China (British Trade).
  Mr. CHARLES BATHURSTasked the Secretary of State for Foreign Affairs, whether he is aware that the action of the British Consul-General at Shanghai, in giving notice to all traders of British nationality that they must not provide either of the belligerents in the Chinese Empire with supplies of any kind, while it is left open to traders of other nationalities to sell goods to such belligerents without any interference on the part of the representatives of their respective Governments has resulted in diverting trade into other than British

  1883
  channels; and whether, under these circumstances, the notice can be withdrawn or, alternatively, uniform action be secured in this matter on the part of the Governments of all foreign nations whose subjects carry on trade at Shanghai?
  Mr. ILLINGWORTH: As far as my information goes, the action of His Majesty's Consul-General at Shanghai was confined to calling the attention of British subjects to the Order in Council of 1904, by which British subjects are forbidden to assist in any way in the carrying on of war, insurrection, or rebellion against the Government of China. But I will request His Majesty's Minister in China to report on the subject.

  Store Pigs from Ireland (Restrictions).
  Mr. CRUMLEYasked the President of the Board of Agriculture if there is any reason for the continuance of the restrictions on the removal of store pigs from Ireland to England; and, if not, will he take steps to have such restrictions annulled?
  The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman): Yes, Sir, the restrictions in question are necessary in order to prevent the spreading of swine-fever from Ireland to Great Britain, and I do not think they could be withdrawn with safety at the present time. I may add that similar restrictions are in force with regard to the movement of store pigs from one district to another in Great Britain.

  Shuttle-Kissing Inquiry.
  Major STANLEYasked whether the Committee appointed to inquire into the practice of shuttle-kissing has finished its inquiries; and, if so, when its Report may be expected?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): The inquiry has been delayed by the death of one of the members of the Committee, but it is now concluded, and the Committee hope to have their report ready early in next year.

  Home Office Employés.
  Colonel YATEasked the Home Secretary why so small a percentage of ex-Service men, namely, 32.50, are employed under the Home Office; and whether, in view of the fact that many ex-Navy and
  1884
  ex-Army men are well qualified for such posts as messengers and attendants, he will give instructions that the percentage of men employed under the Home Office be raised to at least 50 per cent. as soon as possible as vacancies occur?
  Mr. McKENNA: This low percentage is rather misleading, because the numbers include ten temporary employés under eighteen years of age. But for them, the percentage would have been 43.3. I find that since 1901 twelve out of sixteen persons appointed to the post of messenger or the like have been ex-Service men, or 75 per cent.

  High Sheriffs.
  Mr. KINGasked the Home Secretary whether the attention of the Government has been called to the position of high sheriffs of counties and to the objection of certain persons to undertake this office; and whether, in view of the character of the duties, he will propose legislation either abolishing the office of high sheriff or removing the grounds of complaint?
  Mr. McKENNA: My attention has not been called to the subject; but, even if a case could be made for legislation with regard to the office of high sheriff, there is no prospect at present of finding time for it.
  Mr. KING: Will the right hon. Gentleman see whether it is not possible to exempt men who are already doing large public duties, like the chairmen of county councils, from these onerous burdens?
  Mr. McKENNA: I do not know. I think that would be taken into account in appointing the sheriffs.
  Mr. KING: Is the right hon. Gentleman aware that it is not now the rule to take, that into account? May I further ask whether the duties of this office are not confined to giving luncheons to judges before the assizes, and then executing their victims after the assizes, and whether these duties are hardly suitable to give to hard-worked county gentlemen at the present time?
  Mr. SPEAKER: The hon. Gentleman had better put the question down on the Paper.

  Admiralty Contracts.
  Mr. KEIR HARDIEasked the First Lord of the Admiralty whether he has received a report from the advisory committee concerning the wages scale for Dowlais; and whether, as the dispute was

  1885
  settled ten weeks ago, the firm of Guest, Keen, and Nettlefold is again eligible to tender for contracts for his Department?
  The CIVIL LORD of the ADMIRALTY (Mr. Lambert): All restrictions on the works of this firm other than Dowlais were removed several weeks ago. The Admiralty have little connection with the Dowlais works. The Departments having concern with Dowlais now being satisfied, the Admiralty will remove their restriction.
  Mr. W. THORNEasked the First Lord of the Admiralty whether he is aware that the firm of Thornycroft, Southampton, are discharging workmen employed at the rate of wages agreed upon between masters and men, namely, 30s. per week, and taking on men at a wage of 22s. per week, thus violating the Fair-Wages Clause; and whether he will have inquiry made with a view to enforcing compliance with the Clause in question?
  Mr. LAMBERT: Investigation is now being made into this matter.

  Telephone Transfer.
  Mr. BOWERMANasked the Postmaster-General if representations have reached him to the effect that, in connection with the impending transfer of the National Telephone Company's undertaking to the Post Office, no statutory provision has been made to retain the property as rateable hereditaments, and that, in the absence of such statutory provision, the local rates must suffer unless the Government continues to pay local rates on the telephone undertaking after the transfer or makes an equivalent contribution in lieu thereof based on the full annual value of the undertaking; whether such representations have been considered; and, if so, can he state the result?
  The POSTMASTER-GENERAL (Mr. Herbert Samuel): Representations to this effect have reached me. Statutory provision to make Crown property rateable would be unusual, and is, moreover, unnecessary. As I have already stated in reply to earlier questions, the Government is prepared to make some contribution in lieu of rates on the buildings and plant to be acquired, but the precise basis of the contribution has not yet been settled. Returns of assessments are being furnished by the National Telephone Company, and have to be considered.

  Hull General Post Office.
  Mr. MARK SYKESasked why both sorting clerks and postmen are employed in recording parcels and sorting inward correspondence at the Hull General Post Office, seeing that, previous to March, 1911, these duties were performed only by qualified sorting clerks?
  Mr. HERBERT SAMUEL: I am having inquiry made into this matter and will communicate with the hon. Member.

  Meals for School Children (Glamorganshire).
  Mr. LANSBURYasked the President of the Board of Education if he is aware that dissatisfaction prevails in the county of Glamorgan owing to the failure of the education authority to administer the Provision of Meals Act in an effective manner; and whether he will cause an inquiry to be made into the matter on the spot, in order to ascertain if necessitous children are really being left unfed by this authority?
  The PRESIDENT of the BOARD of EDUCATION (Mr. Joseph Pease): Representations have been made to the Board with reference to the matter referred to in the first part of the question. I must remind the hon. Member that the Education (Provision of Meals) Act, 1906, is permissive in character and that it rests with the local education authority to decide whether they will take any steps under it. An order was issued by the Board in June last sanctioning expenditure under the Act in certain parishes in the county of Glamorgan up to 31st March, 1912. If the hon. Member will bring to my notice any instances of inability on the part of children, owing to lack of food, to take full advantage of the education provided for them, I shall be glad to communicate with the local education authority in respect of them.

  Census Returns.
  Mr. CAMPIONasked the President of the Local Government Board whether he can give any assurance that the Census (1911) Returns will be published at an early date, and, if so, when?
  The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. John Burns): It is hoped that the volumes dealing with the populations of various classes of area will be issued during the spring and early summer of next year, and those

  1887
  dealing with social statistics (such as age, occupations, etc.), in the early part of 1913.

  Camberwell Borough Council (Arlidge v. Conolly and Lawrence).
  Viscount WOLMERasked the President of the Local Government Board whether his attention has been drawn to the remarks of the judge and foreman of the jury in the case of Arlidge v. Conolly and Lawrence upon the conduct of the Local Government Board and of the Camberwell Borough Council; whether he proposes to indemnify Mr. Arlidge for the expense to which he has been put by the action of the Camberwell Borough Council and the methods of the Local Government Board; and whether he will introduce legislation amending the Housing, Town Planning, etc., Act, 1909, to restore to individuals the right to appeal to a judicial tribunal in order that similar cases may not occur again?
  Mr. BURNS: I must refer the Noble Lord to the reply which I gave on the 6th instant to a question on this subject put by the hon. Member for St. Pancras (West). I see no reason for adopting the suggestion in the last part of the Noble Lord's question.

  Legislative Council, Ceylon.
  Mr. PETOasked whether the Legislative Council in Ceylon has been dissolved; if so, how it is proposed to reconstitute it; and whether it is intended that in future there will be no member of the Legislative Council directly representing the interests of the European commercial community?
  The SECRETARY of STATE for the COLONIES (Mr. Harcourt): I am not aware whether the council has yet been dissolved but, if not, it will be dissolved very shortly in order that a reformed council may be appointed. The constitution of the new council is shown in the correspondence published last year in Cd. 5098 and 5427. The interests of the European commercial community will be adequately represented by the urban and rural European members, and there will be no member to represent that community alone.
  Mr. PETO: Is the right hon. Gentleman aware that there is a strong feeling in Colombo, particularly among the European community who represent both the import
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  and the export traders, that they ought to be represented specially on the council?
  Mr. HARCOURT: No, Sir.
  Colonel YATE: Considering that one of the seats was taken from the Europeans, will the right hon. Gentleman not take this opportunity of restoring the balance?
  Mr. HARCOURT: No. A representative has not been taken away from the European community. One of the representatives of the Colomban Chamber of Commerce has represented firms of all nationalities.

  NATIONAL INSURANCE BILL.

    APPOINTMENTS.
    Mr. JOWETTasked the Chancellor of of the Exchequer if he is able to state that no applications for posts under the proposed national insurance scheme will be invited or considered, or any appointments made, by the Insurance Commissioners until particulars of the posts to be filled have been published, and such information regarding duties and qualifications as can be given has been publicly announced as being available, on request, to intending applicants?
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): I am hoping to lay a White Paper on the Table in a few days giving information as to such arrangements as can at this early stage be decided upon, pending a careful consideration of the whole of their problem by the Commissioners when the Bill has passed into law.
    Mr. WATT: May we take it that Members of Parliament will have no influence whatever with these appointments?
    Mr. LLOYD GEORGE: That is one of the things that will be stated—that there will be no political considerations. It will deprecate pressure by Members of Parliament.
    Mr. JOWETT: May we take it that no appointments will be made meantime, until the White Paper is issued?
    Mr. LLOYD GEORGE: I cannot say whether two or three clerks may not be appointed for immediate purposes, but I think that my hon. Friend may take it that there will be no really important appointments made at all.

    INSURANCE COMMISSIONERS.
    Lord ALEXANDER THYNNEasked the Chancellor of the Exchequer whether it was intended that the Insurance Commissioners shall be a Government Department for the purposes of the Rules Publication Act, 1893; and, if so, whether Amendments would be proposed to the Bill to make clear this intention?
    Mr. LLOYD GEORGE: The Insurance Commissioners will be a Government Department for the purposes of the Rules Publication Act, 1893, and it is unnecessary to introduce any Amendment to make them so.

  Finance Bill (Loss of Revenue).
  Mr. PETOasked the estimated loss of revenue which will be due to the operation of Clause 2 of the Finance Bill, giving separate figure for loss under Sub-section (1) and under Sub-section (2).
  Mr. LLOYD GEORGE: The estimated loss of revenue for a complete year is £100,000, namely:—

  £70,000 under Sub-section (1)

  £30,000 under Sub-section (2)

  Imports (Cocoa Butter).
  Mr. PETOasked the imports of cocoa butter into this country in the years 1890, 1895, 1896, 1897, and 1900?
  Mr. LLOYD GEORGE: The imports of cocoa butter prior to the 7th August, 1896, cannot be stated, as cocoa butter was not then separately distinguished in the Accounts. The figures for 1896 (from 7th August), 1897 and 1900, are as follows:—

  Year.

  Lbs.

  1896

  …

  …

  …

  242,940

  1897

  …

  …

  …

  1,601,132

  1900

  …

  …

  …

  1,259,821

  Land Purchase (Ireland).
  Mr. BOLANDasked the Chief Secretary for Ireland whether he is aware that Thomas Cousins, Kenmare, has applied to be allowed to purchase his holding on the Lansdowne estate on the same terms as the other tenants who have purchased; and whether the Estates Commissioners will take steps to secure that his application is complied with?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell): The holdings on this estate in respect of which purchase agreements were lodged with the Estates Commissioners under the Act of 1903 were sold
  1890
  direct by the owner to the tenants. No purchase agreement has been lodged in respect of the lands referred to, and the Commissioners have no compulsory powers in the matter.
  Mr. BOLANDasked whether the Congested Districts Board were now prepared to complete the purchase of the Colomb estate, near Cahirciveen?
  Mr. BIRRELL: The Congested Districts Board cannot yet say whether they will purchase this estate, which is now being inspected.
  Captain CRAIGasked the Chief Secretary whether in the distribution of the lands of the Pollock estate, county Galway, the Estates Commissioners granted Father Geraghty, parish priest, Crosswell, president of the Glynsk and Crosswell branches of the United Irish League, who acted for the tenants during the negotiations for the sale of the property, Skehard House and the home farm, and the Roman Catholic curate at Glynsk an additional six acres of the property to his house and other holding; whether it is the practice of the Estates Commissioners to make allotments to parish priests; and, if so, can he state the acreage owned by them in Ireland?
  Mr. BIRRELL: This house and demesne were not allotted to Canon Geraghty, but were resold to the vendor of the estate under Section 3 of the Irish Land Act, 1903, and were vested in him in pursuance of the provisions of that Section. No advance has been sanctioned to the Roman Catholic curate, but three plots, comprising some 10 acres, have, on the resale of the property, been sold to the Diocesan Trustees, two of the plots being for national school teachers' residences, and the third an addition to the holding occupied by the local clergy. Where the Commissioners allot sites for teachers' residences or schools on estates purchased by them the allotments are vested in trustees, of whom the parish priest or the rector is usually one. The Commissioners have no separate record of the number of cases in which this has been done.
  Mr. FFRENCHasked when the estate of Francis Boxwell, Esq., Butlerstown Castle, will be vested in the tenants?
  Mr. BIRRELL: This estate is being sold direct to the tenants by the owner under the Irish Land Act, 1903. It is on the principal register of direct sales, and, having

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  regard to the claims of other estates, the Estates Commissioners are not at present in a position to say when it will be reached.
  Mr. PATRICK WHITEasked whether the Estates Commissioners have purchased the Blackburne estate, situate at Footstown Great, country Meath; and, if so, when would a distribution scheme be prepared?
  Mr. BIRRELL: The Estates Commissioners have not yet acquired this property, but are in negotiation with the owner.

  Schoolhouse Cleaning (Ireland).
  Captain CRAIGasked the Chief Secretary whether the Memorandum issued by the Commissioners of National Education dealing with the grant of a moiety of the cost of heating and cleansing Irish national schools restricts the grant to the whitewashing or otherwise cleansing of the exterior of the schoolhouses and the emptying and cleansing of the pits of the outhouses; and whether he will have the conditions so amended as to cover the cleansing of the walls and disinfecting the floors, desks, and benches in the interior of the schools?
  Mr. BIRRELL: The provisions of the Memorandum are as stated. The Commissioners of National Education did not consider that the sum of £21,000 would be sufficient to meet a moiety of the cost of cleaning and whitewashing the inside of the schoolrooms as well as the outside. The suggestion that the rule should be extended so as to include both has also been made by the Catholic Clerical Managers' Association, and I have asked the Commissioners to consider it, but I have not yet received their observations. When I do I will communicate with the hon. and gallant Gentleman.
  Captain CRAIG: I would ask the right hon. Gentleman to bear in mind that in many cases the exterior fabric of the national schools is in perfect order, and that no further expenditure is necessary upon it, but that the interior requires constant cleaning?
  Mr. BIRRELL: Yes. I think that is one of the points I will call attention to.

  South Dublin Guardians (Religion of Child).
  Captain CRAIGasked the Chief Secretary whether at a meeting of the board of
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  guardians, South Dublin union, on Wednesday, the 15th November last, a lady member moved that a child already baptised as a Protestant at the written request of its mother by Archdeacon Walsh be allowed to remain a member of the Church of Ireland; that the guardians defeated the motion by a majority of five and decided that the question of the child's religion be left in abeyance pending inquiries; and whether he will give the necessary orders that the child be brought up in the religion its mother desired and in which it was baptised?
  Mr. BIRRELL: At the meeting of the board of guardians on the 15th November a proposal was made that the deserted child referred to should be registered as a Roman Catholic, and an amendment was moved to the effect indicated in the question. The guardians adjourned the consideration of the question of the religion of the child's parents for inquiries, and at their next meeting unanimously decided to take no further action and to leave the child to be brought up in the faith in which by its mother's wish it had been baptised.

  Castlecomer Magistrates.
  Mr. MEAGHERasked the Chief Secretary whether the composition of the bench of magistrates in the Castlecomer Petty Sessions district is mostly of the Tory and Unionist personnel; and, seeing that the Lord Chancellor of Ireland has had the names of several properly qualified gentlemen of popular tendencies recommended to him by the local bodies and by the Member of Parliament for the Division, whether he will see his way to accede to the request of the people and appoint additional magistrates?
  Mr. BIRRELL: The Lord Chancellor informs me that he does not know the political views of the magistrates referred to. The names of certain gentlemen have been suggested to the Lord Chancellor for appointment to the Commission of the Peace in connection with the Castlecomer Bench, and will be duly considered.

  Tramps (Castlecomer).
  Mr. MEAGHERasked the Chief Secretary whether the Castlecomer Board of Guardians, in order to try and repress the tramp evil, instructed the workhouse master to institute proceedings for vagrancy against all tramps whom he could prove were vagrants, and that in carrying out that order of the guardians

  1893
  the master had some tramps whom he could prove offenders under the Vagrancy Act brought before Mr. Butler, the only justice of the peace in the town of Castlecomer; and, seeing that this justice of the peace, instead of convicting the said tramps, allowed them off without any punishment, he proposes to take any action in the matter?
  Mr. BIRRELL: I am aware that the Castlecomer Board of Guardians have issued instructions as stated. Proceeding's have been instituted against certain vagrants, and in one case the magistrate inflicted a sentence of seven days, and in the others cases discharged them with a caution. I understand that there are four magistrates in Castlecomer. The Government cannot interfere with the judicial decision of the magistrate in these cases.

  Sillies River Drainage.
  Mr. CRUMLEYasked the Chief Secretary whether he intends introducing, in next Session, a small drainage Bill applicable to Sillies River and its tributaries in Fermanagh county?
  Mr. BIRRELL: I cannot undertake to introduce legislation on this subject next Session.
  Mr. CRUMLEY: Cannot the right hon. Gentleman do something, seeing the damage that is caused by these great floods?
  Mr. BIRRELL: I cannot, of course, deny that a great deal of damage is done, but I am afraid that I cannot undertake to deal with it next Session.

  Lisconnor Harbour.
  Mr. LYNCHasked the Chief Secretary whether his attention has been called to a resolution of the Ennistymon Rural District Council condemning the action of the Board of Works in allowing the works at Lisconnor Harbour, West Clare, to remain unfinished, so that numbers of workmen have in consequence been thrown out of employment; and whether he can state what steps will be taken to complete the works necessary to render the harbour serviceable?
  Mr. BIRRELL: The resolution of the district council appears to be founded on a misapprehension of the facts, which were stated in my reply to the hon. Member's question of the 9th November. Owing to recent silting, which does not interfere
  1894
  with the navigation, the harbour bottom is now at least as safe as it would be if further expenditure were incurred in rock-cutting. The physical conditions of the harbour are such that unless a very large expenditure were incurred no substantial improvement in its present condition can be made.
  Mr. LYNCH: Will the right hon. Gentleman be prepared to incur that larger expenditure which is necessary and which would be very salutary?
  Mr. BIRRELL: I have no doubt that it would be salutary, but the doubt is whether I should be able to find the money.
  Mr. WILLIAM REDMOND: Could it not be dealt with by the Development Commissioners?
  Mr. BIRRELL: The people interested in it have only to bring it before the Development Commissioners.
  Mr. W. REDMOND: Is it possible for the people of the locality to make their case before the Development Commissioners? I ask that because I understood that it was necessary that it should go through some third party.
  Mr. BIRRELL: I believe that it is usual for some Department of the Government to bring it forward. Unless it is brought forward they will not undertake it themselves.
  Mr. LYNCH: Will the right hon. Gentleman look into the matter personally, when I am sure he will agree that it is deserving of consideration?
  Mr. BIRRELL: I have been to this harbour, and I am quite satisfied that this is an exceedingly hard case, but that it would cost from £30,000 to £40,000 to undertake the work which the hon. Gentleman has in mind.
  Mr. LYNCH: £5,000.

  Small Arm Ammunition (Reserve).
  MARQUESS of TULLIBARDINEasked the Under-Secretary of State for War whether on the 1st July last the stock of reserve small arm ammunition of the present pattern, and not more than five years old, was depleted or up to full quantity usually stored; and whether there was a large or small quantity of the new pointed ammunition in store at that time?
  The UNDER-SECRETARY of STATE for WAR (Colonel Seely): It is not in the public interest that any details of stocks of reserve of small arm ammunition should be disclosed. It may, however, be stated that during this year prior to 1st July the new pointed ammunition was manufactured in lieu of the old pattern so as to obtain a sufficient stock to allow of a rearmament at an early date, and the stock of the old pattern was in consequence gradually reduced, though always remaining at an adequate figure.
  MARQUESS of TULLIBARDINE: Can the right hon. Gentleman give me any reply as to the old pattern ammunition? I may take it that it was easy to say it was satisfactory if it was actually satisfactory. With regard to the pointed bullet, what was the object of having a large stock if you had not rifles to fire them?
  Colonel SEELY: With regard to the first part of the question, as to whether the ammunition was satisfactory, I have said that it is not in the public interest that details should be issued. I may say at once, if the Noble Lord is anxious, that on the date named there were more than twice as many cartridges in this country alone as were fired during the whole of the South African war, a period of two years and three-quarters. With regard to the pointed bullet, there is always inconvenience in a transition period; but we endeavoured to see that no risk was run during that period.
  Mr. ASHLEY: Can the right hon. Gentleman state what the stock is at the present moment?
  Colonel SEELY: Yes; there are now in the country three and a half times as many cartridges as were fired during the whole of the South African war.

  5th Lancers (Captain Bryce Wilson).
  Mr. HUNTasked whether the Under-Secretary for War is aware that Captain Bryce Wilson served in the Army for nineteen years with continuously favourable reports, but that in September or October, 1906, an unfavourable confidential report was sent in by Lieutenant-Colonel Graham, D.S.O., and was not shown to Captain Bryce Wilson till 17th December, 1906, and was then undated and sent by a junior officer; whether this is against the Regulations; and whether, in view of the fact that this report by Lieutenant-Colonel Graham stated that Captain Bryce Wilson
  1896
  had not a good influence in the regiment, and that Major-General Scobell stated that for the sake of the 5th Lancers he hoped that Captain Bryce Wilson would never rejoin, and his patronymic was Flash Wilson, which described him aptly, and as no reasons were given, Captain Bryce Wilson was entitled, under Section 42 of the Army Act, to an inquiry; and, if so, why was it refused before he was turned out of his regiment and placed on half-pay?
  Colonel SEELY: The reasons for the action taken in the case of Captain Bryce Wilson were fully explained by the Secretary of State for War in the Debate on Army Estimates on 27th June, 1910. To the statement then made I have nothing to add.
  Mr. HUNT: Does not the right hon. Gentleman know perfectly well the fact that the reasons given were personal reasons for getting Captain Wilson out of the regiment?
  Colonel SEELY: I think the Secretary of State's answer is adequate, and I cannot accept any reflection on the gallant officer, Colonel Graham.
  Mr. HUNT: Is it not a fact that the reason given by Colonel Graham was a personal reason?
  Colonel SEELY: I do not think it is wise at question time to go into a complicated case. I cannot accept the inference of the hon. Gentleman and I do not think it is at all fair.
  Mr. HUNT: Are we to understand that officers can be got rid of on the mere personal wish of one man?
  Colonel SEELY: No, Sir; certainly not.

  Royal Engineers (Land Values Work).
  MARQUESS of TULLIBARDINEasked whether any members of the Royal Engineers are being used for land values work; and, if so, to what department will their services be charged?
  Colonel SEELY: Nothing is known in the War Office of any such employment of Royal Engineer officers.
  MARQUESS of TULLIBARDINE: Have these officers been employed in this service, and will the right hon. Gentleman inquire and communicate the information to the President of the Board of Agriculture forthwith?
  Colonel SEELY: If the Noble Lord has any information to give me I shall be very glad to receive it. We know nothing except that they filled up the forms.
  MARQUESS of TULLIBARDINE: Who filled them up?
  Colonel SEELY: The Royal Engineer officers who were fortunate enough to have property which rendered them liable to fill up the forms. Nothing else has come to our knowledge. I have made careful inquiry.
  MARQUESS of TULLIBARDINE: Have they been employed as land valuers?
  Colonel SEELY: I have said that I know nothing about that.

  Alien Immigration Board (London).
  Viscount WOLMERasked whether the Home Secretary's attention has been called to the fact that on 5th December the Alien Immigration Board for London admitted into this country a Russian woman with her child, who was certified by Dr. Willoughby to be suffering from favus, which he explained was an almost incurable infectious disease, and therefore likely to be transmitted to English children; whether this case forms a precedent for admitting diseased aliens into this country; and whether such persons when admitted will be allowed to enter elementary schools or factories in company with healthy English people?
  Mr. McKENNA: Yes, Sir. A Russian child suffering from favus was admitted with her mother by the London Immigration Board last Tuesday; and it is a fact that favus is an infectious disease which is difficult to cure. The circumstances of the case were exceptional, seeing that both mother and child had already lived in this country and were returning, after a visit to Russia, to join the father here. The Board stated clearly that the case was not to be regarded as a precedent: and, further, put the father under a guarantee to have the child treated with a view to curing the disease. The case will be carefully watched.
  Viscount WOLMER: Was this child sent to a public elementary school?
  Mr. McKENNA: The child is at present only four and a-half years old.
  Mr. HUNT: Are we to cure all aliens who come over her?
  Mr. McKENNA: That is neither our business nor our wish.

  Electoral Reform Bill.
  Dr. CHAPPLEasked whether the Home Secretary could give an estimate of the number of Parliamentary voters there would be in each of the next five years on the assumption that the promised Electoral Reform Bill passed into law and provided that the qualifying age was raised to twenty-five years, that those under twenty-one years of age already enrolled retain their electoral right, and that the franchise was extended to women of twenty-five years and over who possessed the qualifications entitling men to enroll or were the wives of voters?
  Mr. McKENNA: It would be impossible for me to give the figures asked for even if the provisions of the Bill as regards residence and other qualifications were defined in the question. Moreover, I have no statistics, and could not possibly obtain any, of the ages of existing electors. If my hon. Friend desires it, and will put down an unstarred question, I can give him estimated figures of the adult male and adult female population above twenty-five years old for the five years he mentions, and can exclude aliens, paupers, and certain other disqualified persons; but that is all I can do for him.

  Suffragist Disturbances (Mr. Victor Duval).
  Mr. CHANCELLORasked whether his attention has been called to the case of Mr. Victor Duval, who was sentenced at Bow Street on Tuesday last to a fine of 10s. or imprisonment for five days, which sentence he has now served; whether he has noted that, though the charge was for obstructing the police, the admitted facts were that Mr. Duval was not originally in the crowd but on the green, and that he was dragged into the crowd by the police, and further that the learned magistrate apparently held that the obstruction occurred after arrest; and whether, under these circumstances, he will consider the advisability of the sentence being quashed?
  Mr. McKENNA: I am informed that the facts are not accurately given in the question. During the disturbance in Parliament Square Mr. Victor Duval was seen to be trespassing on the green within the iron railings of the square. When he was removed he endeavoured to force his way back through the police cordon, and he was then arrested and charged with obstructing the police in the execution of their duty. He behaved with much violence both before and after his arrest. The

  1899
  offence for which he was dealt with took place before his arrest. The magistrate held that the police were right in removing Duval from the enclosure, he found the charge of obstruction proved, and he made no suggestion that the obstruction occurred after the arrest. My hon. Friend has no doubt been misled by an inaccurate newspaper report of the magistrate's remarks.
  Mr. CHANCELLOR: Is the right hon. Gentleman aware that the magistrate sentenced the prisoner for obstruction after, not before, arrest?
  Mr. McKENNA: The hon. Member is misinformed. He must have got his information from a newspaper report.
  Mr. CHANCELLOR: Does the right hon. Gentleman know that my information is not from newspapers, but from a verbatim report of the case taken on behalf of the prisoner?

  Coal Mine Explosions.
  Viscount WOLMERasked if the Home Secretary can state how many explosions of a serious character have occurred in coal mines since 1872, and in how many of them has there been reason to suppose that the intake air road has been either the seat of origin of the explosion or has shown evidence of as great or greater violence of the explosion than did the return airway?
  Mr. McKENNA: The number of colliery explosions that have occurred since the year 1872 in which twenty-five or more lives have been lost is forty-five. It is impossible to give a definite reply to the last part of the question. In many cases the point of origin of the explosion was not discovered, but it is probable that in fourteen the explosion originated in the intake airway. Further, the question whether the greater violence was displayed in the intake or return airway cannot in many cases be determined from the reports, but in sixteen cases it is clear that greater damage was done in the intake. It must be remembered, however, that the greater violence as a general rule will be displayed in the haulage roads owing to the presence of dust, and the intake is much more commonly used for haulage than the return. In the recent disaster at the Hulton mine, much greater violence was displayed in the return because the haulage was in the return and in addition to coal dust a small quantity of gas was also present.

  Messrs. Cammell, Laird, and Company, Limited, Birkenhead.
  Mr. LANSBURYasked the Home Secretary if he can state the total number of boys and men injured and killed in the shipbuilding yard of Messrs. Cammell, Laird, and Company, Limited, Birkenhead, during the past two years, and the verdicts given in cases where inquests have been held; and whether the chief inspector of factories and workshops is satisfied that all reasonable precautions are taken by this firm to prevent accidents in their shipbuilding yard?
  Mr. McKENNA: During the two years ending 30th November last, the total number of accidents reported from this yard was 1,102, of which 187 occurred to young persons. The great majority of the accidents were very slight. Sixteen were fatal—namely, thirteen to adults and three to young persons. The verdicts in all cases were "Accidental death," and in no case was the firm blamed. In two cases, where the work was being executed by contractors, the jury recommended that the lighting should be improved, and the firm took steps to remedy this in such cases in the future. It is reported to me that this firm takes all reasonable precautions to prevent accidents, and that the recommendations contained in the special report on accidents in shipbuilding yards, issued by the Home Office in 1908, are well carried out.
  Sir WALTER MENZIES: Can the right hon. Gentleman state the number of the men employed in this shipyard altogether?
  Mr. McKENNA: I think the number is about 2,500.
  Sir W. MENZIES: Is not that an extraordinary proportion of injured?
  Mr. McKENNA: No; I do not think it would be extraordinary, as the accidents reported include a great many which are very trivial.
  Mr. CROOKS: It is fifty out of every one hundred employed.
  Mr. McKENNA: Not quite. In the course of a year it is not to be unexpected that a great many trivial accidents, slight injuries to hands and feet, should be reported.
  Sir W. MENZIES: Do I understand that in these works, with 2,500 men employed, there were sixteen men killed during the course of the year?
  Mr. McKENNA: Two years.
  Sir W. MENZIES: Even in two years is not that an extraordinary number for the number of men employed?
  Mr. W. THORNE: Is this known as the human slaughter-house?
  Mr. WEDGWOOD: How do those figures compare with Armstrong's or Barrow?
  Mr. McKENNA: I must have notice of a question of that kind.
  Mr. KEIR HARDIE: Who was it reported that the regulations have been properly carried out in this yard?
  Mr. McKENNA: The Home Office inspector.
  Mr. CROOKS: Is one of the regulations that the men should meet with accidents like this—it is abominable!

  Streatham Common Meetings.
  Mr. LANSBURYasked the Home Secretary if he is aware that organised attempts are being made by certain interested persons to break up public meetings, held on open spaces set apart for such public meetings, especially on Streatham Common; that at this latter place persons conducting the meetings have appealed to the police for protection, and such protection has been refused on the ground that it was the business of the attendants and park-keepers to preserve order, and that on these latter being appealed to they declined to act as the police were present; and, if the facts are as stated, will he instruct the police to deal impartially with all persons guilty of conduct likely to lead to a breach of the peace at these and suchlike meetings?
  Mr. ASHLEY: Before the right hon. Gentleman answers this question, may I ask if he admits the suggestion contained in this question that the police did not do their duty?
  Mr. McKENNA: I think the hon. Gentleman will find a reply in the course of my answer. I have made inquiry, and am informed that the facts are as follows: There is no foundation for the allegation that the police have referred persons appealing to them for protection to the park-keepers, nor is there any foundation for the statement that there is organised opposition to the holding of meetings on Streatham Common or elsewhere, beyond the fact that the provocative language of
  1902
  certain speakers has made it necessary for the police to protect those speakers from injury at the hands of persons to whom it has given offence. I am satisfied that the police have, in difficult circumstances, performed their duty without any partiality.
  Mr. LANSBURY: May I ask the right hon. Gentleman whether he is aware that those provocative statements are of exactly the same kind as the statements that one of his right hon. colleagues in the other House formerly wrote in books, and that two other colleagues on the same bench, one a right hon. Gentleman and the other an hon. Gentleman, have given utterance to in public lectures up and down the country without being interfered with?
  Mr. McKENNA: Oh, no, Sir, I understand that the language used on Streatham Common was of an entirely different character.
  Mr. LANSBURY: As the gentleman who was accused of that conduct has been removed by the action of the police, and as to the gentleman who have been there since, I would like to ask if any verbatim report or any statement has been taken down as to what those men actually have said which gives the right hon. Gentleman the right to say that their statements are provocative; I am not speaking of Mr. Boulter, I am asking a question as to the speakers since?
  Mr. McKENNA: With regard to Mr. Boulter's language——
  Mr. LANSBURY: There is no dispute between us.
  Mr. McKENNA: With regard to the other persons the question now raised is whether order is to be preserved on Streatham Common or not. The police have been called in to protect certain lecturers. They have done their best but cannot undertake to protect them if they continue to lecture—that is to say, the state of feeling in Streatham is such as that it requires they should not lecture on Sunday mornings.
  Mr. LANSBURY: May I ask the right hon. Gentleman whether he has considered the effect of what he says that gentlemen wishing to lecture on Tariff Reform amongst people who are actually hostile to it and do not want to hear such lectures, that they are to be subject to assault from the crowd without protection by the police?
  Mr. McKENNA: They are protected, and as a matter of fact the police have protected those lecturers and either one or two persons have been fined or sent to prison because they obstructed or interfered with those lecturers. The state of feeling now is such on Streatham Common that it has become necessary in the public interest that those people should not lecture. I have no doubt if my hon. Friend lets a little time elapse feeling will die down and things will go on again in the ordinary course.
  Captain CRAIG: Is the right hon. Gentleman aware that his colleague the Under-Secretary of State for War lectured yesterday morning on a United Irish League platform?
  Colonel SEELY: Yes, but there was no interruption of any kind.
  Sir W. BYLES: Would not the Public Meeting Act, 1908, introduced by the Noble Lord opposite (Lord Hugh Cecil) meet this case, and could it not be enforced to protect the rights of speakers?
  Mr. McKENNA: I will look into the question of the Act mentioned by my hon. Friend. At the present moment on Streatham Common it is merely a question of keeping order.

  Pooling Arrangements (Irish Railway Companies).
  Mr. CRUMLEYasked the President of the Board of Trade if he will cause inquiry to be made as to the loss sustained by Irish dealers in live stock owing to the pooling arrangements entered into by Irish railway companies and cross-Channel steamship companies?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson): I have received no complaints in this matter, but if the hon. Member will furnish me with particulars of any cases of hardship I shall be happy to ask for the observations of the railway companies concerned.
  Mr. CRUMLEY: Can the hon. Gentleman not get the information from the Railway Clearing House, and is it not the fact that throughout Ireland people in business were in the habit of getting rebates which have now been taken from them by this pooling arrangement?
  Mr. ROBERTSON: I do not know whether that is a fact, but inquiries will
  1904
  be made, if the Board think it is proper to address them, to the Irish railway companies.
  Mr. CRUMLEY: I can give every evidence of it.

  Fair-Wages Clause (Dowlais).
  Mr. KEIR HARDIEasked the President of the Board of Trade whether the Advisory Committee has now come to a decision regarding the rates of wages to be paid at Dowlais; and whether the same has been communicated to the different spending departments?
  Mr. ROBERTSON: I am informed by the chairman of the Advisory Committee that, in view of the recent readjustment of wages between the firm and the unions concerned, the contracting departments, which had referred certain matters relating to the Dowlais works to the Committee for investigation, have now informed them that they no longer require the advice of the Committee on the matters referred to them.

  Birkbeck Bank and Building Society.
  Mr. BOWERMANasked the President of the Board of Trade whether, inasmuch as further legal proceedings appear to be threatened in connection with the winding-up of the Birkbeck Bank and Building Society, the Board of Trade or the Official Receiver possess any powers by which the assets of the bank may be protected from being spent upon litigation?
  Mr. ROBERTSON: Notice has been given of an appeal from the recent decision of Mr. Justice Neville in the case of the Birkbeck Permanent Benefit Building Society. Neither the Board of Trade nor the Official Receiver has any power to prevent such an appeal.
  Mr. BOWERMAN: Has the right hon. Gentleman been made aware, through the Official Receiver, that a large majority of the depositors of this bank, something like five-sevenths, are quite willing to accept the decision of Mr. Justice Neville; and, if that be so, would it be possible for the Official Receiver to take a poll of the depositors, and act upon their decision?
  Mr. ROBERTSON: It would not be possible as the law stands. It seems a case for action of another kind.
  Mr. BOWERMAN: Am I to take it, then, that these depositors have no protection from the Government?
  Mr. ROBERTSON: None of our Departments has power to interfere in that way.

  Great Southern and Western Railway (Ireland).
  Mr. CONDONasked the President of the Board of Trade whether his attention has been called to the dissatisfaction of the public who were served by the Great Southern and Western Railway of Ireland with the delay in carrying goods over that line; whether he had any official information showing that such delay arose from insufficiency of rolling stock; whether he was aware that at last Fethard (county Tipperary) fair on the 21st November there were not sufficient wagons to convey cattle, and that similar complaints arose after other fairs; that at Waterford, on the 5th December instant, five steamers were in harbour with coal and only fourteen wagons were available, so that merchants had to pay large demurrage; and would he take steps to compel the railway company to provide sufficient rolling stock at once?
  Mr. ROBERTSON: I have asked the railway company for their observations on the hon. Member's question, and will communicate with him on receipt of their reply.

  North Wales Quarries, Limited.
  Mr. NEWMANasked the President of the Board of Trade whether his attention had been drawn to the recent winding-up of the North Wales Quarries, Limited, with a total liability of £40,101; and whether, in view of the interest that this experiment in co-operative working had aroused and the sum for which the company had failed, he could see his way to recommend the appointment of a small committee to investigate and report on the causes of failure?
  Mr. ROBERTSON: My attention has been drawn to a report in the Press as to the affairs of the North Wales Quarries, Limited; but, as at present advised, no useful purpose would appear to be served by the appointment of a committee to investigate and report on the causes of failure.
  Mr. NEWMAN: As this company was originally formed entirely free of the capitalist connection, is not its utter failure a matter of real national interest?
  Mr. ROBERTSON: If the hon. Member has any further information to give it will be considered.

  Official Chemical Analyses.
  Mr. PETOasked the President of the Board of Trade whether there was any regular means of obtaining an official Government chemical analysis in this country; if not, whether he was aware that in France, Germany, and Russia such official analyses were a regular part of the trade systems of those countries, and that, in the absence of means of obtaining such official guarantee of the chemical contents of samples, British traders were placed at a disadvantage both in cases of dispute with foreign Customs authorities and in offering samples in order to effect sales in foreign countries, and in settling disputes with foreign traders as to deliveries; and whether he would arrange for the Government laboratory at the Customs House, London, E.C., to undertake such analyses in future and grant certificates, as was done by foreign countries, on payment of a fee that would not compete with the business of private analysts?
  Mr. ROBERTSON: There are no regular means of obtaining official analyses of samples, but in certain cases, where apparent hardship has been caused to British traders by foreign Customs decisions, analyses of the goods in question have been obtained from the Government Laboratory or from the Imperial Institute. I have not, up to the present, been aware of any dissatisfaction among British traders in this respect, but if the hon. Member has any definite information to that effect I shall be glad to consider it.

  New French Tariff.
  Mr. NEWMANasked the President of the Board of Trade whether he had recently received a deputation, representing all branches of textile industry, to protest against the new tariff as sanctioned by the French Government; whether at such deputation a statement was made that as regards cotton goods the new duties imposed constituted in effect a protectionist measure to prevent the importation of goods which France had commenced to manufacture for herself, and that the imposition of such duties would be inimical to the continuation of the friendly relations between the two countries; whether a subsequent announcement was made by the French Government, postponing the alteration in tariff as affecting England alone to midnight on 31st December; whether the continuance of our friendly understanding with France was to be made

  1907
  dependent on special tariff concessions being granted to this country; and whether as a result of any negotiations the hands of this country would be tied with regard to any import duties which she might in the future determine to levy on French goods without giving Parliament an opportunity of discussing such negotiation?
  Mr. ROBERTSON: No, Sir; no deputation has recently been received with regard to the French tariff. A deputation representing a number of important chambers of commerce was, however, recently received with regard to the new tare regulations of the French Customs authorities, and their effect upon certain classes of British goods (especially textiles) imported into France. Prior to the deputation, the operation of the new regulations (which do not affect the United Kingdom alone) had been postponed to 1st January, 1912. Communications on the subject are proceeding with the French Government, and in the meantime the operation of the regulations has been further postponed for two or three months. The last part of the question does not arise.
  Mr. NEWMAN: May I take it that the precedent in the case of Japan will not be followed in the case of France?
  Mr. ROBERTSON: Negotiations are actually going on.
  Mr. NEWMAN: Will our hands be tied in the negotiations as they were in the case of Japan?
  Mr. ROBERTSON: I do not know of any tie in either case.

  Official Despatch Bags.
  Captain CRAIGasked to whom official bags for the conveyance of papers and correspondence were issued; and whether any register was kept either in the Stationery Office or the departments of the persons to whom these bags were issued?
  The FINANCIAL SECRETARY to the TREASURY (Mr. McKinnon Wood): Requisitions on the Stationery Office for official bags for the conveyance of papers and correspondence are signed by an authorised officer of the department requiring them. This officer is also responsible for the issue of the bags.
  Captain CRAIG: Are they issued to Members of this House other than those connected with Government Departments?
  Mr. McKINNON WOOD: Not as far as I am aware.
  Captain CRAIG: To any officials connected with the United Irish League?
  Mr. McKINNON WOOD: Not as far as I am aware.
  Captain CRAIG: Why does the hon. Member for South Galway have one?
  Mr. McKINNON WOOD: I was not aware that he had one.
  Captain CRAIG: Will the right hon. Gentleman make inquiries into the matter?

  Civil Service Regulations.
  Mr. FRED HALLasked what principle was followed in the Civil Service when, for reasons other than the specific reasons of efficiency or economy, it was decided to supplant one class of established officers by another; whether the prospects of promotion of existing members of the supplanted class were safeguarded; whether a common principle obtained in the different Departments; and, if not, whether the variations in different Departments could be stated?
  Mr. McKINNON WOOD: I am not aware of any instances of the substitution of one class of established officers for another effected for reasons other than those of efficiency or economy. Officers entering the public service do so on the understanding that the organisation of the Department to which they are assigned is subject to any alteration which may be required in the public interest from time to time, and it is, of course, impossible to recognise the right of any individual to promotion to a higher situation.

  Postmasters' Duties (Ireland).
  Captain CRAIGasked the Postmaster-General whether it was the general practice for postmasters in the various head office districts in Ireland to personally undertake the work of post-testing and checking of sub-office accounts, while their more important duties at the head offices were being performed by officers in the majority of cases in receipt of small salaries and who received no extra remuneration for the added responsibility thus cast upon them; and whether he would consider the advisability of a rearrangement which would give effect to the principle that the officer in receipt of the higher salary should at all times perform the more responsible duty or, failing

  1909
  this, that officers placed in temporary charge of head offices should be remunerated at a rate equal to the salary of the postmasters whom they substituted?
  Mr. HERBERT SAMUEL: I can hardly say that it is the "general practice" in Ireland or elsewhere for postmasters to undertake personally this or that duty. The importance of a duty varies according to the circumstances of the case. I have no reason to doubt that postmasters generally undertake personally the work which from time to time calls most for their personal attention, and I have no information which would point to the necessity of making any rearrangement.

  Undeveloped Land Duty.
  Captain FABERasked from what date the tax on undeveloped land would be due, seeing that the valuation of it was not yet completed; and at what approximate date it was likely to be completed?
  Mr. MACMASTERasked whether, when the provisional valuation of land liable to pay Undeveloped Land Duty had not been made or finally settled till a prolonged period of time had elapsed since the commencement of the Finance (1909–10) Act 1910, the payment of such Land Duty would be demanded by the Treasury for the financial year ending 30th April, 1910, and every subsequent financial year, or only from the date when such provisional valuation was made or finally settled?
  Mr. LLOYD GEORGE: Undeveloped Land Duty will be collected for the financial year ended 31st March, 1910, and for each subsequent year, subject to the limitation provided by the concluding words of Section 19 of the Finance (1909–10) Act, 1910. I anticipate that the valuations will be completed in sufficient time to prevent any serious loss of duty arising from this limitation.
  Mr. W. PEEL: Will all the arrears of duty be collected, however late the date on which the valuation is completed?
  Mr. LLOYD GEORGE: There is a limitation in the Finance Act.

  Liquor Licences (Revenue).
  Mr. GRETTONasked the Chancellor of the Exchequer whether he would state the percentages of the amounts drawn from the duty on retail liquor licences, distinguishing on-licences and off-licences relating to England (including Wales),
  1910
  Scotland, and Ireland, respectively, for the years 1908–9, 1909–10, and 1910–11?
  Mr. LLOYD GEORGE: If the total amount of duty levied on retail liquor licences in the United Kingdom in respect a of (1) on-licences, and (2) off-licences be apportioned between England (including Wales), Scotland and Ireland respectively, the percentages are as follows for the 1908–9:—

  England.

  Scotland.

  Ireland.

  (1) On-licences

  84.69

  7.47

  7.84

  (2) Off-licences

  54.44

  34.26

  11.30

  No reliable figures are available for the two following years.

  Old Age Pensions.
  Mr. PATRICK WHITEasked the Chief Secretary whether he was aware that the Kells sub-committee granted a pension to Mrs. Bridget Meehan, but that, on appeal by the pension officer to the Local Government Board, her claim was disallowed because no baptismal certificate could be found, although she produced the testimony of a man, admittedly over eighty years of age, that he knew her from childhood, and that she was over seventy years of age; whether she also submitted her marriage certificate showing she was forty-three years married and thirty years of age when she got married; and whether, having regard to all the circumstances, the Local Government Board would again consider her case?
  Mr. BIRRELL: The Local Government Board disallowed Bridget Meehan's claim on the ground that the evidence submitted as to her age was not sufficient to show that she had attained the statutory age. It is the fact that a man claiming to be over eighty years old stated that he had known the claimant from her childhood, and that in his opinion she was "over age," but no evidence as to this man's age was submitted, and in any case his statement of belief cannot be regarded as conclusive evidence. The claimant was married forty-three years ago, but her age at that time was not entered on the marriage certificate. It is not open to the Board to reconsider their decisions.

  Native Labour (Nyasaland and Rhodesia).
  Mr. COOPERasked the Secretary of State for the Colonies if he was aware that Nyasaland had a large surplus of unemployed native labour and placed every obstacle in the way of natives being recruited for or emigrating to Rhodesia,

  1911
  where they were urgently needed and were paid from two and a-half times upwards the rate of wages paid in Nyasaland; and was he prepared to advise the Governor of Nyasaland to make such regulations as would permit surplus labour to emigrate to or be recruited for Rhodesia under suitable Government control?
  Mr. HARCOURT: As at present advised I am not prepared to sanction the recruitment of labour in Nyasaland for employment in Rhodesia. The policy at present approved is that natives desirous of proceeding to Rhodesia on their own initiative receive passes enabling them to do so, and then proceed to Rhodesia under full supervision and with every precaution for their welfare. The whole question, however, is at present forming the subject of correspondence.

  Straying Animals (Personal Injuries).
  Mr. ALDENasked the Attorney-General whether his attention had been called to the recent decision of Justices Hamilton and Banks in the case of Jones and another v. Lee to the effect that the law provided no redress for a cyclist, motorist, or other road user who sustains injury from animals which had been allowed to stray on the highway, and imposed no obligation on farmers or others to keep their fences in such a condition that animals could not stray on the road; and whether he would initiate legislation to amend the law in this regard?
  The ATTORNEY-GENERAL (Sir Rufus Isaacs): The effect of this judgment is not so far-reaching as my hon. Friend suggests. I will consider the desirability of introducing amending legislation.

NATIONAL INSURANCE BILL.

  PERSONAL EXPLANATIONS.
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): By leave of the House, I should like to make a personal explanation arising out of certain questions that arose during the discussion on the Third Reading of the National Insurance Bill. I am sorry to have to refer to the matter, but there are two points. One arose out of a certain challenge which I gave to the Noble Lord the Member for Hitchin (Lord Robert Cecil). On Friday I gave notice to the Opposition Whips that I proposed to raise these matters, but I
  1912
  understood that it would be inconvenient then. I have since had an intimation from the Noble Lord that he proposes to make a statement on the subject. I shall therefore wait for what he has to say, as it may be unnecessary for me to make any further statement in reference to that matter. I shall confine myself for the moment to a certain statement made by the hon. Member for Colchester (Mr. Worthington-Evans), the Noble Lord, and the Leader of the Opposition, on a book, for which I accept full responsibility, published under my name in reference to the Insurance Bill. The statement was that I had misled the public by implying, in a paragraph quoted by the hon. Member for Colchester, that the Post Office insurers could draw an unlimited amount in respect of disablement benefit, and that I did not make it sufficiently clear that the amount they could draw was limited to the amount of their deposits, the State contribution and the employers' contribution, and such bonus as would be received under the tontine arrangement. If it rested entirely on the paragraph quoted by the hon. and learned Gentleman, I agree, the words are ambiguous. But it does not. On page 25 of the book—and I call attention to it because the thing has been quoted outside by a writer who usually sits opposite—I enter very elaborately into the provisions for Post Office contributors, and there I make it amply clear that the amount which a Post Office contributor would draw is limited to those amounts. I not only state it, but I emphasise it, and I say that the Government deliberately made that arrangement in order to induce people not to become Post Office contributors, but rather to enter friendly societies. I say:—
  "We shall distribute the funds first of all in medical needs. They have paid their own contribution, and there is the contribution from the State and the contribution of the employer. You will make a deduction for medical relief, and for sanatoria, and you will distribute the balance on purely deposit principles. There are societies in this country which do this thing now: it is really a kind of banking transaction. You pay an amount in and you draw to the extent you paid in."
  Then I proceed to say that in addition you get a bonus derived from the lapses of other Post Office contributors. I go on:—
  "Therefore those who are inside the Post Office Society will be able to draw to that extent upon the fund, and will get that additional advantage."
  I go on, and I have a separate heading for the next: "No inducement to become a Post Office contributor."
  "It is quite clear that there is no inducement to join the Post Office contribution, and we do not want that there should be."

  1913
  On page 51 I again call attention to the fact that they can only draw to the extent of those contributions, and I do it again on pages 86 and 87, and once more on page 140, where I head it: "The Advantages of the Friendly Society and the Post Office." I say:—
  "But if a man is not in a friendly society, all he gets will be benefits to the extent of the money he has contributed."
  After giving figures, I end:—
  "From this you will see that there is every inducement held out to a man to join a friendly society. We have framed our scheme deliberately on these lines, because it is our object to make it worth everybody's while to do so. We desire to make use of the experience and organisation of these bodies."
  Four times do I explain, not merely what deposit insurance means, but I emphasise its limitations, in order to induce people not to become Post Office contributors. When I come to the paragraph which the hon. Gentleman quoted I simply say:—
  "Men and women whom friendly societies will not take in, work on the deposit principle in the Post Office."
  After my four explanations it would have been fairer to me if the hon. and learned Gentleman (Mr. Worthington-Evans), in making the statement he did, had called attention to the fact that I had four times already emphasised the limitations of these contributors. I say that also of the right hon. Gentleman (Mr. Bonar Law), because he used very strong words in the Debate. He said, "My hon. Friend below the Gangway has pointed out the misrepresentation—made by him on his own responsibility—as more scandalous than has ever been made on any Bill by any Minister in any Government."
  Mr. BONAR LAW: Hear, hear.
  Mr. LLOYD GEORGE: I think I am entitled to ask the right hon. Gentleman if he had known that I had already explained four times what the deposit principle meant, whether he would have made that statement? Supposing, in the by-election leaflet from which I quoted, the benefits of the Bill had been four times stated, and at the end there had been a sentence which did not fully explain them, would he consider the quotation of the sentence the same as referring to all the passages together? I think I am entitled to ask the right hon. Gentleman whether, after my explanation, he was justified in using the strong language he did?
  Mr. BONAR LAW: As we could have been perfectly certain of in advance, the
  1914
  explanation of the right hon. Gentleman is an attack upon somebody else. As regards my share of it, I was careful to say—a charge of misrepresentation "more scandalous, etc.," it is true, had been made by my hon. Friend—that my charge against the right hon. Gentleman was, not that that charge was well or ill-founded, but that with it unanswered, he himself should have made charges against anybody else. I am perfectly certain that what the right hon. Gentleman has said just now represents his intention in regard to this book, for which he is responsible.
  Mr. LLOYD GEORGE: I say what is in it.
  Mr. BONAR LAW: Perhaps the right hon. Gentleman will wait until I have finished. What, when examined, is his defence, stated by himself in the best way he can state it? His defence is that in one part of the book explanations are made which are not made, and are distinctly contradicted, in that part of the book to which we took exception. There are no qualifying words whatever in that part of the book to which my hon. Friend drew attention—none! Undoubtedly, if a book is published under the sanction of the right hon. Gentleman, with the position of the deposit contributors clearly stated in it, use will be made of that part of the book without any reference to the explanation in the other part of it. What does the right hon. Gentleman say?
  "Men and women whom friendly societies will not take in, work on the deposit principle in the Post Office. Their insurance will be 9d. per week: 4d. from the employé, 3d. from the employer, and 2d. from the State. Thus in five years they will have £10 to the good, 'and.' in addition to that they will have a bonus which will be given to them——"
  Mr. LLOYD GEORGE: "'But' in addition."
  Mr. BONAR LAW: It is "and" here, but perhaps it does not matter.
  "they will have a bonus which will be given to them as certainly a large number of these people will neither be ill nor die. If they are ill for thirteen weeks in the year, they will be allowed 10s. per week. That is to say, they will get back £6 10s. For fourteen weeks beyond that thirteen weeks, they will get 5s. per week."
  That is to say that apart from bonus all those who are ill—for those who died do not come in now as I understand—apart from the bonus this pamphlet tells them they will get about £10 when the total amount which is available is something like £6. But that is only the beginning. He then goes on:—
  "Then if the illness continues, they will receive an invalidity pension of 5s. per week."

  1915
  That is to say, if a man continues an invalid for ten years, he will receive in addition to £10—which he could not possibly receive—£130 as well. I say, as I am always ready to say, I do not accuse the right hon. Gentleman of wilful misrepresentation, but I do say that in a book for which he was responsible it was utterly unjustifiable that a statement of that kind which could be quoted without the context of the rest of the book and which entirely misled everybody who read that statement, should be made.
  Mr. WORTHINGTON-EVANS: The Chancellor of the Exchequer in answer to the statement I made on Third Reading, quoted from page 25 of his book.
  Mr. SPEAKER: We are not debating this matter. If the hon. Gentleman has any personal explanation to make, I am sure the House will be willing to give him the same indulgence as it gave to the two right hon. Gentlemen.
  Mr. WORTHINGTON-EVANS: This was intended to preface my explanation.
  Mr. SPEAKER: No one has attacked the hon. Gentleman. I do not know what he wishes to explain.
  Mr. WORTHINGTON - EVANS: I understood the Chancellor has attacked my accuracy. He said I had no right, as I understood him, to quote one part of the book without quoting the other parts, and it is in answer to that charge that I wish immediately to speak with your permission. The Chancellor of the Exchequer quoted from page 25 of the book, which is a reproduction of his First Reading speech; from page 50 of the book which is the same thing and from page 68, which is a reprint of the Bill and not his statement at all, and then when he comes to the explanation of the difficult point and it is to the explanation of difficult points written in the first person by the Chancellor that I want to deal——
  Mr. LLOYD GEORGE: And page 140.
  Mr. WORTHINGTON - EVANS: Yes, page 140 and 150 are both parts of the fourth part of the book which are explanations of difficult points. I will deal with page 140, which is only just a little less inaccurate than page 150. I am not suggesting that the right hon. Gentleman did I not give the principle of deposit insurance correctly, but what I did say and what I
  1916
  now repeat is that when he works the principle out in figures he is hopelessly inaccurate.
  Mr. SPEAKER: This is not the opportunity for making an attack. This is an opportunity for making a personal explanation. If the hon. Gentleman has any explanation to offer, now is the time, but this is not the time to make a personal attack.
  Mr. WORTHINGTON - EVANS: The form of the personal explanation of the Chancellor of the Exchequer was to accuse me of picking and choosing in the book and not making a correct statement. With your permission, Sir, I would like to deal with page 40 which the Chancellor has asked the House to consider in his own personal explanation. I will not take more than a moment or two. On page 140, he says:—
  "Let us take an illustration. Supposing a Post Office contributor is paying in for three years at 9d. per week, he will have £5 17s. to his credit."
  As a matter of fact, he will not have £5 17s., but £3 3s.
  "From this must be deducted 5s. a year for the doctor."
  This is the first time we have ever heard of the 5s. a year. The healthy man is to pay 6s., the unhealthy deposit contributor will not get it for 5s.
  "and 1s. sanatorium treatment."
  There never has been a shilling, it has always been 1s. 3d., and the Chancellor conveniently leaves out the administration cost of 4s. a year, and he brings out the total of balance at £4 19s., but the fact is it will not be £4 19s., but it will be £3. So that instead of getting the benefits which the Chancellor of the Exchequer says on working out the principle of deposit insurance, he will get six weeks instead of ten weeks. There is one other point. I made a statement on the Third Reading which I would like to correct to the effect that the Chancellor has not dealt with deposit contributors in his Tabernacle speech. I find I am wrong. He did deal with them and also in a most misleading way.
  Mr. SPEAKER: The hon. Gentleman is abusing his privilege. This is not the opportunity, I repeat, of renewing old attacks but for making a personal explanation. If the hon. Gentleman has anything to apologise for or explain, he is at liberty to do so; he is not entitled to take this opportunity to make an attack.
  Mr. WORTHINGTON-EVANS: I bow to your ruling, Mr. Speaker, but I have nothing to apologise for and nothing to explain.
  Lord ROBERT CECIL: I desire, with the indulgence of the House, to make a personal explanation. The House will recollect that on Wednesday last the Chancellor of the Exchequer made an attack upon myself which, I at any rate regard as a very serious matter. It was strongly worded; I do not know whether it is necessary to repeat it, but, coming from a Gentleman in the position of the Chancellor of the Exchequer, and speaking of a fellow-Member of this House, I think it is a matter of serious importance, and one which I am bound to deal with to the best of my ability. The attack was made in reference to a leaflet issued in the course of the Hitchin by-election; no notice was given to me by the Chancellor of the Exchequer, and therefore I am sure the House will pardon me if, in dealing with that attack at the time I was not able to deal with every portion of it on the spur of the moment. Fortunately, I did recollect the leaflet, and was able to deal with a good deal of it. I do not intend to repeat what I then said, because, in my opinion, what I then said was quite sufficient for my justification. But the House will recollect that the attack fell into two divisions. The Chancellor charged me, in the first place with omitting to set out certain portions of the Bill which he thought I ought to set cut. That portion of the attack I dealt with on Wednesday last; and I have nothing to add except to say that the document was a leaflet dealing with a particular point in the Insurance Bill, and was not a treatise upon the whole Bill. In addition to that the Chancellor charged me with special and specific misstatements. He said this:—
  "This is a leaflet which the Noble Lord circulated … 'North Herts By-Election. Radicals say you will get 9d. worth of insurance for 4d.'"
  Then there were some cheers, and the right hon. Gentleman said:—
  "I will wait and see whether the next sentence will be cheered. 'You will pay much more than 4d.' What does that mean? If it means anything at all, it means that the contribution that will be levied on the workman will be more than 4d."—[OFFICIAL REPORT, 6th December, 1911, col. 1460.]
  I explained, upon the spur of the moment, that that was not at all my meaning, and I did not believe anyone was misled, but I had not at that moment the leaflet before me. Here is the leaflet, and, as hon. Members will see, it consists
  1918
  of a preface and a table. It is quite true that the preface contains the words,
  "You are paying more than 4d."
  but it is equally clear that there could be no misapprehension, because in the very table itself is set out the full contribution that will be made, namely, 4d. from the workman's wage, 3d. from the employer, and 2d. from the Government. Therefore the suggestion that there could be any possible misapprehension as to the phrase used in the preface falls to the ground. The next charge made by the Chancellor of the Exchequer was this: he says:—
  "The first thing I have got to say about that is, that the funeral benefit involves an extra payment of 1½d. per month."
  That I contradicted. It is all included in the 4d. The Chancellor of the Exchequer did not accept the contradition. He said:—
  "It is not included in the 4d., it is not included in the tables of the Buntingford Association."
  I said:—
  "It is included in the 4d. per week. I will explain it if I had an opportunity of joining in the Debate,"
  and the Chancellor of the Exchequer said:—
  "I hope the Noble Lord will. There is a good deal more that he will have to explain."—[OFFICIAL REPORT, 6th December, 1911, col. 1461.]
  4.0 P.M.
  If I may venture to say so, the charge was persistent and in a very offensive form. I have now, but I had not then, owing to want of notice, the rules of the Buntingford Society. Here are the figures. Age sixteen: per week in sickness, 1s. 4d. for 10s. benefit, 1½d. for funeral at thirty, and that makes 1s. 5½d. These are monthly contributions. Multiplied by twelve that comes to 17s. 6d. per year. That is 210 pence, which, divided by the number of weeks, leaves 2d. over for the extra day of the year, and it makes the amount 4d. as nearly as possible within 1–40th of a 1d. the one way or the other. I therefore venture to say that that accusation is perfectly groundless. There was a third accusation. He says:—
  "What is the next thing? This is a society which was started at the beginning of the nineteenth century. And gets something which is equivalent to a Grant-in-aid. from the Government. They are getting, in respect of all their investments before 1850, £4 11s. per cent. per annum under an Act of Parliament. That is more than sufficient to pay surgical aid, and it also pays a part of the management expenses."
  As a matter of fact every single statement made in those observations is inaccurate. The Chancellor of the Exchequer knows, and knew it at that time, that this association was started in 1832,

  1919
  because I told him so across the floor of the House myself. The Chancellor of the Exchequer must be aware that by the Statute of 1882 it is only societies formed before 1828 that get the £4 11s., and societies established between that date and 1850 get £3 16s. for their investments, so that the £4 11s. is altogether inaccurate. But that is not the only thing. The Chancellor of the Exchequer says:—
  "That is more than sufficient to pay surgical aid, and it also pays a part of the management expenses."
  That is altogether untrue. The difference between the normal interests from investments and £3 16s. would obviously be altogether insufficient for making any such contribution, but as a matter of fact I have communicated with the secretary and I find that no part of that sum goes towards surgical aid or management expenses. The accounts have always been kept distinct from one another. In point of fact, whatever advantage does accrue from that old Act of Parliament which gives an interest of £3 16s., does not in any way advantage anyone who joins the association at the present moment. Therefore, that statement is altogether inaccurate, and it was upon those three statements and some others equally inaccurate, which I do not want to repeat that the Chancellor thought it right to say that I had withheld the facts, that I had borne false witness, and that I had grossly and scandalously misled the electors in my Constituency. I prefer to leave the House to judge upon those accusations.
  Mr. LLOYD GEORGE: One story is good until another is told. [Interruptions.] Perhaps hon. Gentlemen opposite will listen to what I have got to say. The Noble Lord has referred to two or three charges of misstatement which he says I made in reference to this leaflet. There were at least five, but the Noble Lord has left out those that represent several pence a week, and has only alluded to those which represent fractions of 1d. per week. The two statements in this leaflet which he did not read are the most important of all. This leaflet shows that the Government 9d. is not worth more than the Buntingford Society's 4d., and the part of the statement which referred to that the Noble Lord has not alluded to. [An. HON. MEMBER: "He did that on Wednesday."]
  Lord R. CECIL: I understood from your ruling, Mr. Speaker, that I was not entitled to refer to anything which I dealt with on Wednesday last, and it was only
  1920
  on that account that I did not deal with the other points.
  Mr. SPEAKER: I think it is both unnecessary and undesirable to go over old ground. The only raison d'être for a personal explanation is that hon. Members have been taken by surprise by something said in Debate, and they should only make explanations about something due to the fact that they were taken by surprise.
  Mr. LLOYD GEORGE: That is one reason why I thought the Noble Lord would refer to that point. [Interruptions.] Hon. Members on this side of the House listened to the Noble Lord's statements without any interruption, and I claim the same right. I gave the Noble Lord the figures on Wednesday.
  Mr. AUSTEN CHAMBERLAIN: May I ask whether the Chancellor of the Exchequer is not now transgressing the ruling which you laid down a few moments ago as applicable to my hon. Friend the Member for Colchester? The right hon. Gentleman is now attacking the hon. Member under the guise of making a personal explanation.
  Mr. SPEAKER: It is impossible for me to answer that question until I have heard what the Chancellor of the Exchequer is going to say.
  Mr. LLOYD GEORGE: I would preface my statement by saying that out of the five charges which I made against the Noble Lord two of them, which are the most important, have not been cleared up by him at all.
  Mr. AUSTEN CHAMBERLAIN: They were dealt with on Wednesday.
  Mr. LLOYD GEORGE: They were not dealt with on Wednesday. I will come to the three points which the Noble Lord has dealt with. What did he mean by saying that they would have to pay much more than 4d.? Surely he did not mean that the employers and the State would pay it? I say that the Noble Lord has circulated a statement of that kind, and when you state that those men will have to pay more than 4d. you are entitled to expect that that does not mean that somebody else will pay it. Now I come to the second statement, that the 1½d is included in the 4d. The way the Noble Lord worked it out is this. He says the month is a calendar month, and, adding it together, he

  1921
  makes forty-eight weeks. The 4d. of the Government is a forty-eight weeks' payment, and if the Noble Lord had only looked at the actuarial tables he would have discovered that the 4d. a week is not for fifty-two weeks, but for forty-eight weeks. The Noble Lord is perfectly willing to take advantage of the forty-eight weeks.
  Lord R. CECIL: No, no.
  Mr. LLOYD GEORGE: Will the Noble Lord allow me to finish. He is willing to call attention to the fact that it is forty-eight weeks in the Buntingford scheme, but he will not give credit for the fact that it is forty-eight weeks in the Government scheme.
  Lord R. CECIL: The right hon. Gentleman is wholly misrepresenting what I said.
  Mr. LLOYD GEORGE: The Noble Lord said it was a calendar month.
  Lord R. CECIL: I said that in monthly payments it came to 4d. a week. I said nothing about forty-eight weeks.
  Mr. LLOYD GEORGE: That is really the point. [An HON. MEMBER: "Why?"] The hon. Member asks me why. If you are comparing like with like you ought to state the facts on both sides, and not deal with one set of facts. The Noble Lord dealt with the question of Government investments. What are the facts? Here, again, he has not told the whole of the facts. It is perfectly true that this is one of the points I meant to explain on Friday when I gave notice. [An HON. MEMBER: "No."] Does the hon. Member challenge me?
  Lord EDMUND TALBOT: The right hon. Gentleman said he had the intention of doing so.
  Mr. LLOYD GEORGE: Yes, but I gave notice.
  Lord R. CECIL: But you never gave me any notice.
  Mr. LLOYD GEORGE: I understood notice was given to all the Whips and others interested, and if notice was not given to the Noble Lord I regret it. What are the facts? It is true this society when it was registered instead of coming on the 3 per cent. basis came on the 2½ per cent. basis, and instead of getting a bonus of £2 it got a bonus of 1.5 per cent. Instead of getting 2.10 per cent. on Government securities it is getting £3 16s., and that is
  1922
  a bonus of 26s. When I made my statement I thought it was £2 upon £2,500, but it turns out to be 26s. on something over £4,000, and that is the extent of my inaccuracy.
  Mr. AUSTEN CHAMBERLAIN: Does the right hon. Gentleman put that statement forward as if it explained the benefits which could be given to the new members now enrolled?
  Mr. LLOYD GEORGE: Why does the right hon. Gentleman say that when I was only just beginning my statement.
  Mr. AUSTEN CHAMBERLAIN: I interrupted because the right hon. Gentleman said that was the extent of his inaccuracy.
  Mr. LLOYD GEORGE: The right hon. Gentleman might have at least waited until I had reached that point. I meant the extent of my misstatement so far as the cash is concerned. Now I come to the second point, and if the right hon. Gentleman had had the civility to wait he would have heard it. This small society since 1888 has had the advantage of a subsidy from the State and this special provision alone came to £1,200 since the year 1888. Then they had over £9,000 invested at those high figures. They have now over £4,000. I propose to circulate a statement by Mr. Watson, the actuary, who acted on behalf of the Unionist party upon this particular society.
  Mr. PEEL: At whose expense?
  Mr. W. REDMOND: Not at yours, anyhow.
  Mr. LLOYD GEORGE: What are the figures? There is a surplus of £3,416, most of which is attributable to this subsidy of over 26s. per cent., which is given by the State in respect of this society, which came into existence in 1832.
  Lord R. CECIL: A surplus of which fund?
  Mr. LLOYD GEORGE: I am referring to the fund of the old members.
  Mr. PRETYMAN: Was the right hon. Gentleman alluding——
  Mr. SPEAKER: This is an occasion for personal explanations and not for argument.
  Mr. LLOYD GEORGE: I am sorry to take up so much time, but, of course, interruptions must be dealt with. The

  1923
  surplus on the fund of the old members is £3,416. Most of that is due to this exceptional advantage given to the Buntingford Association and all other associations brought into existence before 1830. If the Noble Lord will look at the book in his hand, and which I had in my hand on Wednesday, he will find the charge in respect of surgical aid and also in respect of management is partly cast upon the surplus; and when I said the money in respect of surgical aid came entirely out of that fund and there was a contribution towards management it was strictly accurate. He has only got to look at this book, and he will find it for himself.
  Lord R. CECIL: Where?
  Mr. LLOYD GEORGE: In Article 19 he will find that
  "The necessary expenses of management shall be defrayed from the interest upon the surplus fund of the society."
  He will also find in Article 17 with respect to surgical aid that
  "any such payment to be defrayed out of the surplus fund of the society."
  The whole of that surplus comes out of this State subsidy.
  Lord R. CECIL: No.
  Mr. LLOYD GEORGE: And I shall circulate a Paper.
  Lord R. CECIL: I have the balance-sheet here.
  Mr. LLOYD GEORGE: So have I. Therefore, when I said that the whole of the surgical aid and a proportion of the management came out of this special advantage which was given to this society it was strictly accurate. The Noble Lord will see for himself if he will only look at his own rules and at the balance-sheet which is circulated. There is another thing I have to say finally to the Noble Lord. I am not allowed to enter now—I accept your ruling absolutely upon that point—into the much larger question which I put to him on Thursday that he had omitted to give the value of the large benefits in the Bill, and which are not given by the Buntingford Association. I challenge him to find any actuary in the whole of the United Kingdom and put to him this proposition which he has got at the end of his leaflet, that the Government 9d. is not worth more than the Buntingford 4d., who will not say my statement in regard to it being grossly inaccurate is absolutely true.
  Mr. SPEAKER: Before we pass to the business on the Order Paper, I would like to say that if I had had any idea that these so-called personal explanations were going to lead to personal recriminations and to a renewal of old attacks, I would never have permitted the time of the House to be occupied for five and thirty minutes in this manner. I hope this day's proceedings will not be drawn into a precedent.

BILL PRESENTED.
  SUNDAY CLOSING (WALES) ACT (1881) AMENDMENT BILL.
  "To amend The Sunday Closing (Wales) Act, 1881, and to make further provisions for the sale of intoxicating liquors in Wales and Monmouthshire," presented by Sir HERBERT ROBERTS; supported by Mr. Ellis Davies, Mr. Robinson, Mr. Hugh Edwards, and Mr. Richards; to be read a second time upon Thursday, and to be printed.

TELEPHONE TRANSFER [CONSOLIDATED FUND, ETC.].
Ordered, that the First Resolution reported [27th June] from the Committee on Telephone Transfer [Consolidated Fund, etc.], and then agreed to by the House, be now read:—
"1. That it is expedient to authorise the Treasury—

(a) to advance out of the Consolidated Fund such sums as may be necessary for paying the cash portion of the purchase money of the undertaking of the National Telephone Company, and a sum, not exceeding £4,000,000, for the further development of the telephonic system;

(b) to issue terminable annuities or Exchequer Bonds for paying off that portion of the purchase money which is not payable in cash, and to borrow by means of terminable annuities for the purpose of providing the money necessary for any advance out of, or repayment to, the Consolidated Fund;

(c) to provide for the payment of superannuation allowances to transferred officers out of moneys provided by Parliament, and for the payment of terminable annuities and the principal of and interest on

1925
any Exchequer Bonds out of moneys provided by Parliament for Post Office services, and if those moneys are insufficient out of the Consolidated Fund."

TELEPHONE TRANSFER [CONSOLIDATED FUND, ETC.].

  TELEPHONE TRANSFER ACT, 1911 (AMENDMENT) BILL.
  Mr. HERBERT SAMUEL: I beg to ask for leave to bring in a Bill to amend the Telephone Transfer Act, 1911, so as to authorise a payment to be made to the National Telephone Company, Limited, of a sum on account of the Telephone Purchase Money before the amount thereof is finally ascertained.
  I desire to ask the indulgence of the House for two or three minutes—it will not be longer—before it passes to the Order of the Day, in order to ask leave to bring in at this late period of the Session a new Bill. It is a Bill consisting only of two or three lines. It deals with a very urgent matter, and I trust the House, when it hears what it is, will realise the necessity for passing it speedily. It is to effect what is little more than a drafting Amendment in the Telephone Transfer Act passed by Parliament this Session. Since that Act was passed, new circumstances have arisen. The National Telephone Company raised difficulties with respect to the transfer of their undertaking to the Post Office on 1st January next on the ground that their debenture holders would lose the security on which their debentures were charged owing to this transfer, and they asked that some arrangement should be made to enable them to meet their debenture holders. To have refused this might have meant long and costly litigation, and, as there was no question of additional payment by the State involved, I consulted with the Treasury, and, with the full concurrence of the Treasury, it was arranged that a sum of £3,000,000 should be paid to the National Telephone Company on account of the purchase money at the moment of the transfer on 1st January. This was the sum asked for by the company in order to enable them to pay off their debenture holders. As it is quite certain the purchase money which will ultimately be payable to the company will be very considerably more than £3,000,000, there is no risk in paying that sum on account. Of course we were bound by the wording of the Transfer Act, and the Treasury would not have had power to issue this sum on account in advance of the award of the Railway and Canal Com-
  1926
  missioners of the amount of the purchase money. Therefore, it is necessary to introduce this very brief Bill in order to enable the Treasury, not to pay any additional sum, but to pay in advance in cash a sum not exceeding £3,000,000 in order that the National Telephone Company may pay off its debenture holders before the plant which is the security for the debenture holders is transferred from the hands of the company into the hands of the State. No further Resolution is needed for this as the Resolution already passed by this House in Committee of Ways and Means on which the National Transfer Act was based, being a Resolution of this Session, will also cover in its terms the new Bill, which I now beg to ask leave to introduce.
  Bill ordered to be brought in by Mr. Herbert Samuel. Presented accordingly, and read the first time; to be read a second time To-morrow, and to be printed.
  Mr. AUSTEN CHAMBERLAIN: I do not desire to raise the question now unless I am obliged, but I have a point of Order which I desire respectfully to submit to you, Sir, as to the sufficiency of a Resolution passed some months ago and for another Bill as the foundation of this Bill. If I could raise the question later, I would like to have some opportunity of looking at the precedents.
  Mr. SPEAKER: I have looked at the Bill and I have looked at the Resolution, and my opinion was that the Resolution covered the Bill. If the right hon. Gentleman has any further point which he wishes to raise, perhaps he will raise it at Question Time to-morrow.

FINANCE BILL.
Considered in Committee.
(IN THE COMMITTEE.)
[Mr. WHITLEY in the Chair.]

Part I.
  CUSTOMS AND EXCISE.

    CLAUSE 1.—(Duty on Tea.)
    The duty of Customs payable on tea until the first day of July, nineteen hundred and eleven, under the Finance Act, 1910, shall be deemed to have been continued as from that date and shall continue to be charged, levied, and paid until the first day of July, nineteen hundred

    1927
    and twelve, on the importation thereof into Great Britain or Ireland (that is to say):—

    Tea, the pound

    …

    …

    fivepence

    The CHAIRMAN: The Amendment in the name of the hon. Member for Ludlow (Mr. Hunt)—
    To leave out all the words of the Clause from the word "shall" ["Finance Act, 1910, shall"], and to insert instead thereof the words,
    "cease, and from that date the duty of Customs payable on tea shall be three pence per pound from all foreign countries. On tea grown within the British Empire one penny per pound."—
    and that in the name of the hon. Member for Yarmouth (Mr. Fell)—
    At the end of the Clause to add the words,
    "Tea grown within the British Empire, the pound fourpence,"
    cannot, I think, be taken here. The same point was raised in connection with the same Bill on the Report of the Ways and Means Resolution, and the House came to a decision on the matter. I think I should not be doing my duty if I allowed the same matter to be raised again.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. FELL: This is the only opportunity I shall have of raising this matter. I believe some years ago I raised it in Committee on the Bill after it had been raised on Report of the Resolution, and we had a Division upon it. Of course, if we cannot do that I must on the Question, "That the Clause stand part of the Bill," beg leave to make a few remarks. I am extremely sorry it cannot be put in the way in which we have previously discussed this.
    The CHAIRMAN: If the hon. Member puts that to me as a point of Order, I have taken the opportunity of looking the matter up. No less than thirty-five columns of the OFFICIAL REPORT were occupied with the discussion on the occasion to which I refer.
    Mr. AUSTEN CHAMBERLAIN: I rise also to a point of Order. May I ask whether it has not been the annual practice of the House in connection with these Money Resolutions on all Budget Bills, and I think I might say on almost all Bills, to repeat, if the Committee thought fit, and to raise again in Com-
    1928
    mittee on the Bill questions which have been discussed upon the Resolution, and has it not been repeatedly stated by Ministers and ruled from the Chair that the decision on the Resolution is not in any way binding upon the Committee on the Bill, but that the object of the Resolution is to set a limit to the charge which can be imposed upon the taxpayer, and that it is not in the least to fetter the liberty of the Committee to deal with that charge as it pleases within the limits so set down? If I may venture to say so, I remember certainly in several Budgets with which I have been connected either as defender or critic, and particularly those of which I was the defender, exactly the same questions were raised in Committee on the Bill as had been raised on the Resolutions. They were raised again on the Report stage, and even the same question was discussed again, both in Committee and on the Report stage, as well as on the Resolution, on a succesion of Clauses.
    Mr. LLOYD GEORGE: On that point of Order may I suggest that this is a very different point which the right hon. Gentleman is raising. It is true that on a Resolution founding a Bill there is a general discussion which covers the whole ground, but this is a different matter. Here a specific issue was raised, and the decision of the House obtained. I would point out it is very unusual for that to be done in Committee. I remember when in opposition to the right hon. Gentleman criticising his Budget, but we never in Committee on the Resolution challenged a specific issue, although we had a general discussion.
    Mr. AUSTEN CHAMBERLAIN: The right hon. Gentleman is mistaken. Specific reductions were proposed on the Resolution, and were repeated afterwards in Committee of the House.
    Mr. SNOWDEN: I wish to raise the same point as the right hon. Gentleman the Member for East Worcestershire. My own recollection entirely corroborates what the right hon. Gentleman has said, that Motions of this nature have been made in Committee of Ways and Means, and repeated on the Committee stage of the Bill.
    Sir F. BANBURY: Has it not always been the custom of the House when a stage of a Bill is taken and an Amendment is in order on that stage to accept it quite irrespective of the fact of whether it has been discussed at previous stages? For

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    instance, in Committee stage of a Bill an Amendment may be moved to do something or other, and then when we come to the Report stage that Amendment may be repeated. I certainly think that that has been the case in the past, and my recollection is that when a decision has been taken on Report of a Resolution in Ways and Means that has not hitherto prevented the same Amendment being moved in Committee stage of the Bill. I cannot give a concrete instance at the moment, but my recollection is that that has always been the case. I understand the ruling to be that, as this Amendment was raised on the Report stage of the Resolution, it cannot be raised in Committee on the Bill.
    The CHAIRMAN: I have allowed this point of Order to be raised, although I have already put the Question, "That this Clause stand part of the Bill." I am, of course, most unwilling that there should be any idea that I am not ready to explain any decision I have come to in a matter of this kind. The right hon. Gentleman the Member for East Worcestershire will be aware that the practice of moving Amendments on a Resolution in Ways and Means is quite a recent one. Therefore, when I saw this Amendment on the Paper I had to take into account the fact that there was no precedent to guide me in the matter. But it seems to me that when a matter has been discussed in so long a Debate as one occupying thirty-five columns of the OFFICIAL REPORT, and the House itself, which is a superior body to the Committee, has come a decision upon it and negatived it, I should certainly not be doing my duty if I allowed, in connection with the same Bill, a re-discussion and, possibly, re-decision of the same question. I think I am acting in the interests of the Committee in giving that ruling, in order that the time may be devoted to other subjects.
    Mr. AUSTEN CHAMBERLAIN: I think the Committee is placed in a great difficulty. This decision undoubtedly does curtail privileges which the Committee has practised for some years past, and it curtails them to a serious extent. I would ask whether you feel it possible to make a ruling of this kind without any order of the House upon it?
    The CHAIRMAN: I do not think there are precedents to the contrary, except perhaps in a single case. I admit, of course, that the House has power to review a decision of the Committee, that is on the
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    Report stage as compared with the Committee stage, but this would be reversing a decision come to by the House.
    Mr. AUSTEN CHAMBERLAIN: This is a very important matter, and I should like for our future guidance to see exactly what is your ruling. I understand you to rule that if a Committee of Ways and Means rejects a particular Amendment to a Resolution, and that Amendment is not moved again on Report it may be moved in Committee when we come to the Bill. But if the House on Report of the Resolution has rejected that Amendment then that Amendment is not permissible on the Committee stage of the Bill. I shall be very much obliged if it can be stated whether I have correctly interpreted the meaning of your present ruling.
    The CHAIRMAN: I quite understand, but the right hon. Gentleman is inviting me to go rather further than the point I have dealt with on the present occasion. This is a case of a decision of the House on the Report stage of a Resolution and the subsequent revival of the Amendment in Committee on the Bill. I would rather not, without further consideration, deal with any question comparing Committees of Ways and Means with Committees on the Bill itself.
    Mr. MAURICE HEALY: Suppose a Division is taken in Committee on a Resolution and the Committee affirm the Resolution, does that preclude it being discussed afterwards?
    The CHAIRMAN: This is only a case of my objecting to an Amendment being moved in connection with a subject twice over.
    Sir F. BANBURY: This is an extremely important ruling. As I understand it, there is no precedent for it. While of course the Committee accepts the decision, I would ask whether we may be allowed, if we can find certain precedents the other way, to raise the question again later on. This is going to make a very important alteration in the procedure of the House of Commons, and I feel certain the Chairman would not desire to prevent the question being reconsidered should we, on looking into the matter further, think it desirable to do so.
    The CHAIRMAN: Certainly, when a similar question again arises the hon. Baronet will be perfectly entitled to raise the question.
    Mr. FELL: This is a Clause to impose a duty of 5d. in the lb. on tea. I wish it had been possible for me to move the Amendment which stands in my name, and which would have relieved the tea-growing parts of the Empire from paying such a high duty. I put this Amendment down in July last. Usually the Committee stage of this Bill has been taken in May or June; now we are dealing with it just before Christmas, towards the end of a very arduous Autumn Session, and, in the short time which is being devoted to it, we are losing one of our privileges. [HON. MEMBERS: "No, no."] I feel confident that on more than one occasion I have moved an Amendment on the Committee stage to reduce this duty in the same way as I am doing to-day. I cannot say whether it had been previously discussed on the Resolution, but I certainly have been allowed to move it in Committee on the Bill. I wish, however, to make a few remarks on the Tea Duty itself. It is, I am sorry to say, comparatively speaking, a stationary duty, and I think, on a whole, when the country is enjoying a period of great prosperity such as this country has enjoyed for the last three or four years—I do not deny that there is a boom at the present time—when you find on an important item such as tea the consumption remaining nearly stationary then one is driven to the conclusion that there is something wrong, perhaps, in the duty laid upon it which prevents it showing that automatic increase which usually accompanies an increase in the population and wealth of a country. Apparently the Tea Duty does not respond to this influence as it should do, and I presume that is very much to the regret of the Chancellor of the Exchequer. It is all the more strange that it does not do so when we take into account the fact that the consumption of alcohol has greatly decreased. One would have expected that to have tended towards an increase in the consumption of tea.
    As a matter of fact the increase has been very small. The figures are not easily obtainable, because the returns usually show the total imports of tea into the country, and then it is necessary to ascertain the quantity exported, as it is only that which is retained in the country for home consumption that has to pay duty. Now, in 1910, the imports from India and Ceylon amounted to 244,000,000 lbs., and in 1911 the total was 255,000,000 lbs., an increase of 11,000,000 lbs., whereas the imports from China in 1910 were 8,000,000 lbs., and in 1911 12,000,000 lbs. The imports
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    from Java remained stationary, about 20,000,000 lbs. each year. If you put those figures into percentages you will find that while the consumption of tea grown in India and Ceylon increased 5 per cent. the increase in the case of China tea was 50 per cent. I do not say that that increase is normal, but one may draw the inference that the consumption of China tea is fast increasing in this country, and that the duty put upon tea is having a prejudicial effect on the importation of Indian and Ceylon tea. I thing that is a very unfortunate circumstance. The suggestion that China tea is being imported into this country in steadily increasing quantities has been more than once denied by the present Chancellor of the Exchequer, as well as by the Prime Minister, when he was Chancellor of the Exchequer, and it has been suggested that the increase was quite accidental. But undoubtedly there has occurred a change in the taste for tea, and that change has affected Chinese tea to a very appreciable extent. There are a certain number of people nowadays who always desire to have China tea, and wherever one goes he is usually asked which he prefers. I know that in many households a supply of both kinds of tea is placed on the breakfast-table for the guests. That clearly proves that amongst certain classes the consumption of China tea is growing rapidly. It may not be so among the larger mass at the present moment, but you never know how tastes may change, or how soon they may change. It would be a pity if by this flat tax all round on all tea we should tend in any way to encourage the growing of tea in foreign lands when we can get it from our own countries. I cannot enlarge upon that topic. It is one which would be covered by the Amendment which I am very sorry I cannot move.
    As to the question whether the tax is at too high a rate, I believe the Labour party do consider it too high. The hon. Member for Blackburn (Mr. Snowden) has himself proposed the reduction of 2d. in the pound on tea. I do not say whether or not I agree with that, but it shows that the Labour party consider the Tea Duty excessively high at the present time. As to the Irish party, they have on more than one occasion declared in eloquent language that it is their earnest desire to see the duty on tea reduced materially. In 1898 they brought forward an Amendment of their own, and made the most powerful speeches, telling us that in Ireland tea was

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    not only the luxury of the poor but an absolute necessity to them, and they did their utmost to get the duty reduced. I hope, therefore, that to-day we shall have the support of the whole of the Irish party, because I know they consider the duty on tea is too high, and that it should be materially reduced. I do not know whether my suggestion that it should be a penny for our own tea will commend itself to them. That would have affected the Budget to the extent of about £1,000,000. We must remember, however, that half the year has already gone by, and that any change made in the tax on tea would only affect half the year's imports, so that instead of being £1,000,000, the only loss sustained by the Treasury would be £500,000. In addition, we have to remember that any reduction in the duty on tea, or on any other article of general consumption, increases that consumption materially, and it may happen, as it did in the palmy days of Liberal finance thirty years ago, when they reduced the duties on various items, that the reduced rate will bring in more than the increased rate did previously, because the consumption of the taxed article did increase. I do not know what the effect would be with a decreased duty on tea, but I believe it would increase to a remarkable extent the consumption of tea in this country. The Chancellor of the Exchequer may remember that an hon. Member called attention to the fact, in the Debate in 1898, that the reduction of a penny a pound on tea had so increased the consumption of tea in Ireland that the reduced duty brought in £47,000 more revenue than the increased duty had done before. That is a most remarkable tribute to the benefit of reducing the tax upon an item of general consumption, such as tea. I do not know whether the reduction would have a similar effect in Ireland. I do not think it would. The Treasury must know better than we do how far reduction stimulates consumption, and what would be the loss supposing the duty were reduced by a penny. I believe the reduction would be nothing like that anticipated, because the consumption would be very much stimulated. If the Chancellor of the Exchequer says that his Budget would be very much upset by this, my answer to that is that I do not think one penny would alter it by £300,000 or £400,000, or just about the amount we have lost this year on the land taxes.
    Mr. LLOYD GEORGE: How much?
    Mr. FELL: About £300,000 or £400,000. I think that is the difference, comparing what we have got in and the cost of getting it in. Another point in favour of reducing the tax is that we shall get a partially freer breakfast-table, and we should be without all these inspectors. I feel myself very much hampered by the fact that I am not in order in referring to the Colonies and the preference which I wish to give them in this matter. The duty I consider to be higher than is necessary, and I should have proposed a method by which it could be reduced to the benefit both of this country and of the Empire; but if I cannot go into that question now, I must reserve it for some future occasion. All I can do now on the Question that the Clause stand part is to enter the strongest protest that the duty is unnecessarily high, and that it might well be reduced.
    Mr. CROFT: There is one point which the House will agree is very important with regard to whether this question should be discussed again or not. It is that conditions are changing so rapidly in regard to the position of the working man, upon whom, after all, this duty falls most, that they ought to be considered afresh not yearly, but, with the present kind of legislation, monthly. I think the Chancellor of the Exchequer will admit that the price of food is rising enormously in this country. I think he will admit that the process has been continuous since 1900, and that wages have been practically stationary. Real wages have been decreasing in the last ten years. When real wages are rising there is some justification for keeping a duty of this description upon the food of the poorest people in the country. But we know for a fact that the lot of the working class is getting worse year by year, and it is a time when a generous Chancellor of the Exchequer at least ought to try to do something to meet the needs of those of whom he professes to be the champion. In addition to the fact that food prices have gone up so enormously, we in this House must remember that, while the weekly budget is so difficult for the working classes to negotiate, the working man has now to pay an additional 4d. a week under the Insurance Bill, and even the Chancellor of the Exchequer will not endeavour to tell him that he is going to have 9d. to pay for his tea because the 4d. is imposed upon him by that Bill. The lot of the working man is going to be dearer, whatever may be the benefits he will gain in years to I come from recent measures. I know that

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    the party opposite have liked to be regarded for some time as the people's champions. When we consider the protestations at the last three elections with regard to the breakfast-table, it is time that they began to show some move in the direction of improving the lot of the working classes in this connection. This Tea Duty falls far heavier upon the poor in this country than it does upon the rich.
    On the one hand we are being taught that it is criminal for a man to take alcoholic drinks of every description. Those who sit on the Treasury Bench are endeavouring to prevent their access to reasonable alcoholic drinks such as we have in this country. Now, on the other hand, we find this burden being placed upon the tea consumers also. The consequence is that even if a man desires to be temperate he still finds himself taxed in this connection higher than on any other commodity. It is said that on the present price the working man is being taxed to the extent of 5d. on every 8d. worth of tea. The Chancellor of the Exchequer once said, "blessed be he that considereth the poor." If he is going to allow this tax to continue when he sees the increasing burdens on the poor all round, we are inclined to think that his motto is "blessed is he that taxes the poorest in the land." Tea is the most heavily taxed of all foods. The cheapest descriptions of tea are grown in the Empire. Here we are on the one hand pressing heavy duties on India which are very difficult to justify, and on the other hand refusing to give any remission on a commodity which these British subjects are able to produce. This is a question which affects labour. The duty of 5d. does nothing whatever for labour, and a tariff of this description can only be justified if you are finding employment by means of it. In India there are 500,000 British subjects employed in producing tea, and anything we do in the direction of lowering the duty will be a distinct benefit to them since, as we cannot produce tea, we have at the present time to pay the whole tax upon it. That was admitted by the Financial Secretary to the Treasury last year when he was speaking on this subject. There is no doubt whatever that the people of this country have to pay the whole of the tax. I maintain that it is high time the Government considered some better means of raising money than by taxing the tea producers in this Empire.
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    5.0 P.M.
    This is a levy of the worst description. Tea is an article of universal consumption, and cannot be described as a luxury. The people who are taxed heaviest are Empire producers. I know the Labour party are extremely anxious to see the Tea Duty reduced if it is possible. I think they will be the first to admit that, even if we must keep the duty on China tea in the future, it is essential that we should reduce it on a cheaper description of tea, so that there may be greater facilities for purchasing among the poorest in the land. China tea is a luxury; it is not essential, and at the same time I think the argument of my hon. Friend (Mr. Fell) is true, that, if you were to reduce this duty, you would have a greater consumption of tea all round. With regard to the comparative value of China or Indian tea, I think we ought to realise that even if we keep a higher duty on the Chinaman, he is so busily engaged at the present moment that he will not be likely to want to retaliate against us. Every Chinaman who is thrown out of work in this particular direction would mean another British subject coming into work in India. I hope the Government are going to announce, before this Clause is carried, that they have changed their minds. I presume it is impossible to get a Division on this subject under your ruling, Sir, except on the Clause as a whole, but I hope that the Chancellor of the Exchequer, who has in the last two or three weeks probably realised the enormously increased burden he is putting on the poorest in the country, will at any rate promise to do something in the near future. Of course, it is a farce about the Budget not being completed at this time of the year. It does not much matter this year, though it did last year. There is another point the Chancellor of the Exchequer might consider. At the present moment millions of our subjects in India are proclaiming the King-Emperor, and it would be a fitting opportunity if he could tell the House he was prepared to do something for those natives for whom this country does very little, taking it altogether, in order to show that they appreciate the fact that they are citizens of a British Empire.
    Mr. C. E. PRICE: We, on this side of the House, are more than delighted to find that hon. Members opposite are greatly concerned about these taxes on tea. I recollect that during the time they were in office they raised the tax on tea from

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    3d. to 8d. We welcome this new-born zeal very sincerely. It is very gratifying to find that at last they have realised that it is a serious matter to do anything to increase the taxes on food. The hon. Member (Mr. Fell) has referred to the fact that the taste for China tea is changing. If people prefer China tea, why not let them have it? There is no doubt this tax upon tea is a legacy from the old days when it was the common thing to derive the great bulk of the taxes from food, and I regret very much that more has not been done to reduce this tax, because the party is pledged up to the hilt to remove all taxes upon food. I remember in my early days the great gospel we preached was to abolish all taxes upon food and to have a free breakfast table. I am extremely sorry we have only made a reduction of 1d. in the tax on tea since we came into office. I would rather see an increased tax upon land than have this tax upon tea continued. Hon. Members opposite complained that the result of the taxes on land has brought in so little, so that if you double the tax you would please them. It would at least show some justification for the trouble you took in passing the Budget. It is an extraordinary fact that from 1901 to 1905 there was actually a reduction in the consumption of tea in this country. That was owing to the increased duty. On the other hand the moment we took off the tax there was an increase in the consumption of no less than 4,000,000 lbs. I regretted that the Government did not take off 2d. instead of 1d., and whenever they come to make a change they will please bear that in mind. Again I notice that in connection with the Insurance Bill the right hon. Gentleman said he could not take 1d. from those whose wages were 9s. and under. I wonder whether the right hon. Gentleman is aware that there are some people who are so poor that they are unable to buy ordinary tea, and buy what is called tea dust, for which they pay 1s. a lb.? Out of every 1s. these poor people spend 5d. is taken as a tax which goes to the Government. That is equal to an Income Tax of 8s. 4d. in the £. That is a positive scandal. These are the poorest of the poor, the people who live in some cases actually upon their old age pension, and tea is the only comfort they have. Every year since I have been in the House of Commons I have voted for this tax with the greatest regret, and I am sure I am expressing the feelings of a great many Members when I say that unless we do some-
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    thing before a General Election comes——[HON. MEMBERS: "Hear, hear."] Those cheers show that hon. Members opposite are pledged, if they get into office, to put no taxes upon food. I should like the right hon. Gentleman very seriously to take into consideration the advisability of taking this tax off tea, because a great many Members on this side are very greatly concerned to see the great increase which has taken place in the cost of living.
    Mr. LLOYD GEORGE: I need hardly say I am in full sympathy with my hon. Friend. I have repeatedly taken part in discussions on the Tea Duty, and my only regret is that I have not yet had an opportunity of carrying into operation the wishes I expressed when I was in opposition. The hon. Gentleman (Mr. Croft) seems to consider that it was I who put these taxes upon the poor of the country. When the present Government came into office we found a duty of 6d., and at least we have taken 1d. off. That is the extent of our interference with the Tea Duty.
    Mr. CROFT: I said you put an additional burden of 4d. on them, no doubt for a very good reason, and I thought that was a reason for taking off part of the duty on tea.
    Mr. LLOYD GEORGE: The hon. Gentleman is now opening up a very wide subject which took about fifty days to discuss, and the Opposition expressed the view that the limitation of time was most oppressive. So far from being a burden the insurance premium is a very considerable relief. At any rate that is the view which the Government take of that scheme. The Motion now before the House is an absolutely impossible one for any Chancellor of the Exchequer, and the hon. Gentleman quite realises it. I should have to find £6,000,000 somewhere else if the Clause were omitted. I could not possibly at present see my way to do that without a very considerable readjustment of the various burdens which are now cast on the different classes of the community. I am not defending the Tea Duty at all. I am not sure that there are not other and better means of levying contributions on people with small means, but they have to be thought out very carefully. I am not one of those who think that anybody who is earning anything ought to escape altogether from contribution. I think everyone ought to contribute his mite, as it were, towards the National Revenue, but the method of raising

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    that money is a matter which I think well worth the while of those who are interested in the finance of the country taking a much greater concern about. On the Continent there are other methods of raising contribution from people with small means. In Saxony the Income Tax is brought down to £45 a year. That means that practically all the working classes there pay Income Tax, and there are still other duties which fall heavily on the class which does not earn £45. We can discover, in the administration of the old age pensions, that the poorer the people are the larger in proportion is their consumption of tea, and therefore the Tea Duty is an impost very largely on the poorest classes of the community. But if the Tea Duty is to be abolished there must be some other method of levying contributions—I mean direct contributions—upon all sections of the community. The hon. Gentleman has in his mind some sort of scheme whereby you can tax something outside the limits of the United Kingdom altogether. I will not debate that, but even assuming it could be done, I do not think it would be a good thing that you should put your impost upon others and leave a large section of the community without any sense of contributing anything to the common stock. I am sure it would be a bad thing from the point of view of real interest in the national well-being if there was not a real sense of responsibility for the expenditure of the year. That has got to be distributed over the whole population.
    I have never had any sympathy with the idea that someone has got to be exempt because he is earning a small amount. It ought to be more or less the sort of principle which you have in a place of worship, where everyone is supposed to contribute something, however trifling, because they feel they have a kind of interest in the common work that is going on, and there ought to be the same common interest in the work of the Empire, and one way of realising that is to get every section of the community to contribute. The only principle I would lay down would be that they ought to contribute in proportion to their means. As far as tea is concerned, for the moment I can think of no more effective method of revenue unless you bring down your Income Tax to a £50 limit or charge a poll tax. Chancellors of the Exchequer have been driven to indirect taxation because any attempt at raising anything in the nature of a poll tax from people earn-
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    ing weekly wages has generally ended in disaster. Those who are raising money for local purposes are experiencing the same difficulty. You cannot get your rates as a rule from people earning a weekly wage, and therefore it is merged in the rent, and the money is collected from the landlord, and it is really for the same reason. There is a good deal to be said on the other side, but the balance of convenience, up to the present, undoubtedly has been in favour of the indirect method of taxation. Whether tea is the best method of doing it is another question. There is one advantage which tea has, it is an article of general consumption; it is an article of almost universal consumption. It enables the Chancellor of the Exchequer to get at the teetotaler as well as the beer and spirit drinker. There is hardly any class of the community who do not drink tea, but there are probably hundreds of thousands who do not smoke. You have got, I do not know how many male adults. [An HON. MEMBER: "Seven millions."] Well, I think that is putting it rather high. At any rate, there is a considerable proportion of the male adults of the country who do not contribute to taxation through tobacco or other excisable articles. But almost the whole of these people drink tea, cocoa, or coffee. Therefore, this is the one duty whereby we do get into every household. That seems to be one advantage which you get by putting a duty upon tea. It is the only method I can think of except direct taxation, and I am perfectly certain that no Chancellor of the Exchequer would get up and say that he was willing to face the responsibility of reducing the Income Tax limit to £40 or £50. The cost of collection, and, I think, the political difficulties, would be so great that you could not face it. Having started with a low Income Tax limit in Germany, they can stick to it, but we, having started with the £120 limit, have been driven upwards instead of pressed downwards. Political economists, though their opinions may be sound upon the question as to where the tax ought to commence, have not been able to give much practical guidance on the subject of collection. They do not know anything of the difficulties of the men who have to put their theories into actual practice. You must find a tax that brings everybody into contribution, and for the moment I cannot think of anything better than the Tea Duty. The Insurance Bill does it by a sort of indirect tax on wages. These are the only two methods

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    which bring everybody in to contribute towards a common purpose. As to the suggestion of the hon. Member for Yarmouth (Mr. Fell), he seems to think that we would only lose £300,000 if we reduced the duty by a penny in respect of tea grown within the British Empire.
    Mr. FELL: For the half-year.
    Mr. LLOYD GEORGE: I am not so sure that that would be the result. I am only collecting now upon the Resolution of the House of Commons. What does that mean?
    Mr. FELL: One million pounds or £500,000, subject to the increase in consumption.
    Mr. LLOYD GEORGE: Let me show the hon. Gentleman what that means. In order to make a loss to the revenue merely of £300,000, the consumption of tea would have to go up enormously. That is one reason why we have not been able to discriminate between India and China tea. The proportion of tea that comes from outside our own possessions is trivial from the point of view of the revenue. The hon. Gentleman says that there is a considerable increase in the consumption of China tea. There is really no appreciable increase in the consumption of China tea. In 1907 the import from China was rather higher than it was last year. There is a great deal of fluctuation in the consumption. It depends largely on the fashion of the hour, and on the harvest in India. But in the main China tea consumption is largely a matter of fancy. If you were to put an extra 2d. or 3d. on a pound of China tea, I have no doubt that the people who use it now would still buy it, but that would not help India at all, for the reason that the people who buy China tea would still use it. They are not the sort of people who would discontinue buying China tea because the cost was 2d. or 3d. extra. Although I have a good deal of sympathy with what has been said about India tea, I cannot see my way to face the enormous loss of revenue which the differentation proposed by the hon. Gentleman would involve.
    Mr. AUSTEN CHAMBERLAIN: My hon. Friend was unable, owing to the procedure of the House, to raise the question he wanted on this Clause, but I can at least congratulate him on having drawn from the Chancellor of the Exchequer a most interesting contribution to the consideration of our fiscal system. I am not
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    now referring to the concluding passages of the Chancellor of the Exchequer's speech. I do not desire to criticise these passages on the present occasion. I am referring to the survey of the principles of taxation with which he opened his observations, and which, indeed, formed the staple part of his speech. I heard these remarks from him with peculiar satisfaction. I have myself, both in office and in Opposition, given expression to the same sentiments, but I remember that one, at least, of the right hon. Gentleman's colleagues pointed to what would be an ideal system which was very far removed from that of the Chancellor of the Exchequer. I refer to a speech delivered by the First Lord of the Admiralty (Mr. McKenna), in which he pointed to the time when there should be no taxation, or practically none, on the working classes, except in respect of luxuries or amusements, which, of course, are in one sense another form of luxury. The Chancellor of the Exchequer laid it down—and I associate myself with what he said—that everybody in a free country like ours ought to contribute something to the expenses of the State of which he is a citizen. He added that the contribution of a man ought to be proportionate to his means, and again I associate myself with the principle he laid down. He says that it is the general acceptance of these principles by past Chancellors of the Exchequer, coupled with the inherent difficulties with respect to other forms of taxation, which have led to our adoption of such duties as those upon tea or sugar in order to levy the poor man's proportion of the taxation of the country.
    Mr. LLOYD GEORGE: The man of small means.
    Mr. AUSTEN CHAMBERLAIN: Yes, the man below the Income Tax limit. Of course, that includes many whom we do not habitually speak of as the poor in the sense of their being just on the margin of subsistence. My hon. Friend has taken the Tea Duty, and examined it by itself, and he has brought against it a charge which the Chancellor of the Exchequer finds proved. If you look at the Tea Duty alone, undoubtedly it does not secure contributions proportionate to their means from those who pay. In the first place, there is no proportion between the amount of the duty and the prime cost of the article. An expensive tea pays only the same duty as a cheap tea. I should not be popular with tea drinkers if I suggested a proportionate duty. When I held the office of Chancellor

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    of the Exchequer I found that there were people who regarded the Tea Duty as very harsh, because such a large proportion of the revenue it yields was derived from duty on the cheapest forms of tea. [An HON. MEMBER: "It is the same with tobacco."] When replying to one of the deputations that waited upon me from the tea merchants, I said that if it would suit them better, I would graduate the duty according to value. Their faces fell when I said that. The duty is not proportionate to the value of the tea, nor is it proportionate to the incomes of the persons who pay it. If you had this Tea Tax as a single tax, it would be grossly unjust and unfair, and it only begins to become fair when its inequalities are compensated and made up by other taxes. Hon. Members when discussing the Tea Tax must bear in mind that it is only one of many taxes, and, so far as workmen are concerned, if they pay too much in proportion to their means on their tea, the difference is made good in many other ways. The difference between the amounts paid in Tea Duty by the poor and the well-to-do is compensated to the poor by other taxes. Bread, sugar, and tea are what you find in all the poorest houses, if you find anything at all. I think that is an argument not for doing away with the Tea Duty altogether, but an argument against our present system. I believe in a canon of finance which is anathema to right hon. and hon. Gentlemen opposite, but it is one which was often propounded by the late Leader of the Opposition on this side of the House (Mr. Balfour), namely, that it would be much better to have a greater number of low duties than only to have a small number of duties and to keep these very high.
    Then the right hon. Gentleman said that you must have some tax which falls upon general articles of consumption, or else you must have an Income Tax extending downwards to a very low point indeed, to include the ordinary working man. I thought, in the earlier part of his observations, that he was favourably inclined to that course, but he made it perfectly clear before he finished that he thought that such a course was impossible, not unjust, but impracticable, on broad political and administrative grounds. I agree with him, but I would add this, that those who urge the extension of the Income Tax downwards do so with the object of bringing the influence of the mass of people to bear in checking taxation of that kind. It would have that effect if you could
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    make it a law which no future House of Parliament can break, that whenever there was addition at any point in the scale there should be proportionate addition throughout the whole of the scale; but when you do, as we have done lately, reduce the tax at some points of the scale and leave it unaltered at others, while you add very much to the burden of a small number of Income Tax payers then the Income Tax itself ceases altogether to have that particular merit. This is not a criticism—at the moment I do not stop for that purpose—of what the Chancellor of the Exchequer has done with the Income Tax, but is an answer to those who think that merely by extending the Income Tax downwards they would check all future increases in expenditure, and the propensity of those who do not contribute directly to spend freely the taxes paid by other people. You cannot do that unless you make a law that no future House of Commons can increase the Income Tax at a higher point without increasing the proportion at the lower point. Unless you can do that I think that the very merits which would cause some people to overlook the administrative inconvenience and the expense of collection, and even to risk the political disadvantage, would escape your grasp, and you would not be rewarded, by security, for all the trouble and difficulty you had undertaken. If that is so—so far I occupy common ground with the Chancellor of the Exchequer—then I agree that you must have resort to indirect taxation. But putting aside for the moment the contribution which by a wide revision of our Customs Duty you would obtain in a much larger proportion from the rich than you do now, and considering the question of relieving the poor, to have a wider range of duties with duties at a lower rate would be much fairer than to have the very few duties at very high rates which we now have.
    Mr. HUNT: The right hon. Gentleman (Mr. Lloyd George) says that everybody ought to contribute according to his means, and he cites the tea tax as a fair tax. As a matter of fact it is the very reverse. By means of it you impose on the very poor a tax which is double or treble proportionately the tax on the rich. The rich man who buys a pound of tea at 3s. has to pay 5d. taxation. The very poor person who buys 3lbs. of tea for the same money has to pay three times that amount of duty I cannot understand how hon. Gentlemen

    1945
    can have the cheek to sit over there on that side of the House and call themselves free traders. It always did beat me. They sit there and I believe they think they are free traders. Trade is exchange and Free Trade may be called free exchange. Where does the freedom come in when you tax the tea of the very poor? Then you say it is the best thing for the working people of this country. There is no tax on tea in America, and yet you call America a protected country. You get all your import taxation practically in this country off food, drink, and tobacco. They are tremendously taxed, and yet you say this is a free country. Look at the difference in the case of America. The taxation per head there is about the same. In America they get about £45,000,000 a year in Import Duties on the luxuries of the rich, while here, where we call ourselves free traders, we get about £32,000,000 a year from food, drink, and tobacco, the greater part of which is paid by the working classes. Then you say, "No, we must not tax any of the luxuries of the rich because we might be able to make them help, and it might give our people more employment and better wages." Is there any answer to that? Is not it true that when you tax tea the whole of the import tax has to be paid by the people of this country? Hon. Gentlemen must see that this enormous taxation of tea is a frightful burden on the poor people of this country. The Chancellor of the Exchequer said that it was a very dangerous thing to put a poll tax on the working people, and that it generally ended in disaster. But that is exactly what you have done by the Insurance Bill, under which you have put a poll tax on the people, and yet you cannot put ½d. on any of the luxuries of the rich
    coming in here, except alcohol and tobacco, because it would tax the rich people and it certainly would help the poor and make the foreigner pay a fair share towards keeping up our markets. I think that the people in this country are beginning to find out what a frightful humbug is the policy which hon. Gentlemen are pleased to call Free Trade. I do not know what the Labour Members are going to do. I do not know whether they will go down to their constituencies and say, "We voted to tax your tea about 100 per cent."
    Mr. LANSBURY: We will not.
    Mr. HUNT: Then I hope that the hon. Gentleman will vote with us.
    Mr. LANSBURY: You are as bad as they are.
    Mr. HUNT: At all events, if we can put the taxation on the luxuries of the rich we could take some off the necessaries of the poor.
    Mr. LANSBURY: You got ten years' chance.
    Mr. HUNT: There is really nothing whatever to be said in favour of this tax. There is no tax on tea in any of our great Colonies nor in America, because they have got sense enough to tax the things that the rich require. If you had a fair system of taxation in this country you ought to be able to do away with the tea tax altogether.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 158; Noes, 98.

    Division No. 436.]

    AYES.

    [5.45 p.m.

    Abraham, William (Dublin Harbour)

    Bryce, J. Annan

    Falconer, James

    Addison, Dr. C.

    Burns, Rt. Hon. John

    Ferens, T. R.

    Agar-Robartes, Hon. T. C. R.

    Burt, Rt. Hon. Thomas

    Ffrench, Peter

    Ainsworth, John Stirling

    Byles, Sir William Pollard

    France, G. A.

    Alden, Percy

    Carr-Gomm, H. W.

    Furness, Stephen

    Atherley-Jones, Llewellyn A.

    Cawley, Harold T. (Heywood)

    Gelder, Sir W. A.

    Baker, H. T. (Accrington)

    Chancellor, H. G.

    George, Rt. Hon. David Lloyd

    Baker, Joseph A. (Finsbury, E.)

    Chapple, Dr. W. A.

    Gladstone, W. G. C.

    Balfour, Sir Robert (Lanark)

    Collins, G. P. (Greenock)

    Glanville, H. J.

    Banbury, Sir Frederick George

    Collins, Stephen (Lambeth)

    Goddard, Sir Daniel Ford

    Baring, Sir Godfrey (Barnstaple)

    Compton-Rickett, Rt. Hon. Sir J.

    Greig, Colonel James William

    Barlow, Sir John Emmot (Somerset)

    Condon, Thomas Joseph

    Hackett, J.

    Beauchamp, Sir Edward

    Cotton, William Francis

    Hall, Frederick (Normanton)

    Beck, Arthur Cecil

    Crumley, Patrick

    Hamilton, Lord C. J. (Kensington)

    Benn, W. (T. Hamlets, S. George)

    Davies, E. William (Eifion)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Bentham, G. J.

    Dawes, J. A.

    Harcourt, Robert V. (Montrose)

    Bentinck, Lord H. Cavendish-

    Doris, William

    Harmsworth, Cecil (Luton, Beds.)

    Bethell, Sir J. H.

    Duncan, C. (Barrow-in-Furness)

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

    Birrell, Rt. Hon. Augustine

    Edwards, Sir Francis (Radnor)

    Haslam, Lewis (Monmouth)

    Black, Arthur W.

    Edwards, John Hugh (Glamorgan, Mid)

    Havelock-Allan, Sir Henry

    Boland, John Pius

    Elibank, Rt. Hon. Master of

    Haworth, Sir Arthur A.

    Bowerman, C. W.

    Esmonde, Sir Thomas (Wexford, N.)

    Hayden, John Patrick

    Brady, Patrick Joseph

    Esslemont, George Birnie

    Hayward, Evan

    Henry, Sir Charles

    Morton, Alpheus Cleophas

    Roche, Walter F. (Pembroke)

    Horne, Charles Silvester (Ipswich)

    Munro, R.

    Rose, Sir Charles Day

    Howard, Hon. Geoffrey

    Murray, Capt. Hon. A. C.

    Rowlands, James

    Isaacs, Rt. Hon. Sir Rufus

    Nannetti, Joseph P.

    Rowntree, Arnold

    Jones, Edgar (Merthyr Tydvil)

    Nicholson, Charles N. (Doncaster)

    Samuel, Rt. Hon. H. L. (Cleveland)

    Jones, H. Haydn (Merioneth)

    Nolan, Joseph

    Scanlan, Thomas

    Jones, Leif Stratten (Notts, Rushcliffe)

    Norton, Captain Cecil W.

    Shortt, Edward

    Jones, William (Carnarvonshire)

    O'Brien, Patrick (Kilkenny)

    Simon, Sir John Allsebrook

    Jones, W. S. Glyn- (Stepney)

    O'Connor, John (Kildare, N.)

    Spicer, Sir Albert

    Keating, M.

    O'Connor, T. P. (Liverpool)

    Strauss, Edward A. (Southwark, West)

    Kellaway, Frederick George

    O'Doherty, Philip

    Tennant, Harold John

    Kennedy, Vincent Paul

    O'Dowd, John

    Thorne, G. R. (Wolverhampton)

    King, J. (Somerset, N.)

    O'Malley, William

    Toulmin, Sir George

    Lambert, George (Devon, S. Molton)

    O'Shee, James John

    Trevelyan, Charles Philips

    Levy, Sir Maurice

    Palmer, Godfrey

    Wadsworth, John

    Lough, Rt. Hon. Thomas

    Pearce, Robert (Staffs, Leek)

    Ward, W. Dudley (Southampton)

    Lundon, T.

    Pearce, William (Limehouse)

    Wason, Rt. Hon. E. (Clackmannan)

    Lynch, A. A.

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Wason, John Cathcart (Orkney)

    Macdonald, J. M. (Falkirk Burghs)

    Pollard, Sir George H.

    Watt, Henry A.

    Macpherson, James Ian

    Power, Patrick Joseph

    Webb, H.

    M'Callum, John M.

    Primrose, Hon. Neil James

    White, J. (Glasgow, Tradeston)

    M'Curdy, Charles Albert

    Radford, George Heynes

    White, Patrick (Meath, North)

    M'Laren, Hon. F. W. S. (Lincs, Spalding)

    Raphael, Sir Herbert Henry

    Whittaker, Rt. Hon. Sir Thomas P.

    M'Micking, Major Gilbert

    Rea, Walter Russell (Scarborough)

    Wiles, Thomas

    Martin, Joseph

    Reddy, M.

    Williams, Llewelyn (Carmarthen)

    Mason, David M. (Coventry)

    Redmond, John E. (Waterford)

    Wilson, Hon. G. G. (Hull, W.)

    Masterman, C. F. G.

    Richardson, Albion (Peckham)

    Wood, Rt. Hon. T. McKinnon (Glas.)

    Meehan, Francis E. (Leitrim, N.)

    Roberts, Charles H. (Lincoln)

    Meehan, Patrick A. (Queen's Co.)

    Roberts, Sir J. H. (Denbighs.)

    TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.

    Menzies, Sir Walter

    Robertson, Sir G. Scott (Bradford)

    Molteno, Percy Alport

    Robinson, J. M. (Tyneside)

    NOES.

    Agg-Gardner, James Tynte

    Hardie, J. Keir

    Price, C. E. (Edinburgh, Central)

    Aitken, Sir William Max

    Harrison-Broadley, H. B.

    Pryce-Jones, Col. E. (M'tgom'y B'ghs)

    Amery, L. C. M. S.

    Haslam, James (Derbyshire)

    Remnant, James Farquharson

    Anstruther-Gray, Major William

    Henderson, Arthur (Durham)

    Richardson, Thomas (Whitehaven)

    Archer-Shee, Major Martin

    Henderson, Major H. (Berks, Abingdon)

    Roberts, S. (Sheffield, Ecclesall)

    Ashley, W. W.

    Herbert, Hon. A. (Somerset, S.)

    Samuel, Sir Harry (Norwood)

    Benn, Arthur Shirley (Plymouth)

    Hill-Wood, Samuel

    Sanderson, Lancelot

    Boscawen, Sir Arthur S. T. Griffith-

    Hope, Harry (Bute)

    Sandys, G. J. (Somerset, Wells)

    Boyton, J.

    Hope, James Fitzalan (Sheffield)

    Smith, Albert (Lancs., Clitheroe)

    Bull, Sir William James

    Houston, Robert Paterson

    Smith, Rt. Hon. F. E. (L'p'l, Walton)

    Burn, Colonel C. R.

    Hume-Williams, William Ellis

    Smith, Harold (Warrington)

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

    Hunt, Rowland

    Snowden, Philip

    Campion, W. R.

    Jardine, E. (Somerset, E.)

    Stanier, Beville

    Carlile, Sir Edward Hildred

    Jowett, F. W.

    Stewart, Gershom

    Carson, Rt. Hon. Sir Edward H.

    Kerry, Earl of

    Swift, Rigby

    Cassel, Felix

    Kirkwood, J. H. M.

    Sykes, Mark (Hull, Central)

    Castlereagh, Viscount

    Lansbury, George

    Taylor, John W. (Durham)

    Chaloner, Col. R. G. W.

    Locker-Lampson, G. (Salisbury)

    Terrell, Henry (Gloucester)

    Clough, William

    Locker-Lampson, O. (Ramsey)

    Thompson, Robert (Belfast, North)

    Clynes, J. R.

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

    Thorne, William (West Ham)

    Cooper, Richard Ashmole

    Lonsdale, Sir John Brownlee

    Tobin, Alfred Aspinall

    Crooks, William

    Lowther, Claude (Cumberland, Eskdale)

    Touche, George Alexander

    Doughty, Sir George

    MacCaw, Wm. J. MacGeagh

    Tryon, Captain George Clement

    Du Cros, Arthur Philip

    Macdonald, J. R. (Leicester)

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

    Falle, B. G.

    Macmaster, Donald

    Wedgwood, Josiah C.

    Fletcher, John Samuel (Hampstead)

    Magnus, Sir Philip

    Willoughby, Major Hon. Claud

    Foster, Philip Staveley

    Malcolm, Ian

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

    Gilhooly, James

    Newton, Harry Kottingham

    Wilson, W. T. (Westhoughton)

    Gill, A. H.

    Nield, Herbert

    Wolmer, Viscount

    Goulding, Edward Alfred

    O'Brien, William (Cork)

    Yate, Col. C. E.

    Greene, Walter Raymond

    Paget, Almeric Hugh

    Gretton, John

    Parkes, Ebenezer

    TELLERS FOR THE NOES.—Mr. Fell and Mr. Croft.

    Guiney, Patrick

    Pease, Herbert Pike (Darlington)

    Hall, D. B. (Isle of Wight)

    Peel, Capt. R. F. (Woodbridge)

    CLAUSE 2.—(Alterations of Cocoa Duty.)
    (1) The duty of Customs of twopence per pound on cocoa or chocolate ground, prepared, or in any way manufactured imposed by Section three of the Customs and Inland Revenue Act, 1879, shall cease; but nothing in this Section shall affect the power to charge duty under Section seven of the Finance Act, 1901.
    (2) Drawback shall be allowed on any goods in the manufacture or preparation of which in Great Britain or Ireland any cocoa, or cocoa butter, or cocoa husks and shells, has or have been used, equal to the duty in respect of the quantity of that cocoa, or cocoa butter, or cocoa husks and shells, as the case may be, which appears, to the satisfaction of the Treasury, to have

    1949
    been used in the manufacture or preparation of the goods; and in allowing that drawback the Commissioners of Customs and Excise may, with the assent of the Treasury, in order to facilitate trade, relax in the case of any goods any requirements of Sections one hundred and four and one hundred and six of the Customs Consolidation Act, 1876, as to the giving of security and the examination of goods.
    Mr. COOPER: I beg to move, to leave out Sub-section (1).
    I would like to emphasise the fact that neither I nor anyone else, as far as I can see, is making any proposal to interfere with the drawback on cocoa which is proposed by the Chancellor of the Exchequer, and I think it is generally recognised on both sides of the House that this is an act of justice to the cocoa industry which has been too long delayed. On the Second Reading of this Bill, my right hon. Friend the Member for East Worcestershire (Mr. A. Chamberlain) said, speaking from experience, this was, after all, the occasion on which the Finance Minister, as a business man, made a business statement to the country of his revenue expenditure and liability. The present Chancellor of the Exchequer, I think, usually tries to be lucid and clear in his explanations to the House, but when we refer to his speech on the Introduction of the Finance Bill, on the 16th May of this year, we find a very short reference to the proposed changes in the Cocoa Duties, and there are only two facts of any importance that he brings out. The first is that there is an element of protection in this duty, and, secondly, that it was proposed to put cocoa on exactly the same footing as any other industry in the country. One is rather surprised—seeing that these duties have existed since the year 1853, and although the subject has been referred to many times in recent years—to find that the Chancellor of the Exchequer gives no explanation of this proposed change whatsoever, nor does he give any business reason why he brings it before the House in this Bill.
    In the few remarks I am going to offer I wish to show the Chancellor of the Exchequer and the House very clearly the exact results that are going to follow to the country or the industry from these proposed changes. If we look at the question of revenue, it is obvious that the change is not proposed with any idea of benefit to the revenue of the country,
    1950
    because it has rather the opposite effect. If we consider the position of the consumer of cocoa and chocolate in this country, the difference, which I understand works out at 1½d. a pound, is perhaps sufficient to make an alteration when one is buying a shillingsworth of the article, but it certainly cannot be divided into the 1d. for an ounce of chocolate or in regard to the small quantities of cocoa which the working classes, when they buy cocoa, usually purchase. Therefore, if it is claimed that this alteration is going to be of the slightest benefit whatever to the consumers of this country, I would like the Government to state whether it is not a fact that such benefit can really only apply to the well-to-do of the country, and that it is impossible for it to apply to the working classes in general. In the industry itself I find that there are over thirty employers in this country who have petitioned the Chancellor of the Exchequer not to interfere with, or to postpone for the present, any alteration in the Cocoa Duty. In the statement which has been published, they state that they view with grave concern the proposed alteration, and they add that the fact constitutes a serious menace to the continued prosperity of the industry. Those statements, coming from thirty cocoa and chocolate manufacturers in this country cannot be ignored by either side of the House, and they do justify one's fear that some injury will inevitably happen to at any rate some section of the industry if those duties are altered. Then there arises the question of labour and employment. If the alteration of these duties is calculated by those who are in the trade to injure them, it certainly must have a detrimental effect on the labour employed in that industry. Twenty-five out of the thirty firms who composed the deputation to the Chancellor of the Exchequer, I find, employ amongst them 15,500 people, and it is a fact worth remembering that if any Members of this House took a foreign deputation to see the best-housed section of the working classes in this country, I believe they would unquestionably take the visitors to Bournville, where the people are employed in the cocoa industry. The next interest to look for benefit from the change might be the State in general, but I can find no reason to think that this alteration will benefit the State in any direction whatever. The hon. Member for York (Mr. Rowntree) last year, when speaking in this House as an expert on

    1951
    this matter, made the following statement:
    "Some elaborate scheme of Import Duties would have to be made to get rid of the taint of Protection, yet at the same time not put the home manufacturer in a worse position than his foreign competitors. It is not impossible, but it will not be altogether a simple matter."
    This small alteration in the Cocoa Duties proposed by the Sub-section, we are told by the hon. Member for York, will require a good deal of care to avoid putting our home industry in a worse position than that of its foreign competitors. Therefore, I submit, that search how one will, it is not possible, certainly it is not easy, for any Member of this House to discover in the justification of an alteration of these Duties any advantage to the State, to the industry itself, to the workmen who are engaged in that industry, or, finally, to the consumer. Those of us who were in the House last year remember that there was a rather heated Debate in the month of July about a certain poster referring to Cocoa Duties, which I well remember the Chancellor of the Exchequer described as the most disreputable he had ever seen. On the occasion of that Debate four somewhat prominent Members opposite made direct reference to the necessity of altering the Cocoa Duties. I can find no other than those. I will take a line or two of each. The hon. Member for Blackburn (Mr. Snowden) said:—
    "I want the Chancellor of the Exchequer, because of my interest in Free Trade, to make a placard like that impossible."
    The hon. Member for Norwich (Mr. G. Roberts) said on the 30th June:—
    "The Cocoa Duty is not a small matter from the point of view of the honour and consistency of the Free Trade movement."
    The hon. Member for Newcastle-under-Lyme (Mr. Wedgwood), on the 4th July, said,
    "I do think, in the interests of Free Trade as well as sound finance, steps should be taken to wipe out this ridiculous tax on cocoa and chocolate."
    The hon. Member for East Northampton (Mr. Chiozza Money) said:—
    "The Cocoa Duty has furnished them—"
    Referring to hon. Members on this side of the House—
    "with a weapon which they have not been slow to use on thousands of platforms throughout the country."
    In the absence of any reasonable suggestion of benefit to the country, or to the industry, or to the people, arising from these changes, it is impossible for us, and I think it is impossible for any honest Member of this House, to ignore these statements nor the actual facts. I do not
    1952
    desire to suggest for one moment that the Chancellor of the Exchequer himself has been led to make this change by any unworthy political motive. I do not suggest that for the reason that I believe the ordinary duties, in a busy Session like this, of the Chancellor of the Exchequer are pretty onerous, taking a good deal of his time, and when we bear in mind the further fact that he has been giving a remarkable amount of time to the Insurance Bill, I think we may conclude that, when he was approached by a body of Liberal Members, at the end of this Session, to bring in this alteration, he probably was very glad to get rid of that deputation of his own supporters, by agreeing to the change being made, assuming of course, that they did not err in the justification for their request.
    6.0 P.M.
    In any case how far the Chancellor of the Exchequer is or is not guilty of using the Budget of this country for political exigencies, the fact still remains that I cannot find, and I can find no other person who can, any justifiable reason for altering these duties except the taint of Protection. If that is the purpose of the Government, let me say, speaking for myself, and I have no right to speak for my hon. Friends on these benches, I desire nothing more than that you should pass this Sub-section, for the simple reason that up to the present time we have been able to say "here is the one protected trade"—and I would like to remind the House it is the only article of food that has not risen in price during the last ten years—here is a protected industry that flourished, in which the wages are comparatively satisfactory, and where the people are the best housed in the country. If you remove this advantage that the industry has got today, give me in twelve months' time the opportunity to look at the figures of the imports of manufactured or prepared cocoa and chocolate, and I shall be only too happy to have that advantage given to us of going to the country and saying, whereas previously we have only pointed out the advantage this country would get, here to-day is an actual proof of the whole contention of Tariff Reformers and the Unionist party. There fore, from the point of view of political exigency, I ask nothing better from the Government than that they should insist on retaining this Sub-section, which, for more honest motives, I appeal to the Committee to postpone for the present. There is one point in one of the statements of

    1953
    the Chancellor of the Exchequer in the two or three minutes' speech which he made on the 16th May, namely:—
    "We propose to put cocoa on exactly the same footing as any other industry in the country."
    I ask the Chancellor of the Exchequer what other industry of this country pays 15 per cent. duty on raw material? Until he removes that duty on raw material, he cannot, and it is a farce to, pretend that he is treating this industry on exactly the same footing as other industries in the country. As the hon. Member for York (Mr. Rowntree) is present, I want to make this remark. I spoke of thirty manufacturers who approached the Chancellor of the Exchequer and pointed out the disadvantage of the change in these duties. I think it is perfectly fair to say that two of the largest manufacturers are not included in that thirty. They are Messrs. Cadbury, of Bournville, and Messrs. Rowntree. So far as I can discover, they played a perfectly honest, straight game over the question of Cocoa Duties. I can find no case where they ever asked for what the Government are doing, and several cases where they said, "Give us absolute Free Trade in cocoa, that is what we want." They may differ from the views of other manufacturers, but at the same time it is right, I think, to point out that the proposal of the Government now before the Committee is not, so far as I can discver, what either of those two large firms has ever demanded. The hon. Member for York said, "Give us Free Trade, that is what we want. Abolish the duty on raw cocoa. Both Messrs. Cadbury and my own firm have publicly again and again asked for the duties to be abolished." This proposal does not abolish the duties. I think it is a great pity, especially when some of us at any rate anticipate that next year probably we are likely to be in power and that we are pledged, if we are, as a party to give Protection within the limits as defined by the leaders of the party. [An HON. MEMBER: "What are they?"] I do suggest that it is a mistake for the Government to be tinkering in the way they are doing with these duties, and in a way which does not meet the demands of two of the largest manufacturers, and which does not meet the wishes—or, rather, is absolutely opposed to the wishes—of thirty others out of the forty manufacturers all told in the industry. I have endeavoured to make three points. The first is, and I do appeal to the Secretary of the Treasury, when he replies on this subject, to tell the House
    1954
    perfectly frankly what is the reason for the alteration that justifies the Government in asking the Committee to accept this proposal. The second is, is cocoa on exactly the same footing as other industries, or is not the Chancellor of the Exchequer a little mistaken in making that suggestion? Thirdly, I appeal to the Government, in the interests of the industry, to postpone for the present the duties which are proposed. I should like to remind the Chancellor of the Exchequer of what the present Prime Minister said in this House in April, 1907, when he was dealing with the same subject:—
    "This duty, with its Protectionist flavour, has stood the scrutiny and has been preserved, at any rate, with the connivance of Mr. Gladstone, of Sir William Harcourt, of Sir Stafford Northcote, of Mr. Goschen, and of Sir Michael Hicks-Beach, who slightly increased its protective character—a string, I should think, of as good and severe Free Traders as have ever been responsible for the finances of this country. I may say that what was good enough for them is good enough for me."
    I respectfully ask the Chancellor of the Exchequer if what is good enough for the Prime Minister is not good enough for him and his colleagues.
    Mr. PETO: I rise to second the Amendment of my hon. Friend. In doing so I should like to ask the indulgence of the House if I go into a little more detail than the hon. Member did in the very clear and lucid speech in which he has put his Amendment before the Committee. Whether this be important or unimportant, it is certainly one of the most intricate questions connected with the raising of the revenue of the country as it still remains. There are at least four different duties concerned, and a great many different interests in the country and different branches of the trade whose interests are not one, but which are essentially varying in varying degrees. I am personally very sorry that the Chancellor of the Exchequer could not see his way to be here and to take part in this Debate, because I know that it is the desire of those with whom I have spoken and connected with the trade, to get some opportunity of putting their case frankly and fairly before him as a business proposition, quite apart from any political bias whatever, and they had hoped that at least this afternoon that so far as I could do so, I should have had the opportunity of having the Chancellor here. That, apparently, is not to be the case. I would commence by saying that in the remarks I intend to address to the Committee I am not going to deal with the political side of this question at

    1955
    all, or with the relative merits of the two schools of finance represented by right hon. Gentlemen opposite and right hon. Gentlemen on this Front Bench. I want to deal with the matter as a plain business proposition and to ask the Committee to consider what are the various interests affected, and so directly affected, by the proposals of the Chancellor of the Exchequer, and whether those proposals will be for the benefit of the trade of the country as a whole, and whether they will be for the benefit of the employés in the trade and, above all, and I am sure right hon. Gentlemen opposite will agree with me as to this, whether they are for the benefit of the whole people of this country regarded as consumers.
    I will just say one word with regard to the revenue side of the question. I asked a question this afternoon as to what the estimated loss of revenue would be by the proposal of the Chancellor of the Exchequer, that is to do away with the duty upon the manufactured article coming into this country, except in so far as you calculate a percentage of the raw material there is in the article, in which case it will be calculated as a percentage of one penny in the pound, and the second proposal to grant a drawback to all goods exported which contain cocoa, with which I entirely agree and with which none of us want to interfere. If this tax, which we do not defend, on the raw material or the industry is to be kept on, the very least the Government can do is to grant a drawback on the exports. The Chancellor of the Exchequer told me that he anticipated a loss of revenue on Sub-section (1) of this Clause of £70,000, and on Sub-section (2) by the drawback about £30,000. I have had the advantage of a somewhat elaborate calculation made by an expert in the trade who puts the loss of revenue at £74,000. Consequently we are closely agreed, while as to the £30,000, that is 2d. per pound on 3,500,000 lbs. of cocoa, which the Chancellor told us was the quantity of manufactured chocolate and cocoa exported for the year just past. We cannot possibly consider the result of this proposal of the Chancellor of the Exchequer unless the Committee will first consider what are the three trade interests affected. I divide them into three: first of all, we have the interests of the foreign manufacturer who has got a very very large and direct interest in this ques-
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    tion before the Committee. The second, is of the cocoa manufacturer, mainly two great firms, whose speciality it is to manufacture cocoa; and thirdly, of a large number of much smaller people, whose main business it is to manufacture chocolates and sweets and other things of that sort. The interests of Nos, 2 and 3, of the large firms in this country and the small ones are entirely different. I will take, first of all, what are the elements of protection in this tax, and see how they affect, and how differently they affect, those two branches of the trade. There are two elements of protection at present in the Cocoa Tax. The first is the tax on the manufactured goods—cocoa coming into this country, and the second is the tax about which we heard very little in these Debates on cocoa butter, which was only put on in 1896. I believe I am right in saying that it was put on then at the direct request of the great cocoa firms of this country, and it was put on by a Unionist Government, the Chancellor of the Exchequer being Sir Michael Hicks Beach. I believe I am also correct in saying that the Cocoa Butter Duty was not as large as the cocoa trade in this country would have liked to have had it. The hon. Member for York, speaking in the Debate last year on this subject, told the House that it was necessary, in order to consider the question, to go into some of the details of manufacture. His remarks were:—
    "I should like to say a few words on the subject as a manufacturer of cocoa. I will try to do so without being too technical, and I will certainly try and not give away any trade secrets."
    I am quite sure the hon. Member succeeded most admirably in that part of his intention.
    "With regard to cocoa the present trade in England consists almost entirely of pure cocoa powder"—
    I think the hon. Member rather forgot the smaller people in the trade—
    "and we find that 2 lbs. of raw cocoa will produce 1 lb. of pure cocoa powder, the difference being due to the loss in manufacture. We pay a duty of 1d. per lb. on raw cocoa. The foreign merchant pays a duty of 2d. per lb. on the prepared article he imports into this country, and that counterbalances the duty which the home manufacturer has paid."
    So far in a large measure I agree with the hon. Member. A little further on he says:—
    "It is true that a certain proportion of the loss in manufacture is a valuable article of commerce known as cocoa butter, and that a duty of 1d. per lb. is levied on cocoa butter coming into this country. It might be argued on this account cocoa powder is protected; but to show how trifling that is, the duty received from cocoa butter yields to the Treasury less than £4,000 a year."—[OFFICIAL REPORT, 6th July, 1910, cols. 1679–80.]

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    I cannot congratulate the hon. Member on his last argument. It seems to me that nothing could possibly be clearer than that the small amount of revenue collected and the small amount of cocoa butter that comes into this country is a pretty obvious proof of the efficacy of the protection. Let us go a little further into these trade secrets. I have here—and I do not think the hon. Member will contest it—what might be termed a fair average out-turn of the raw cocoa introduced into this country. It is calculated that 212 lbs. would yield 179 lbs. of dessicated and clean cocoa. That would give 112 lbs. of cocoa powder. So far I am in entire agreement with the hon. Member's statement that out of 1 lb. of raw cocoa you get little more than 50 per cent. of cocoa powder. You also get on the average about 67 lbs. of cocoa butter. So that if the cocoa powder duty counterbalances the duty on the raw material, you have to account for the duty on 67 lbs. of cocoa butter. A penny a pound, it being exactly one-third the out-turn of the raw material, gives you a clear protection of one-third of a penny on every pound of raw cocoa. I do not want the Committee to imagine that we in any way grudge the duty on cocoa butter or think that the cocoa trade ought not to have it. I see no reason whatever why they should not have it. But I would point out that, although cocoa butter is a by-product of the manufacturer of cocoa powder, it is one of the ingredients in the manufacture of chocolate, and in some kinds of chocolate—milk chocolate, for instance—there is pound for pound, the same weight of cocoa-butter as of cocoa powder used in the manufacture. Consequently what the Chancellor of the Exchequer is doing is to leave on the duty which is of some assistance to those firms who manufacture cocoa powder, overlooking the fact that cocoa butter is what hon. Gentlemen opposite would call a raw material, though I do not agree with the term, of the manufacturers of chocolate in this country. Hence he is doubling the burden on the chocolate, while trying to do something to make up to the cocoa trade for maintaining on the raw material a tax which they do not ask to be maintained and which no section of finance in this House believes is a good thing.
    I would like to call the attention of the Committee to a curious fact. I notice in the answer of the Chancellor of the Exchequer to-day, in reference to the im-
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    ports of cocoa butter into this country, that when the tax was put on in 1896, under 250,000 lbs. were brought in in the year. In 1897, the year after it was put on, the quantity was 1,600,000 lbs. Hon. Members may say that that was due to its being rushed ill beforehand in anticipation of the new tax. But that is not the answer, because in 1898 the quantity was 1,200,000 lbs. So that the imposition of 1d. per lb. did not keep the cocoa butter out, but it seems to have had an extraordinary stimulating effect on the import of the article. When we come to the present year there is an import of only 715,000 lbs. That shows conclusively, to my mind, what a magnificent hold the cocoa industry has over the home trade of this country, and these great firms are responsible for it. I recollect—and probably the recollection of other hon. Members will be the same—that when I was a boy at school if any learned medical man recommended cocoa as a strengthening and refreshing beverage instead of tea, which was supposed to have rather deleterious effects, it was always Van Houtens, Sweitzers, or some other foreign brand. The cocoa made in this country was certainly very far from defying competition in those days. Now the case is different, and, as far as that branch of the trade is concerned, I congratulate them on the magnificent progress they have made under the existing order of things. Now take the case of the smaller firms who manufacture chocolate. Undoubtedly, under the existing scale of taxation—I will make the frank admission—they get a larger share of protection than falls to those who manufacture cocoa powder—a very much larger share—and it appears to be likely that the course of trade will make it an increasingly larger share. Take, for instance, one of the principal articles of competition. Seven million five hundred thousand pounds a year of chocolate is brought into this country from Switzerland. Practically the whole of that is what is now called milk chocolate. In a hundredweight of that article there is only 18 lbs. of cocoa powder, 17 lbs. of cocoa butter, 35 lbs. of milk solids which pay no tax at all, and 42 lbs. of sugar. The duty payable is, on cocoa powder, 1s. 11d., on cocoa butter 1s. 5d., and on sugar 8d., making 4s., which they have to pay to manufacture a hundredweight of that particular class of chocolate in this country. The foreigner has to pay 18s. 8d. to import it. Therefore, the protection is 14s. 8d. a hundredweight.

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    What is the meaning of this translated into the figures of all the imports of these articles into this country? We have an import of manufactured chocolate of 15,000,000 lbs. Seven million five hundred thousand pounds comes from Switzerland, and the differential part of the duty amounts to £50,000 on the Swiss imports alone. The imports from the Netherlands amount to 6,750,000 lbs., mainly cocoa, at 5s. 11d. per cwt., which the Committee may take as being an extremely accurate calculation of the protective amount of the tax on cocoa. So that there is £7,500 difference to the manufacturers in Holland if the duty is taken off. Then there is about 400,000 lbs. from Germany, 150,000 lbs. from France, and the rest in negligible quantities, the total amount of the protective duty being £74,000. There is no question that the employés in this country benefit by the work being done here. It is certainly in their interests to keep this great home trade to ourselves. In regard to the foreign trade I will have something to say presently. The effect of this Clause 2 will be practically to kill the smaller manufacturers of chocolate in this country. It will leave them to compete, not on level terms, but on very unequal terms with the great Swiss combine of chocolate manufacturers abroad.
    Next I want to consider how this question affects the general public. The hon. Member for Walsall (Mr. Cooper) said that there was no evidence that cocoa had increased in price in the last ten years. I do not think he went so far as to say that it was rather the reverse. I have had this question looked into, and I find from the statistical trade abstracts, comparing last year with 1900—the very period during which we have seen general necessaries go up 10 per cent. in price—cocoa and chocolate, taken as a whole, have dropped from 100 to 77 per cent., a fall of 23 per cent., so that I cannot see that there is any justification for the proposal from that point of view. The large number of small firms that we have in this country at present compete with one another for the home trade; they practically do not attempt to do the export trade at all. When we consider whether it is wise in the interests of the consumer to pass a Finance Bill which will practically sweep these firms away and leave our market perfectly open to the import on unfair terms of Swiss chocolate, it is certain that in so doing you are not acting in the interests
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    of the consumer. As long as you keep alive the firms who are competing with one another here you will have a low price for these articles; but if you leave it in the hands of foreign importers—particularly when, as in the case of Switzerland, it is a great chocolate combine—I have no belief that these large tablets which are offered as an inducement to the Chancellor of the Exchequer to take off this tax will remain large tablets, or that the chocolate will remain cheap chocolate very long. The agent in this country has stated perfectly frankly to one of the Scottish chocolate manufacturers that it will make an enormous difference to the people he represents. He put the figure at £40,000. As £50,000 represents the total duty on the imports from Switzerland, the interest of the combine is probably very accurately represented by £40,000. Hon. Members opposite will probably make the point: could not that be used to reduce prices? It will not necessarily mean increased profits to the foreign trade; it may mean a cheaper chocolate for the consumer here. If it results in killing your home competition, I do not believe that it does or will mean cheaper chocolate. At any rate, you have no guarantee whatever that it will. You are maintaining your duty on the raw material. You are not putting the cocoa and chocolate trade on the same terms, as the Chancellor of the Exchequer said, as all other trades in the country, but you are putting them in the extraordinary position of having a duty upon their raw material and no duty upon their manufactured products at all. Does that mean that the manufacturers in this country will compete on equal terms? So far as the duty is concerned they certainly will not, because there is no duty on the raw material of our greatest competitor in the trade on the Continent, Holland; and there is only some tiny registration duty in the case of Switzerland. These two countries are responsible for practically the whole of the imports into this country. With regard to rebate, I would like to point out to the right hon. Gentleman that that does not concern the smaller firms. They do not do any export trade worth talking about, and they do not expect to be able to do it on account of the high protective tariff abroad. It will perhaps assist to some extent the manufacturers of the cocoa. Apart from that, I do think they are not on equal terms in trading, and they are not trading on equal terms for this reason: the two countries

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    they have got to compete against are not Germany and France, or any of the other great countries in Europe which have to maintain great armies and navies, and be under the burden of very heavy taxation. The two countries are Switzerland and Holland, which have got no great armies and no navies at all to maintain, and whose direct taxation is not a great burden upon the trade. The burden upon the Swiss manufacturer is infinitely lower than the burden placed upon the manufacturers of this country.
    I want the Committee to look upon one other point in regard to these imports, and that is that it seems to me a most curious time for the Chancellor of the Exchequer to propose to take off this duty. One would imagine that the reason that would be given for doing such a thing would be that it was depriving the people of this country of a very valuable food that might and ought to be imported from abroad—that it was keeping out foreign imports. What do I find when I look at the figures for the last two years. In 1908 the imports were 10.8 million pounds. In 1910 the figure was over 15,000,000, an increase of imports into this country in two years of very nearly 50 per cent.
    Sir A. MOND: Weight?
    Mr. PETO: Yes, pounds weight. Look at the raw material. In 1909 we imported seventy-seven million pounds. In 1910 we imported seventy million pounds, so that our imports of raw material went down by 10 per cent. at the very same time that our imports of the manufactured article went up by nearly 50 per cent. Let us go back for a longer period. Since 1889 the imports of the manufactured article have increased seven and a-half times and the imports of the raw material have increased three and a-half times. It cannot, therefore be alleged that the existing duty has kept out the manufactured products from abroad to an undue extent or has discouraged the import trade. Another thing. The Chancellor of the Exchequer gave me some figures in answer to a question to-day. This duty of 2d. in the pound was put on in 1879. I asked what were the imports of manufactured cocoa and chocolate. I think that the classification is cocoa paste or chocolate. In 1878 it was 136,000 lbs. In 1879—we put on the duty of 2d. in the pound—the imports were 682,000 lbs. In 1880 they were 895,000 lbs. When you come to 1889 the importation was three and one-third millions. Again, I say the imposition
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    of the duty of 2d. in the pound and the imposition of a duty of 1d. in the pound on cocoa butter did not keep out manufactured chocolate and cocoa. I really am beginning to feel that there are very few headings on which hon. Members opposite can argue that we must, from the purely business point of view, in the interests of the trade, of the people who are employed by the trade, and in the interests of consumers—the only people that I will consider in this connection—alter this tax.
    I want to say one word about the cocoa butter part of the question. I want particularly to ask the hon. Gentleman the Member for York (Mr. Rowntree) to give me an answer to one question that I cannot work out for myself, seeing that I am not in the secrets of the business. I find that he regards this as a very little and negligible question. When I say that the imports of cocoa butter into this country, allowing for re-exports, were only 671,000 lbs., and that we bring in 70,000,000 lbs. of raw material, that we export 14,000,000 of them, leaving 56,000,000 lbs. net, the cocoa butter contents of which are 14,000,000 lbs. if all extracted, I cannot help thinking that those concerned have got a most meritorious and most magnificent hold and control of the trade of the manufacture of cocoa butter in this country. That is, remember, a very large ingredient used by the chocolate maker. I think it is important to know, because I absolutely refuse to measure a question of this kind by the amount collected at the Customs House. I think it is very important to know just how much these different little duties are worth to the trade of the country, and I think there is evidence that that one little duty of 1d. in the pound on cocoa butter is worth a very great deal to the trade of this country. Perhaps the hon. Gentleman the Member for York will tell us how many million pounds of cocoa butter they and Messrs. Cadbury make?
    The only other subject of detail that I want to deal with is the question of the drawback on the cocoa exported. I know that the hon. Gentleman the Member for York considers that a very valuable thing for his trade. I do not know whether he told the right hon. Gentleman opposite that he is quite satisfied that the trade should continue to pay 1d. a pound duty on the raw material, provided it could get a drawback on the exports. Since 1889 the exports of cocoa and chocolate from this country have been practically a

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    constant quantity. They have not increased. They have only increased from three and one-third millions to three and a-half millions. That is not worth calling an increase in twelve years. But I want to know where this great increase of foreign trade is going to be done when we have got what, after all, is merely what amounts to the abolition on the tax on the raw article so far as the export trade is concerned? The hon. Gentleman the Member for York, in the same speech that I have quoted from, referred just briefly to this subject. He said:—
    "Look at it from a commercial side for a moment. There is the manufacturer who desires to export cocoa to other countries. There are preferential rates, I admit, in one or two places. I think there is in regard to South Africa and Canada. He is handicapped to the extent of 12½ per cent. compared with his Dutch competitor. The English manufacturer wishing to export chocolate may have to pay, I think, up to 5 per cent. more than his Dutch or Swiss competitor.
    That, of course, is because of the larger proportion of cocoa, I suppose, in the cocoa than there is cocoa in the chocolate. That, I take it, is the explanation of the difference between 12½ and 5 per cent. The hon. Member, I am sure, did not mean to be otherwise than candid with the House, but I do not think he was quite fair as to the enormous advantage that is given to the cocoa and chocolate trade by our Colonies. I find that in South Africa, for instance, we have got a preference of ½d. per lb. on cocoa, and ¾d. per lb. on chocolate. In Canada it is ¾d. per lb. preference on cocoa. But perhaps I ought to give the figures to show the proportions of the Duty. In Canada the Duty is 2¼d. from England, and 3d. from other foreign countries. In Australia it is 2½d. from England, and 3d. from other foreign countries. In New Zealand it is 3d. and three-fifths. Therefore every one of our Dominions and the Commonwealth of Australia gives us this substantial Preference as it is. I quite admit that the rebate will assist the cocoa manufacturers of this country to keep perhaps an even larger share, if it is possible—the hon. Member the Member for York will know—even a larger share of the Colonial markets. So that to that extent it may be of importance. But where are we to build up this enormous increased trade which will make up to us—taking the trade as a whole—for the enormous risk we run of losing our home trade, or a very large portion of it? Where are we going to send this enormous amount of cocoa to? Certainly not Holland or Switzerland, the great countries which send it out! I do
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    not think you are going to do a very largely increased trade owing to this small drawback with any of the great protective countries of Europe. Therefore I think it is a good thing to leave well alone. Recollect that we are importing 56,000,000 lbs. net per year of raw material, and only 15,000,000 lbs. of the manufactured product. There are very few trades in this country which can show such a favourable comparison between what we do for ourselves at home and what we leave to the foreigner to do for us.
    I cannot help wishing that the Chancellor of the Exchequer was here. I can only hope that the Committee will agree with me. If they do agree with what I have said, or any substantial part of it, they will possibly agree with me that if the Chancellor of the Exchequer insists upon the exact proposals that he makes in this Clause that he, of all men, is the most miserable sinner. We all say that from time to time in church. We say that we have left undone precisely what we should have done, and that is the case of the Chancellor, if he does not repeal the duty on raw cocoa, and he will have done precisely what he ought not to have done if he repeals the duty on the manufactured article. I have mentioned Mr. Bernhardt, the agent of a Swiss firm. I think that whatever may be our motives in either refusing to agree to the proposals of the Chancellor of the Exchequer or making the alterations that he proposes—if it turns out to be that we are going to do that—that the Committee in every part of the House will wish to do whatever they do in the interests of the trade and the people of this country, and will certainly not wish to do it in response to pressure brought to bear by the agent of one of the firms which has an important amount at stake in this matter. Before the Committee comes to a final decision in this matter it is of great importance that they should know exactly the part played by Mr. Bernhardt in our own domestic politics. Go back to the by-election of Kilmarnock on September 26th. I have no doubt that many hon. Members opposite were very indignant at the exhibition of certain posters. They had every opportunity of knowing exactly what was going on, because copies of these posters were given in the "Daily Graphic" and the "Daily Mirror." I do not know whether they know exactly how it came about that there was this tremendous display of posters at Kilmarnock, but it was a prodding of the Chancellor of

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    the Exchequer so that he might do something that he otherwise would not do. The substance of this poster is:—
    "Mr. Lloyd George makes concession to Tariff Reformers by postponing the removal of the protective Chocolate Duties."
    I wish to tell the Committee how this poster came to be put out and who paid for it. The advertisement sheet in the "Daily Mirror" contained a statement on top in small letters, "Advertisement announcements." I do not know whether hon. Gentlemen opposite would like to look at these pictures, but if they care to do so I shall be happy to let them have them. I am prepared to tell the Committee that this Mr. Bernhardt, who is a member of the Constitutional Club, and who poses as an ardent Tariff Reformer, puts in this advertisement in aid of Messrs. Nestle, Kohler, Cailler, and Peter, and that while he appears on the one side to be an ardent advocate of Tariff Reform, and is prepared to pay for these posters and for these advertisement sheets, he was exceedingly anxious to get the official imprimatur of the Tariff Reform League in London; and as he could not get that, he tried by a very ingenious manner to get the imprimatur of one of its branches. He went up to Scotland on his own and tried and failed to get a Scottish branch to agree with him, but he could not get the Kilmarnock branch. When he arrived there he found a Scotchman who was as cute as the little Welsh girl we heard about some time ago, and who, though assured by Mr. Bernhardt that the Tariff Reform League would be most anxious to give their name, told him the Kilmarnock branch was dissolved, and therefore had no secretary at all. There was no Kilmarnock branch, and therefore this gentleman could not have their name to his leaflets, but there were posters put out and sent round by sandwichmen for the purpose of trying to ginger up the Chancellor of the Exchequer and to prod him to take off these duties by which this gentleman and his combine stood to win £40,000 a year. In December last year, before the last General Election, this ardent Tariff Reformer sent round to every retailer in the place a post-card to this effect. The pose-card read:
    "If you are in favour of the removal of the present highly protective duties on chocolate, which severely hamper the confectionery trade, please sign the obverse side of the card and post it to the candidate for the constituency. It would also be of great assistance if you could attend and put this question to Free Trade different speakers, and on the other side to be addressed to the candidate. You are doubtless aware that the existing highly protective duties on chocolate are resented by all traders. Will you pledge yourself to use your influence to obtain their abolition?"
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    This gentleman was playing the part of Dr. Jekyll and Mr. Hyde. This was rather a cute dodge to insure by very shady methods that our market could be invaded by the foreigner as soon as the Chancellor of the Exchequer took off this duty. I understand that when a deputation saw the Chancellor of the Exchequer in August last, he was good enough to say to them that the year was going on and that if the trade could show any strong reason why this alteration should be postponed he would consider it. I wish to tell the Committee what some of the reasons are. The whole of my speech has mainly been a summary of the reasons why, at any rate, it should be postponed. There is one other very strong reason why this is a most inopportune moment for making this alteration, and that is that there has been an enormous rise in the price of all raw material for chocolate at the present time. Sugar is up 60 per cent. in the last twelve months; cocoa is up 14 per cent.; milk 25 per cent.; vanilla is up 45 per cent.; packing tinfoil, and so on, is up 5 to 20 per cent.; wages are up generally, and coal has risen 15 per cent.
    Mr. W. E. HARVEY: What kind of coal?
    Mr. PETO: I do not think it is necessary to state what kind of coal. Coal generally is very much dearer. The hon. Gentleman, I am sure, will not dispute the fact that sugar has gone up enormously, and that is infinitely more important than coal, which really supplies only the motor power, and only comes in as a secondary consideration. All the ingredients or raw materials of chocolate are gone up enormously in the last twelve months, and when you add up all these articles I hope, at any rate, that the Chancellor of the Exchequer, before finally adopting his proposal contained in Section (1) of this Clause, now that we have come to the month of December, will take a few months more and go into the whole question for himself, particularly as he has not done us the honour of attending this Debate, and then if he does decide that the proposals are for the benefit of the trade and the consumers, then, and only then, should he make the alteration incorporated in that Clause.
    Sir A. MOND: I do not propose to follow the hon. Gentleman into all the technical points of his speech, but I do thank him candidly for the shameful exposition he has made of the methods of some of the members of the Tariff Reform League.
    Mr. PETO: I did not say anything about the methods of the Tariff Reform League. Nothing whatever.
    Sir A. MOND: I thought he said Mr. Bernhardt was a member of the Tariff Reform League.
    Mr. PETO: No, no; he was a member of the Constitutional Club.
    Sir A. MOND: I understood he was a member of the Tariff Reform League, but I see now he is merely a Tariff Reformer.
    Mr. PETO: He is a Dr. Jekyll, the Tariff Reformer, and Mr. Hyde, the Free Trader.
    7.0 P.M.
    Sir A. MOND: He has a dual capacity. Apparently he wants the assistance of the organisation to further his private business, but that is what all Tariff Reformers are driving at. That is what they are doing in every protected country. We are only beginning to learn a little of the methods that we should be very familiar with if they succeeded. If hon. Gentlemen attended in protected countries, at Berlin, Washington, or Paris, they would find these methods are not the exception but the ordinary familiar methods of Protectionists all the world over. The hon. Gentleman was rather hard upon the Chancellor of the Exchequer, and I will tell him why. For many years now the Tariff Reform League has been attacking these duties. I have seen hoardings covered with posters declaring that the Liberal party have been giving Protection for the benefit of Messrs Cadbury, Rowntree and Fry, and I have had hundreds of papers sent to me showing what the Protection was that was given to chocolate. We have had it suggested in speeches, pamphlets, and posters, that the Liberal party deliberately left these duties on because some of the chief manufacturers in the trade were Liberals and supported the Liberal fund. That accusation has been made over and over again. Now, when the Chancellor of the Exchequer comes forward and shows the effect, hon. Gentlemen opposite say, "You must not do that." It is the hon. Gentleman opposite who is playing Dr. Jekyll and Mr. Hyde. He abused the Chancellor of the Exchequer for keeping these duties on, and attributed corrupt motives; but now Tariff Reformers are ready to take the opposite view. I congratulate the Chancellor of the Exchequer on his efforts to remove this last remnant of Protection. It is not a very important matter or a very big one, but, at any rate, it is the last rem-
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    nant of the protective system which Mr. Gladstone swept away, and the right hon. Gentleman is to be congratulated on being the Chancellor to remove it. The hon. Gentleman gave a curious definition of Protection. We always understood it to mean good prices for the home manufacturer. But, in view of the argument of hon. Gentlemen apposite, I do not know what benefit it is to be to the manufacturers of this country. The hon. Gentleman seemed to think that, in spite of tariffs, the importation of chocolate was increasing. I thought one of the objects of a tariff was to keep out foreign imports. The hon. Gentleman opposite gave us the information that the import of chocolate amounted from ten to fifteen millions. There has been Protection, but Protection has not been successful in keeping out imported manufactured chocolate. What they want is a prohibitive tariff. We always understood that what they wanted were moderate duties, and that moderate duties would do this. Hon. Gentlemen opposite are learning their lesson very quickly. Small duties do not affect their object, and, of course, they cannot; and then they would immediately go to the American tariffs, denounced in eloquent speech by the hon. Member for East Worcester. The Liberal party are now sweeping away the last remnant of Protection, and giving the English manufacturer and chocolate trade a chance. The hon. Gentleman opposite does not seem to know where the markets of the world are to which we send chocolate. The markets of the world are very large, and include the whole of the American Continent, India, the Far East, and the great part of the Continent of Europe along the Mediterranean. This is not a question of increasing British exports to British Dominions. I do not see how the home trade will suffer by this proposal. The hon. Member seemed to indicate that if we take this duty off prices will go up.
    Mr. PETO: Ultimately.
    Sir A. MOND: At any rate it is a very curious result of introducing more competition if prices do go up, for it simply means that tariffs lower prices and the introduction of Free Trade raises them. Such arguments as those make me a more confirmed Free Trader than I was before.
    Mr. PETO: My argument was that it threw the whole business into the hands of a great combine.
    Sir A. MOND: If a great combine raised prices it would find smaller manufacturers would cut them out. What has been put forward would be an extraordinary effect of competition between Swiss chocolate manufacturers and the firms which exist to-day. I think that argument will not be borne out by those who know the facts, and although there may not be a considerable reduction of price by this proposal there certainly will be some reduction, and it will be for the benefit of the consumers. Speaking on behalf of the consumer, I am afraid that he is only going to derive a small benefit. I should have been much more pleased if the Chancellor of the Exchequer had done what I think he ought to have done, and that is sweep away the whole of these duties. It is a very small duty, and brings in very little money. All these small duties are an expense to collect, and a considerable amount of trouble, and all duties such as these ought to be abolished as soon as they can be. I regret that the Chancellor of the Exchequer has not seen his way to abolish the whole of these duties. I am very glad to think that he has made some start, and I hope in future Budgets he will see his way to accede to the demand made by hon. Members on this side by sweeping these duties away altogether.
    Mr. STANLEY WILSON: It seems to me a most extraordinary thing that in a Debate like this the Government should take no part or make any attempt to answer the arguments which have been brought forward. The Government have put up a back-bencher to reply, but he has made no real attempt to answer the speeches made by my hon. Friends. It is admitted that this tax does give a certain amount of protection to certain industries in which many people of this country are interested. Everybody also admits that these industries are in a most flourishing condition. As the hon. Member for Walsall (Mr. Cooper) pointed out, those engaged in this industry get the very best wages, they are thoroughly satisfied with their lot, and they have no complaints to make. Are the manufacturers satisfied? I should like to ask the hon. Member for York (Mr. Rowntree), who has taken no part in this Debate, that question, because he is vitally interested in this industry. I remember a speech which he made on the Second Reading of the Finance Bill, in which he said he had no objection to the removal of this tax—in fact, I think, as a rule, genuine Free Traders rather
    1970
    welcome the removal of it. The hon. Member for York himself headed a deputation to the Chancellor of the Exchequer of manufacturers consisting of his own colleagues in this great industry, and what was the object of that deputation? Simply to implore the Chancellor of the Exchequer not to carry out this policy, and not remove this tax. The hon. Member for York was at the head of that deputation.
    Mr. COOPER: No, not at the head of it.
    Mr. S. WILSON: The hon. Member for York introduced the deputation, and the object of it was to urge the Chancellor of the Exchequer not to carry out this policy.
    Mr. COOPER: I think that is hardly fair to the hon. Member for York. I happen to be the only Member of this House who was with the hon. Member for York at the time when he undertook to take that deputation to the Chancellor of the Exchequer. It was pointed out to me that he had the ear of the Chancellor of the Exchequer, and it was known that there had been a meeting of the Liberal party to approach the Chancellor of the Exchequer. It was also pointed out that it would not be quite fair, seeing that there were thirty manufacturers who appealed on the 24th May to the Chancellor of the Exchequer to receive a deputation, that the right hon. Gentleman should see the Liberal Members and refuse to meet the thirty manufacturers. The hon. Member for York recognised the injustice of it, and said, that although I am not in sympathy with these thirty manufacturers, I will myself introduce the deputation.
    Mr. S. WILSON: I have listened to the explanation made by the hon. Member for Walsall, but I am afraid that I do not agree with his view.
    Mr. COOPER: I was there and I ought to know.
    Mr. S. WILSON: If an hon. Member of this House introduces a deputation to the Chancellor of the Exchequer, my view is that he is expressing himself in favour of the views of that deputation. Most certainly I should take no deputation to the Chancellor of the Exchequer unless I agreed more or less with the views of the members of that deputation. That is my view of the situation, and I should like to have the views of the hon. Member for York with regard to this point. There is another point upon which I cannot agree

    1971
    with the hon. Member for Walsall. The hon. Member said he felt sure the Chancellor of the Exchequer was not removing this tax for political purposes, but I disagree with him entirely, for this is solely a sop to his conscience, because he thinks this tax is of a protective character, and he wishes to remove it. Can any hon. Member get up and explain where there is going to be the slightest advantage if this tax is removed in the way the Chancellor of the Exchequer proposes? What will the advantage be and who will get it? I think we are entirely justified in insisting upon one of the hon. Members now representing the Chancellor of the Exchequer on the Treasury Bench to state his views and the views of the Chancellor of the Exchequer upon this subject.
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson): I think the hon. Member has complained a little prematurely that no representative of the Government has taken part in this Debate.
    Mr. S. WILSON: The question was being put from the Chair.
    Mr. ROBERTSON: On this particular question, the larger proportion of the talk has always been done by hon. Members opposite and it is not surprising that that proportion has been continued to-night. There shall be no lack of attention to the case put by hon. Members in the reply I am about to make, and if I should not cover all the points, perhaps I shall be excused because I am speaking for the first time. The case resolves itself into two aspects. We have had an argument on the merits of the case, and we have had a very interesting argumentum ad hominem dealing with a certain mysterious and Machiavellian Bernhardt. The hon. Member for Walsall made quite a lucid and interesting speech in proposing this Motion, and he affected surprise at the resort to the policy that has been followed in the Finance Bill in the matter of Cocoa Duty. He said the Cocoa Duty was an old one dating back as far as 1853, and he asked why it should be touched now. The hon. Member did not appear to understand how a Government could think of touching such an almost sacred institution which had become one of the ancient institutions of this country by sheer antiquity. The hon. Member produced an interesting pamphlet on this question which did not point
    1972
    to any clear policy but pointed to two policies. He showed that it was wicked on the part of the Government to keep this duty on and he also showed it would be equally wicked to take it off. At any rate that was the only conclusion I could come to after a very careful perusal, and I was struck with the ingenuity and I might also say the impartiality of his argument.
    The hon. Member is very well aware that he and his associates have conducted for several years a very determined propaganda outside this House apparently with the object of forcing the Government to do precisely what is now being done. This is where the mystery first arises. The hon. Member for Wiltshire (Mr. Peto) discussed certain episodes at the Kilmarnock election. It appears that there a Machiavellian Bernhardt came into the controversy, and although he was a member of the Constitutional party, he was merely posing as a Tariff Reformer. The previous propaganda was entirely carried on by the Tariff Reform League in its leaflets and handbills, and Liberal speakers in every constituency had to meet them, and I have myself had to meet them in many parts of the country. Was the foreigner doing all this? I put the question with some diffidence, because I fancied the foreigner was doing some of it, but I want to be quite fair to the Tariff Reform League. I fancy that long before the Kilmarnock election a certain association called the Tariff Reform League was doing this and then comes along this Machiavellian Bernhardt, so they were acting together until the Kilmarnock election. Then the Tariff Reform League began to take fright. They saw they had gone too far. They saw their propaganda was actually leading to action being taken, and then they repudiated the man who had been their guide, philosopher, and friend for a number of years. That I take it to be the case. I do not know how it stands on the financial side. I do not know whether the foreigner was financing the Tariff Reform propaganda. Possibly other hon. Members will make further disclosures covering that point. I have only to say this: It does not seem to me to matter anything to the merits of the case to-night whether the Tariff Reform League were fooled by the foreigner all along or only for part of the time. If they played the game of the foreigner who wanted the tax on during all those years, well, that experience should surely chasten the Tariff Reform League and cause them to reflect whether they do really see the movements

    1973
    of trade and the effects of taxation. Who knows whether other foreigners are not exploiting them? Who knows how much foreign money is being expended in this way? I do not suggest it is the hon. Member for Wiltshire (Mr. Peto) who has forced this question on the House——
    Mr. S. WILSON: Tell us a bit about the tax now.
    Mr. ROBERTSON: I have only to say that the argument ad hominem from Bernhardt has really nothing to do with the merits of the case as regards the alteration that is being made in levelling the Cocoa Duty. On the other hand, the fact remains that those very Members who are now appealing to the Government not to alter the duty have for years been taunting and denouncing the Government for not altering it. Now the hon. Member for Walsall (Mr. Cooper) showed, on the one hand, that it is wicked to keep it on, and, on the other hand, that it is wicked to keep it off.
    Mr. COOPER: No.
    Mr. ROBERTSON: Well, let us say grossly inconsistent to keep it off. The argument of the hon. Member is now something to this effect: "You, on the Free Trade side, have hitherto offered us a most welcome target. It was about the one point on which we could get at you. Much capital have we made out of it in the past. Many a vote has been won by telling English voters that the Cocoa Duties as they stand are maintained for the express purpose of enriching Liberal magnates who run Liberal newspapers."
    Mr. COOPER Mr. COOPER indicated dissent.
    Mr. ROBERTSON: No, I am not saying the hon. Member has said that in his pamphlet or in the House. I do not know what he actually says in the pamphlet. That, however, was the main, line of the propaganda, and it was on that ground Members on this side of the House—at least it was largely on that ground—appealed to the Chancellor of the Exchequer. They said, among other things, "This unscrupulous and nefarious propaganda is injuring the whole cause of Free Trade." That argument was certainly urged on the Chancellor of the Exchequer. I do not suppose it will be said it was inconsistent on the part of the Chancellor of the Exchequer if he asked himself whether it was worth while keeping the duty as it stood and injuring Free Trade.
    1974
    The hon. Member, in effect, appeals to us now, "Pray continue your policy."
    Mr. COOPER: The hon. Member is really misrepresenting my speech to-night, at any rate, because I absolutely devoted myself to the question, "What are the reasons for this change? What are the Government reasons for it?" At the end, I said, "If it is political exigency, I ask nothing but that you follow out the Bill, because from the platform point of view in twelve months' time we can make use of it."
    Mr. ROBERTSON: I have no doubt the hon. Member has had much experience in making good use of matters, Bernhardt among other things. I think, again, he is a little premature. He may find the result of that past propaganda, taken with the attitude now adopted, may not make it so easy for him to make good use of these matters. At all events, this fact remains. He knows the Cocoa Duties, as they stood in the past, were an easy target for himself and his friends, or let us say for his friends, and he says, "Pray continue to offer us that easy target; continue to be inconsistent; continue to put it in our power of accusing a Free Trade Government of keeping on duties to enrich Liberal magnates who run Liberal newspapers." When we come to the merits of the matter—[HON. MEMBERS: "Hear, hear."] I suppose hon. Members are sorry the argument ad hominem was raised. I think they have cause to be. The hon. Member for Wiltshire apparently considered it a most important argument. The hon. Member for Walsall and the hon. Member for Wiltshire both argued that the alteration of the duty would do no good to the consumer. I am entirely unable to reconcile this argument with the other statement that the alteration of the duty will have the effect of killing the small maker here. How can he be killed unless foreign goods can be made against him at a lower rate? They say the smaller maker, who appears to us to be the one person—and not the cocoa magnate of the Liberal Press—who benefited, will be killed. The hon. Member for Walsall even suggested Bournville is the product of the Cocoa Duty.
    Mr. COOPER: I did not put it that way. I made no such statement whatever. I merely said, "If you were to show the place in this country where workmen were best housed you would go to Bournville." I made no insinuation of any kind.
    Mr. ROBERTSON: The hon. Member was then dealing with the merits, and he surely implied that Bournville had something to do with the Cocoa Duty.
    Mr. COOPER: Oh, unquestionably; so it has.
    Mr. ROBERTSON: The strange thing is that Bournville has never asked to keep on the Cocoa Duty. It is the small man who is the friend of hon. Members opposite who has been getting the high protection. Hon. Members opposite are perfectly accurate on that point. The big producers whom they have reviled as men profiting by the Cocoa Duties—these large producers, gentlemen associated with the Liberal Press—have had the minimum benefit possible, and the maximum benefit went to the small producers, who are apparently politically on the side of hon. Members opposite. So the very campaign of hon. Members opposite or of their party, the campaign carried on by the Tariff Reform League, has been for the purpose of vilifying at once the Free Trade party and the Government and certain leading Members of it as having been in a corrupt plot to keep up duties for the advantage of certain Liberals, when by their own showing the main part of those duties was going into the pockets of tarifist manufacturers. I think it is impossible to believe that the alteration in the duties is going to kill the small cocoa manufacturers who have hitherto had the larger benefit, and, at the same time, is not going to reduce the price. The argument resolves itself into the old Protectionist argument, and, even although you may reduce prices at the start, you play into the hands of the combine. They will sell you cheap goods at first, but when they have got hold of the market they will either raise the price or reduce the size or quality of their goods. It is the old story of Tariff Reform based on prophecy; it can never be based on experience. [HON. MEMBERS: "Foreign countries."] Has the cocoa trade been killed in the past elsewhere? If so, why did not hon. Members give us that experience? If they have arguments from experience, why do they so perpetually rely on prophecy? Surely, for practical purposes, and, above all, for the purposes of this House, an ounce of experience is worth a ton of prophecy. We have had no experience to-night, but we have had the usual bluff.
    The hon. Member for Walsall argued further that the alteration of the duty
    1976
    would give no benefit to the State. I think it would not be unreasonable to argue it is a benefit to the State that the fiscal policy in vogue at the moment should be made as rigorously consistent as possible. I think it is a benefit to politics. Hon. Members may claim the main benefit will go to the Government and to the Free Trade party, but they cannot expect us to regard that as an injury, and that particular argument, I think, may be put aside. The hon. Member, however, put this point. He said we had committed the crime of using the Budget for political exigencies. After his party have been doing it all these years, he should not be startled, if he believes the charge, by seeing the Government do it once in a way. All this unscrupulous propaganda is to be forgotten and counted for nothing against those who use it for the purposes of winning votes, but the moment the Government, under pressure of its own supporters, yields to the demand that the fiscal system at this point should be made consistent and the moment we seek to rectify it and meet it the charge is levelled against us, and the hon. Member ingenuously tells us we are using the Budget for political exigencies. If I understood the hon. Member aright, his main contention was that if we meddled with the duty at all, we should wholly remove the duty on raw cocoa. Am I right?
    Mr. COOPER: My whole point was: What was the business reason for making the change?
    Mr. ROBERTSON: If the hon. Member is again implying that to rectify the fiscal system and make it consistent is not a business reason, I think it may fairly be stated it is a business reason. We do not pretend the object is to put money into the pockets of British producers. That is never a Free Trade purpose. That is the kind of purpose hon. Members opposite advocate. With regard to his suggestion that employment is at stake in this matter, I have pointed out already that Bournville does not ask for protection. It has done very well with a minimum of protection. There is not the least reason to suppose, even on the argument of the hon. Member himself, that the great bulk of the cocoa and chocolate making business in this country could be affected in the least degree, even from his point of view. It is only the small men, we are told, that are going to the wall, so the argument of employment covers a very small ground. When we come to the

    1977
    question of abolishing the duty altogether, the hon. Member says: "In what other case have you a duty on raw material?"
    Mr. COOPER: Except tobacco. [HON. MEMBERS: "Sugar."]
    Mr. ROBERTSON: Did the hon. Member never hear of the duty on sugar which was put by his own Government at a much higher level than 25 per cent? I grant him there is always an argument for the removal of any duty that is both a tax on goods and on raw material. The Chancellor of the Exchequer to-night indicated his general sympathy with the whole line of argument against this tax, but the question is really one of finance. Many hon. Members on this side of the House hope to see all of those taxes removed. [HON. MEMBERS: "When?"] I do not pretend to prophesy. I leave that to hon. Members opposite. Hon. Members opposite indicate only one way in which they think it can be done, and that is by imposing a very much worse tax than the one we are asked to take off. If the tax is imposed as purely direct taxation, if the money required to be made up is ultimately to be got by purely direct taxation, I, for one, should not be sorry, but I venture to think that hon. Members opposite would be very sorry indeed. There comes in the difficulty. It is not for me to dwell on the necessity of continuing the revenue as it is. We are face to face with an expenditure which is being added to, and this is not the time when the Chancellor of the Exchequer can afford, there being no prospect of any other duty, to throw over even a small amount of £300,000. The hon. Member for Swansea argued that the duty might be abolished, but I would ask hon. Members to realise the fact I have just mentioned. When this matter was discussed in June last year the hon. Member for Christchurch (Mr. Croft), a most active and zealous exponent of Tariff principles, debated the subject in this House, and one of his arguments was that it was extremely unfair, as a result of the Chancellor of the Exchequer's finance, that a small amount of alcohol should be taxed while the proprietors of cocoa, who finance the press of the Liberal party, were permitted to go almost scot free. If that does not mean that we should tax cocoa I do not know what it means. It is quite true that the same hon. Member a little while previously had declared that Liberals ought to give a free breakfast table. Thus we had two propositions laid down
    1978
    in absolutely opposite directions. The fact stands the hon. Member for Christchurch told us last year it was grossly unjust, when taxing alcohol, not to put an extra tax upon cocoa, and now the party he represents says that the only decent thing to be done is to take the duty off cocoa.
    What would happen if the Government took the duty off cocoa altogether? Would not the hon. Member for Christchurch resume his crusade and tell us that the one thing the Government will take the duty off is that particular raw material which enters into business of the gentlemen who finance the Liberal Press! At any rate, that is the line the hon. Member for Walsall (Mr. Cooper) would take. I do not think the case is a very strong one, although we all agree it is a duty that might be dispensed with. But if you are dispensing with breakfast-table duties it will be difficult to make out a good case for dispensing with the smallest first and doing nothing to relieve the consumers of tea and sugar rather than those who partake of coffee and cocoa. The removal of the duty altogether would do nothing to benefit the small man. May I urge this consideration on the attention of hon. Members that, on their own showing, the complete removal of the duty would only affect small men. But if you alter the duties and remove protection, the small man is going to suffer badly.
    Mr. PETO: You do not relieve him of the duty on cocoa butter.
    Mr. ROBERTSON: I deny that there is any protection in that case. It is rather the other way. It is the small man who is going to suffer by being put on an equality with the foreigner, and if you remove the duty altogether he will still remain at a disadvantage. Now I come to the observations of the hon. Member for East Wilts (Mr. Peto). He admits there has been very heavy protection in the past, but the proposition we put in that connection is that no benefit accrues from levying the tax on cocoa butter. It is of no advantage to the home producer. The fact is that cocoa butter probably costs little more to get out of the bean than it costs if it is brought in from abroad. The hon. Member admits that £4,000 worth of it comes in, and, therefore, it does seem that it is worth while to bring it in to some extent. If you take away that part of the case for the hon. Member for Wiltshire, I do not think there is much left to answer.
    Mr. PETO: Does not the hon. Gentleman admit that cocoa butter is one of the ingredients used in the manufacture of chocolate?
    Mr. ROBERTSON: It may be a valuable product, but I deny that there is any essential protection in this matter. The hon. Member went on to argue that the rebate will be of no use to the small man. Surely if the suggestion is that the rebate is going to be an advantage to the trade the suffering small man would do well to go in for the export trade. Will the representatives of the cause of Tariff Reform ask us to specially help the less enterprising section of a particular trade which could make money if it would only go in for export trade like other producers in the same trade? I do not agree with the hon. Member as to small men being killed. I do not know why they should be. The suggestion I know is that it will be done by the process of dumping. In that case the foreigner is going to pay, and it is a strange thing that, whenever the foreigner proposes to pay, it infuriates the Tariff Reformers.
    Mr. PETO: What is he going to pay?
    Mr. ROBERTSON: He will pay through the process of dumping; that is the only way.
    Mr. PETO: But what will he pay?
    Mr. ROBERTSON: I think the hon. Member cannot have quite followed my argument. When hon. Members opposite argue that the effect of taking a particular course is that the foreigner will have to pay, I say there is only one way in which he will pay.
    Mr. PETO: That is a duty you are taking off.
    Mr. ROBERTSON: The hon. Member is telling us that the foreigner is going to dump. Is not that paying? Does he not realise that the foreigner by dumping pays. [HON. MEMBERS: "No, no."] I think he pays, but I suppose we shall not all agree on that. We have got the candid admission of hon. Members opposite, that in the past the Cocoa Duty has not kept out foreigners' goods. It is the fact that in spite of the protective duty foreign chocolate does come in in increasing quantities, and that is another proof apparently of the failure of the tariff to keep foreigners' goods out. Surely one is justified in arguing that the tariff has been a
    1980
    failure in this direction—in this little bit of protection—it has failed to keep the foreigners' goods out.
    Mr. COOPER: A penny keeps them out to-day.
    Mr. ROBERTSON: The hon. Member is quite impervious to logical demonstration. I have only to say one word further, and that is in regard to the hon. Member for Holderness (Mr. Stanley Wilson), who made an attack on my hon. Friend the Member for York (Mr. Rowntree), to which he may, or may not, accordingly as he thinks it worth while, reply. In respect of that I may say there still seems to be some connection between the operations on the Tariff Reform League and those of a Machiavellian foreign gentleman. It is part of the attack; he is apparently in co-operation with the hon. Member for Holderness. The hon. Member for Walsall honourably admitted that my hon. Friend the Member for York chivalrously introduced a deputation with whose views he did not agree. It was this same Machiavellian personage who made the attack on the hon. Member for York that was endorsed by the hon. Member for Holderness. This foreigner has been a very useful partner in the Reform League for several years. The Tariff Reform League has been taken in by him. It has been unable to see that his activities could have but one result, forcing a Free Trade Government to introduce a change of duty which, by their own account, would be very injurious to a number of their own men. They paid us the compliment of thinking we would not do so, and discovered that their eternal attacks on Free Trade had had the effect of making Free Traders call upon their own Government to make the required alteration. It is far from certain whether such a policy will be vigorously advocated in the future.
    Mr. AUSTEN CHAMBERLAIN: The hon. Member began his speech by asking for the indulgence of the House on the ground that it was the first occasion on which he spoke in an official position. Gentlemen who seek the indulgence of this House are generally careful to avoid any unnecessary offence to their opponents, but the hon. Member has studiously striven to be as offensive as he could.
    Mr. CHARLES DUNCAN: Is this the "heavy father" style?
    Mr. AUSTEN CHAMBERLAIN: The hon. Member's interruption is about on a

    1981
    par with his usual language. The hon. Gentleman who has just spoken on behalf of the Government has sought to connect the Tariff Reform League and the party to which I belong with an individual whose name has played a large part in this Debate. What do we know about him? He is an agent for a foreign firm. He appears to have represented himself as the emissary of the Tariff Reform League, but he was refused acceptance by the Tariff Reform League in England and Scotland, and especially in a particular place where an election was going on. [An HON MEMBER: "Kilmarnock."] He acted on his own authority; he had been expressly refused authority to act.
    Mr. ROBERTSON: At what date?
    Mr. AUSTEN CHAMBERLAIN: I do not know the date. Unless the hon. Member has facts which he has not disclosed to the House it was scarcely in keeping with the usual courtesy to try and use that man in order to tar the whole Tariff Reform League. What is it that he has been doing? I do not know this Mr. Bernhardt, although I may have seen letters of his in the papers.
    Mr. ROBERTSON: It had been represented to me that this Machiavellian foreigner had made a catspaw of the Tariff Reform League; that is, he befooled and deceived them. That is the case brought forward in defence of the League.
    Mr. AUSTEN CHAMBERLAIN: I believe it is quite untrue to say that he had been using the League for years as the hon. Member suggests. It is totally untrue.
    Mr. ROBERTSON: It is from your side that I got it.
    Mr. AUSTEN CHAMBERLAIN: In any case, what is it that this man is alleged to have done? He is alleged to have posed as a Tariff Reformer being, in fact, in favour of the Free Trade movement which the Government are carrying out. He is not a supporter of our movement, he is a supporter of their movement, and in order to advance that movement he masqueraded in our dress. If that reflects discredit on anyone it reflects discredit on the party opposite. Now I come to some other observations of the hon. Member which were a little more pertinent. I believe he has taken a large part on his side in the discussions on Tariff Reform and Free Trade, and I am sorry he has so
    1982
    little appreciated the views of the Tariff Reform party. He appears to think that a duty like the Cocoa Duty, which admittedly has raised a certain amount of revenue, which at the same time has enabled prosperous trades to exist in this country, that as yet are admittedly in competition with outside, and which has not prohibited the import trade, has failed to realise any of the advantages that Tariff Reformers expect from their policy. It has realised everything. It has protected trade at home, it has not stopped foreign trade, it has given us revenue, it has found work for our own people, and it has done all that without injury to the consumer, who has bought his cocoa and his chocolate cheap. The hon. Gentleman goes on to say that as a result of the change in the duty, of the abolition of the duty as proposed by the Government, that either prices cannot be reduced, or no home industry will suffer. I do not agree. Suppose the prices remain at practically the same level. In the first place, the hon. Gentleman says on that argument that it is like all the arguments of the Tariff Reformers, that it is founded not upon experience but upon prophecy. We cannot deal with the effect of a change in duty which has not yet been made, by reference to experience drawn from that particular duty or from that particular change, and to that extent we are obliged to prophesy, if he likes to call it so; we are obliged to form the best conclusions that we can from experience in other ways as to what the effect of that change will be. Does he think he is answering us by asserting that this has never been the result of changes in any duty.
    I remember the present Leader of the Opposition giving a case from the nail trade. He told how a particular branch of the nail trade with which he was dealing—the particular class of articles made by it—was crushed out of this country by dumping. There were dumpers, both German and American, who had dumped for a certain length of time. They first kept the prices low by competition between themselves, but after a time they did not see why they should do that to the advantage of the English people, so they combined and raised the prices to our consumers. My right hon. Friend had, on the date on which he made his speech in this House, verified the prices in the City of London. He had asked the price for these articles as they were sold in England, and was given a price so much a ton. He then asked the price for supply to Japan, and

    1983
    he was given a price so much less per ton from the same manufacturer. What was the reason of that? The immediate reason was that there was competition in Japan with native manufacturers. The ultimate reason was that that competition had been kept alive by the protective tariffs of the Japanese, so that the Germans and Americans had not been able to crush out the Japanese manufacturer as the English manufacturer was being crushed out. If we cannot argue from the experience of England in this particular trade, we have at least experience to guide us as to the probable consequences of action of this kind. The hon. Gentleman then says that my hon. Friends have contended that the consumer will not benefit. How can he benefit? How is it possible, asks the hon. Gentleman, that the consumer should not benefit if the British manufacturer suffers? I think I put his question differently, but I think I put it rightly.
    Mr. ROBERTSON: No.
    Mr. AUSTEN CHAMBERLAIN: May I try once more? He says that if prices do not fall the British manufacturer cannot be injured; and that, if prices do not fall, the consumer does not get the benefit. The only case in which he can benefit is if prices do fall, but that is not the only case in which the British manufacturer can be injured. Suppose that at the present time there is a very large trade to be done, and that it is done at a certain price, and that foreign manufacturers do it at a certain handicap which limits the amount of trade they can do. If you take away that handicap, which is the preference to the British manufacturer, then they are in a much better position to compete with the home manufacturer for that trade, and without reducing the prices the British manufacturer may be seriously injured by finding the trade going from him and being transferred to the foreigner, especially in so far as the duties on these articles are prohibitive now. Where they cannot send in the stuff now they will be able to send it in in future. Even without any reduction of prices, there is a much greater competition in the market, and a much less chance for the home manufacturer. The hon. Member asks would they not reduce prices. It is possible that prices may be immediately reduced, but only until the supply, which owing to these changes has become greater than the demand, is reduced to an equality with the demand again. Then it
    1984
    will be these small manufacturers who will be crushed out. The moment they are crushed out prices will bound up again, and the only change will be not that the consumer is benefited for more than a temporary interval, but that the profits will go to foreign manufacturers and the employment to foreign workmen.
    The hon. Member began by finding great fault with us for what he considers to be our inconsistent attitude on this matter. If it is any satisfaction to him, I am perfectly willing to admit that our party attacked his for maintaining these duties, and it now criticises them for taking these duties off. I make a further admission to the hon. Member: that his party is consistent now with their general sentiment on trade policy in removing these duties. That is only to say they have never been consistent heretofore. For my own part I have never—although it is dangerous when one has spoken so much to make a general assertion—I think I have never used Cocoa Duties as a weapon of attack, and I can certainly say with confidence that I have never attacked any particular firm, but I think I have attacked the Government in the past for inconsistency. They were perfectly inconsistent. The hon. Member admits it. They maintained the inconsistency year after year, and they did not care a rap about it. Why have they ceased to be inconsistent? Because it hurts their consciences as Free Traders to maintain a Protective Duty? Because they are really ashamed to do it? It is not because it hurts their consciences, but it is because they are ashamed of being found out. They said the consumer may have gone hang for his money for as many years as we like. The hon. Member says I do not do it to please the manufacturing industry as a whole; I do it because you have made the situation so inconvenient to the Members of my party that they go to the Chancellor of the Exchequer and beg him to remove this reproach from us.
    Mr. ROBERTSON: I said that was one of the reasons.
    Mr. AUSTEN CHAMBERLAIN: And is it not obvious, whether the hon. Member said so or not? I do not know the exact emphasis he laid on it, but he said that we had won many votes on this side on the subject, that we had boasted that injury was done by it to Free Trade, and I think he said that was the reason why many

    1985
    Members went to the Chancellor of the Exchequer. I will add any qualification to his own statement he would wish me to make. Whether he laid more or less stress upon it or not, everybody knows that this change is now made, not as part of a wide policy, not on a consideration of its merits, but for purely political reasons, regardless of its effect on the country or the trade, because it is inconvenient to hon. Gentlemen opposite. My hon. Friends were entitled, and we are all entitled, to accuse the Government of inconsistency. I do not think they deserve much credit for a consistency which is only practised when the preaching of it is both politically and electorally convenient for themselves. I say it is deplorable that the interests of trade should figure so little in the thoughts and speeches of Members of the Government, and that their political and party interests should figure so largely.
    8.0 P.M.
    Mr. PEEL: I listened with great interest to the speech of the Parliamentary Secretary, and I have never heard any Minister less anxious to come to grips with the subject. I want to put a question to him. I want to know whether he considers that these duties are, or are not, protective? On that he said nothing. If you look at the statements made by Cabinet Ministers during the last three years, you will find that they practically say that these duties are not protective at all. First of all, there was the Prime Minister. He said these duties had the flavour of protection. The flavour of protection surely is not protection. No one is going to take off his coat, even on behalf of the most theoretical of Free Traders, against a duty which has the flavour of protection. Then there was the right hon Gentleman (Mr. Churchill) who only supported the Prime Minister and said the duties had the flavour of protection. Again, is that a reason for putting the House to the trouble of a long discussion on the subject? Then there is the right hon. Gentleman (Mr. Runciman). He says the protection is infinitesimal. Is it worth while troubling yourself about infinitesimal duties? Is Free Trade so weak that it has to be protected even against an infinitesimal suggestion of some sort of protectional duty. Last of all, there is the right hon. Gentleman (Mr. Hobhouse). Speaking at Bristol he said:—
    "The cocoa and chocolate industry is supposed to be protected. I am pretty well convinced that, the amount of Protection, if it exists at all, is very small."
    1986
    So that during the last three or four years Members of the Government have been maintaining that there is either no protection at all, or that protection was infinitesimal, and it is not worth while talking about. Now I want to know why the hon. Member says these protective duties must go. Apparently he seems to admit that they are protective. It was his duty, in attacking the Tariff Reform League, to show why the view of the Government has changed, and why they thought these duties were not protective, and now have come to the conclusion, after mature consideration and after a number of speeches made by our side on the platform and elsewhere, that they are protective and ought to go. The hon. Member showed an extraordinary misinterpretation of the propaganda carried on on our side. He says, "You have been attacking these duties all along, and then when they are going to be taken off you are not satisfied." I really never saw anyone so obtuse, if I may say so without offence, as the hon. Member in understanding the motives of other people or trying to throw himself into their position. Of course he is entirely mistaken. We criticised the duties because they were kept on by people who professed to be strong and almost extreme Free Traders, but no one wanted to take them off. All we tried to suggest by our criticism was, if you had a trade which prospered so exceedingly under a small protective duty, do not take the duty off but extend that system of Protection, or limited Protection, which has been so prosperous in the case of cocoa, to other businesses, and you will have in those other businesses the same success you have had with the Cocoa Duties. That is a more consistent interpretation than the one the hon. Member suggested. I would really ask him, if he is going to try to penetrate the motives of his opponents, to throw a little more imagination and sympathy into them before he tries to understand them.
    Mr. ROBERTSON: The hon. Member accuses me of obtuseness, and I have also been accused of being offensive. I shall perhaps best treat that charge by neglecting it.
    Mr. PEEL: I particularly said I said that not in any offensive sense.
    Mr. ROBERTSON: I do not mind. I did not wish to be offensive to anyone, and I will not take offence at that. But the hon. Member is certainly mistaken in the

    1987
    propaganda of his party if he thinks that all they have suggested is that if the Cocoa Duties do good to certain trades, they should be extended to all. If he seriously tells us that is the whole drift of their propaganda in the past few years he must know very little about it. I have met with that propaganda on many platforms and in many places. There have been many advertisements, many letters, and many articles written about it, and the constant line of the propaganda, was, "the Free Trade people knew very well what a great benefit there is in the duty, and they maintain it expressly in order to benefit certain cocoa manufacturers who run newspapers." He further asked me the question, whether I think these duties are protective? I thought there had never been any hesitation or doubt as to that. We have all said—and that is the whole trouble—that the duties are protective. The Prime Minister said in 1907:—
    "I think there is a good deal of the flavour of Protection about the present scale of Cocoa Duties, but at the same time it is a very small tax."
    That is where the confusion seems to have arisen in the hon. Member's mind. The hon. Member (Mr. Stanier), in reply to me last year, pointed out that I must be aware that the Protection varied from 20 per cent. to 50 per cent., and other Mem-
    bers have argued in the same way. It is true that though the whole yield of the duty was very small the amount of protection actually given at certain points in the percentage was very high. So you get two propositions, which, put together, may account for the hon. Member's confusion. The heavy protection went to the small man and never to the Liberal cocoa newspaper proprietor. But that is a small matter. I have always understood these duties had a distinctively protective action, and the defence we gave in the past was that the whole matter was very small, and that it did not seem worth while taking the serious trouble to derange the fiscal system to that extent. It was a bagatelle. The right hon. Gentleman (Mr. Austen Chamberlain) tells us we were grossly inconsistent. He knows very well what our reason was. It did not seem worth while to change the Budget for the sake of so small an amount of duty as actually was involved. But the percentage of protection nevertheless was high, and that has never been disputed.
    Question put, "That the word 'The' ["The duty of Customs"] stand part of the Clause."
    The Committee divided: Ayes, 157; Noes, 76.

    Division No. 437.]

    AYES.

    [8.10 p.m.

    Abraham, William (Dublin Harbour)

    Duncan, C. (Barrow-in-Furness)

    Howard, Hon. Geoffrey

    Adamson, William

    Elibank, Rt. Hon. Master of

    Isaacs, Rt. Hon. Sir Rufus

    Addison, Dr. C.

    Essex, Richard Walter

    Jones, Sir D. Brynmor (Swansea)

    Ainsworth, John Stirling

    Esslemont, George Birnie

    Jones, H. Haydn (Merioneth)

    Allen, Arthur A. (Dumbarton)

    Falconer, J.

    Jones, Leif (Notts, Rushcliffe)

    Allen, Charles Peter (Stroud)

    Ferens, T. R.

    Jones, William (Carnarvonshire)

    Baker, Joseph A. (Finsbury, E.)

    Ffrench, Peter

    Jowett, F. W.

    Balfour, Sir Robert (Lanark)

    Furness, Stephen

    Keating, M.

    Barnes, G. N.

    Gelder, Sir W. A.

    Kellaway, Frederick George

    Benn, W. W. (T. H'mts., St. George)

    George, Rt. Hon. D. Lloyd

    King, J. (Somerset, N.)

    Bentham, G. J.

    Gill, A. H.

    Lambert, George (Devon, Molton)

    Bethell, Sir J. H.

    Gladstone, W. G. C.

    Law, Hugh A. (Donegal, West)

    Birrell, Rt. Hon. Augustine

    Glanville, H. J.

    Lawson, Sir W. (Cumb'rlnd, Cock'rmth)

    Black, Arthur W.

    Goddard, Sir Daniel Ford

    Levy, Sir Maurice

    Bowerman, C. W.

    Greenwood, Hamar (Sunderland)

    Low, Sir F. (Norwich)

    Brady, Patrick Joseph

    Griffith, Ellis J.

    Lundon, T.

    Bryce, J. Annan

    Guest, Hon. Frederick E. (Dorset, E.)

    Lynch, A. A.

    Buckmaster, Stanley O.

    Gulland, John William

    Macdonald, J. Ramsay (Leicester)

    Burke, E. Haviland.

    Gwynn, Stephen Lucius (Galway)

    Macpherson, James Ian

    Buxton, Noel (Norfolk, North)

    Hackett, J.

    M'Curdy, Charles Albert

    Buxton, Rt. Hon. Sydney C. (Poplar)

    Hail, Frederick (Normanton)

    McKenna, Rt. Hon. Reginald

    Cameron, Robert

    Hancock, John George

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Carr-Gomm, H. W.

    Harcourt, Rt. Hon. Lewis (Rossendale)

    M'Micking, Major Gilbert

    Cawley, Harold T. (Heywood)

    Hardie, J. Keir

    Marks, Sir George Croydon

    Clough, William

    Harmsworth, Cecil (Luton, Beds.)

    Masterman, C. F. G.

    Clynes, J. R.

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

    Meehan, Francis E. (Leitrim, N.)

    Compton-Rickett, Rt. Hon. Sir J.

    Haslam, James (Derbyshire)

    Meehan, Patrick A. (Queen's Co.)

    Condon, Thomas Joseph

    Havelock-Allan, Sir Henry

    Montagu, Hon. E. S.

    Cotton, William Francis

    Hayden, John Patrick

    Munro, R.

    Crooks, William

    Hayward, Evan

    Murray, Captain Hon. A. C.

    Crumley, Patrick

    Henderson, Arthur (Durham)

    Nannetti, Joseph P.

    Davies, E. William (Eifion)

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

    Nolan, Joseph

    Davies, Timothy (Louth)

    Henry, Sir Charles

    O'Brien, Patrick (Kilkenny)

    Davies, Sir W. Howell (Bristol, S.)

    Higham, John Sharp

    O'Connor, John (Kildare, N.)

    Dawes, J. A.

    Hinds, John

    O'Connor, T. P. (Liverpool)

    Doris, William

    Horne, Charles Silvester (Ipswich)

    O'Doherty, Philip

    O'Dowd, John

    Roch, Walter F. (Pembroke)

    Wadsworth, John

    O'Malley, William

    Rowlands, James

    Wardle, George J.

    O'Shee, James John

    Rowntree, Arnold

    Wason, Rt. Hon. E. (Clackmannan)

    Palmer, Godfrey Mark

    Samuel, Rt. Hon. H. L. (Cleveland)

    Watt, Henry A.

    Parker, James (Halifax)

    Scanlan, Thomas

    Webb, H.

    Pearce, Robert (Staffs., Leek)

    Seely, Col. Rt. Hon. J. E. B.

    White, J. Dundas (Glasgow, Tradeston)

    Pearce, William (Limehouse)

    Shortt, Edward

    White, Patrick (Meath, North)

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Simon, Sir John Allsebrook

    Whitehouse, John Howard

    Power, Patrick Joseph

    Smith, Albert (Lancs., Clitheroe)

    Whittaker, Rt. Hon. Sir Thomas P.

    Price, C. E. (Edinburgh, Central)

    Snowden, P.

    Wiles, Thomas

    Rea, Walter Russell (Scarborough)

    Stanley, Albert (Staffs, N. W.)

    Williams, P. (Middlesbrough)

    Reddy, M.

    Strauss, Edward A. (Southwark, West)

    Wilson, W. T. (Westhoughton)

    Redmond, John E. (Waterford)

    Taylor, John W. (Durham)

    Wood, Rt. Hon. T. McKinnon (Glas.)

    Richardson, Albion (Peckham)

    Tennant, Harold John

    Young, William (Perth, East)

    Richardson, Thomas (Whitehaven)

    Thorne, William (West Ham)

    Roberts, Charles H. (Lincoln)

    Toulmin, Sir George

    TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Dudley Ward.

    Robertson, Sir G. Scott (Bradford)

    Trevelyan, Charles Philips

    Robertson, John M. (Tyneside)

    NOES.

    Agg-Gardner, James Tynte

    Gilmour, Captain J.

    Rutherford, W. (Liverpool, W. Derby)

    Ashley, W. W.

    Gretton, John

    Salter, Arthur Clavell

    Astor, Waldorf

    Gwynne, R. S. (Sussex, Eastbourne)

    Sanders, Robert A.

    Baldwin, Stanley

    Haddock, George Bahr

    Sanderson, Lancelot

    Barlow, Montagu (Salford, South)

    Hall, Fred (Dulwich)

    Sandys, G. J. (Somerset, Wells)

    Bathurst, Charles (Wilts, Wilton)

    Hamilton, Lord C. J. (Kensington)

    Smith, Harold (Warrington)

    Bentinck, Lord Henry Cavendish

    Henderson, Major H. (Berks, Abingdon)

    Stanier, Beville

    Boyton, J.

    Hope, Harry (Bute)

    Stanley, Hon. G. F. (Preston)

    Brassey, H. Leonard Campbell

    Horne, Edgar (Surrey, Guildford)

    Stewart, Gershom

    Bridgeman, W. Clive

    Houston, Robert Paterson

    Swift, Rigby

    Bull, Sir William James

    Kerry, Earl of

    Sykes, Mark (Hull, Central)

    Burn, Col. C. R.

    Knight, Captain E. A.

    Talbot, Lord Edmund

    Carlile, Sir Edward Hildred

    Larmor, Sir J.

    Tobin, Alfred Aspinall

    Cassel, Felix

    Lowe, Sir F. W. (Birm., Edgbaston)

    Valentia, Viscount

    Castlereagh, Viscount

    Mackinder, Halford J.

    Walker, Col. William Hall

    Chaloner, Col. R. G. W.

    McNeill, Ronald (Kent, St. Augustine)

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

    Chamberlain, Rt. Hon. J. A. (Worc'r)

    Mason, James F. (Windsor)

    White, Major G. D. (Lancs., Southport)

    Courthope, George Loyd

    Mount, William Arthur

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

    Craig, Norman (Kent, Thanet)

    Orde-Powlett, Hon. W. G. A.

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

    Croft, Henry Page

    Pease, Herbert Pike (Darlington)

    Wolmer, Viscount

    Du Cros, Arthur Philip

    Peel, Hon. W. R. W. (Taunton)

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

    Duke, Henry Edward

    Perkins, Walter F.

    Yate, Col. C. E.

    Eyres-Monsell, Bolton M.

    Pollock, Ernest Murray

    Younger, Sir George

    Fell, Arthur

    Pretyman, Ernest George

    Fletcher, John Samuel (Hampstead)

    Rawlinson, John Frederick Peel

    TELLERS FOR THE NOES.—Mr. Cooper and Mr. Peto.

    Foster, Philip Staveley

    Roberts, S. (Sheffield, Ecclesall)

    Gardner, Ernest

    Rolleston, Sir John

    Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

    Amendment proposed: In Sub-section (2), after the word "on" ["drawback shall be allowed on any goods"], to insert the words "the exportation or shipment for use as ship's stores of."—[Mr. McKinnon Wood.]
    Mr. FELL: May I ask what is the effect of this Amendment?
    Mr. McKINNON WOOD: It is purely a drafting Amendment in order that the words of the Sub-section may follow precedent.
    Amendment agreed to.

    CLAUSE 4.—(Definition of Premises for the Purpose of the Valuation of Licensed Premises.)
    The following definition shall be substituted, as from the first day of April, nineteen hundred and eleven, for the definition of premises contained in Section fifty-two of the Finance (1909–10) Act, 1910:—
    The expression "premises" in relation to the annual value of licensed premises includes any offices, courts, yards, and gardens which are occupied together with and are within the curtilage, or in the immediate vicinity, of the house or place where the liquor is sold, except any such offices, courts, yards, or gardens as are proved to the satisfaction of the Commissioners to be used exclusively for any trade or business which is entirely distinct from the trade or business carried on upon the premises by the licence holder as such, and also includes any building or place which though not within the curtilage, or in the immediate vicinity of the house or place where the liquor is sold, is used by the licence holder for receiving or storing liquor or, which in the opinion of the Commissioners is used by him, otherwise than occasionally, for any purpose in connection with the sale of liquor.
    Mr. HAROLD SMITH: I beg to move, after the word "premises" ["the expression 'premises' in relation to"], to insert the words "means the house in which the liquor is sold and."
    I submit that this Clause, which purports to give a definition of the expression "premises," does not, as a matter of fact, give a definition. I would ask the Solicitor-General to look carefully at the words of the Clause. I think, if he does so, he must agree with me that the wording of the Clause does not do what it purports to do. I would call the attention of the Committee particularly to the words "trade or business carried on upon the premises." That, to my mind, begs the whole question of the so-called definition, because it has never defined what the premises are to include. On the question of drafting alone the Clause requires some revision by the Government. In order to show that this is really a very important point, I would like to call the attention of the Committee to what the effect of this failure to define the word "premises" would be. I would remind the Committee that many difficulties may arise through this failure to define the word. The Solicitor-General will remember that Section 8 of the Revenue Act states that the annual value of premises for the purpose of Licence Duty is discovered in one of three alternative ways. The first way the annual value is arrived at is for the Inhabited House Duty value to be taken as the basis. If that Inhabited House Duty is not applicable, Income Tax is taken as the basis of value, and if Income Tax is not applicable, the Commissioners of Customs and Excise come in and determine the annual value themselves. The Commissioners have great powers, and there is no right of appeal from their decisions by an aggrieved person.
    I suggest that very serious questions may arise as to whether the premises to be assessed for Licence Duty are the same as those assessed for Inhabited House Duty, whether they are more or less, and whether they ought or ought not to be included. When any such question arises the Commissioners of Customs and Excise would step in and insist that the assessment should be arrived at, not as for the purpose of Inhabited House Duty or Income Tax, but in the way they themselves decide. They would have the very arbitrary power of deciding whether the property in question was or was not part of the premises. I am sure under these
    1992
    circumstances the Committee will see how essential it is that the wording of the Clause should be accurate and clear. I would remind the Committee that the definition of "premises" in this Clause is entirely different from that given in the Act relating to Inhabited House Duty, and therefore the property to be valued will obviously be considered a different property from that liable for Inhabited House Duty. If the definition is left to the Commissioners of Customs and Excise, no trouble will arise in simple cases, but in difficult and complicated cases it is obvious that trouble will arise under this Clause as it stands. When you are leaving these matters to be decided by the Commissioners without appeal you do not in your own Bill direct what is the meaning of the word "premises." Without clear instructions from the Government I think it is exceedingly probable—I do not say wilfully or deliberately—that injury would result to those who are being assessed. The Government may reply that it is impossible or impracticable to further define the word "premises." My answer to that is that it is not impossible. The word has been defined in several Acts of Parliament and I think satisfactorily. For instance, in the Excise Licenses Act of 1825 we find the definition "dwelling house in which such persons reside or retail beer, etc., together with offices, courts and gardens." In the Inland Revenue Act of 1830 we find "premises" defined as "dwelling house in which the retailer shall reside or retail spirits, together with offices, courts and gardens." I quite appreciate that the words "dwelling house" would not be appropriate in this case, but on the other hand it is perfectly appropriate to keep within these limitations, and instead of using the words "dwelling house" the words "the house in which the liquor is sold" could be used. I do submit, first of all, that the Clause as drafted is not a proper way of defining what is meant, and, in the second place, that seeing the Commissioners have these wide and arbitrary powers they ought to have the strictest instructions in the definition on which they are acting. Further, I say that there is ample precedent for a clear definition of the word "premises." I hope that the Government will accept the Amendment, which is simply intended to clear away difficulties that must arise through not giving the Commissioners of Customs and Excise a very clear understanding as to what is intended in the Bill as regards the definition.
    Mr. FELL: I beg to second the Amendment. I know myself from experience that very grave difficulties have arisen with respect to the word "premises." The Government in this Clause are attempting to define "premises." Then, when we come to it, we do not find that the definition is one which will assist hereafter the definition of it by the Commissioners. I know that the difficulties are now under consideration by the Commissioners, and I think that the Solicitor-General should consider this point now and see if the Clause could not be amended in some such form as is suggested by my hon. Friend.
    The SOLICITOR-GENERAL (Sir John Simon): The hon. Gentleman who has moved this Amendment has stated very fairly and frankly that his object is to make this definition clearer than it is in the Bill, and if what he proposes would have no unintended consequences, and make the matter clearer the Government would have no objection to accept his proposal. I cannot help thinking, however, that he has not had present to his mind all the classes of case to which this expression "premises" would be applied. He desires, as I understand, to make this Clause run at the beginning:
    "The expression 'premises' in relation to the annual value of licensed premises means the house in which the liquor is sold and includes——"
    He will see, therefore, even in the form of wording which he has suggested, a little later on he is going to commit what he would conceive to be the drafting error of using the expression "includes"; he is postponing the moment in which that expression is going to be used. I quite agree, as a matter of strict definition, that if you are trying to define something it is much better to say what the thing is than to say what it includes. But when you are dealing with a matter so variable it is not possible to use this particular form of drafting. If the hon. Gentleman had looked into the earlier Acts of Parliament, as I am sure he has, dealing with this subject, he will agree that I am right when I say that in every single case up to now the definition of premises for these licensing values has run "premises includes." I have checked it myself, and I think that is so.
    Sir GEORGE YOUNGERmade an observation which was inaudible.
    Sir J. SIMON: That is a different point. Those engaged in drafting, and most of all
    1994
    those draftsmen who are continually employed in the public service realise that it is much better to say "means" rather than "includes," but they do come across cases, and this is one of them, where it is really necessary to say "includes," because it is so difficult otherwise to be sure that you have covered the ground accurately. What the hon. Baronet opposite meant was, I think, that it was much less important in the old days to define it exactly, because the duty was calculated in a different form. It is quite true that my right hon. Friend the Chancellor of the Exchequer promised, when this Bill was introduced earlier in the year, that he would have a Clause which would cut down an unfortunately wide application of the definition as it stood, and it in pursuance of that promise that these words are introduced. I have carefully examined the Debates on the subject, and whatever else may be said as to the definition it really is intended to, and does, cover the ground which the Chancellor marked out as the ground to be covered. I may point out that we have to bear in mind amongst other things that you have many places licensed which are not houses, and do not include a house at all. For instance, very often you find that there is a licence connected with a cricket ground. It is probably a shed or a couple of sheds in a cricket ground, and it would be quite inapplicable and lead to confusion to say in a case like that that the license attached to a house. There is no such thing; and it is to cover cases like that all over the country that those who have advised us think it is better to keep to the form which has been used up to the present.
    I come now to the other criticism which has been made by the hon. Member, and I am most anxious to show myself reasonable in this matter. I think he makes a good point here. He says, "your definition has this demerit, that it is, so to say, arguing in a circle. It sets out to explain what 'premises' mean and in the course of the explanation you use the expression you are endeavouring to explain." That is a perfectly just criticism. This Clause, as drafted in the Bill, runs: "The expression 'premises' in relation to the annual value of licensed premises, includes any offices, courts, yards, and gardens which are occupied," and so on "or in the immediate vicinity of the house or place." We use the expression house or place to cover such cases as the cricket ground where liquor is sold and I think the hon. Gentleman is quite right when he says,

    1995
    later on, that it is really illogical to go on and say: "Except any such offices, courts, yards, or gardens as are approved to the satisfaction of the Commissioners, to be used exclusively for any trade or business which is entirely distinct from the trade or business carried on upon the premises." I think that that is a perfectly legitimate point. I shall be quite prepared to strike out the word "premises" in order to put in some such words as "in the house or place," so that we shall not commit the technical error of using the word we are trying to explain in the course of our explanation. For the reason which I have given, I am sorry that I cannot accept the actual proposal of the hon. Gentleman. I confine myself to that proposal now because he has other Amendments, and I do not wish to embarrass him in any way by dealing with the other Amendments at this moment. The promise of the Chancellor of the Exchequer was to tighten up and limit the description of premises as it occurs in the Finance Act of 1909–10, and for that purpose we desire to keep to the same framework, though, as the Committee knows, we have been careful to cut it down in various directions.
    Mr. GRETTON: The main object of my hon. Friend has been to attempt a certain definition of what licensed premises are, and I think that he is perfectly right. The objection of the hon. and learned Gentleman to the word "house" seems to me to be not at all forcible, because actually, in his own drafting, he is obliged to employ the words "house" or "place." As to the difficulty which the hon. and learned Member suggested, that there may be a licence for another place than the house, it really to my lay mind does not convey any very serious obstacle whatsoever; because a licensed place must be attached to something, to a building of some kind or another, whether a railway refreshment room, or any other kind of licensed house, or hotel. A licensed place must be attached to a building of a more or less permanent character. So far as I follow it, I think my hon. and learned Friend (Mr. Harold Smith) has made out a good case, and in the interests of everybody, the Government, the officers of Excise, and even those whom you tax, it is desirable that there should be some complete definition in this Clause of what is meant by "licensed premises." It is admitted that the Licence Duties are now
    1996
    raised to the very highest possible point, and it is desirable, in the interests of justice, in the interests of these taxes, and also in the interests of the officers who have to administer the regulations under the law, that the words "licensed premises" should be made as clear as possible, so that all those who are affected may know where they are and with what they have to deal.
    Mr. J. M. HENDERSON: I think my hon. and learned Friend the Solicitor-General will really see that something must be done about this matter if the licensing authorities and the Inland Revenue are to run on parallel lines. I have here a case which illustrates the point under discussion in a very simple manner. It is that of a small inn in a country district where the occupier carries on the business of a farmer as well as that of the landlord of a public-house. Close adjacent to the licensed premises there is a hall and cloak-room; there are also turnip sheds, byres, farm stables, public stables, cart sheds, etc. The whole of these buildings are included in the assessment. The licensing authorities, be it remembered, do not license the landlord to sell liquor in all parts of those premises which I have enumerated; it limits the licence to the premises on which the liquor is sold, and they do not grant it in respect of the adjacent buildings. If the licensing authority licensed to sell on all the premises, cadit quœstio, but they do not do that. On the other hand, you draw a tax from all these buildings which I have described, while the licensing authorities limit the licence to one part of the premises. Great confusion arises, in Scotland particularly, even amongst the Excise officers themselves. The hall to which I have referred is sometimes used for entertainments of one kind and another, and the occupier of the licensed premises has been accustomed, as his licence only pertains to the house, to apply for a special licence.
    Mr. H. SMITH: On a point of Order. I wish to ask whether the question which the hon. Member is discussing does not arise on the further Amendment which I have to move, and which directly touches upon the point which he is now raising. I should certainly be glad of his argument and his assistance in regard to that further Amendment.
    Mr. J. M. HENDERSON: If that is so, I will take the opportunity of discussing the matter afterwards.
    Sir G. YOUNGER: My hon. Friends and I raised this very point of the definition of licensed premises at the time when the Act passed through this House. We said that there was no proper definition of the words, and that they are capable of the widest possible construction. As a matter of fact we are now able to show the House that the construction of those words has amounted almost to a scandal, and that the pledge or undertaking which was given—I think by the Finance Secretary to the Treasury rather than by the Chancellor of the Exchequer when we last debated this Bill—went at all events further than the Clause now goes. I can quite understand the hon. and learned Gentleman's difficulty, but the hon. and learned Gentleman and his Friends exist for the purpose of solving difficulties, and I am sure no one is more competent to arrive at a solution than the Solicitor-General if he takes the trouble. I therefore say to him, if he can show us any way under which we can get rid of this extreme difficulty, I think the least he can do is to tell the House. He has refused to accept the Amendment of my hon. and learned Friend, and I ask him to suggest words which will simplify the situation and make it more clear. We have submitted an Amendment which is not accepted, and it would relieve the situation very much if some kind of definition were given on which the authorities could act. There are authorities and authorities, and there are Excisemen and Excisemen; and it is not every Exciseman's judgment which reaches the supreme authority or is reviewed by the supreme authority. I admit that the supreme authority when they have had cases of particular hardships brought before them have invariably tried, with great discretion and fairness, to deal with the matter. There are many people who have a holy terror of the Exciseman—I never have myself—and they submit to injustice and hardship without their case ever reaching the source from which relief could be obtained. Therefore, something plain and clear should be put into this Clause.
    Mr. MAURICE HEALY: I have read the Clause several times in the Act, and I must confess personally that some definition is required.
    Sir J. SIMON: I will take the opportunity to explain the scope of the Clause, but the Amendment, which is now under discussion, does not raise the point to which the hon. Gentleman refers.
    Mr. MAURICE HEALY: I will raise the point on the Amendment which the hon. and learned Gentleman intends to move.
    Mr. NORMAN CRAIG: I do not wish to say anything at this moment providing the matter may be discussed at large on the later Amendment. This Amendment is a necessary part of a group of Amendments. If I understand the hon. and learned Gentleman says that the matter is at large on future Amendments I have nothing to say, but I am anxious that we should be protected.
    Mr. H. SMITH: In view of the fact that I have got an Amendment which opens up the greater question I desire to withdraw.
    Amendment, by leave, withdrawn.
    Mr. C. BATHURST: I beg to move, after the word "gardens" ["yards and gardens"], to insert the words "(but not stables used for posting)."
    I move this with the object of removing from the definition of the word "premises" that part of the hotel premises the stables which are used for posting purposes. I take the opportunity of putting these words in the forefront of the definition in order to get some statement from the Government as to whether they include the stables within the definition of premises, and which in most country hotels are used for purposes wholly unconnected with the sale of drink. I have instances in my own district in Gloucestershire of country inns, which are described, I believe, in the trade as "family and commercial hotels," used in a somewhat rural sense, where commercial travellers go to stay during the time they are in the district in order to carry on their business over a large rural area, and where other persons, connected it may be with the local education authority or other county authorities, reside for a time while they are carrying out their official duties. Those hotels do a comparatively small amount of trade in the sale of liquor, but do a large amount of trade in the way of housing temporary guests, and taking them by means of their posting facilities to the different parts of the large area in which they conduct their business, or in which their official duties lie. It cannot be intended surely that those conveniences, which are an almost necessary adjunct to hotels of this character, should be in any way penalised, because in the houses to which they are attached there happens to be a certain amount

    1999
    of drink sold even to those who are residents, or, rather, temporary guests, within the licensed premises. Those same people, as no doubt the Committee is aware, as a rule provide what is required for the purpose of funerals in the districts which they serve, and also provide station facilities in the form of a 'bus which runs between the village and the station, particularly if the station is not very close to the village. I have two instances in my own district, and I have no doubt there are many others where the innkeeper has asked to have the stables taken entirely off his hands because of the additional duty which he has to pay owing to the stables adding to the annual value of the premises. I do not in any way represent the trade, and, on the other hand, I represent the other side of the hotel keeper's business, which is a very essential and very important one in country districts, particularly in places which are not well served with railways, where good posting is absolutely essential to provide for the amenities of the place in order to meet the convenience of those who are staying temporarily as guests in such hotel. I have one or two other Amendments very specifically making clear this definition shall not extend to stables used for these purposes. I now move this Amendment mainly with the view of eliciting from the Solicitor-General, as representing the Government, what the views of the Government are on the matter.
    Sir J. SIMON: The hon. Gentleman has moved the Amendment, as I understand him, rather with the object of getting an explanation than because he really wishes to recast the Clause in this particular way. I make no complaint of that, but perhaps it will be convenient if I asked you to consider what is the point at which it would be convenient to take what I may call a substantial discussion, because it is obvious we do not want to deal with the thing in a hundred pieces. I am certainly desirous that the hon. Member for Warrington (Mr. H. Smith) and my hon. Friend below the Gangway should have the opportunity of dealing with the suggested proposal as a whole. It has occurred to me probably there are no Amendments after this one which would take any considerable time, though I do not wish to belittle them, until we come to the proposal of the hon. Member for Warrington, in which he moves, after the word "Commissioners," to insert the word "not." That really introduces
    2000
    the substantial framework of the Clause, and I suggest that probably it is a convenient point at which to get a general explanation and a general discussion.
    Mr. PRETYMAN: I rather agree with what the hon. and learned Gentleman has said, and I attach great importance to the Amendment moved by my hon. Friend. It will be very difficult to discuss this particular Amendment without travelling over a wider area which the Amendment does not cover. Therefore if my hon. Friend will assent to the course suggested, having made his point, it would be open to the Solicitor-General to deal with the matter, and either to accept it wholly or in part.
    Sir J. SIMON: That is what I should wish to do.
    Mr. C. BATHURST: I have not sufficiently studied the Amendments to know exactly whether this one which the Solicitor-General has referred to will cover the case. What I should like to safeguard myself as to is if the Solicitor-General is unable to accept the much wider Amendment, which I understand is going to be moved, that it shall not in any way prejudice the narrower question on which I feel very strongly, and, not being in any way connected with the trade, I should not like to have it thought that I am moving it for any other motive or interest than that which I have stated.
    Sir J. SIMON: I am sure we all understand it, and I will be most willing. The actual proposal which the hon. Gentleman makes, is as I take it, an illustration of a sort of difficulty which we should meet in discussing it in general terms. I am bound to point out to him, certainly, that for some years past this so-called definition of premises has always begun: "Premises in this connection includes any offices, courtyards, and gardens." The object of those who are trying to get the definition a little tighter is not to recast these introductory words, but rather to see that the qualifications on those words are sufficiently strong. It appears to me that when we come to discuss qualifications we shall in substance do what the hon. Gentleman has so clearly raised.
    Mr. C. BATHURST: After that statement, I beg leave to withdraw.
    Amendment, by leave, withdrawn.
    Mr. H. SMITH: I beg to move, to leave out the words "or place" ["house or place where the liquor is sold, except"].
    The Clause is supposed to limit, to some extent, the definition of premises for the purpose here in view; but I suggest that the words "or place" indefinitely extend the definition. I would remind the Solicitor-General of the trouble which many of our learned judges have had in defining what is a place. I suggest that he is only adding to the difficulty by putting these extremely vague and wide words in a Clause which purports to define what licensed premises really mean. His suggested difficulties in reference to exhibitions and cricket grounds, if applicable at all, would perhaps be more applicable to this Amendment than to the other. But I do not think they are applicable at all. In all such exhibitions or cricket grounds which have such a licence there would be a house, or building, or shed, or pavilion, or something which would represent the licensed premises. I suggest that these words are very vague and unsatisfactory, and ought to be omitted.
    Sir J. SIMON: I hope the hon. and learned Member will not press this Amendment. We are on the eve of what I regard as his substantial proposal, and really, whatever else may be said about the words "or place," they do not one way or the other affect the burden which the hon. and learned Member is rightly concerned carefully to measure and adjust. It is clear that we cannot be content with the word "house," because, as a matter of fact, there are some places not accurately described as houses in which none the less liquor is sold. There is no hidden mischief in these words. They are only intended to cover the place or building when it is not a house—the shed or pavilion, or whatever it is.
    Mr. PRETYMAN: Will the Solicitor-General accept the word "building" or "house"? The word "place" is very wide. I remember on one occasion a lady's lap was defined by a Court of Justice as being a place.
    Sir J. SIMON: The hon. Member's recollection is no doubt correct, but he is not applying it very relevantly. The question is whether a "place where the liquor is sold" is liable to be misunderstood. You cannot sell it except in a place which has a licence for its sale. I cannot accept the word "building," because there would be, for instance, such a question as whether it includes a tent.
    9.0 P.M.
    Mr. GRETTON: The Government mean a building, a house, a structure, a premises, a permanent or semi-permanent structure to which the licence is attached, where the convenience for carrying on the business is erected, and where the liquor is kept for sale. But they are not satisfied with that. They will not put in words that anybody will understand, because they are afraid something will escape their taxation. Therefore they put in the very vague word "place," but they do not mean "place" at all. A licence holder is very often squeezed unjustly, or he has to go to the Law Courts for a remedy. I suggest that it is very desirable if a man is to be taxed that he should have some clear idea of how he is going to be taxed. The law should be framed so that it can be understood by all. I object to these vague words being introduced. It is clear that the Government do not mean a place; they mean a building. My hon. and learned Friend is perfectly right. As a matter of convenience the word "place" ought not to stand; the word "building" would be much better.
    Mr. MAURICE HEALY: The word "place" greatly extends the possible meaning of this Clause. The word "house" or "building" appears to me to serve all the purposes of the Government by fixing the centre from which the valuation is to start. If you put in the word "place" you allow the radius to extend so far that you may be any distance from the central point before you end the valuation. If you say the house or building where the liquor is sold, it is quite plain; but if you say the place where the liquor is sold, it may mean London or Dublin or Cork. It may mean any area of which those names would be a proper description. If the Government were in a difficulty, if there was not always a central building of some kind from which to start the valuation, I could understand their saying, "We cannot dispense with the word 'place,' because 'house' or 'building' will not do." But you must have a building to start from. It is quite inconceivable that you can have a licence without a building. That being so, I cannot conceive, while you might have buildings which are not houses, how you can have a licence for a building which was not at the same time a house. Even granting that the Government do want to have something besides the word "place," all the requirements, it seems to me, are fully

    2003
    met by using the word "building." That being so, I do not understand why the Government want to retain this extraordinary word "place." The illustration has been given that in a cricket ground if you happen to have a store half-a-mile away at the other end of the cricket ground, it would all be included in the licence.
    Sir J. SIMON: It is not a place where liquor is sold?
    Mr. MAURICE HEALY: Yes, but it is in the vicinity of the place where liquor is sold, and that is the whole question. As I have said a place where liquor is sold is a house, no doubt, but it is in the cricket ground; also in the town, also in the city, and also in the island! That being so, it appears to me that the right hon. Gentleman is carrying his definition very far when he says that you cannot get on unless you have the word "place."
    Mr. J. M. HENDERSON: Why not follow the words of a previous Clause, and say "a house or premises where liquor is sold." There is there no difficulty about the word "place," and it will be remembered that a place has been held to be a man standing up in the paddock and making a bet; you cannot licence a man to sell beer or spirits in a yard standing by himself!
    Mr. NORMAN CRAIG: It appears to me that the Solicitor-General made one point in the case of a temporary licence. Manifestly the word "place" is objectionable. It is far too vague, and incidentally it is altogether out of touch with the rest of his own Clause. His own Clause presumes premises which Mould include "place" in this definition. His own premises are such premises as might have offices, courts, yards, or gardens attached. How in the world is a "place" going to comply with these conditions? The word "place" is far too wide, vague, and indefinite. If the right hon. Gentleman wants to meet the possible case of a temporary licence, a marquee, or a tent, there are surely words in the English language which would meet the case? Why not use the word "building," and make it indicate something such as a "structure" or "erection"? The word "place" in an Act of Parliament of this kind is a word which already has considerably lost caste. I do suggest to the right hon. Gentleman, without in any degree limiting the width
    2004
    of his definition, that for all practical purposes, it should be quite sufficient instead of the word place to say "structure or erection." That would cover not only permanent but also temporary buildings which are the subject-matter of licences.
    Mr. PRETYMAN: The learned Solicitor-General has suggested that his difficulty was in regard to a temporary structure such as a tent. I would ask him when he replies if he can name a single case or instance where a permanent annual licence is given to a structure like a tent? I am right, I think, in saying that this Clause applies only to an ordinary annual licence, and also that no ordinary annual licence under any circumstances is given except to a house which is thoroughly satisfactory structurally to the licensing bench? Therefore I would like the Solicitor-General to say under what possible conceivable circumstances a licence affected by this Clause could be granted to anything except a house or a structure, which means a house. There may be, I admit, a pavilion on a cricket ground, but that is a permanent structure, and should certainly be, I should say, regarded as a house. It is quite unnecessary to introduce such a word as the word "place," as my hon. Friend behind me has pointed out. I cannot understand how an office, courtyard, or garden, can be attached to a "place." They can only be attached to a house. My objection to this word is from a drafting point of view. The Solicitor-General surely will agree that immense trouble is being caused with the taxpayer nowadays by the complicated legislation into which vague terms are introduced with the idea of covering all possible considerations, seen or unseen, under which it might be possible for somebody to escape from a small fraction of a tax. The consequence of that is that the Revenue Department who are bound to try and interpret the Act in the strictest possible sense, and get the last penny out for the revenue, make a claim under the word Act, which is naturally resisted by the taxpayer, who looks at the general principle on which the Act is based. Then we have the expense of cases in the Law Courts, simply because the Government of the day cannot make up their minds exactly what they want taxed, and say so clearly in the Clause which imposes the tax. I do not put this matter forward from the trade point of view at all, and if the Solicitor-General can tell us of an actual concrete case which the word "house" or "building" would not meet,

    2005
    then I think he has made good his case. If he cannot do that, then I think the Committee will be justified in refusing to accept the vague word, for which no real case can be made out for the Government, and we shall confine the tax to a "house" or "building," which is the only conceivable place to which an annual licence can be granted.
    Mr. J. M. HENDERSON: I do not think I ever knew of a cricket pavilion being licensed. They come in as clubs.
    Sir J. SIMON: I can assure hon. Gentlemen, after applying my best judgment to the matter, that if I thought there was obscurity in the words, or any advantage in changing them, on the suggestion from hon. Gentlemen opposite, I should have no pride in the matter at all. All I want to do is to see that this Bill is properly framed. With great respect, may I just point out that these words are not chosen with any malicious desire either to create vagueness or difficulty of interpretation. If hon. Gentlemen will do me the kindness to look at the way in which these words are used in this Clause, they will certainly see that the last half-hour's discussion has not been upon a point of very great importance. The question is not whether "place" is a vague word. The hon. Gentleman has given us his reminiscences of cases in which the word "place" received very wide construction. This is not a point as to whether or not anybody will misunderstand a word. We mean a place where liquor is sold. No one can sell intoxicating liquors unless they have a licence. All that is meant by the word "place" is to take in a case which might not be covered by the word "house." It is no use to suggest a particular case. I can imagine that, in one sense of the term, a hotel is not a house. It is not a house for the purpose of Inhabited House Duty. There are many cases that would only produce argument in the future. May I point out, in confirmation of what I have already said, that these words are not used maliciously or to make difficulty, that, as a matter of fact, this very word "place" occurs again and again in the Licensing Acts of all Governments. I find it in the Licensing Act of 1872. There is a prohibition of illicit sale. That provision is, that a person is exposed to a penalty for illicit sale if he sells in any place in which he is not authorised by the licence to sell.
    Mr. MAURICE HEALY: That is liquor. A man might be selling it in the street!
    Sir J. SIMON: Exactly the same words were introduced by the Joint Committee upon which the hon. Baronet (Sir G. Younger) and I sat. The expression used in the Licensing Act of 1902 is the same, and there is an actual interpretation of a public place. We have really occupied a good deal of time on a point of no substance. You cannot be sure, but some person, I will not say a lawyer, because there is nothing so technical as some legally minded laymen talking law, will contend that some place is not included in the word "house" and starting a definition of "house."
    Mr. AUSTEN CHAMBERLAIN: Would the hon. and learned Gentleman tell me whether the definition he has referred to would be the governing definition of "place" in this Bill?
    Sir J. SIMON: I am much obliged to the right hon. Gentleman. I do not want to suggest that. I am dealing now with the suggestion made that the word is introduced here for its vagueness. I am only suggesting that when one uses the word "house" or "place" where liquor is sold, it is not a fair criticism to say that it is done for vagueness, and then to press upon the Minister who is for the moment responsible that he should substitute some other word. You are creating, quite unintentionally I am sure, a possible difficulty, because the words you suggest may not cover what is intended to be carried in it. There is a real point coming on in the next Amendment in the name of the hon. Member (Mr. Harold Smith). It raises a point that is worth discussing on its merits. I suggest we have spent a long time on the question whether the word "house" or "place" where liquor is sold is not a sufficiently clear description of a point covered by authorities. The hon. Gentleman (Mr. Pretyman) asked me a question whether, on reflection, I suggest that a temporary structure would be a proper subject for a full on-licence, I think his question is a fair one. I am not aware that there is anything legally impossible in a place having a full on-licence which is not necessarily of a permanent character. With regard to cricket grounds, mentioned by the hon. Member (Mr. J. M. Henderson), it is a pretty question what they should have to pay.
    Sir G. YOUNGER: I think this Amendment raises the question whether these

    2007
    words are not doubtful, and the fact that if they are introduced into the Clause they may give the Commissioners of Inland Revenue an excuse for further extending the meaning, with a view to roping in premises outside the law at present. If the hon. and learned Gentleman will assure us that the words "or place" will not give them any further foundation for that, perhaps my hon. Friend will be satisfied. Certainly that is the intention and reason with which this Amendment was moved. We want some distinct understanding.
    Mr. NORMAN CRAIG: I desire to add a word, not as a legally-minded layman, but as one who hopes to be a lay-minded lawyer. The point is one of more importance than the hon. and learned Gentleman seems to think. One does not want in a case of this sort indefiniteness. The hon. and learned Gentleman says "house" is not sufficient. I do not know whether it is worth while appealing to him in the sacred name of tradition or precedent, but both in the Excise Licensing Act of 1825 and the Inland Revenue Act of 1830 the word "house" was the only word included, and I never heard that "hotel" was excluded on the ground that it did not fall within this definition. If there is no point as regards permanent and temporary structures, if the word "building," which is certainly wider than the word "house," would include an hotel, surely for the sake of simplicity and for the understanding of laymen it is undesirable that we should use vague words which nobody can defend and nobody can understand, and least of all His Majesty's Government. I hope the matter will not be passed by in this way.
    Sir J. SIMON: Perhaps I may add that in what I have been saying here I have been expressing what I know to be the views entertained by the heads of the Department. I am perfectly confident what I have said represents their view, and when their view has been called for it has on the whole been fairly applied. If the hon. Gentleman accepts that from me and withdraws this Amendment and proceeds to the substantial matter lower down, I shall by no means shut my mind against the point he raises.
    Mr. H. SMITH: I am not in the least convinced or satisfied, but, nevertheless, as the other Amendment perhaps covers this point I shall ask leave to withdraw this Amendment.
    Mr. WATSON RUTHERFORD: Before the Amendment is withdrawn I should like to congratulate the Government in sticking to the word "place." Having regard to the profession to which I belong, I think it is a most delightful word to put into an Act of Parliament. It has in it all the essence of fruitful litigation for many years to come, out of which the profession can hope to be richly rewarded, and on behalf of that profession I feel entitled to thank the Solicitor-General for adhering to his decision to keep in this word "place," because of the emoluments which are bound to come to the legal profession in consequence.
    Amendment, by leave, withdrawn.
    Mr. C. BATHURST: I beg leave to move, after the word "yards" ["offices, courts, yards or gardens"], to insert the word "stables." I should like the opinion of the Solicitor-General as to whether the words "offices, courts, yards or gardens" can be construed to include stables.
    Sir J. SIMON: May I point out that the inclusion of the word "stables" as proposed does not quite make sense of the Clause. As regards the question put to me by the hon. Member, I should have thought myself that "offices" in the abstract might be taken to include stables. One of the objects of this Clause is to try to draw a line between those cases where stables ought to be included and where they ought not to be included.
    Mr. C. BATHURST: If "offices" can be deemed to include stables, well and good, but I do not consider the Solicitor-General's answer is quite sufficient, and I should like a definite assurance from him that the term "offices" includes "stables."
    Sir J. SIMON: I am quite ready to give that assurance, although I do not mean to say that every set of stables comes within the definition of premises, but offices undoubtedly is intended to include stables.
    Amendment, by leave, withdrawn.
    Mr. H. SMITH: I beg to move, after the word "Commissioners" ["satisfaction of the Commissioners"], to insert the word "not." It will be convenient perhaps that I might be allowed to draw attention to other Amendments which are consequential upon this Amendment, and which are set out on the Amendment Paper. I would also call attention to the Clause

    2009
    which I put down in order that hon. Members might appreciate what would be the effect of my Amendments if carried. The principle involved in this series of Amendments is a very important one. It really involves the question which has already been raised in different parts of the House as to whether outbuildings, such as stables, should come within the assessment for Licence Duty. In short, it is a question whether a stable which is occupied by a tenant for a business entirely distinct from the business which is carried on should be assessed for Licence Duty. One would naturally ask why should a stable which is close to premises which are licensed be included in the assessment of the licensed building. It seems to me that it is utterly indefensible where you have a stable, as suggested by my hon. Friend used as a posting business that it should be assessed for Licence Duty. As I understand the present proposition is that if the licensee has sublet his stables, then it is not included for the purpose of the Licence Duty, but if it falls empty then it comes within the assessment of the Licence Duty. I think that is indefensible, and I wish to put a real case. I submit to the Solicitor-General that the livery stable business fulfils a public want, and I submit also that it does not increase the custom of the house. I submit that point strongly. I will take a place which supplies in the main taxi-cabs and hansoms. I am sure the Solicitor-General would not say that that posting business brings increased business or profit to the house, but even if it does, that does not support this proposal in the least. If it does bring increased business in the house that is taken into consideration when the house is reassessed.
    I will give an example. I will take licensed premises valued at £100, and the licensee imagines that by using his stables for a posting business he can increase his business and does so, and by so doing increases the annual value of his premises from £100 to £120. It is increased in value in this way, in addition to the extra rates and taxes in respect of Income Tax under Schedules A and B. So that the extra benefits through the increased business are directly assessed by increased assessment. If the stables are included in assessing the value for the Licence Duty then the Excise authorities get extra duties not only on the extra value of the licensed property, but also on the value of the stables. They get not only the increased duty on the £20, but the increased duty
    2010
    which is caused by the addition of the stables to the premises. Another point is that the yard, or shed, or building, or place is not licensed. The hon. Member for Ayr Burghs (Sir G. Younger) pointed out last year that these places are not licensed, and if the licensee desires to sell a glass of beer on any part of these outside premises which are rated as though they were licensed, he could not do so. I suggest that either his stables are licensed or they are not, and if they are not you have no right to assess them on the basis that they are licensed. You must either let the man sell liquor in those stables or buildings whatever they are, and of course rate him accordingly, or you must deprive him very properly of the right of selling liquor, and not do him an injustice by assessing him on the basis that he can sell liquor in them.
    I want to put a specific case to the Solicitor-General. I wish to refer him to a house known as The Windmill, in High Street, Lambeth. Here stables were sublet to a gentleman of sporting instincts, and he used them for his trotting horses. Owing to a change in the neighbourhood, it became impossible for him to use them, and his tenancy expiring, he let the premises. Those stables have been empty now over nineteen years, and they have been going through a process of decay. There are no rates, of course, although they are assessed for rating purposes at £15. Since 1909 they have collected in repect of those tumble-down stables a sum of £7 10s. in Licence Duty. They have collected that on that which was once a stable, but which is now nothing more or less than a tumble-down building. That is a specific case. If the licensee could find a tenant, which he cannot, not only would he get rent, but he would be immune from duty, and because the man cannot find a tenant for stables, which, I believe, are now scarcely fit to be used as stables, he loses his rent, and he also has to pay this Licence Duty. That means that the Excise Authorities are penalising this man for his inability to let his property. I do really think it is impossible for the Solicitor-General to oppose the principle of my proposal, unless he is prepared to stand at that box and justify the Treasury penalising a man because he cannot let his stables for the purpose for which they were once let.
    I want to bring to the notice of the Solicitor-General another case, the case of the Redcliffe Arms, Fulham Road. I notice

    2011
    he pricks up his ears. There were some places adjacent to the licensed house. They have been let to the London General Omnibus Company for the last twenty years at £12 per annum. On September 29th this year, two days previous to the Licence Duty becoming payable, the proprietors vacated the premises, and the authorities made a demand for an increased rental value of the stables to the extent of £12, necessitating an increased Licence Duty of £6. A letter appeared in some London paper drawing attention to the iniquity of this, with the result that the very day the letter appeared the authorities notified the licensee they had made this demand in error. It was just before enternig this House this evening I received notice that the authorities have withdrawn their claim. Why have they withdrawn? I do not want to make a suggestion I ought not to make, but I cannot help thinking their withdrawal has something to do with the fact this letter stated that the case was going to be cited in the House of Commons. The day that letter appeared the authorities came to this tenant and told him they had made this demand in error, and would not press it. But why? They pressed it in the case I have given to the Solicitor-General, the case of The Windmill, High Street, Lambeth, and I could give him many others. It is only a question of time. I believe one could cite dozens and, yes, hundreds of similar cases without any doubt at all. I cannot understand why, in the case of the Redcliffe Arms, they should withdraw their claim the very day this letter appeared, stating it was going to be raised in the House of Commons, and why they should go on pressing their claims in respect of hundreds of other cases throughout the country.
    Finally, I have two or three Amendments, such as to leave out the word "exclusively" and the words "entirely distinct from the trade and business." May I deal with those as they are all consequential? I would point out that none of these Amendments would exclude or protect the case where stables are used directly for trade purposes. In a case where a stable is used for trade purposes, of course I would not think, and I am sure no hon. Member would think, of asking it should be excluded from the assessment of Licence Duty. If they were used simply as a place where the licensee kept his van and horse for the purpose only of delivering the goods he sold in his public-house,
    2012
    then I would say such premises were used in a business directly concerned with the trade for which the tenant was licensed, and in such a case I would consider the Solicitor-General would be justified in saying it ought to be rated, though I do not say I would agree with him. There would at any rate be some justification for him saying so, and my Amendments would not exclude such a case, but they would exclude from the assessment for Licence Duty premises which are in the main used for posting business. Just think what the present position means. A man who, as in the case I cited in my own Consituency, supplies, or mainly supplies, the posting business of the town, would probably be immune from assessment, providing he never used a cab or a taxi from his own yard for one of his customers or for someone staying in the house. The very moment he uses, say a cab, for one of his guests or customers, then from that moment the Commissioners can come down and say these premises are not entirely distinct from the trade or business for which the tenant is licensed. That, I suggest, is an impossible position. How often is there a 'bus attached to the village inn, and how often is that 'bus used by the proprietor of the inn to carry, say, cricket teams to and from the station? The moment he does that for his guests, then you are no longer able to say the posting business is absolutely and entirely distinct from the business of his licence. I do trust the Solicitor-General will see there is urgent need for some such proposal as I have suggested. I do not think my words are too wide, and I do suggest to him and to the Committee something ought to be done. The present position is indefensible. It is inconsistent, and it is grossly unjust. It rates a man where he ought not to be rated, and it refuses him privileges which such rating ought to confer upon him. This point has been raised in this House I think for several years past, and I do hope this year, if I am right—and I think I am right—the Solicitor-General will see his way to making an Amendment which I think in all justice ought to be made. I am only asking for justice where I think justice is demanded, and I do urge my Amendment on the Solicitor-General.
    Sir J. SIMON: I am sure Members of the Committee are indebted to the hon. and learned Gentleman for the clearness with which he has explained a very complicated matter in regard to the tests which he proposes to substitute for those

    2013
    contained in the Government Clause for the purpose of measuring premises, the annual value of which is material for arriving at the amount of Licence Duty. I think it would be for the convenience of the Committee if I point out to what extent the Government proposes to make a change in the existing law. The hon. Gentleman himself, in the course of his argument, was compelled to abandon the very principle upon which that argument was founded. The principle which he laid down was that you should not, for the purpose of ascertaining what the premises are, the annual value of which measures the amount of duty, have regard to anything except premises in which liquor is authorised to be sold. That was the principle he laid down. It no doubt would greatly simplify matters if that principle were adopted, as undoubtedly it would materially contract the revenue and put it in the power of the licence holder to pay more or less in the way of Licence Duty accordingly as he selected the part of the premises in which liquor would actually be served. But the hon. Member has abandoned that principle. When he got to close quarters with it he did not dispute it would not be unreasonable to include stables in the premises which are to be regarded for the purposes of Licence Duty.
    He has printed on the Paper the language of the Clause as it would read supposing we adopted his proposals. He himself proposes to start this definition by saying that the premises "include any offices, courts, yards, and gardens, which are occupied together with and are within the curtilage or in the immediate vicinity of the house where the liquor is sold." But the hon. Gentleman surely does not mean that a man may sell liquor in the garden. The result is that his own definition which he recommends to the Committee as though it carried out simply the principle he laid down, really fails to satisfy his own tests. Whatever the tests you are going to apply we cannot accept the hon. Gentleman's tests. What we do desire to do is to cut down the width of the definition as it stands at this moment in order that we may exclude from the premises for this purpose certain places which I quite agree, in the circumstances, should very properly be excluded. My hon. Friend the Member for one of the Divisions of Aberdeen put the case of a farmer who happens to hold a licence, and asks, "Is it fair to include the farm stables in the area of the premises, the annual value of which you
    2014
    are going to arrive at for the purposes of assessing the Licence Duty?" Ono of the objects of the proposal which the Government has put down is to exclude such a case as that.
    In order to get at the real definition it is necessary to refer to two or three Acts of Parliament, and I hope the Committee will excuse me if I occupy some little time in referring to these. The idea that you should include in your premises, offices, courts, yards, and gardens, therewith occupied is not an innovation. It is a definition to be found in the Act of 1880. Whether it is right to continue that or not is a fair matter for consideration, but, at any rate, it is a case of continuing an old definition and not imposing a new definition of serious moment to the trade. The definition is embodied in the Finance Act of 1909–10, which occupied a good deal of time in passing through this House, I think I am right in saying that in the course of the passage of that Act there were some words added to the definition of premises with a view to limitation. That Bill, as introduced, reproduced the language of an old Act of Parliament, and in the course of the Debate it was pointed out that it would hardly be fair to continue that wide definition, the reason being that if you rearrange your Licence Duties to make the duty depend exactly and proportionately on the annual value of the premises it was absolutely necessary to have a clear definition, and therefore it was laid down that the expression "premises" with relation to licensed premises should include any such offices, courts, yards, or gardens, occupied together therewith, except any offices, courts, yards, or gardens as are proved to the satisfaction of the Commissioners to be used for any trade or business which is entirely distinct from the trade or business carried on on the premises by the licence-holder as such.
    The hon. Member for North-East Cork (Mr. Maurice Healy) has suggested that that definition would not bring in farmers' stables. I must confess I am not quite sure that that is so. It is highly desirable we should make it clear that it does not bring them in, but my strong impression is that the technical reading of these words might involve their inclusion, although I am aware that, in the administration of the Section, it has been common in many cases not to include them. But as long as you have a definition of that sort you make no distinction between premises which are I close by, what I may call the centre of

    2015
    sale, and premises which may be further off, because premises which are in the immediate vicinity of the centre of sale, perhaps in the same appurtenance, might very well be reckoned as having an effect on the business carried on by the licence-holder, because he has got a licence. I think also that this definition of 1909–10 does not very clearly distinguish between the cases of offices, such as stables, which are part of a hotel-keeper's premises, the hotel-keeper being a licence-holder, and stables which happen to be occupied by a man who holds a licence, but is not running his premises in any sense as an hotel, but simply as a small public-house, and who happens to have stables for a business totally unconnected therewith. It has been our object, in strict pursuance of an undertaking given earlier in the year, to introduce such an Amendment into the existing law as will deal with both of these points. That is to say, on the one hand we make a distinction between the areas which are in the immediate vicinity of the centre of sale as contrasted with the areas which are at a distance from the centre of sale; and on the other hand, we make a distinction between offices, stables and the like, which are normally associated with the carrying on of the business under the licence, and the offices, stables, and the like which are not.
    I say we have been careful strictly to carry out our undertaking, and I have fortified myself by reading carefully the Debate which took place when the Resolulutions were introduced earlier in the year. When that happened, not only my right hon. Friend the then Financial Secretary to the Treasury, but the Chancellor of the Exchequer also, on 16th May, both made statements, which are quite consistent one with the other, showing they desired to make a distinction between these remote areas and the areas in the immediate vicinity, and showing also that they desired a distinction between cases where the stables were associated with the business going on under the licence and cases where they were not. Will the Committee be so good as to look at the Clause as we propose it. The Clause, as we propose it, is necessarily a long Clause, and I am not saying that it is very easy to follow it, but the key of the Clause is to be found by observing that it deals with two things, which are dealt with in the two separate limbs of the Clause: first of all, the case where
    2016
    the subordinate premises are close to the centre of sale, and, secondly, the case where the subordinate premises are at a distance. The principle on which the Clause is constructed is this, that as regards the first half of the Clause, which deals with the subordinate premises close to the centre of sale, we lay down the general principle that they ought to be included in the premises, but there is a provision for exclusion; whereas when we deal with premises which are at a distance from the centre of sale, the general principle is that they are excluded, with a special provision for inclusion. If the Committee will follow me they will see this is the way in which the Clause runs, the Clause provides,
    The expression "premises" in relation to the annual value of licensed premises includes any offices, courts, yards, and gardens which are occupied together with and are within the curtilage, or in the immediate vicinity, of the house or place where the liquor is sold, except any such offices, courts, yards, or gardens as are proved to the satisfaction of the Commissioners to be used exclusively for any trade or business which is entirely distinct from the trade or business carried on upon the premises by the licence holder as such.
    Under that exception, if I may say so to the hon. Member for West Aberdeenshire (Mr. J. M. Henderson), I am confident that the farm stables that he referred to would be excluded. I do not want to say that the stables of an hotel would be excluded by this Clause—at any rate, in all cases. I hear the hon. Baronet (Sir G. Younger) say he is sure they would not. I go further and say that they are not intended to be. The Clause is designed to draw a distinction between cases where the stables are, as I have described them, necessarily associated with the business that is actually being carried on by the man who holds the licence—which is the common case of hotels and stables—and the cases where the licence is that of a mere public-house as distinguished from an inn, and the fact that stables are attached to it does not have any direct relation to the business that is being carried on.
    Mr. AUSTEN CHAMBERLAIN: Suppose the stables are habitually used in connection with the farm, but are occasionally and exceptionally used for the accommodation of the customers of the house, what is the position then?
    10.0 P.M.
    Sir J. SIMON: I am much obliged to the right hon. Gentleman. I only venture to enter this caveat. I am far from saying that it is within my power—I do not think it is within anybody's power—at a moment's notice to give a confident opinion on every hard case, but I think the answer to the case put is one which may fairly be arrived at by considering whether or not in that case the stables are proved to be used exclusively for any trade or business which is distinct from the trade or business carried on upon the premises.
    Sir G. YOUNGER: Entirely distinct.
    Sir J. SIMON: Yes. I rather agree with the right hon. Gentleman that the case he puts is probably the case in which, under the Clause as drawn, the stables will be included. The Committee will see that the idea of the first limb of the Clause is to bring them in, but to make exclusions in a certain limited class of cases. I wish to be quite frank about its being a limited class of case. Will the Committee now turn to the other half of the Clause. It reads,
    and also includes any building or place.
    I am much relieved to find that the hon. Gentleman opposite also used the words "other building or place."
    Mr. H. SMITH: It is a very convenient word to use in debate, but a very inconvenient word in an Act of Parliament.
    Sir J. SIMON: I understood that the hon. Gentleman was proposing to substitute his words for ours in this Act of Parliament. I did not understand him as merely raising debate. The Clause says,
    and also includes any building or place which though not within the curtilage, or in the immediate vicinity, of the house or place where the liquor is sold, is used by the licence-holder for receiving or storing liquor, or, which in the opinion of the Commissioners is used by him, otherwise than occasionally, for any purpose in connection with the sale of liquor.
    The last words would, I think, cover just that sort of instance which the hon. Gentleman gave in the course of his speech. It would cover the case of stables which may be at a distance, which were habitually used to house vans used for the distribution of liquor sold under the licence, but the substantial case is covered
    2018
    by the earlier words "place for receiving or storing liquor." That is the general scheme of the Clause. I say with a good deal of confidence that the Clause as drawn is a Clause which does carry out what has been our sincere desire to carry out, the representations which were made when this matter was discussed earlier in the year. The sum mentioned by the Chancellor of the Exchequer as involved in this concession was £50,000. In fact our advisers tell us that more than £50,000 is probably involved. The proposal the hon. Gentleman makes would involve a much greater loss to the Exchequer, and it is a loss which we could not in the circumstances consent to make by accepting his Amendment. I do not say that these words will meet every difficulty which the ingenuity and knowledge of my hon. Friends can put forward, but I do say that they provide a very fair working rule. I do say they are a great improvement on the words now on the Statute Book, and I say with great confidence that they carry out those undertakings which were given in the month of May last.
    Mr. AUSTEN CHAMBERLAIN: I entirely accept the Solicitor-General's statement that the words which he has proposed are in fact, as they are in intention, an execution of the pledge given in May by the Chancellor of the Exchequer and the then Secretary to the Treasury. I have not referred to these words, but I take it from him that they meet the intention in the fullest way, and do whatever has been promised. That does not settle the whole question which is before the Committee. It is not a question whether the form proposed by the Government does what they promised, but it is a question whether that form is sufficient to meet the justice of the case. I desire to deal with that portion of the Clause which is concerned with premises close to what the hon. and learned Gentleman called the centre of the sale of liquor. On what terms are they to be exempt? Only if they are proved, to the satisfaction of the Commissioners, to be used exclusively for a trade which is entirely distinct from that of the sale of drink. That is a tremendous test. I took the case put by my hon. Friend, not so much because I was doubtful of the effect of the words, but because I wanted to ascertain the intention of the Government. I think it was legitimate, and the hon. and learned Gentleman made no complaint about it. I wanted to know before I argued this whether the Government

    2019
    words were incomplete, or whether they intentionally included such a case as that within the limits of taxation. Take a man who has licensed premises and stables. The stables are in connection with a farm, but from time to time a customer arrives in a trap or on horseback, and he puts the horse up in his farm stable. He would not have the stables at all if he had not got the farm, but, having the stables, he is able to accommodate the man's horse. At once these stables, though necessary for the work of the farm, though he will have had them quite apart from the licensed premises, become liable to Licence Duty. Then take the case of a man who has a posting establishment. The moment he supplies one of his cabs to a customer or to a person in the house it becomes assessable for Licence Duty. Surely the Government cannot pretend that that is just. Still less can they pretend that it is just when they see the practical effect of the law.
    I own licensed premises which have stables attached. I sub-let the stables to my hon. Friend, who does a posting business there. If that posting business brings increased custom to the house, I am taxed because I do an increased business, but I am not taxed on the value of the premises as long as I let them to him and he does the business. But if he throws up the lease, and I neither can find another tenant to continue the business nor myself carry it on, I become taxable. I lose the rent and I lose the additional profit, if there was any, which the posting business, carried on in stables appurtenant to the licensed premises, brought to the licensed premises and I become taxable. That cannot be just. It cannot be defended except on one of two grounds. One is that it will cost the Treasury too much to do justice and the other is that it is impossible to find any form of words which will do justice. I do not think the first plea is open to the Government when this injustice arises really from the result of increased taxation which they themselves have imposed. The hon. Gentleman said these provisions were of old standing, but were of little consequence under the old licencing law and valuations as they were then carried out. They have become of enormous importance to the people concerned with the new licensing law and the new scale of duties, and if you are to have that very high scale of duty on the premises you ought to discontinue them the moment these anomalies are pointed out. The
    2020
    injury is twofold. You tax the man if he gets increased profit in his licensed premises by reason of his business, and you tax him twice over for that increased business. You tax him on the premises which bring it to him and you tax him on the increased trade which he does in his original premises. You have in addition the injustice that, if the same addition of business is brought to him by a lessee, he escapes all taxation. It is only if he carries on the two businesses that the premises in which his second business is carried on become taxable.
    There is one wider question still which I am not sure is correctly raised by my hon. and learned Friend. I doubt profoundly the wisdom of our present procedure in regard to assessing for Licence Duty the appurtenances of a public-house from the point of view of temperance legislation. The effect of the Clause on the existing law and the law as the Government propose to amend it, is to tax a publican for providing better accommodation or an alternative to mere drink. The idea, no doubt, of temperance reformers in pressing successive Governments to take that step has been that all these additions act as an incentive to increased consumption of liquor. I do not believe that is true. I think it is possible that they bring more men to the public-house than would otherwise come, but I think that, instead of tending to excessive drinking, they tend to less excessive drinking. The bane of our present public-house is that there is nothing to do but drink. There is a constant pressure on a man to drink, and if a man does not drink his room is more desirable than his presence. A public-house must be conducted with a view to the sale of drink, but you want to encourage them to supply their drink under conditions which do not tempt a man to drink too much, and which allow him to linger long over his one glass instead of drinking a great deal. I am quite sure if we devoted more attention to that, though we might not reduce the actual amount of liquor sold, we should reduce the amount of drunkenness. I believe foreign example has a great deal to teach us in this matter which we would be wise to follow. That is a criticism on the Amendment as much as on the Clause. It is travelling outside the scope of what the Amendment proposes to effect, but I mention it partly because of the interest of the subject itself and partly because it brings me to this conclusion, that really the basis of our present taxation on the sale of

    2021
    liquor is wrong. You want to tax in proportion to the liquor sold, and not in proportion to the value of the premises in which it is sold. You cannot make that change all of a sudden. It is a very big affair. I am sorry the Chancellor of the Exchequer did not proceed on those lines when he was enormously increasing the taxes which were imposed upon the sellers of excisable liquor. But as he did not proceed on those lines, then I do not suppose it is possible for him to undertake it in the month of December, 1911. I do say that the fact you cannot now make a more perfect system of that kind is no reason why you should not remedy such obvious imperfections as my hon. and learned Friend has pointed out in moving the Amendment. I really do not think it can be pretended by the Government that their form of words will meet the cases put by my hon. and learned Friend and myself. Nor do I believe that the Solicitor-General, or the Chancellor of the Exchequer himself, would pretend that the action of the law as it stands, or as it would stand under the proposal of the Government, would meet such cases. I think the Solicitor-General has spoken in a reasonable frame, of mind, and I would appeal to him to be more generous and to accept the form of words which my hon. and learned Friend has proposed, if he cannot find a better form himself. I would ask the Committee to bear in mind that the hon. and learned Gentleman showed no cause why the Amendment should not be accepted. I do not know whether he intended to do so, but as a matter of fact he sat down without adducing a single argument against the adoption of the Amendment of my hon. and learned Friend, except that it did not go so far as the Mover of it laid down as necessary.
    Sir J. SIMON: I think I said that there was this distinction between the hon. and learned Gentleman's Amendment and the Government proposal, that his Amendment went further than our proposal, that it involved greater loss to the Revenue, and that it went further than we ought to go.
    Mr. AUSTEN CHAMBERLAIN: The hon. and learned Gentleman certainly did say something about the loss of revenue. If this were an old-established tax there would be great force in saying, "We cannot deal with these cases at once." But this is the first opportunity the House of Commons has had of reviewing this tax in practice. The Government admit the
    2022
    great hardship which is caused, and they further admit that there are cases which their proposal will not cover. I think, therefore, the Government ought to widen their proposal so as to include these admitted cases of hardship.
    Mr. LLOYD GEORGE: I have a great deal of sympathy with the general argument of the right hon. Gentleman that the present, system of assessing Licence Duty is illogical. I do not think it is very conducive to the encouragement of temperance. I acknowledged the defects of the system some two or three years ago, and I think, at any rate. I laid the foundation of a better system by some provisions which I introduced into the Finance Bill with the view of getting a valuation which would get approximately at the value of the premises for trade purposes, the basis of that being the quantity of excisable liquor sold. In fact there were two methods which I introduced very largely for the first time which carried out the idea of the right hon. Gentleman opposite, though imperfectly, I admit. The first was that special conditions were given where the trade represented one-third of liquor and two-thirds of something else. That was a great advance on the old system, because under this new idea that was introduced in the Budget of 1909 you can take posting into account and the sale of refreshments other than excisable liquor in ordinary village inns and houses of that kind. To that extent, I think, we have advanced considerably along the line indicated by the right hon. Gentleman, but I propose to go much further than that. You should get as the basis of your assessment something approximating to the quantity of liquor sold at any given house. The system of assessing on the size of the house and on a valuation for purposes other than the sale of liquor is, I think, a vicious system. You get little houses sometimes in the country with no accommodation for anything, barely accommodation for drinking, with people packed in a small room, and doing an enormous trade. On the other hand, you get a very large house where the sale of liquor is comparatively small. I was amazed at figures given me by some of the London publicans about well-known houses in London—I do not care to name them: I have no right to do so—houses which are really very well known, and if I had not known the gentleman with whom I was dealing I could scarcely have accepted the figures, the

    2023
    quantity of liquor sold was so small in proportion to the reputation of the houses as public houses; and, on the other hand, you will probably get in a slum district a wretched little house selling five or six times as much liquor as these great houses that you have got in prominent corners in London.
    That is a thoroughly bad system. I said then to the brewers who owned these houses, "Cannot you agree on some basis? I want just this much money from the licensed trade. I do not care on what basis it is as long as it is fair. If you agree upon a fair basis of distribution I will accept it." The first thing I found was that there was hopeless disagreement between London and the provinces. The provincial publicans would not even come into conference. Nobody knows that better than the hon. Member for Ayr Burghs (Sir G. Younger). He knows that we could not get the London brewers and the provincial brewers to agree. We could not get them to come on a common platform. What suited London did not suit the provinces, and what suited the provinces did not suit London. London wanted to be taxed on the basis of the trade done, because the rateable value was so high here, and very often the business was small. When you go to the provinces it was just the other way about. The rateable value was low, and business was very considerable. In those conditions I failed to get any sort of agreement among the brewers of the country who owned these great houses as to the basis of assessment. The next best thing that I could do was to provide for some sort of systematic valuation. I did not get very much assistance from the publicans in that respect. I am not blaming them. I do not say that it was a refusal on their part. It was because they do not keep books. A very small proportion of publicans keep books. They simply reckon upon the barrels that come in and the account to the brewer, but there is no real systematic book-keeping by the majority of the publicans as far as I could see. Therefore they could not give me the information that I wanted to establish a new basis. I have carefully gone through the returns, and I do not think that half the publicans have sent them in.
    Sir G. YOUNGER: Seventy per cent. of those in Scotland have sent them in.
    Mr. LLOYD GEORGE: I have no doubt that the Scottish publicans keep a very
    2024
    careful account. I am taking the whole country and not merely Scotland. That may be sufficient to enable us to form some sort of a basis, but it would be a mistake to tinker at it, because you can really make out a case which is much worse than this. The case made out by the right hon. Gentleman. I do not deny; I think compared with other houses it is unfair, but not nearly so unfair as some of the things I have mentioned—a big house with splendid accommodation, but not doing a great trade in liquor, and a wretched little house with no accommodation, which is there purely for slopping and drinking, and which does an enormous trade. I think the grievance is much greater for a big house of that description, conducting its trade respectably, with fine accommodation, and showing some sense of responsibility towards the public. The right hon. Gentleman says, "Here is one grievance." We deal with it. What happened? We have given away about £300,000 or £400,000 of revenue, largely due to the blandishments of the hon. Member for the Ayr Burghs.
    Sir G. YOUNGER: And the Law Courts.
    Mr. LLOYD GEORGE: No; I can assure the hon. Gentleman that we already had that Amendment prepared before the case came before the Law Courts. It was before the Wrigglesworth judgment, I believe, that an agreement was made between ourselves and the brewers.
    Sir G. YOUNGER: No.
    Mr. LLOYD GEORGE: That is my recollection. The hon. Gentleman says it was not, and, of course, I accept his statement. My own recollection is that it was agreed before the case came into Court. If we begin by making one concession after another, the revenue goes, and by the time we come to recast the whole basis of valuation, we shall, as it were, have to rebuild our Licence Duty when we have to get revenue. For the moment, I think I have gone as far as I am justified, and I have gone beyond the statement I made to the House in May. The right hon. Gentleman will bear me out that I have gone as far, though I am assured by my advisers that I have gone a little beyond. I think it is as far as I can reasonably be expected to go in giving away revenue until we come to re-open the whole question. I shall be very glad when it is possible to consider the whole thing

    2025
    from the point of view of taxing on the basis of the sale of intoxicating liquors. It would be more encouraging to those who try to keep good houses, and I am sure would be more conducive to the best interests of temperance. That is really what I am aiming at, but in the meantime I do not want to see my revenue frittered away by £50,000, £100,000 and £200,000 at a time.
    Mr. MAURICE HEALY: With great respect to the right hon. Gentleman, I think the discussion has been diverted from the Amendment to a Debate on the general principle. Both right hon. Gentlemen have made something in the nature of Second Reading speeches. The Solicitor-General promised that when this Amendment was reached he would explain the Clause and exactly what purpose it is intended to serve. I got up earlier in the Debate, and I said, having read this Amendment, that I professed myself unable to say whether it lessened the burden on licensed premises or whether it increased them. In reply to that suggestion or complaint, the hon. and learned Gentleman promised that when we came to this Amendment which, he said, went to the whole root of the Clause, he would give us a full statement on that subject. I am sorry to say that when he rose—or, rather, when he sat down—we were as ignorant on the point as when he rose. This is the year 1911, and the Act of Parliament which we are seeking to amend was passed as lately as the year 1910. In the year 1910 the Government passed a wholly new definition of licensed premises, and in the year 1911 they come down to the House and repeal that definition and substitute for it something wholly different. Is it unreasonable, under those circumstances, if we ask the hon. and learned Gentleman in charge of the Bill to tell us what defect they have found in the existing definition, and how they mean to amend that definition. The hon. and learned Gentleman and the right hon. Gentleman who spoke last told us that one of the objects of this Clause was to give away £50,000 (I do not know whether I am correct in my figures). I began, as I say, by being in some doubt as to what this new Clause does, but I am no longer in doubt. I am quite satisfied that this new Clause does not give away one brass farthing. The right hon. Gentleman makes a contemptuous gesture, but I will endeavour to prove what I say. To give the hon. and learned Gentleman the Solicitor-General the opportunity of deal-
    2026
    ing with the point, I put a question in the course of the Debate. The hon. and learned Gentleman proceeded to put the case of a farm and public-house, and I asked the question in that case would the stables on the farm be taxed under this Clause for the purpose of the licence. The Solicitor-General answered that that was one of the objects of the Clause to prevent those stables from being taxed. Thereupon I interrupted him in Debate and pointed out that the point which he suggested this Clause met was already met in the Act of last year. I have the Act here, and it is as plain as light, and on the terms of that Act it is made abundantly plain and clear that the stables in the case which the hon. and learned Gentleman raised would not be taxed and that no Amendment of the law is necessary to meet that case. The Act of last year says,
    "The expression premises in relation to the value of licensed premises includes any offices, courts, yards, and gardens, occupied together with the house in which the liquor is sold, except any such offices, courts, yards, or gardens as are proved to the satisfaction of the Commissioners to be used for any trade or business distinct from any trade or business carried on in the premises of the licensed owner."
    Under those circumstances, if the stables were purely farm stables, they would not be taxed under the old Act. Consequently so far as that particular point is concerned it is abundantly plain that we need no Amendment of the law. While it does not amend the law so as to relieve the publican in that case, it amends the law in order to relieve the Treasury of difficulties on no less than two points. First and foremost in the definition of the Act of last year the word "exclusively" was not used. The law is tightened under this Clause. Under the Act of last year you might say, "I am using these stables as farm stables," and the Commissioners could not say to you, "Yes, but you must show us that you are using them exclusively for that purpose." Under this Clause, which is inserted by way of a concession, when the farmer-publican goes before the Commissioners to seek exemption for his stables he must prove that he is using them, not merely mainly, but exclusively, for the purposes of his farm. Secondly, not only must the publican seeking exemption prove that the premises are used exclusively for some second trade or business, but that that trade or business

    2027
    is entirely distinct from the trade or business of the publican. There, again, the law is made stricter.
    Finally, the new Clause goes out of its way to make it perfectly plain that, no matter how remote from the licensed premises may be some other premises winch the publican happens to use as ancillary to his trade or business, they are now to be included in the definition of premises, and taxed on their valuation. Under the old Act the publican could not be taxed upon any additional premises wholly severed or at some distance from the licensed premises, notwithstanding that he used them in connection with the public-house. Take the case of premises a street away used in some way in connection with his trade or business. No one will contend that they could be included in the valuation of the public-house; but under this Clause, passed under pretence of being a relief to the licence holder, it is made perfectly plain that, no matter how remote the ancillary premises may be from the main premises, they are to be included in the valuation. On these three distinct points the law is made stricter against the publican and easier for the Treasury. I have searched in vain for one syllable or comma in which the Clause gives relief to the publican or in any way lightens his burden. When the Government were seeking to amend the definition which they advisedly adopted only last year, they might have favoured us with a clear statement as to what was in the new definition that was not in the old, and what in the old that was not in the new. My interest in this matter is purely an Irish interest. There is no difference, so far as this Clause is concerned: it will hit the publican in England and also the licence holder in Ireland. [An HON. MEMBER: "No, no."] That is my argument. I may be quite wrong, but I have failed to extract from the right hon. Gentleman the Solicitor-General any single particular in which this will be otherwise. The point he made clear is in the Act of Parliament already. The new law instead of making the law clearer for the publican makes it clearer against him.
    Mr. J. M. HENDERSON: I was very pleased to hear what fell from the Chancellor of the Exchequer. I am glad he has been converted. In 1909 I told him that rent as the basis of assessment for Licence Duty was entirely wrong. I cited the case of a £50
    2028
    house actually doing more business than a house of £500. The right hon. Gentleman has struck the difficulty. Some of us have always agitated for a percentage on the sale. The difficulty is the provincial brewer and the tied house. I appeal to him to carry out a scheme for valuation according to sales which is the only just way. The Solicitor-General was good enough to say that the case I sent to him would be met—that of farm buildings. It is necessary, I submit, for the Treasury to come to some understanding on this point, because there is a very great muddle and difficulty, and the difficulty arises in this way. There are two authorities. There is the Inland Revenue, who say, "We want the assessment for Duty of such and such premises," and there is the licensing authority, who say, "These are the premises on which you actually sell the liquor." I cited a case. The man was assessed for the whole block, offices, farmsteading and everything. On complaining he got a letter from the assessors:—
    "With regard to your application for repayment of licence duty, the Board direct me to acquaint you that they are advised that the whole of the farm buildings.… should be included in the valuation for 1910–11."
    In these circumstances the current annual value for Licence Duty was so much and the Duty has been paid on the annual value.
    "The Board are unable to make any repayment of publicans' licence duty for this year."
    So that, assuming my hon. Friend the Solicitor-General is right, and that this case I cited to him will be exempt this year, it is quite clear it was not exempt last year. Mark what followed. This collector could not blow hot and cold; he could not say the whole were included, yet when, the previous August, this farmer asked for a special licence for some sort of entertainment in his hall, the collector claimed a licence of 10s. In the circumstances, however, they have sanctioned the repayment of the occasional Licence Duty in respect of the hall. Then the letter goes on to say:—
    "As regards 1911–12, the case will require to be considered with reference to the new definition of premises' proposed in the Finance Bill now before Parliament; but the decision cannot be come to until the Bill becomes law. Meantime, the duty will be accepted on deposit upon the annual value."
    That shows the whole thing is in a muddle. I had another case of a man in the country with a hotel and stables who had an entertainment, and wanted to put up a tent in his garden. He asked the superviser whether he would want to take

    2029
    out a licence, and he said he did not know. The Solicitor-General, as I understood him, said that if the premises are part of the building or immediately contiguous to the building, the duty will be charged, but if they be at a distance—how far I do not know, whether a hundred, or two, three, four, or five hundred yards—they are not to be rated. Why? I suppose the only possible reason you can include stables is because they are ancillary to the business, and that they bring people there. That is quite true. But what about the London hotels? They spend thousands of pounds upon advertisements to bring people to them. Are they to be taxed upon that expenditure? In your 1904 and 1909 Acts you are forbidden to take anything else but the liquor sold. If that is so I want to know what the argument is as to what the "place" is to be. The Solicitor-General said the "place" was one that acted and had effect upon the trade——
    Sir G. YOUNGER: The Solicitor-General said it was distinctly intended to rope in these places wherever they were.
    Mr. HENDERSON: That makes the case still worse. I fail to see why that should be. In any case, let us be quite fair about the thing. If you are going to charge this Licence Duty then the man is entitled to sell liquor on the premises. [HON. MEMBERS: "NO."] Why not? What is the equity in saying to a man, "Here you have stables at a rent of £50; we are going to charge you Licence Duty on £25, but we are not going to allow you to sell a single glass of beer in them?" What is the justice of that? My hon. Friend (Mr. Leif Jones) is largely responsible for this Licence Duty. I want to know can anybody justify it? I have asked a lot of these men, and they say, "We do not agree; if you are going to charge us Licence Duty for the stables we shall claim the right to sell liquor in the stables." Then the justices come in and they say, "No, you must not sell liquor in the stables," although the Government are going to charge for selling liquor in the stables. The Chancellor of the Exchequer said that the rent ceased to be a criterion for the Licence Duty, and that is the difficulty. What law are we under? If it is the rent let us understand it, but I find in the North that it is not the rent, but they are going upon a sort of hybrid mixture of the annual licensing value and the rent. This shows how difficult and how mixed up it is, and how absolutely necessary it is that we should have some proper basis. To ascertain the
    2030
    licence value, you are forced to include all your posting receipts. If that is so in order to arrive at a proper proportion he will he able to reduce his annual licence value or his compensation value.
    Sir G. YOUNGER: This has nothing to do with the annual licence value at all.
    Mr. J. M. HENDERSON: If you are going to charge a Licence Duty on the stables, it is only right that a man should be able to return his total receipts so much less in order to show that he is not under this special Clause. I do not think that these stables should be included in the licence-value Clause unless the man is going to have a free hand to sell in the stables or other places, and the Licence Duty should be confined to the portion of the premises on which the licensing authority allow drink to be sold. They allow drink to be sold in certain premises, and those premises alone should be subject to Licence Duty. Immediately you bring it beyond that you will create a great deal of trouble, muddle, and dissatisfaction to the people. The only remedy by which you can destroy these anomalies is to get a proper system of charging a percentage.
    11.0 P.M.
    Mr. GRETTON: The hon. and learned Gentleman complained that my hon. Friend the Member for Warrington (Mr. Harold Smith) had stated his whole case, and then proceeded to set up an Amendment which upset his whole argument. That is exactly the position to which we are driven. We have no other course. The whole case has been stated by the hon. Member for Aberdeen (Mr. J. M. Henderson). It is a manifest injustice which cannot be defended that Licence Duty should be charged for portions of premises which are not licensed. That is our case, and it has been before the House on many occasions. The Government have been forced to deal with it at last, and on the Revenue Bill this year they made an undertaking they would do something in their Finance Bill to deal with it. This Amendment is drafted carefully to carry out as well as can be done the undertaking which the Government itself gave. It does not go beyond that. The Amendment in the Bill, as drafted, is in some respects worse than the law as it stands. There is now a doubt in some cases, and the licensee gets the benefit of the doubt. This Clause is very largely going to do away with those doubts, and I can assure the House that the expert advisers to the

    2031
    licensed trade think the position under this Clause will be rather worse than if the Clause were not passed. Is that what the Government mean? I thought, after all the arguments and the Debates we have had, they were really going to do something, and this Amendment of the hon. Member for Warrington, as I venture to assure the Committee, is not going beyond the undertaking of the Government itself. Conferences have taken place, and I think I am entitled to say they ended as every argument addressed to the Government in this House ends, and as it has ended to-night, in this: "We are only going to give up so much money, whatever the justice of the case may be; we have got the money in our pockets, and we are not going to give it up." That is a very extraordinary principle. The Chancellor of the Exchequer takes his proposals largely out of the purview of the House, and the Budget is becoming an automatic machine for grinding taxes out of the taxpayer. We have no opportunity of reviewing its provisions unless they can be raised in the form of new Clauses in the Finance Bill. This question, at any rate, has been raised, and the Government promised to deal with it. After careful conference and careful discussion they have broken their promise because they are afraid of losing a little more money. If you take the arguments of the Chancellor of the Exchequer and of the hon. Member for Aberdeen, and pursue them to the end, then all Licence Duties should disappear, and their only course is to fall back upon the article itself. That is an enormous confession of failure. The Government set out to tax licences, and now they are obliged to admit their whole process has broken down. That is a very remarkable position, and I do not know how they are going to get out of it. Two cases were taken as test cases in regard to the new Licence Duties. There were a vast number of cases, but the Treasury decided to take two of them as test cases The Government lost both those cases, and judgment was given in no uncertain terms against them.
    Sir J. SIMON: The hon. Gentleman is entirely wrong. The decision, in point of fact, was in the Government's favour. That, however, does not alter the fact that we are carrying out what had been previously stated in this House.
    The CHAIRMAN: I do not think this is pertinent to this particular point.
    Mr. GRETTON: I was led into the matter by the Chancellor of the Exchequer. The Wrigglesworth case was antecedent to the Budget of last year. It was decided on appeal against the Government on every material point, and they had to put Amendments in their Bill to meet what the courts decided. The Government are now acting on the advice pressed upon them from the Benches behind them. Although they desired to make some slight concession in this matter, they have been misled into doing nothing whatever.
    Mr. LEIF JONES: The speech to which we have just listened is a very ungrateful one to the Government. I would like to ask the hon. Member whether he wishes the Government to withdraw the Clause which is now before the Committee?
    Mr. GRETTON: Personally I am quite indifferent whether the Clause is passed or not. It is really of very little benefit.
    Mr. LEIF JONES: I wish the Chancellor of the Exchequer were here to hear that. Personally I have no desire to press the Clause, and I do not know that anybody on this side has desired it. The Clause is proposed in fulfilment of an undertaking given to the hon. Members opposite.
    Mr. WATSON RUTHERFORD: It is not in fulfilment.
    Mr. H. SMITH: It is an attempt at fulfilment.
    Mr. LEIF JONES: We claim it is a fulfilment, and the Solicitor-General, speaking with the full authority of his office, claims that it is a fulfilment of the undertaking that was given. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) accepted it as a fulfilment. [HON. MEMBERS: "When?"] To-night.
    Mr. H. SMITH: The hon. Gentleman is entirely misconstruing my right hon. Friend's assent. He accepted the statement of the learned Solicitor-General that it was the desire of the Government by this to fulfil the pledge which the Government had given. The right hon. Gentleman nodded his head, but he did not accept it as a fulfilment.
    Mr. LEIF JONES: My own recollection is that he said he would take it from the

    2033
    Solicitor-General that so far as the legal interpretation of the words went it was a fulfilment of the pledge that the Government had given. It would be interesting to know whether or not the Opposition really wish the Government to withdraw the Clause.
    Mr. WATSON RUTHERFORD: Certainly.
    Mr. MAURICE HEALY: How does this Clause improve the law so far as Ireland is concerned?
    Mr. LEIF JONES: Ireland is subject to a special valuation, and until the revised valuation comes in force, Ireland is exempt.
    Mr. MAURICE HEALY: The hon. Member is quite wrong. No doubt Ireland is governed by the existing valuation but this Clause fixes what is to be valued.
    Mr. LEIF JONES: I think the Opposition have displayed singular ingratitude towards the Government. The Government have made considerable concessions over the whole assessment.
    Mr. WATSON RUTHERFORD: What concessions?
    Mr. LEIF JONES: In the interpretation of the words.
    Mr. WATSON RUTHERFORD: Where?
    Mr. LEIF JONES: The result is estimated in this case to be £50,000 or thereabouts, less to be taken from licence holders, but that comes on top of £400,000 conceded at the beginning of the year; altogether close upon half a million which has been taken off the Licence Duties. I think the present system of assessing the licences is a very unsatisfactory one. Those familiar with the discussions we had in 1909 know that I have never been an ardent defender of the present system of assessing the duties. I think it would be better to assess them on a basis measured by the amount of alcohol consumed on the premises. But while the present system exists, and until a schedule of licence values is drawn up, I am bound to say the hon. Member is one of the difficulties in the way. The speech which he has made is not helpful towards getting on to the basis of alcohol consumed, which, I think, nearly all who give fair consideration to this question have come to the conclusion is the only satisfac-
    2034
    tory basis of the assessment of Licence Duties. Until we can do that it does seem to me we are bound to maintain the system in something like its present form. A great deal has been made by the Mover of the Amendment as to the case of stables auxiliary to licenced premises. I quite admit that in certain cases it does seem very hard indeed that the stables are to be included in the valuation and assessed for Licence Duties. But, on the other hand, they do undoubtedly increase the value of the licence, and if you did not include the stables close to the licensed premises you would not reach the true value of those premises, I can imagine the hon. and learned Member for Warrington when applying for a licence for a house adjoining posting stables pointing to the fact that these stables brought a large number of people there, and consequently justified him in asking for a licence.
    Mr. H. SMITH: I can assure the hon. Gentleman I should not use such a stupid argument.
    Mr. LEIF JONES: I cannot say what argument the hon. and learned Gentleman would use, and therefore, perhaps, I was wrong in putting into his mouth an argument which most counsel, even with greater experience than the hon. and learned Gentleman would use, and which I have very frequently myself heard—Gentlemen of his own profession quite as much entitled to lay down the law as the hon. and learned Gentleman.
    Mr. HAROLD SMITH: Is it in order for the hon. Gentleman to allude to me in my profession without my having the right to point out that the allusion is entirely wrong, and why it is wrong.
    The CHAIRMAN: Not by way of interruption, certainly. Unless the hon. member gives way the hon. and learned Gentleman must wait.
    Mr. LEIF JONES: Another point is this: In a compensation case, if the licence were going to be taken away from the licensed premises undoubtedly evidence would be adduced to show that the value of the licence was greater because of the neighbourhood of the stables as part of the business carried on in the premises, and it really seems to me, though it is very easy to raise difficult cases, and I think there are many difficult cases under the present assessment, we shall never get rid of them until we get on to the other scheme of assessment.

    2035
    The Opposition ought to recognise that the Government have tried to clear up some of the difficulties at present in the wording of the law and have made certain concessions. Having said that, I want to appeal to the Government to recognise that the whole House really feels that the present system is a very unsatisfactory system of assessing the duty to be placed on licensed premises. It evidently does a great injustice to some of the large London houses, and it equally does injustice in the case of provincial houses, sometimes the other way. We want to get down to a basis which will do justice all round. The hon. Member (Mr. J. M. Henderson) referred to me in a very pointed way as having helped to increase the duty on licensed premises. I do not deny that. I am quite ready to do it. I am not prepared to say the limit is reached now. It is in the amount of the duties that I want to deal with them. I want to have an assessment perfectly fair between house and house. I think that assessment is not perfectly fair on the present system, and I appeal to the Government to fulfil the expectation they held out when discussing this question in 1909, that they would have a basis of licence value which would enable the duty to be assessed practically in proportion to the amount of alcohol consumed on the licensed premises. When that is done, all the difficulties with which our time is taken up year after year on the present system of assessment, would disappear and be placed upon a simple basis, and I think justice would be done all round, and the Government which did it might find a certain amount of criticism from the opposite side of the House, but they would find very general agreement that that was a sound basis on which to assess the Licence Duty.
    Mr. C. BATHURST: This question is always discussed as if it were one for brewers and distillers, and it is most unfortunate that it should be so. The hon. Gentleman has expressed sympathy with the view, and I wish he would persuade the Chancellor of the Exchequer to translate it into legislation, that these Licence Duties should be based upon the actual sale of the liquor. That is the only fair basis. The Chancellor of the Exchequer has expressed the view that his difficulty lies in the assessment of licence values in the provinces. I do not think that difficulty actually exists. He thinks it exists because he has only consulted the brewers,
    2036
    but if he considered the fact that the bulk of the small country hotels are just those premises which are not in the hands of the brewers, and are not tied houses, he would be better able to estimate the hardship which is being suffered in these cases. I feel particularly interested in the case of stables. It is the main case of hardship in the country districts where a large amount of posting is done quite irrespective of the trade of the house. The hon. Gentleman opposite thought the fact that there were stables was a reason why there should be increased value in the house. I could cite several cases where the existence of stables since the passing of the Finance Act of 1909–10, so far from increasing the value of the house, has actually decreased it. There are cases to-day in my own neighbourhood where stables are being deliberately taken away to the great detriment of the village and neighbourhood, and the bar is being increased in order to make the place a more saleable proposition to some brewing company. Is that satisfactory?
    It seems to me that the tendency of licensing legislation and of Finance Acts which affect licences, so far from putting a premium upon temperance, has actually put a discount upon temperance and a premium upon drinking. It has driven free houses, which are largely posting houses, into the hands of brewing companies. The only suitable proposition for the brewery companies to take them over is to have them converted into mere drinking shops instead of allowing them to remain places for the accommodation of travellers. I know two cases in Gloucestershire where there were attached to the country hotel cowsheds, the cows being milked to provide the travellers who were staying at the hotel with the milk they required. Both of these cowhouses were closed because they added to the value of the house for Licence Duty. Is that desirable? It is putting, if I may say so to the hon. Gentleman (Mr. Leif Jones) who is intensely interested in the development of temperance, a discount upon temperance and a premium upon drinking. Take the ordinary case of stables attached to a country inn or hotel. The Solicitor-General suggested that these stables might be used to accommodate carts which would carry about barrels of beer or bottles of whisky which were to be sold by the licensee to the outside public. I have lived in the country all my life and I have never seen any hotel cart or carriage carrying about barrels of beer or

    2037
    bottles of whisky for outside customers. What the hotel keepers do carry about in their carriages are the travellers they accommodate or else they cater for the convenience of the travelling public who do not choose always to travel by rail. Why should you add to the Licensing Duty the amount the hotel keeper gets for carriages or carts provided for the convenience of the travelling public? If he does not use them actually for trade purposes, there is no reason for putting an additional tax on these stables as part of the licensed premises. I should have preferred that this Amendment should be restricted to the case of stables, because there is an unanswerable case. I hope oven now at the eleventh hour the right hon. Gentleman will see his way to make some concession as regards stables in country districts. If the Government wish to know something about the conditions of country hotels they should not go to the brewers to find out their facts.
    Captain MURRAY: I agree very much with what has been said with regard to stables. I had intended to press several cases upon the attention of the Government this evening, but there is one, at any rate, to which I should like to draw attention. The valuation was made early in the year of a particular hotel. I will not give the name. In that valuation upon which Licence Duty was assessed there were taken into account farm buildings to the extent of £10. Inquiry was made into the matter some few months afterwards, and the valuation of the farm buildings was taken off, thus reducing the valuation for the purpose of assessment by £10. That does show that there appears to be no certainty as to how the valuation is going to be made. If the Amendment introduced by the hon. and learned Gentleman is to give some certainty to the matter I think a great advance will have been made. So far as the stables are concerned, I do think that the case has been made out. In fact, the Chancellor of the Exchequer agreed himself. But he said he did not think it wise or expedient at the present moment to fritter away money here, there, and everywhere before the principle of levying taxes on the amount of liquor sold was adopted. Seeing what he said in this House to-night and the measure of agreement there appears to be from every quarter of the House as to the principle upon which the taxes on liquor should be levied, and that
    2038
    something ought to be done, surely much lip service is paid by many hon. Members all round to this principle, for year after year we are told that something will eventually be done, and yet year after year the Finance Bill goes through and nothing is done. [An HON. MEMBER: "Change the Government."] I am not certain even if we changed the Government of anything being done. The Chancellor of the Exchequer stated as his reason for doing nothing that London and the provinces were opposed to each other. It seems to be quite evident that if the Chancellor of the Exchequer is going to do anything he will have to throw over London or the provinces. Personally, I am not much concerned which he throws over so long as he gets something done. I do urge on the Government that they should take this seriously in hand in order to carry out next year, if possible, what is evidently the desire of the House.
    Mr. NORMAN CRAIG: I am afraid that I shall have to disappoint the hon. Member for Wiltshire (Mr. C. Bathurst) if he imagines that I am rising to express gratitude to the Government. My political Christianity is not sufficiently advanced to enable me to bless a Government for what I believe to be an entirely mischievous proposal. The Chancellor of the Exchequer has not said one single word really directed to the Amendment before us. He has made a great many observations, and I regret that he has been followed by a number of hon. Members on both sides of the House, in what might be Second Reading speeches as to what might be the proper policy with regard to the sale of intoxicating liquors. He has not touched at all the real grievance which it is the design of this Amendment to cure. I invite the Committee to redirect its attention to the particular Amendment. It is not, as the right hon. Gentleman said, an attempt to tinker at a new system. This Clause, however, while not tinkering at a new system, does aggravate an old and a bad system. This so-called redemption of a pledge by the Government to give relief is no true relief, but an aggravation of what existed before. The Clause of the Act of 1909, as originally introduced, was to the effect, that "licensed premises" included any offices, courtyards, gardens, etc., occupied together with the house itself in which the liquor was sold. It was pointed out to the then Solicitor-General (Sir Samuel Evans) that this was unfair, and the Committee

    2039
    will have noticed what Sir Samuel Evans then promised the House should be done. He said he would provide words which would make it perfectly clear that any part of the premises shown to the satisfaction of the Commissioners to be used for a trade or business separate and distinct from the business authorised by the licence should be excluded from the annual valuation. That pledge was given, and that pledge was not carried out.
    When the Finance Bill of 1909–10 was passed Section 52 added words which did not give effect to the pledge of the then Solicitor-General, because it did not limit the definition to businesses which were pursuant to the authority of the licence. That is the real point to which attention should be directed. It is quite right to include in the tax any property that enhances the value of the licence, because it is in connection with and by virtue of the licence; but in the case of property which stands outside the licence, which is entirely distinct from it and the business which it authorises, it would be entirely unfair. But the definition in the Clause is very much worse than the definition in the previous Clause. In the first place you have in it two objectionable adverbs. The licence holder has to prove that the premises have been used "exclusively" for some trade or business. That is new, and that is the grievance. In the second place he has to prove that the business is "entirely" distinct from the licensed business. Here, in this Clause, you have these two new adverbs, "exclusively" and "entirely," which are an aggravation and not a definition.
    The first part of the Clause deals with the property in the curtilages and the property in the vicinity coming under the same occupation. But you get a very much worse case than that when you come to the second part of the Clause, which deals with property outside the curtilage, and not in the immediate vicinity. Then you introduce what has never been introduced into the definition of licensed premises before, not only the premises within the curtilage or in the vicinity but neither in the curtilage or in the vicinity, and not occupied in the curtilage but used "in connection with." User as a test of the value of licensed premises has never been applied. You are now introducing it without any sort of limitation. It may even not be in the same area. You may get this position that there are a dozen
    2040
    houses in the same hands and in different parts of the country, and you may have a central store or distilling place. That store may be in Birmingham and the houses in London and yet the store is to be thrown on to the licence. The hon. and learned Gentleman is introducing into this Clause a great aggravation of anything which has ever occurred in a definition of this kind before, namely, user as distinct from occupation, and user of other premises outside the occupation and any distance from the premises. The hon. Member for Rutland (Mr. Gretton) has said he does not care whether or not this Clause goes through. I quite understand that he may not only be anxious that it should not go through, but may really think it is an aggravation instead of an amelioration of the former conditions. It overlooks what the pledge of 1909 was directed to, and it makes it more difficult to give proof in demanding exemption, and introduces an element of annual value which has never been introduced, and irrespective of the fact as to whether the premises are in the same area or at any distance. For my part I regard this Clause as infinitely more mischievous than any of the various definitions for the purpose of annual value which have preceded it.
    Mr. AINSWORTH: I think hon. Gentlemen opposite are unnecessarily alarmed at this Clause. Its last words provide anything connected
    for any purpose in connection with the sale of liquor.
    Surely it is clear the licences are granted and authorised for the sale of liquor and premises which are used in connection with that ought to be included in the definition, and therefore in the valuation. How do the authorities distinguish between a hotel business and a public house business? If we could settle the licence value by the amount of liquor sold it might be fair; but in the meantime we have to ask, Does the income arising from the liquor sold on the premises amount to more than one-third of the total receipts of the licensed premises? If it does not the premises are licensed as a hotel on the lower scale; if it does, the premises are regarded as a public house, and pay at the higher rate. To get his premises licensed as a hotel, the licence holder must include in his receipts every possible source of income. In the Highlands of Scotland there are many roadside inns where visitors stay for fishing, coaching,

    2041
    and so on. It is the object of the occupier to get his place licensed as a hotel, and if he is allowed to include the receipts from boating, posting, fishing, and so on, surely it is only fair that there should be included in the word "premises" everything in connection with the hotel which enables him to draw money from those different sources. I have brought a number of these cases before the authorities, and I should like to take this opportunity to tender my sincere thanks to the authorities at Somerset House for the continuous trouble they have taken to enable the tenants of these houses to establish themselves on the more favourable basis. I sincerely hope the Government will adhere to the Clause which confers an enormous benefit on the trade as a whole.
    The CHAIRMAN: May I remind the Committee that the Debate has run into rather wide questions of licensing reform. I would invite hon. Members to endeavour to bring it back to the question of the definition in this Clause.
    Sir G. YOUNGER: I shall endeavour to follow your ruling, but I am bound to say that my right hon. Friend the Chancellor of the Exchequer has gone rather wide.
    Mr. LLOYD GEORGE: I was answering the right hon. Gentleman opposite.
    Sir G. YOUNGER: I wish we all had the same latitude as the right hon. Gentleman, but, of course, we cannot, under the circumstances, ask for it. My objection to the Clause is that it does not carry out the undertaking given by the Chancellor of the Exchequer on the Second Reading. It is quite unintentional, of course. It appears to do so in the first half of the Clause, but the second half renders the first half nugatory. The Commissioners of Excise and Customs by this Clause can, and will, if possible, rope in the extreme cases of premises contiguous to a public-house. The Solicitor-General told us distinctly that it was not intended in any kind of way to exempt the associated buildings, however remote they may be from the licensed premises. The hon. Gentleman the Member for Rushcliffe (Mr. Leif Jones) said that people would pay more for a licence where there was a stable, because it brought more trade to the House. But I can tell him of a case where the hotel stable brought more trade to another house. This stable, in fact, was so far from the house it belonged to that the other house derived the benefit.
    2042
    It shows how absurd and ridiculous it is to rope in the stables——
    Mr. LEIF JONES: It really proves my point—that, the stable did bring business. In this particular instance, through the stable being nearer to the second house, it brought the trade to it. Still it did bring business.
    Sir G. YOUNGER: I have in my mind a case of a little hotel in Aberdeenshire. There is attached to it a five-stalled stable. The proprietor had four horses stalled for the purposes of his farm, and one empty stall. This he allowed to be used occasionally on Sundays by some of his friends for putting up their horses. The Customs and Excise immediately roped in the whole of the buildings. That case is included by this Clause. I am perfectly certain that the right hon. Gentleman quite honestly tried to carry out his obligation, but I do not think he has succeeded in doing so. To do so needs some modification of the wording of the Clause. I do not know whether we are to have the Budget crammed into the corner of the year. One has not time to consider the thing; the Government itself has not time. There may only be a few moments between the Committee and the Report stages. You cannot do this sort of thing. This is just one of the cases which show how the absurdity and scandal of putting off the Budget so long, affects adversely the interests so important. I ask the right hon. Gentleman to look most carefully into this matter and to believe that we are advised by those whom we can trust, that this Clause as it stands does not carry out the obligations. My withers are unwrung by the right hon. Gentleman's plea of poverty. The figures he gave us some time ago of the proceeds shows he has got more money than he estimated. He has no right to take more than £600,000 a year. On his own showing he has got a good deal more than his due proportion. The right, hon. Gentleman shakes his head; he is very lavish in throwing away money sometimes, but he does not give any back. Whether the right hon. Gentleman has the money or whether he has not he ought to carry out his obligations. Under the Clause as it stands the authorities and their subordinates will be able to include ridiculous cases in the future as in the past.
    Sir FREDERICK CAWLEY: If the right hon. Gentleman gives favourable consideration to the case made on both

    2043
    sides of the House he will meet an undoubted injustice. The Chancellor of the Exchequer's speech came to this, "It is practically an injustice but I cannot do away with this injustice because there are a lot of other injustices, and if I did away with this one I should have to do away with the other injustices as well." I do not think that is a fair argument.
    Mr. LLOYD GEORGE: I cannot accept that version of what I said. What I did say was I thought the whole present basis of assessment of Licence Duly was not a right one and it would be far better if we went on the basis of trade, but if you begin to haul it to pieces here and there the result would be you would lose all your revenue.
    Sir F. CAWLEY: I think that is very much what I said after all. It is not very much consolation for a man who has to pay perhaps £5 or £10 too much in practice to be told, "Oh we know it is an injustice, but the whole thing is wrong." I suggest to the Chancellor that there might be some words put in not perhaps so stringent as the words of the hon. Member opposite. I think his words are too wide. I think you might put in the words "or mainly" after the word "exclusively." I do not think the words are just as they stand, because disused stables or stables built of old beer barrels and stables that have not been used for twelve months may be roped in. I do not think that ought to be. I think the Chancellor might accept the word "mainly" and leave the matter to the discretion of the Commissioners. They would see justice done. I hope the Chancellor of the Exchequer will favourably consider some such Amendment as I have suggested.
    Mr. WATSON RUTHERFORD: I hope, as the result of this very long Debate the Government may see their way to withdraw this Clause altogether. This is supposed to be given us as a concession, and when it comes to be examined it is found that it is not a concession at all, but something which will considerably tighten and increase the burden of taxation. A pledge was given first of all on this matter by the former Solicitor-General, Sir Samuel Evans, who gave it in Committee when the point was first raised. The same point has been raised several times in subsequent debates, and almost on every occasion the Government has ended off by
    2044
    giving a distinct pledge that this question would be considered, and something done upon it. This is the first time we have had an opportunity of seeing what the concession is to meet the pledge which they had previously given. What is the point we are discussing? I am bound to ask that because on both sides of the House we have indulged in a general discussion of licensing taxation which has nothing to do with this particular Amendment. The point is the including in licence taxation such things as stables, stock rooms, bowling greens, motor houses and carriage sheds, frequently found associated with licensed houses, which are just as often dissociated from the licensed premises and may be situated on the opposite side of the road, and in some cases they may be adjacent to the licensed premises and let to a separate tenant.
    It is in these circumstances that we get into a bit of a fog with regard to the exact way of expressing the meaning of a Clause, and a considerable amount of injustice may be done in this way unless we are very careful as to the way the provision is worded. What is the law at the present moment? It is that where there are a number of buildings or holdings such as I have referred to in the same occupation and assessed on the same occupier, they are all roped in for licence duty upon this high scale. This did not make very much difference until the right hon. Gentleman's extra duty was imposed, and it then became very important to see what were the licensed premises that ought to pay. Under the Finance Act of last year but one the position is that if it is the same tenant and the buildings are in the same occupation, and the premises are contiguous, they all have to pay. Supposing there are gardens on the opposite side of the road occupied together with the hotel or part of the same occupation, they are not assessed to-day provided they are not in the same assessment on the rate-book. I will give an illustration of a corresponding difficulty the other way. Where a hotel has a lot of stables behind it which are let to a separate person they are not assessed, although they may be occupied in connection with the hotel just as much as if they were actually in the occupation of the man who keeps the hotel itself. The extraordinary anomaly has arisen in this way. If the tenant happens to give up the occupation of the stables one day before the arrangements are made for imposing the licence tax, then the owner of

    2045
    the hotel, the licensee, has got to pay his Licence Duty upon the value of the stables, just because his tenant has left. It has been stated by speakers on both sides and by the right hon. Gentleman that the present state of affairs is open to a great many objections and some criticisms which cannot be defended, but in order to get exemption for any part of the curtilage of licensed premises such as a bowling green or stables, he proposes that you should have to prove to the Commissioners they were occupied for some business that was entirely distinct from that of the licensed house. I venture to think that is impossible. If you have got stables behind a licensed house, even if sublet to another tenant, it would be impossible for the licensee to prove they were being used entirely distinct from that licensed house.
    12.0 M.
    If one of the stablemen were to go into the licensed house or if an old barrel were rolled out of the house and put into the stable, it would be sufficient to show the stables were not entirely distinct from the licensed house. I venture to think that part of the new Clause makes the law infinitely worse and more oppressive on the licensee than it was before. That is not all. When we come to the last eight lines of the now Clause, we find something else now is to be roped in which was not in the taxation before. If it can be shown that the licensee for any possible purpose connected with the sale of liquor uses some other premises, however far they may be from the house, even if they are in another county, they are liable to be taken into account and increase the value for the purpose of the licence duty on that particular house. Let me give a case. Supposing the licensee has got a printing place, and he prints some show cards for the purposes of his business, do you mean to tell me it would be reasonable, and that there would be the slightest possible ground of public policy for saying you can go to the printing place and take the value of it, the machinery, and the business done there, and, because it is used to some remote extent in connection with the business of the licensed house by printing a few cards, you can include those premises in the assessment of the licensed house? It would be a most preposterous position, and it was only necessary to put such a case forward to show at once that it would be absurd. It would be straining the connection between one set of premises and another to a point which has never before
    2046
    been done. These are the concessions offered. The Government made a distinct pledge that they would take into consideration the gross injustice which they have admitted is done to licensees by the existing inequalities in the assessment of parts of the property not used for the sale of alcohol. They gave us a pledge to remedy it, and they now seek to carry it out by inflicting a further gross injustice in the direction I have indicated. When they pretend to give concessions, which instead of being concessions make matters worse, I think we are justified in protesting against this way of carrying out pledges. If the Government can do no better than that, then the simpler course would be to withdraw the Clause altogether.
    Mr. LLOYD GEORGE: I rise not to continue the discussion, but rather to appeal that we should come to some decision after the long debate we have had. I cannot withdraw the Clause after the promise I gave to representatives of the trade on the subject. They might not be altogether satisfied, but I could not withdraw it without their authority. Our view is that over £50,000 a year is lost to the revenue by our amended proposal, and I cannot undertake the responsibility of withdrawing it. I may say there has been an arrangement to get through the Committee stage to-night, on the express condition that the new Clauses of the Government will be taken on Report.
    Mr. WATSON RUTHERFORD: It is impossible. We shall have to sit up all night.
    Mr. LLOYD GEORGE: If I had known that the pledge was not to be carried out, of course I should have felt it incumbent to put down one or two very important Clauses. But I refrained from doing so because I understood the arrangement was that we should have the Committee stage to-night, the Report stage to-morrow night, and the Third Reading on Wednesday. The arrangement was made through the usual channels.
    Mr. BONAR LAW: I am bound to admit that there was an arrangement somewhat of the nature mentioned by the right hon. Gentleman entered into by my Noble Friend the Member for Chorley, who is not here, however, to explain the reasons—no doubt good ones. I do not think this is the right time for me to say what I should like to say about the discussion of

    2047
    the Budget at all at this time of the evening. I have no doubt those views will find adequate expression from these benches when we come to the Third Reading Debate. But I wish to point out to my hon. Friends behind me that a bargain has been made. I perfectly recognise that it cannot be kept if hon. Members on this side of the House insist—as I am sure the right hon. Gentleman will admit they are entitled to do—on considering and discussing various points. I would submit to the right hon. Gentleman there has been no attempt at obstruction in the Debate to-night, and while he makes an appeal to us I think it would be more to the point if he would ask his own Friends to refrain from discussing the Bill.
    Mr. LLOYD GEORGE: My appeal was directed to the whole House.
    Mr. BONAR LAW: I hope my hon. Friends will be willing to carry out the arrangement to finish the Committee stage to-night on the understanding that the new Clauses will be taken on the Report stage, and will be put down in the exact form and order in which they now stand. I think considering everything that is the best arrangement that could be made, and I hope hon. Members on this side will agree in that view. Let it be clearly understood that while I make that suggestion, I do not propose that we should stop now, or that anyone who has points to raise should not be allowed to make them. It is no part of the bargain, that we should not sit late. That is all I wish to say. So far as we on this bench are concerned, we shall carry out the compact. Of course, anyone who has points to raise will feel that he is at liberty to raise them.
    Mr. LLOYD GEORGE: I understand the suggestion is that we should conclude the Amendments to the Bill as submitted to the House by the Government, that the Debate upon the new Clauses should be postponed until to-morrow, and that arrangements should be made whereby the new Clauses shall appear on the Paper to-morrow in the order in which they appear to-day. So far as I am concerned I shall readily assent to that suggestion. I understand there will be no difficulty in carrying it out.
    Mr. SANDERSON: Will it be necessary for Members to hand in their Clauses again?
    Mr. LLOYD GEORGE: I am informed it will not be necessary. They will be put down by the Opposition Whips and our own.
    Sir G. YOUNGER: Is it possible to include in the arrangement some sort of understanding that Clauses which the Government are willing to accept might be indicated by the Government also placing them on the Paper? For the last three years we have been precluded, by the operation of the Guillotine, from bringing forward many proposals which I believe the Government would have been likely to accept. I know of one of which the Chancellor of the Exchequer, on the Committee stage of a former Budget, said he thought he could accept it from me if I put it down on Report in different words. I did so, and Mr. Speaker ruled it out of order. There are things which are not contentious at all. I have one in my mind, which the right hon. Gentleman is actually administering now. Why cannot he put it down himself?
    Mr. LLOYD GEORGE: I am not sure that hon. Members who have new Clauses on the Paper which are likely to be accepted would agree to have them being put down in the name of the Government. They like to have the credit of putting them down.
    Sir G. YOUNGER: You can put down mine if you like.
    Mr. LLOYD GEORGE: I generally find that that suggestion comes from hon. Members who have Clauses down which the Government are not likely to accept. For instance, the hon. and gallant Gentleman (Mr. Pretyman) has some Clauses down the Government will agree to, and I think he would rather move them.
    Mr. H. SMITH: With regard to my new Clause, will the right hon. Gentleman consult the Secretary to the Treasury as to whether it will be accepted. I for one will be glad to give way and save the time of the House.
    Mr. LLOYD GEORGE: I rather think that that can be accepted, but I will let the hon. Gentleman know before the end of the sitting.
    Mr. CATHCART WASON: I wish to make a strong appeal to the right hon. Gentleman to carefully consider this matter before Report with regard to the

    2049
    question which has been brought before him so repeatedly by my colleagues from Scotland. It is absolutely necessary for the good of the whole community. If he would consider whether that could be done on the Report stage it would make the thing very much easier for the Government to carry out the pledge which it is generally understood was given in regard to this very vexed question of taxing premises which are not used for the sale of drink—stable accommodation, motor
    houses, and suchlike. It would very much mitigate some of the evils which at present exist.
    Mr. PETO: I have new Clauses down, and I should be very glad to know which if any of them would be accepted by the Government.
    Question put, "That the word 'not' be there inserted."
    The Committee divided: Ayes, 103; Noes, 128.

    Division No. 438.]

    AYES.

    [12.15 a.m.

    Agg-Gardner, James Tynte

    Greene, Walter Raymond

    Peel, Captain R. F. (Woodbridge)

    Aitken, Sir William Max

    Guiney, Patrick

    Peto, Basil Edward

    Anson, Rt. Hon. Sir William R.

    Guinness, Hon. Walter Edward

    Pole-Carew, Sir R.

    Anstruther-Gray, Major William

    Gwynne, R. S. (Sussex, Eastbourne)

    Pretyman, Ernest George

    Ashley, Wilfrid W.

    Hall, D. B. (Isle of Wight)

    Pryce-Jones, Col. E.

    Baird, J. L.

    Hall, Fred (Dulwich)

    Raphael, Sir Herbert H.

    Banbury, Sir Frederick George

    Hambro, Angus Valdemar

    Remnant, James Farquharson

    Banner, John S. Harmood-

    Healy, Maurice (Cork)

    Roberts, S. (Sheffield, Ecclesall)

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

    Helmsley, Viscount

    Rolleston, Sir J.

    Bathurst, Charles (Wilts, Wilton)

    Henderson, Major H. (Berkshire)

    Rutherford, Watson (L'pool, W. Derby)

    Benn, Arthur Shirley (Plymouth)

    Hope, Harry (Bute)

    Salter, Arthur Clavell

    Bigland, Alfred

    Hope, James Fitzalan (Sheffield)

    Sanders, Robert Arthur

    Boscawen, Sir Arthur S. T. Griffith-

    Horne, Edgar (Surrey, Guildford)

    Sanderson, Lancelot

    Boyle, W. Lewis (Norfolk, Mid)

    Hunt, Rowland

    Sandys, G. J. (Somerset, Wells)

    Boyton, James

    Jardine, Ernest (Somerset, E.)

    Smith, Rt. Hon. F. E. (L'p'l, Walton)

    Brassey, H. Leonard Campbell

    Kerr-Smiley, Peter Kerr

    Stanier, Beville

    Bridgeman, William Clive

    Kerry, Earl of

    Stanley, Hon. G. F. (Preston)

    Bull, Sir William James

    Larmor, Sir J.

    Stewart, Gershom

    Burn, Colonel C. R.

    Law, Rt. Hon. A. Bonar (Bootle)

    Sykes, Mark (Hull, Central)

    Butcher, John George

    Lewisham, Viscount

    Talbot, Lord Edmund

    Carlile, Sir Edward Hildred

    Locker-Lampson, G. (Salisbury)

    Thompson, Robert (Belfast, North)

    Cassel, Felix

    Lonsdale, Sir John Brownlee

    Thynne, Lord Alexander

    Castlereagh, Viscount

    Lowther, Claude (Cumberland, Eskdale)

    Tobin, Alfred Aspinall

    Cave, George

    MacCaw, Wm. J. MacGeagh

    Tullibardine, Marquess of

    Chaloner, Colonel R. G. W.

    Mackinder, Halford J.

    Walker, Col. William Hall

    Chamberlain, Rt. Hon. J. A. (Worcr.)

    Macmaster, Donald

    Wheler, Granville C. H.

    Courthope, George Loyd

    McNeill, Ronald (Kent, St. Augustine)

    White, Major G. D. (Lancs., Southport)

    Craig, Captain James (Down, E.)

    Malcolm, Ian

    Worthington-Evans, L.

    Craig, Norman (Kent, Thanet)

    Mason, James F. (Windsor)

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

    Croft, Henry Page

    Mildmay, Francis Bingham

    Yate, Col. C. E.

    Eyres-Monsell, Bolton M.

    Morrison-Bell, Capt. E. F. (Ashburton)

    Younger, Sir George

    Fell, Arthur

    Newman, John R. P.

    Gilhooly, James

    O'Brien, William (Cork, N. E.)

    Gilmour, Captain J.

    Paget, Almeric Hugh

    TELLERS FOR THE AYES.—Mr. Harold Smith and Mr. Gretton.

    Goldsmith, Frank

    Parkes, Ebenezer

    Goulding, Edward Alfred

    Pease, Herbert Pike (Darlington)

    NOES.

    Abraham, William (Dublin Harbour)

    Craig, Herbert J. (Tynemouth)

    Harmsworth, Cecil (Luton, Beds)

    Adamson, William

    Crumley, Patrick

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

    Agar-Robartes, Hon. T. C. R.

    Dalziel, Sir James H. (Kirkcaldy)

    Haslam, Lewis (Monmouth)

    Ainsworth, John Stirling

    Davies, Timothy (Lincs., Louth)

    Havelock-Allan, Sir Henry

    Baker, H. T. (Accrington)

    Dawes, James Arthur

    Haworth, Sir Arthur A.

    Baker, Joseph Allen (Finsbury, E.)

    De Forest, Baron

    Hayden, John Patrick

    Balfour, Sir Robert (Lanark)

    Doris, William

    Hayward, Evan

    Baring, Sir Godfrey (Barnstaple)

    Duncan, C. (Barrow-in-Furness)

    Henry, Sir Charles

    Barton, William

    Edwards, John Hugh (Glamorgan, Mid)

    Higham, John Sharp

    Beck, Arthur Cecil

    Esslemont, George Birnie

    Hinds, John

    Benn, W. W. (T. H'mts, St. George)

    Falconer, James

    Howard, Hon. Geoffrey

    Bentham, G. J.

    Ffrench, Peter

    Jones, Edgar (Merthyr Tydvil)

    Bowerman, C. W.

    Gelder, Sir W. A.

    Jones, H. Haydn (Merioneth)

    Brunner, John F. L.

    George, Rt. Hon. David Lloyd

    Jones, Leif Stratten (Notts, Rushcliffe)

    Bryce, J. Annan

    Gill, Alfred Henry

    Jones, William (Carnarvonshire)

    Byles, Sir William Pollard

    Gladstone, W. G. C.

    Jones, W. S. Glyn- (T. H'mts, Stepney)

    Carr-Gomm, H. W.

    Glanville, Harold James

    Keating, Matthew

    Cawley, H. T. (Lancs., Heywood)

    Guest, Hon. Frederick E. (Dorset, E.)

    Kellaway, Frederick George

    Chancellor, Henry George

    Gwynn, Stephen Lucius (Galway)

    Kennedy, Vincent Paul

    Clough, William

    Hackett, John

    King, Joseph

    Clynes, John R.

    Hancock, J. G.

    Lambert, George (Devon, S. Molton)

    Collins, Stephen (Lambeth)

    Harcourt, Rt. Hon. L. (Rossendale)

    Law, Hugh A. (Donegal, West)

    Cotton, William Francis

    Harcourt, Robert V. (Montrose)

    Lawson, Sir. W. (Cumb'rld, Cockerm'th)

    Levy, Sir Maurice

    Pearce, Robert (Staffs, Leeks)

    Taylor, John W. (Durham)

    Lundon, Thomas

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Tennant, Harold John

    Macdonald, J. R. (Leicester)

    Pollard, Sir George H.

    Toulmin, Sir George

    Macpherson, James Ian

    Price, C. E. (Edinburgh, Central)

    Trevelyan, Charles Philips

    M'Curdy, Charles Albert

    Rea, Walter Russell (Scarborough)

    Wadsworth, J.

    McKenna, Rt. Hon. Reginald

    Reddy, Michael

    Walters, John Tudor

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Richardson, Thomas (Whitehaven)

    Ward, W. Dudley (Southampton)

    Mason, David M. (Coventry)

    Robert, Charles H. (Lincoln)

    Wason, John Cathcart (Orkney)

    Meehan, Francis E. (Litrim, N.)

    Robertson, John M. (Tyneside)

    Watt, Henry A.

    Meehan, Patrick A. (Queens Co.)

    Roch, Walter F. (Pembroke)

    Webb, H.

    Menzies, Sir Walter

    Rowlands, James

    Wedgwood, Josiah C.

    Munro, Robert

    Rowntree, Arnold

    White, J. Dundas (Glasgow, Tradeston)

    Nannetti, Joseph P.

    Samuel, Rt. Hon. H. L. (Cleveland)

    White, Patrick (Meath, North)

    Nolan, Joseph

    Samuel, S. M. (Whitechapel)

    Whitehouse, John Howard

    Nugent, Sir Walter Richard

    Scott, A. MacCallum (Glas., Bridgeton)

    Wiles, Thomas

    O'Brien, Patrick (Kilkenny)

    Seely, Col. Rt. Hon. J. E. B.

    Wilson, W. T. (Westhoughton)

    O'Connor, John (Kildare, N.)

    Sherwell, Arthur James

    Wood, Rt. Hon. T. McKinnon (Glas.)

    O'Doherty, Philip

    Shortt, Edward

    O'Malley, William

    Simon, Sir John Allsebrook

    TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

    O'Shee, James John

    Smith, Albert (Lancs., Clitheroe)

    Parker, James (Halifax)

    Stanley, Albert (Staffs, N. W.)

    Amendment made: Leave out the words "upon the premises" and insert instead thereof the words "in the house or place."—[Sir J. Simon.]
    Mr. SANDYS: I beg to propose at the end of the Clause to add the words:
    "but does not include any dwelling-house which does not internally communicate with the house or place where the liquor is sold."
    This is to meet that special case which came to my attention in my Constituency and is probably not an exceptional case, but represents a large number of instances of hardship occurring all over the country. In the definition which is substituted in Clause 4 there is an exemption made in the case of "any such offices, yards, courts, or gardens, which are used exclusively for any such trade or business." If it is fair that these courts, gardens, etc., should be exempted, there is all the more reason why premises not used for trade or business purposes at all should therefore not go to increase the value of licences, but should be exempted in the same way. The case to which my attention has been drawn is a case of a wine merchant in an old house in a small country town, to which house subsequently was added a small building in which he carries on the business of a wine merchant. There is no communication whatever between the premises in which he lives and the premises in which the business is carried on, and if it was not for the fact that between the door of his house and the door of the premises where the business is carried on, there is not a public road but a private road, he would only be assessed for that portion of the premises in which the business actually takes place. But owing to the fact that the road is not a public one, but
    2052
    a private one, the whole of the building in which he lives is included in the assessment, and consequently he has to pay over 50 per cent. more than he would do in different circumstances. This is a case of very extreme hardship, and it is one which would be met by this Amendment, which would exclude a dwelling-house which did not communicate internally with the licensed premises in which the business was acutally carried on.
    Sir J. SIMON: I hope the hon. Gentleman will not persist in this Amendment. The hon. Member has in mind his particular case, which he says is a hard one. That may be so; but whether it be a hard case or be not a hard case, there really is no justification for introducing into the language of this definition special words to meet his hard case compared with other people's hard cases. The house without internal communication with a place where liquor is sold is either like other offices, court yards, or gardens—the whole taken together—premises where liquor is sold or it is not. If it is not, of course, it is outside the definition. If it is, then it may be shown that the house comes within the exception which the Clause provides. It may be that it does; I do not say it does not; all I say to the hon. Gentleman is that it is really no justification for introducing into what is really a general Clause the special exemption of a house without internal communication, because this Clause has nothing to do with internal communication. It is perfectly general as to subject matter, and it would not be proper to introduce those words.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 80; Noes, 114.

    Division No. 439.]

    AYES.

    [12.30 a.m.

    Agg-Gardner, James Tynte

    Goldsmith, Frank

    Pease, Herbert Pike (Darlington)

    Aitken, Sir William Max

    Goulding, Edward Alfred

    Peto, Basil Edward

    Anson, Rt. Hon. Sir William R.

    Greene, Walter Raymond

    Pole-Carew, Sir R.

    Ashley, Wilfrid W.

    Gretton, John

    Pretyman, Ernest George

    Baird, J. L.

    Hall, D. B. (Isle of Wight)

    Pryce-Jones, Colonel E.

    Banbury, Sir Frederick George

    Hambro, Angus Valdemar

    Remnant, James Farquharson

    Banner, John S. Harmood-

    Helmsley, Viscount

    Roberts, S. (Sheffield, Ecclesall)

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

    Henderson, Major H. (Berkshire)

    Salter, Arthur Clavell

    Bathurst, Charles (Wilts, Wilton)

    Hope, Harry (Bute)

    Sanders, Robert Arthur

    Benn, Arthur Shirley (Plymouth)

    Hope, James Fitzalan (Sheffield)

    Smith, Rt. Hon. F. E. (L'p'l, Walton)

    Bigland, Alfred

    Horne, Edgar (Surrey, Guildford)

    Smith, Harold (Warrington)

    Boyle, W. Lewis (Norfolk, Mid)

    Hunt, Rowland

    Stanier, Beville

    Boyton, James

    Jardine, Ernest (Somerset, E.)

    Stanley, Hon. G. F. (Preston)

    Brassey, H. Leonard Campbell

    Kerr-Smiley, Peter

    Stewart, Gershom

    Bridgeman, W. Clive

    Kerry, Earl of

    Sykes, Mark (Hull, Central)

    Burn, Colonel C. R.

    Larmor, Sir J.

    Talbot, Lord Edmund

    Butcher, John George

    Law, Rt. Hon. A. Bonar (Bootle)

    Thompson, Robert (Belfast, North)

    Carlile, Sir Edward Hildred

    Lewisham, Viscount

    Thynne, Lord Alexander

    Cassel, Felix

    Locker-Lampson, G. (Salisbury)

    Tobin, Alfred Aspinall

    Castlereagh, Viscount

    Locker-Lampson, O. (Ramsey)

    Tullibardine, Marquess of

    Cave, George

    Macmaster, Donald

    Walker, Colonel William Hall

    Chaloner, Col. R. G. W.

    McNeill, Ronald (Kent, St. Augustine

    Wheler, Granville C. H.

    Chamberlain, Rt. Hon. J. A. (Worc'r.)

    Malcolm, Ian

    White, Major G. D. (Lancs., Southport)

    Courthope, George Loyd

    Mason, James F. (Windsor)

    Younger, Sir George

    Craig, Captain James (Down, E.)

    Morrison-Bell, Capt. E. F. (Ashburton)

    Craig, Norman (Kent, Thanet)

    Newman, John R. P.

    TELLERS FOR THE AYES.—Mr. Sandys and Mr. Croft.

    Eyres-Monsell, Bolton, M.

    Paget, Almeric Hugh

    Gilmour, Captain John

    Parkes, Ebenezer

    NOES.

    Abraham, William (Dublin Harbour)

    Harcourt, Robert V. (Montrose)

    O'Shee, James John

    Adamson, William

    Harmsworth, Cecil (Luton, Beds.)

    Parker, James (Halifax)

    Agar-Robartes, Hon. T. C. R.

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

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Ainsworth, John Stirling

    Haslam, Lewis (Monmouth)

    Pollard, Sir George N.

    Baker, H. T. (Accrington)

    Havelock-Allan, Sir Henry

    Price, C. E. (Edinburgh, Central)

    Balfour, Sir Robert (Lanark)

    Haworth, Sir Arthur A.

    Raphael, Sir Herbert H.

    Barton, William

    Hayden, John Patrick

    Rea, Walter Russell (Scarborough)

    Beck, Arthur Cecil

    Henry, Sir Charles

    Reddy, Michael

    Benn, W. W. (Tower Hamlets, St. Geo.)

    Higham, John Sharp

    Richardson, Thomas (Whitehaven)

    Bentham, G. J.

    Howard, Hon. Geoffrey

    Roberts, Charles H. (Lincoln)

    Bowerman, C. W.

    Jones, Edgar (Merthyr Tydvil)

    Robertson, John M. (Tyneside)

    Bryce, J. Annan

    Jones, H. Haydn (Merioneth)

    Rowlands, James

    Carr-Gomm, H. W.

    Jones, Lief Stratten (Notts, Rushcliffe)

    Samuel, Rt. Hon. H. L. (Cleveland)

    Cawley, Sir Frederick (Prestwich)

    Jones, William (Carnarvonshire)

    Samuel, S. M. (Whitechapel)

    Cawley, Harold T. (Heywood)

    Jones, W. S. Glyn- (T. H'mts, Stepney)

    Scott, A. MacCallum (Glas., Bridgeton)

    Clough, William

    Keating, Matthew

    Seely, Col. Rt. Hon. J. E. B.

    Clynes, John R.

    Kellaway, Frederick George

    Sherwell, Arthur James

    Collins, Stephen (Lambeth)

    King, Joseph

    Shortt, Edward

    Cotton, William Francis

    Lambert, George (Devon, S. Molton)

    Simon, Sir John Allsebrook

    Craig, Herbert James (Tynemouth)

    Law, Hugh A. (Donegal, West)

    Smith, Albert (Lancs., Clitheroe)

    Crumley, Patrick

    Lawson, Sir W. (Cumbrl'd, Cockerm'th)

    Stanley, Albert (Staffs, N. W.)

    Dalziel, Sir James H. (Kirkcaldy)

    Lundon, Thomas

    Strauss, Edward A. (Southwark, West)

    Dawes, J. A.

    Macdonald, J. R. (Leicester)

    Taylor, John W. (Durham)

    De Forest, Baron

    Macpherson, James Ian

    Tennant, Harold John

    Doris, William

    McKenna, Rt. Hon. Reginald

    Toulmin, Sir George

    Duncan, C. (Barrow-in-Furness)

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Trevelyan, Charles Philips

    Esslemont, George Birnie

    Meehan, Francis E. (Leitrim, N.)

    Ward, W. Dudley (Southampton)

    Falconer, James

    Meehan, Patrick A. (Queen's Co.)

    Watt, Henry A.

    Ffrench, Peter

    Menzies, Sir Walter

    Webb, H.

    Gelder, Sir W. A.

    Munro, Robert

    Wedgwood, Josiah C.

    George, Rt. Hon. D. Lloyd

    Murray, Captain Hon. Arthur C.

    White, J. Dundas (Glas., Tradeston)

    Gill, A. H.

    Nannetti, Joseph P.

    White, Patrick (Meath, North)

    Gladstone, W. G. C.

    Nolan, Joseph

    Whitehouse, John Howard

    Glanville, Harold James

    Nugent, Sir Walter Richard

    Wiles, Thomas

    Guest, Hon. Frederick E. (Dorset, E.)

    O'Brien, Patrick (Kilkenny)

    Wilson, W. T. (Westhoughton)

    Gwynn, Stephen Lucius (Galway)

    O'Connor, John (Kildare, N.)

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Hackett, John

    O'Doherty, Philip

    Hancock, John George

    O'Dowd, John

    TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

    Harcourt, Rt. Hon. L. (Rossendale)

    O'Malley, William

    Mr. HAROLD SMITH: I beg to move at the end of the Clause to add "any decision of the Commissioners upon any question to be determined by them under this Sec-
    2054
    tion shall be subject to the like appeal as that to which the determination by the Commissioners of Inland Revenue of the amount to be paid for compensation under

    2055
    Sub-section (2) of Section 20 of The Licensing (Consolidation) Act, 1910, is subject under that Act."
    I may summarise this Amendment by saying that it gives a right of appeal against a decision of the Commissioners of Customs and Excise. Many of us feel very strongly on this subject, and I may remind the Committee that the principle involved was raised last week during the discussion on the Insurance Bill. It is a very serious step to take, as was pointed out in the case of the Insurance Bill, to leave it to Commissioners to decide questions in an arbitrary and perhaps an unreasonable manner without giving the subject any right of appeal to a higher tribunal. I submit to the Committee that under the provisions of this Section many serious difficulties may well arise. I have already reminded the Committee, when speaking on a previous Amendment to-night, of the manner in which an assessment for rating purposes is arrived at, but I may perhaps be allowed to repeat that in order to arrive at such an assessment the basis which is taken in ordinary cases is the basis taken for the purposes of the Inhabited House Duty. If that is not applicable for any reason then the basis taken is the basis taken for Income Tax and if that is not applicable, then the Commissioners of Customs and Excise step in and determine the annual value. The result of that will I am sure, be seen by the Committee at a glance. In the simple cases there is no need for the Commissioners to interfere, because in those cases the basis that will apply will be either that of the Inhabited House Duty, or of the Income Tax. It is only in the really difficult cases that the Commissioners step in and have this arbitrary power.
    In the assessment for Inhabited House Duty or for Income Tax—that is in the cases in which there is no complication—the person assessed has a right of appeal on both law and fact to the general Commissioners, and on questions of law he can go to the High Court and the House of Lords. If we have said that the subject should have that right of appeal when his property is assessed for Inhabited House Duty or Income Tax, then how can we say that in the difficult cases there should be no appeal, but that the decisions of the Commissioners shall be final? I suggest that that is indefensible and I appeal to the right hon. Gentleman, the Chancellor of the Exchequer, to give way
    2056
    on this point which is one of real substance. I am not using platform rhetoric when I ask the right hon. Gentleman to give us that freedom which after all, we do boast of as one of the proud privileges of our country—the freedom and right to go to the law courts. That is a right which we have always demanded and one which, I think, we always shall demand.
    May I give a case which will illustrate my contention. Suppose a house is valued for Inhabited House Duty at £100 and the Commissioners come in and say "These stores or stabling—in other words, this particular outbuilding—must be included in the valuation for licence duty." We have discussed the definition of "premises" to-night, and the Committee will appreciate the great difficulty of the Commissioners in ascertaining what comes within that definition and what does not, as well as the great difficulty of the person who is being assessed in arriving at the same conclusion. But the Commissioners can come in and say with regard to this particular property, "This must be included in the value for Licence Duty." though it is not included in the assessment for Inhabited House Duty. The consequence is that in such a case premises valued for Inhabited House Duty do not correspond with premises to be valued for Licence Duty. Now, what is the result of that? The result is that not only is there no appeal from the ruling that stores or stables must be included, but the Commissioners of Customs and Excise can come in and say the Inhabited House Duty is too low, and may add another £50 for Licence Duties, plus £50 for stores or stables, and against that decision there is no appeal.
    I think it is monstrous that they should have the right to take the consideration of the question out of the hands of the Inhabited House Duty valuation or Income Tax valuation, and by so doing deprive people of any right of appeal, and put up their assessment how they like in respect of any premises they like, so long as they happen to be near the licensed premises. The result of that is that the Commissioners are able to rule that the Inhabited House Duty is not high enough, thereby defeating the concession made to us in the Revenue Act of 1911, and that the House Duty valuation should govern the Licence Duty. I do ask the right hon. Gentleman to give this right of appeal to the publican. I think it is only just to him,

    2057
    and it is just, I believe, to the Commissioners of Customs and Excise that they should not have these great responsibilities thrust upon their shoulders. I am not going to press the point further to-night, but I cannot resist reminding the Committee of a few words which were spoken by Lord Farwell in the case of Dyson against the Attorney-General.
    "The public interest is all in favour of a speedy access to the Courts by any of His Majesty's subjects who have any real cause of complaint through the exercise of Statutory powers by Government departments and Government officials, having regard to their growing tendency to claim the right to act without regard to legal principles, and without appeal to any court."
    Those words were uttered before we gave these great powers to the Commissioners of Customs and Excise without any right of appeal, and I do say this is a serious tendency of the Government to deprive the people of access to the Courts, and to place these great and arbitrary powers in the hands of persons over whom we in this House have little control. I beg the Solicitor-General really sympathetically to consider this appeal I make. I do not think anyone will be so foolish as to stand up here and suggest, in spite of the smiles of one or two hon. Gentlemen opposite, that this appeal is being made because of any grist it is going to bring to the profession to which I belong. If anybody suggests that one is urging this because of the profession to which he belongs, I think that it is a very wrong suggestion indeed. I move the Amendment in my name.
    Sir JOHN SIMON: I certainly shall not encourage any imputation being made against the hon. and learned Gentleman as to the motives which have caused him to move this Amendment. I have no doubt it is a matter which ought to be discussed, but the hon. and learned Gentleman must allow me to say, however, that one argument which he used in support of it is really not well founded. He seems to think it is due to some special malevolence on the part of the present Government that there is no appeal to the Courts of Law from the decision of the Commissioners. On the contrary, that has been the situation, so far as I have been able to trace it, from the beginning. That has certainly been the situation since 1880, and since that time there have been abundant opportunities for Governments not suspected of these foibles and prejudices to put it right if considered wrong. But, in point of fact, it is not wrong. It is quite right. The question
    2058
    here is, what premises are going to be included in the area to be valued?
    May I point out that is quite distinct from another question, which in his speech the hon. and learned Gentleman seemed to treat as the same? The question in the Revenue Act, 1911, is not what is the area that is going to be valued, but this: When you know the area, what is its value? That is quite a distinct question, but the hon. and learned Gentleman talked about the two as if they were the same. You must leave the Commissioners to exercise their honest best. Sitting next to the hon. and learned Gentleman I see the hon. Baronet (Sir G. Younger), and I recollect that earlier in the debate to-night he bore testimony to the fact that the Commissioners of Customs and Excise in this matter had applied a fair mind to questions of this sort, and if the Committee will observe the sort of question that is to be determined, they will see how singularly inappropriate it is that the House of Lords sitting as a judicial body should have to determine a question of this sort. It would necessitate a visit to view the particular premises. The examination of premises raises questions involving the words "to the satisfaction of the Commissioners," and you can hardly appeal to a Court of Law to ascertain whether the Commissioners are satisfied. It is really a matter of business.
    Mr. H. SMITH: It is on a question of law only that appeal would lie to the Courts of Law.
    Sir JOHN SIMON: I am quite aware of that, but I might point out that the questions which arise in common practice are not questions of law at all. I will not say it is inconceivable that questions of law will arise, but I do say that in substance questions that do arise have to be determined to the satisfaction of the Commissioners. While for my part I sympathise with the hon. and learned Gentleman when he asks that in certain directions—not, I think, this direction—it is desirable to preserve an appeal to the Court, and nothing I have ever said in this House has ever justified a contrary view of my opinion. I do suggest this is hardly a case for that. There is no appeal to the Courts at present. The object of this Amendment is not to change or elaborate the machinery, but to lay down rather more definitely the rules by which they are to be determined, and this is hardly an occasion for starting a brand new appeal.
    Mr. AUSTEN CHAMBERLAIN: I really do not quite follow the right hon. Gentleman's argument. Under the Licensing Clauses of the Act of 1910 every one interested in licensed premises is entitled to have a copy of the valuation on which he is assessed by the Commissioners, and if he feels himself aggrieved by the valuation of the Commissioners he is entitled to take that valuation to the High Court. These are the provisions of Section 44 of the Act of 1910. The amount may be unjust not because the premises which are valued are inaccurately assessed, but because premises are taken into the valuation which ought to be left out. Why should he not have exactly the same appeal in those circumstances? Only one reason is suggested by the hon. and learned Gentleman, and that an astounding one. He says it would be necessary that the House of Lords go down to view the premises. Does the hon. and learned Gentleman suppose that the Commissioners go down to view the premises?
    Sir J. SIMON: The difference is this: The Commissioners are acting as a Department, not as a court of law, and are entitled to act on information as to matters of fact which is put before them. As
    the right hon. Gentleman knows, if you make this a matter for the courts it has to be dealt with on the strict lines of evidence.
    Mr. AUSTEN CHAMBERLAIN: Surely that is an argument in favour of the Amendment of my right hon. Friend. As long as you keep it in the hands of the Commissioners they exercise judicial discretion, but after all they are not governed by the rules of evidence; they can accept information which is not good enough for a court of law; and that is the ground on which the hon. and learned Gentleman defends the decision of the Government to refuse access to a court of law to an aggrieved subject. I do not recollect any complaint being made against the Commissioners of Customs and Excise. There has been serious complaint, however, made in this House—and not without good reason—in recent times of the action of others. The reason which has been given is no good reason for refusing the subject access to the courts of law.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 76; Noes, 111.

    Division No. 440.]

    AYES.

    [12.55 a.m.

    Agg-Gardner, James Tynte

    Goldsmith, Frank

    Parkes, Ebenezer

    Aitken, Sir William Max

    Goulding, Edward Alfred

    Pease, Herbert Pike (Darlington)

    Anson, Rt. Hon. Sir William R.

    Greene, W. R.

    Peto, Basil Edward

    Ashley, Wilfrid W.

    Gretton, John

    Pole-Carew, Sir R.

    Baird, John Lawrence

    Hall, D. B. (Isle of Wight)

    Pretyman, Ernest George

    Banbury, Sir Frederick George

    Hambro, Angus Valdemar

    Pryce-Jones, Col. E.

    Banner, John S. Harmood-

    Helmsley, Viscount

    Remnant, James Farquharson

    Bathurst, Charles (Wilts, Wilton)

    Henderson, Major H. (Berkshire)

    Roberts, S. (Sheffield, Ecclesall)

    Benn, Arthur Shirley (Plymouth)

    Hope, Harry (Bute)

    Salter, Arthur Clavell

    Bigland, Alfred

    Hope, James Fitzalan (Sheffield)

    Sanders, Robert Arthur

    Boyle, W. Lewis (Norfolk, Mid)

    Hunt, Rowland

    Sandys, G. J.

    Boyton, James

    Jardine, Ernest (Somerset, E.)

    Smith, Rt. Hon. F. E. (Liverp'l, Walton)

    Brassey, H. Leonard Campbell

    Kerr-Smiley, Peter Kerr

    Stanley, Hon. G. F. (Preston)

    Bridgeman, W. Clive

    Kerry, Earl of

    Stewart, Gershom

    Burn, Colonel C. R.

    Larmor, Sir J.

    Sykes, Mark (Hull, Central)

    Carlile, Sir Edward Hildred

    Law, Rt. Hon. A. Bonar (Bootle)

    Talbot, Lord Edmund

    Cassel, Felix

    Lewisham, Viscount

    Thynne, Lord Alexander

    Castlereagh, Viscount

    Locker-Lampson, G. (Salisbury)

    Tobin, Alfred Aspinall

    Cave, George

    Locker-Lampson, G. (Ramsey)

    Tullibardine, Marquess of

    Chaloner, Col. R. G. W.

    Macmaster, Donald

    Walker, Col. William Hall

    Chamberlain, Rt. Hon. J. A. (Worc'r.)

    McNeill, Ronald (Kent, St. Augustine)

    Wheler, Granville C. H.

    Courthope, George Loyd

    Malcolm, Ian

    White, Major G. D. (Lancs., Southport)

    Craig, Captain James (Down, E.)

    Mason, James F. (Windsor)

    Younger, Sir George

    Craig, Norman (Kent, Thanet)

    Newman, John R. P.

    Croft, Henry Page

    Morrison-Bell, Capt. E. F. (Ashburton)

    TELLERS FOR THE AYES.—Mr. Harold Smith and Mr. Stanier.

    Eyres-Monsell, Bolton M.

    Paget, Almeric Hugh

    Gilmour, Captain J.

    NOES.

    Abraham, William (Dublin Harbour)

    Bowerman, C. W.

    Dalziel, Sir James H. (Kirkcaldy)

    Adamson, William

    Bryce, J. Annan

    Dawes, James Arthur

    Agar-Robartes, Hon. T. C. R.

    Carr-Gomm, H. W.

    De Forest, Baron

    Ainsworth, John Stirling

    Cawley, Sir Frederick (Prestwich)

    Doris, William

    Baker, H. T. (Accrington)

    Cawley, H. T. (Lancs., Heywood)

    Duncan, C. (Barrow-in-Furness)

    Balfour, Sir Robert (Lanark)

    Clough, William

    Falconer, James

    Barton, William

    Clynes, John R.

    Ffrench, Peter

    Beck, Arthur Cecil

    Collins, Stephen (Lambeth)

    Gelder, Sir William Alfred

    Benn, W. W. (Tower Hamlets, St. Geo.)

    Coton, William Francis

    George, Rt. Hon. David Lloyd

    Bentham, G. J.

    Crumley, Patrick

    Gill, Alfred Henry

    Gladstone, W. G. C.

    Lundon, Thomas

    Robertson, John M. (Tyneside)

    Glanville, Harold James

    Macdonald, J. Ramsay (Leicester)

    Rowlands, James

    Guest, Hon. Frederick E. (Dorset, E.)

    Macpherson, James Ian

    Samuel, Rt. Hon. H. L. (Cleveland)

    Gwynn, Stephen Lucius (Galway)

    McKenna, Rt. Hon. Reginald

    Samuel, S. M. (Whitechapel)

    Hackett, John

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Scott, A. MacCallum (Glas., Bridgeton)

    Hancock, John George

    Meehan, Francis E. (Leitrim, N.)

    Seely, Col. Rt. Hon. J. E. B.

    Harcourt, Rt. Hon. L. (Rossendale)

    Meehan, Patrick (Queen's Co.)

    Sherwell, Arthur James

    Harcourt, Robert V. (Montrose)

    Menzles, Sir Walter

    Shortt, Edward

    Harmsworth, Cecil (Luton, Beds)

    Munro, Robert

    Simon, Sir John Allsebrook

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

    Murray, Captain Hon. Arthur C.

    Smith, Albert (Lancs., Clitheroe)

    Haslam, Lewis (Monmouth)

    Nanneti, Joseph P.

    Stanley, Albert (Staffs, N. W.)

    Havelock-Allan, Sir Henry

    Nolan, Joseph

    Strauss, Edward A. (Southwark, West)

    Haworth, Sir Arthur A.

    Nugent, Sir Walter Richard

    Taylor, John W. (Durham)

    Hayden, John Patrick

    O'Brien, Patrick (Kilkenny)

    Tennant, Harold John

    Henry, Sir Charles S.

    O'Connor, John (Kildare, N.)

    Toulmin, Sir George

    Higham, John Sharp

    O'Doherty, Philip

    Trevelyan, Charles Philips

    Howard, Hon. Geoffrey

    O'Dowd, John

    Ward, W. Dudley (Southampton)

    Jones, Edgar (Merthyr Tydvil)

    O'Malley, William

    Webb, H.

    Jones, H. Haydn (Merioneth)

    O'Shee, James John

    Wedgwood, Josiah C.

    Jones, Leif Stratten (Notts, Rushcliffe)

    Parker, James (Halifax)

    White, J. Dundas (Glas., Tradeston)

    Jones, William (Carnarvonshire)

    Pease, Rt. Hon. Joseph A. (Rotherham)

    White, Patrick (Meath, North)

    Jones, W. S. Glyn- (T. H'mts, Stepney)

    Pollard, Sir George H.

    Whitehouse, John Howard

    Keating, Matthew

    Price, C. E. (Edinburgh, Central)

    Wiles, Thomas

    Kellaway, Frederick George

    Raphael, Sir Herbert H.

    Wilson, W. T. (Westhoughton)

    King, Joseph

    Rea, Walter Russell (Scarborough)

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Lambert, George (Devon, S. Molton)

    Reddy, Michael

    Law, Hugh A. (Donegal, West)

    Richardson, Thomas (Whitehaven)

    TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

    Lawson, Sir W. (Cumb'rid, Cockerm'th)

    Roberts, Charles H. (Lincoln)

    Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

    CLAUSE V.—(Provision as to Minimum Duty not to Apply to Licensed Premises Situate in Outlying Parts of Urban Districts.)
    "Where it is shown to the satisfaction of the Commissioners of Customs and Excise that any premises situated in an urban area are situated in a part of the area which has only a small local population and is essentially rural in character, and that the more populous parts of the district are so remote as not to affect the amount of business carried on upon the premises, the premises shall for the purposes of Scale 3 in the First Schedule to the Finance (1909–10) Act, 1910 (which prescribes a minimum duty for publicans' and beerhouse licences), be deemed to be situate in an area which is not an urban area."
    Mr. S. ROBERTS: I beg to move after the word "Where" ["Where it is shown to the satisfaction of the Commissioners"] to insert the words "the boundaries of any borough are extended or the boundaries of a new borough are fixed so as to include any previously existing borough or urban or rural district, or part thereof, the original borough and the included boroughs and urban or rural districts, as previously existing, shall, for such period not exceeding fifteen years, as the Commissioners of Customs and Excise may determine, having regard to the extent to which the amount of any business carried on in fully licensed premises and
    2062
    beerhouses situate in the original borough or in any of the included boroughs or districts is, or is likely to be, affected by the inclusion of those districts within one borough, be deemed to be separate areas for the purpose of determining the minimum duties payable for publicans' and beerhouse licences under Scale 3 in the First Schedule to the Finance (1909–10) Act, 1910, and during the same period the closing hours for licensed premises in any of the said boroughs or districts shall remain as they would have been if those boroughs and districts had not been included within one borough and where."
    I very much regret that I am bound to move an Amendment of this importance at this early hour of the morning, especially as it is due to the exigencies of the Government in forcing us to pass the Committee stage of the Finance Bill during one day. I will not detain the Committee longer than a few minutes because this point has been raised already this Session more than once. The Clause before the Committee is one to make provision as to minimum duty not to apply to licensed premises situate in outlying parts of urban districts. The reason for my Amendment is that it is considered that this Clause is only a very small step towards remedying the grievance. The Committee will remember that the point was first raised on the Revenue Bill in the case of the borough of Dewsbury. In that case there had been an extension of the borough boundary, and the licensed victuallers of the Dewsbury and the outlying districts saw that by that extension they were going to be let in for a great increased

    2063
    payment in regard to minimum duty. They approached the Government, therefore, through their Member, now the President of the Board of Agriculture, to obtain relief. The Chancellor of the Exchequer granted that relief, and inserted a Clause giving differential licensing to the town of Dewsbury for the space of fifteen years. When that was brought forward many of us on this side saw at once that if it was right that Dewsbury should have this concession it was equally right that boroughs extending their borough boundaries should have the same concession.
    There was the case of Cambridge before the country at that time. Well, the Government saw the point, and they gave way. The right hon. Gentleman the Postmaster-General had charge of the Bill, and after discussion, he said, "I take it that it is the general desire of the Committee that an effort should be made to see whether or not general words should be used in this connection." Ultimately he withdrew the Clause, and promised to bring up a Clause to meet the general application. Afterwards the Postmaster-General had to come down, and admit that the Government could not grant that. He said, "We have come to the conclusion that it is not possible in these cases which vary so much to draft any form of words which would do justice to all cases which might arise in the future." Therefore the Clause was struck out of the Dewsbury Bill, and no other place got it. After that the case of Cambridge came on. That case was a Provisional Order Bill. It was referred to a Private Committee upstairs to investigate the merits of the case. It was very fully gone into. The Committee was presided over by my hon. Friend the Member for Windsor (Mr. James Mason).
    The Corporation of Cambridge, the United Victuallers of Cambridge and neighbourhood pressed for the Clause, and the Committee unanimously granted it. It was eminently a case where its merits were indisputable. By the extension the borough of Cambridge was increased by about 40,000 to 50,000, and by that extension it jumped the scale of minimum licence duties from those places between 10,000 and 50,000 population to those between 50,000and 100,000 population. The consequence was that the minimum duty inside the borough of Cambridge for a fully licensed house was raised from £20
    2064
    to £30, and for a beer house from £13 to £20. For the rural districts round Cambridge which were taken in the rate was raised from £5 each to £30 for a fully licensed house, and from £3 10s. to £20 for a beer house. The result was that out of a total of 234 licensed houses in that district 177 came under this minimum provision. The increase amounted to no less than £1,487 for the year, in addition to the sum of £887, which was, I think, created by the increased licensed duties imposed by the Chancellor of the Exchequer. It meant an increase altogether of £2,200, being 40 per cent. for the borough of Cambridge and the extension.
    The Committee saw at once that this was a case which ought to be met, and it was a case which the right hon. Gentleman himself also admitted, in the discussion on the Revenue Bill in the spring of this year, ought to be met. But the right hon. Gentleman came down to the House and said the Government were not able to draft a Clause to meet a case of that kind. My Amendment is an attempt to meet such a case and I think it would meet it in a reasonable manner. It would give power to the Commissioners of Customs and Excise in all extensions of borough boundaries to determine the question having regard to the extent to which the amount of any business carried on in fully licensed premises and beerhouses situate in the original borough or in any of the included boroughs or districts is, or is likely to be, affected by the inclusion of those districts within one borough. The Clause which the Government have put down does not do anything of the kind. It simply gives power to the Commissioners of Customs and Excise to pick out a house in a part of an area in an urban district where they consider that the population is a small one and is essentially rural in character, and that the more populous parts of the district are so remote as not to affect the amount of business carried on upon the premises. That would not meet the case of Cambridge. There you have a borough where the population is increasing very slowly indeed; and I believe it is not possible within the old boundaries that the population of Cambridge could increase so as to bring it up to a higher scale than the minimum of Licence Duties.
    The Clause of the Chancellor of the Exchequer does not touch such a case, but leaves those boroughs absolutely where they are at the present time. On the other hand, if my Clause

    2065
    were adopted it would meet the case of those boroughs. On the general principle I wish to ask is it just and right, where these extensions are made, that the licensed victuallers should have to pay more because of the extension? Why should they? They get no benefit. They get absolutely nothing in return for the extra duties they have to pay. On the contrary, very likely they will have to pay more in rates, especially after the period of differential rating is over. I repeat that they get absolutely no benefit from the extension, and on grounds of public policy I do not think it is a good principle to go upon. Surely it is a principle of the Local Government Board to encourage districts to extend their boundaries for purposes of local government, but if you put a penalty on people like the publicans you will be inducing them to cast all the weight of their influence against extension where an extension of boundaries ought properly to take place. The case has been stated more than once this Session, and I will not, therefore, detain the Committee further at this late hour.
    Sir J. SIMON: The hon. Gentleman has told us that he put down this Clause because he understood from a declaration of the Postmaster-General earlier in the Session that the Government's advisers, after considering the matter, did not feel themselves equal to drafting a Clause to deal with the point. That is the position, and while we are grateful to the hon. Gentleman for applying his own mind to it and putting the suggestion on the Paper, I am sorry to say the proposal he makes is one which appears to us not sufficiently apt for the varying circumstances which might arise. The hon. Gentleman has very fairly stated the course of events. When the matter was considered in the spring of this year in the House, the Postmaster-General, in explaining what is known as the Dewsbury Clause, indicated his willingness to withdraw the Clause and see if it was possible to frame a general form of words to meet these cases. He went on to say that if it was found possible to do so, then the Government would see in what form words to give effect to that principle should be embodied in the Bill. My right hon. Friend consulted very carefully with the authorities who advise the administration on this matter, and with the best will in the world it was not found possible to devise a Clause in general language which would be really appropriate to the case.
    2066
    It was on that ground that on the 30th March last my right hon. Friend the Postmaster-General again intervened in Debate, and said:—
    "We have considered carefully, with the authorities of the Customs and Excise, and we have come to the conclusion that it is not possible in those cases, which vary so much, to draft any form of words which do justice to all the cases which may arise in future; and further we should have to consider whether such words, if they were adopted, ought not to have retrospective validity."
    The hon. Gentleman will understand that, while there is no absence of sympathy, the position indicated by my right hon. Friend is one in which, I am afraid, we find ourselves still. I think it will be obvious to the House that in each case where there is a proposal to extend the boundaries of a borough you have a number of circumstances, which are bound to vary very greatly in character in individual cases. You may, for instance, have circumstances varying greatly merely on geographical grounds—that is to say, because of the character of the neighbourhood you are taking in. The hon. Gentleman said something about the publicans in a particular area which is being brought hi by an extension of boundaries having to pay a higher duty in consequence. But is there not something to be said on the other side? Let the hon. Gentleman consider. These publicans may, in some cases for many years, have had the great advantage of being close up to the borders of so-called urban areas, and have had all the advantages of urban association, though technically they have all the time been in a rural area. I could, if necessary, give the Committee an example of that in my own Constituency. I only want to show how each case has to be considered on its merits, and that it would be extremely difficult to find a general form of words to cover all the varying circumstances which may be encountered. Our proposal is limited to the rare class of cases where you find on the rural boundary of an extended borough a particular house which, in the circumstances, may fairly be given the relief which our Clause provides. It is true that is a much more limited concession than the one suggested by the hon. Gentleman, but I think it will be admitted that it is one which is much more easy to apply, and also, I believe, to justify.
    Mr. J. F. MASON: The learned Solicitor-General in the latter part of his speech admits that Clause 5, as proposed by the Government, does not meet the case which my hon. Friend has put forward on behalf of Cambridge. I should like to point out

    2067
    to the hon. and learned Gentleman that similarly Clause 5 would not have met the cases of Stoke and Dewsbury which the Government themselves attempted to deal with on a former occasion. The hon. and learned Gentleman in the earlier part of his remarks confirmed the statement made some time ago by the right hon. Gentleman the Postmaster-General to the effect that the Government after attempting to draft a general form of words to deal with all cases had been unable to find any suitable form of words. The hon. and learned Gentleman has repeated this evening the statement that that very fact necessitated dealing with each case on its merits. That is exactly what the Private Bill Committee was obliged to do in the summer in the case of Cambridge. I maintained then and still maintain that the whole action of the Government in regard to this matter was a distinct invitation to Private Bill Committees to deal with each case on its merits for the simple reason that the Government found no other way of dealing with it. In confirmation of that I should like to point out that when the inspector went down to Cambridge to report for the Local Government Board on the whole of this question, the Cambridge and District Licensed Victuallers' Protection Association, after his visit, wrote to the right hon. Gentleman the President of the Local Government Board, and in the course of the letter they reported, speaking of the inspector's inquiry, that—
    "The Inspector has informed us, however, as may be seen by the Report, that it was not in the power of the Board to insert such a covering Clause in their Order, and advised that our proper course was to appear by counsel before the Parliamentary Committee on the consideration of the Confirmation Bill."
    To that letter only a formal acknowledgment was received, and I think that that association was fully justified in interpreting the fact that no answer was received, as we also interpret it, as a distinct invitation to a Private Bill Committee to deal with the matter. It is quite obvious that this injustice cannot be allowed to remain. It is acknowledged on
    behalf of the Government that an injustice of this kind remains. A certain class of people is being taxed out of all proportion, and not for any particular benefits they get, because it is not maintained for a moment that they do any more business because they are included in a bigger borough than before. The two cases which we have heard so much about—Dewsbury and Stoke—were brought forward on the plea that the provisions of the Finance Act were not fully known at the time, and of course the deduction from that is that if the provisions of the Finance Act had been known these extensions might not have taken place. If that is the case, it is quite obvious that extensions which are desirable and legitimate from other points of view are liable to be hampered because the people who are going to ask for these extensions in fact know that the only way to get them is by inflicting upon a particular class of their ratepayers a very great hardship and injustice. The whole of this, if left as it is, must necessarily tend to prevent extensions which are justified and desirable in other ways, and unless the Government are prepared to sit down and calmly accept the position—that is to say, admit there is a gross injustice, and that they have not the desire to raise a finger to remove it—unless they are prepared to take up that attitude, in which case there is very little more to be said, I see no way for them except to agree to this Amendment, or suggest in what way the Amendment could be altered so as to meet the general run of cases, or else go back upon what they did in the summer, and acknowledge that the only way in which this injustice can be removed is by allowing Private Bill Committees in future to deal with each case as it arises, and in that way remove an injustice which is perfectly intolerable to the people of this country.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 74; Noes, 111.

    Division No. 441.]

    AYES.

    [1.25 a.m.

    Agg-Gardner, James Tynte

    Boyton, James

    Craig, Captain James (Down, E.)

    Aitken, Sir William Max

    Brassey, H. Leonard Campbell

    Craig, Norman (Kent, Thanet)

    Anson, Rt. Hon. Sir William R.

    Bridgeman, William Clive

    Croft, Henry Page

    Ashley, W. W.

    Burn, Col. C. R.

    Eyres-Monsell, Bolton M.

    Baird, J. L.

    Carlile, Sir Edward Hildred

    Gilmour, Captain John

    Banbury, Sir Frederick George

    Cassel, Felix

    Goldsmith, Frank

    Banner, John S. Harmood-

    Castlereagh, Viscount

    Goulding, E. A.

    Bathurst Charles (Wilts, Wilton)

    Cave, George

    Greene, Walter Raymond

    Benn, Arthur Shirley (Plymouth)

    Chaloner, Col. R. G. W.

    Gretton, John

    Bigland, Alfred

    Chamberlain, Rt. Hon. J. A. (Worc'r.)

    Hambro, Angus Valdemar

    Boyle, W. Lewis (Norfolk, Mid)

    Courthope, George Loyd

    Helmsley, Viscount

    Henderson, Major H. (Berks, Abingdon)

    Newman, John R. P.

    Stanley, Hon. G. F. (Preston)

    Hope, Harry (Bute)

    Paget, Almeric Hugh

    Stewart, Gershom

    Hope, James Fitzalan (Sheffield)

    Parkes, Ebenezer

    Sykes, Mark (Hull, Central)

    Jardine, Ernest (Somerset, East)

    Pease, Herbert Pike (Darlington)

    Talbot, Lord Edmund

    Kerr-Smiley, Peter Kerr

    Peto, Basil Edward

    Thynne, Lord A.

    Kerry, Earl of

    Pole-Carew, Sir R.

    Tobin, Alfred Aspinall

    Larmor, Sir J.

    Pretyman, Ernest George

    Tullibardine, Marquess of

    Law, Rt. Hon. A. Bonar (Bootle)

    Pryce-Jones, Col. E.

    Walker, Colonel William Hall

    Lewisham, Viscount

    Remnant, James Farquharson

    Wheler, Granville C. H.

    Locker-Lampson, G. (Salisbury)

    Salter, Arthur Clavell

    White, Major G. D. (Lancs., Southport)

    Locker-Lampson, O. (Ramsey)

    Sanders, Robert A.

    Younger, Sir George

    Macmaster, Donald

    Sandys, G. J.

    McNeill, Ronald (Kent, St. Augustine)

    Smith, Rt. Hon. F. E. (L'pool, Walton)

    TELLERS FOR THE AYES.—Mr. Samuel Roberts and Mr. James Mason.

    Malcolm, Ian

    Smith, Harold (Warrington)

    Morrison-Bell, Capt. E. F. (Ashburton)

    Stanier, Beville

    NOES.

    Abraham, William (Dublin Harbour)

    Harcourt, Robert V. (Montrose)

    O'Malley, William

    Adamson, William

    Harmsworth, Cecil (Luton, Beds.)

    O'Shee, James John

    Agar-Robartes, Hon. T. C. R.

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

    Parker, James (Halifax)

    Ainsworth, John Stirling

    Haslam, Lewis (Monmouth)

    Pease, Rt. Hon. Joseph A. (Rotherham)

    Baker, H. T. (Accrington)

    Havelock-Allan, Sir Henry

    Pollard, Sir George H.

    Balfour, Sir Robert (Lanark)

    Haworth, Sir Arthur A.

    Price, C. E. (Edinburgh, Central)

    Barton, William

    Hayden, John Patrick

    Raphael, Sir Herbert Henry

    Beck, Arthur Cecil

    Henry, Sir Charles S.

    Rea, Walter Russell (Scarborough)

    Benn, W. W. (T. H'mts., St. George)

    Higham, John Sharp

    Reddy, M.

    Bentham, G. J.

    Howard, Hon. Geoffrey

    Richardson, Thomas (Whitehaven)

    Bowerman, C. W.

    Jones, Edgar R. (Merthyr Tydvil)

    Roberts, Charles H. (Lincoln)

    Bryce, John Annan

    Jones, Henry Haydn (Merioneth)

    Robertson, John M. (Tyneside)

    Carr-Gomm, H. W.

    Jones, Leif Stratten (Notts, Rushcliffe)

    Rowlands, James

    Cawley, Sir Frederick (Prestwich)

    Jones, William (Carnarvonshire)

    Samuel, Rt. Hon. H. L. (Cleveland)

    Cawley, H. T. (Lancs., Heywood)

    Jones, W. S. Glyn- (Stepney)

    Samuel, S. M. (Whitechapel)

    Clough, William

    Keating, Matthew

    Scott, A. MacCallum (Glas., Bridgeton)

    Clynes, John R.

    Kellaway, Frederick George

    Seely, Col. Rt. Hon. J. E. B.

    Collins, Stephen (Lambeth)

    King, J.

    Sherwell, Arthur James

    Cotton, William Francis

    Lambert, George (Devon, S. Molton)

    Shortt, Edward

    Crumley, Patrick

    Law, Hugh A. (Donegal, West)

    Simon, Sir John Allsebrook

    Dalziel, Sir James H. (Kirkcaldy)

    Lawson, Sir W. (Cumb'rld, Cockerm'th)

    Smith, Albert (Lancs., Clitheroe)

    Dawes, J. A.

    Lundon, T.

    Stanley, Albert (Staffs, N. W.)

    De Forest, Baron

    Macdonald, J. Ramsay (Leicester)

    Strauss, Edward A. (Southwark, West)

    Doris, W.

    Macpherson, James Ian

    Taylor John W. (Durham)

    Duncan, C. (Barrow In-Furness)

    McKenna, Rt. Hon. Reginald

    Tennant, Harold John

    Elibank, Rt. Hon. Master of

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Toulmin, Sir George

    Falconer, J.

    Meehan, Francis E. (Leitrim, N.)

    Trevelyan, Charles Philips

    Ffrench, Peter

    Meehan, Patrick A. (Queen's Co.)

    Ward, W. Dudley (Southampton)

    Gelder, Sir William Alfred

    Menzies, Sir Walter

    Webb, H.

    George, Rt. Hon. D. Lloyd

    Munro, Robert

    Wedgwood, Josiah C.

    Gill, Alfred Henry

    Murray, Captain Hon. Arthur C.

    White, J. Dundas (Glas., Tradeston)

    Gladstone, W. G. C.

    Nannetti, Joseph P.

    Whitehouse, John Howard

    Glanville, Harold James

    Nolan, Joseph

    Wiles, Thomas

    Guest, Hon. Frederick E. (Dorset, E.)

    Nugent, Sir Walter Richard

    Wilson, W. T. (Westhoughton)

    Gwynn, Stephen Lucius (Galway)

    O'Brien, Patrick (Kilkenny)

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Hackett, John

    O'Connor, John (Kildare, N.)

    Hancock, John George

    O'Doherty, Philip

    TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

    Harcourt, Rt. Hon. L. (Rossendale)

    O'Dowd, John

    Mr. C. ROBERTS: I beg to move to add at the end of the Clause,
    "Provided that any premises in respect of which an abatement of duty is allowed under this Section, shall in England and Wales for the purposes of the Sixth Schedule to The Licensing (Consolidation) Act, 1910 (which prescribes general closing hours), be deemed to be premises situate not in a town or populous place; and in Ireland for the purpose of Section seventy-eight of The Licensing Act, 1872, to be premises not situate in a city or town.
    "(2) Any determination of the Commissioners of Customs and Excise under this Section shall take effect for such period not exceeding three years as they may think fit, and at the end of the period for
    2070
    which an abatement is allowed, the character of the area and the amount of the business carried on upon the premises affected shall be reconsidered by the Commissioners."
    This Amendment deals with a simple point and I venture to think it is agreed really between both sides of the House. This Clause deals with certain licences included in an urban area and treats them as though they were rural licences for purposes of taxation. If you do that it stands to reason that you should treat them as rural licences for purposes of hours of sale. You cannot possibly justify treating them as rural for purposes of taxation and urban for purposes of sale. If you are going to give them the privileges of rural licences you should not

    2071
    give them the legal hours which they would get if they were regarded as urban.
    Mr. S. ROBERTS: I submit as a point of Order that the Amendment of the hon. Gentleman is included in the latter part of my Amendment which the Committee has rejected.
    The DEPUTY-CHAIRMAN (Mr. Maclean): I do not think it is. I think the hon. Member is in Order.
    Mr. C. ROBERTS: When this point was discussed on the Cambridge case the right hon. Gentleman, the Member for East Worcestershire, expressed his agreement with the principle, and the right hon. Gentleman the Member for St. George's (Hanover Square) said: "I can see it would be fair that if a rural area was exempted from further taxation these houses should revert to the original state of rural licensed houses." Now I wish to make it perfectly plain that you are not imposing any licensing restrictions, which would not of course be suitable to a Finance Bill; but you are taking a rural licence and treating it as though it had the concomitants of a rural licence. You are taking a licence which, before this Clause comes into force, is an urban licence, with the concomitants and appurtenances of an urban licence, and you are transmuting that into a rural licence with its proper appurtenances in the matter of hours. If this is accepted I shall say no more, but I shall move my Amendment without Sub-section (2), which is unnecessary.
    Mr. AUSTEN CHAMBERLAIN: If the Amendment is to be moved in that form may I again call your attention to the last words of the Amendment of my hon. Friend which has just been negatived: "During the same period the closing hours for licensed premises in any of the said boroughs or districts shall remain as they would have been if those boroughs and districts had not been included within one borough." I venture to submit that the Amendment as now altered by the hon. Member covers exactly the same ground as the Amendment which the Committee has just negatived.
    Sir J. SIMON: I do not think that is so. The Amendment which the hon. Gentleman opposite (Mr. S. Roberts) moved dealt with the case where boundaries were extended so as to cover new territory.
    2072
    The case we are dealing with now does not deal with the extension of boundaries of boroughs, and the hypothesis on which it is proposed to graft this proviso is a different hypothesis. I submit, therefore, that one Amendment does not cover the other.
    Mr. AUSTEN CHAMBERLAIN: Will any answer be given to my question from the Chair?
    The DEPUTY-CHAIRMAN: I rule that the hon. Member for Lincoln (Mr. C. Roberts) is in order.
    Sir J. SIMON: Apart from the question of order, on the merits of the matter I do not think there is much difference of opinion. We agree with my hon. Friend (Mr. C. Roberts) when he says that if you are going to deal with licensed houses on the basis of taxation in a rural area they must accept the results of that hypothesis. Sub-section (2) of his Amendment does not apply. We accept it as he confines himself to the other part of the proposal.
    Mr. GRETTON: I am not going to oppose this Amendment. The only objection I have is to the principle of grafting licensing legislation on to the Finance Act, which deals with taxation. It is a very objectionable practice. It makes it very difficult for those who have to interpret the law in their daily work. But as regards the actual merits of the proposal I have no objection to offer. I regard it as a reasonable proposal.
    Question, "That the following words be added to the Clause, 'Provided that any premises in respect of which an abatement of duty is allowed under this section, shall in England and Wales for the purposes of the Sixth Schedule to the Licensing (Consolidation) Act, 1910 (which prescribes general closing hours), be deemed to be premises situate not in a town or populous place; and in Ireland for the purpose of Section seventy-eight of the Licensing Act, 1872, to be premises not situate in a city or town,' put, and agreed to."
    Sir CHARLES HENRYmoved after the words last inserted to add the words, "and this provision shall apply to all the premises both as regards publican and beerhouse licences situated in the borough of Wenlock."
    The object of this Amendment is to obtain for the borough of Wenlock the advantages offered in this Clause. This

    2073
    is an exceptional case, and should have exceptional treatment. The borough of Wenlock covers a very large area. It has a length of ten to twelve miles, a breadth of four to five miles, and a population, in spite of that immense area, of under 16,000 persons. Under the Finance Act of 1909–10 the full-licensed houses have to pay a duty of £20 per annum, whereas the average total rateable value of these houses is £22 18s. Then as regards beerhouses, they have to pay a duty of £13, whereas the average rateable value is £16 13s. It must be admitted that these duties are out of proportion to what the rateable value is. I think my right hon. Friend will agree this is an anomaly which should receive his consideration, and if he cannot accept this Amendment I hope he will see his way to remedy the matter on some future occasion.
    Mr. STANIER: I should like to support what the hon. Member for Wellington (Sir C. Henry) has said, because I find I supported an Amendment to this effect twice before. This borough has got very exceptional needs for us to consider. The area is absolutely rural, and the population is also rural. Why it should be penalised for being rural simply because of the technicalities of the 1909 Budget I think is absolutely unfair to the district. This area has exceptions in other cases. There is the Education Act of 1870, and also the Local Government Act of 1880, both of
    which give it exceptions. I do hope the Government will give this Amendment sympathetic consideration.
    Sir J. SIMON: I hope my hon. Friend will not press this matter to a Division, because it is not possible to accept the proposal he makes. The Clause to which he proposes this Amendment is a general Clause, and it is not desirable that we should add to a general Clause some provisos to cover some specially named locality. I notice the hon. Member proposes that the benefits of this Clause should apply to fully licensed houses and to beerhouses of the Borough of Wenlock. That alone would justify me in resisting the Amendment. It may or may not be that there are houses in the borough which satisfy the conditions of Clause V. If they do they will come within the Clause; if they do not they will not. I hardly think, however, that we should bring in every single public house and every single beer house which happens to exist in that area.
    Sir C. HENRY: I do not desire to press the Amendment to a Division if I can get some assurance that the matter will receive consideration.
    Question put, "That those words be there added."
    The Committee divided: Ayes, 68; Noes, 105.

    Division No. 442.]

    AYES.

    [1.50 a.m.

    Agg-Gardner, James Tynte

    Goldsmith, Frank

    Pryce-Jones, Colonel E.

    Aitken, Sir William Max

    Goulding, E. A.

    Remnant, James Farquharson

    Ashley, W. W.

    Greene, Walter Raymond

    Roberts, S. (Sheffield, Ecclesall)

    Baird, John Lawrence

    Hambro, Angus Valdemar

    Rothschild, Lionel de

    Banner, John S. Harmood-

    Helmsley, Viscount

    Salter, Arthur Clavell

    Bathurst, Charles (Wilts, Wilton)

    Henderson, Major H. (Berks, Abingdon)

    Sanders, Robert A.

    Benn, Arthur Shirley (Plymouth)

    Hope, Harry (Bute)

    Sandys, G. J.

    Bigland, Alfred

    Hope, James Fitzalan (Sheffield)

    Smith, Rt. Hon. F. E. (Liverp'l, Walton)

    Boyle, W. Lewis (Norfolk, Mid.)

    Jardine, Ernest (Somerset, East)

    Smith, Harold (Warrington)

    Boyton, James

    Kerr-Smiley, Peter Kerr

    Stanley, Hon. G. F. (Preston)

    Brassey, H. Leonard Campbell

    Kerry, Earl of

    Stewart, Gershom

    Bridgeman, William Clive

    Larmor, Sir J.

    Sykes, Mark (Hull, Central)

    Burn, Colonel C. R.

    Lewisham, Viscount

    Thynne, Lord A.

    Carlile, Sir Edward Hildred

    Locker-Lampson, O. (Ramsey)

    Tobin, Alfred Aspinall

    Cassel, Felix

    Macmaster, Donald

    Tullibardine, Marquess of

    Castlereagh, Viscount

    McNeill, Ronald (Kent, St. Augustine)

    Walker, Col. William Hall

    Cave, George

    Malcolm, Ian

    Ward, Arnold S. (Herts, Watford)

    Chaloner, Col. R. G. W.

    Mason, James F. (Windsor)

    Wheler, Granville C. H.

    Courthope, George Loyd

    Morrison-Bell, Capt. E. F. (Ashburton)

    White, Major G. D. (Lancs., Southport)

    Craig, Captain James (Down, E.)

    Newman, John R. P.

    Younger, Sir George

    Craig, Norman (Kent, Thanet)

    Paget, Almeric Hugh

    Croft, Henry Page

    Parkes, Ebenezer

    TELLERS FOR THE AYES.—Sir Charles Henry and Mr. Stanier.

    Eyres-Monsell, B. M.

    Peto, Basil Edward

    Gilmour, Captain John

    Pele-Carew, Sir R.

    NOES.

    Abraham, William (Dublin Harbour)

    Balfour, Sir Robert (Lanark)

    Bryce, John Annan

    Adamson, William

    Barton, William

    Carr-Gomm, H. W.

    Agar-Robartes, Hon. T. C. R.

    Beck, Arthur Cecil

    Cawley, Sir Frederick (Prestwich)

    Ainsworth, John Stirling

    Bentham, George Jackson

    Cawley, H. T. (Lancs., Heywood)

    Baker, H. T. (Accrington)

    Bowerman, C. W.

    Clough, William

    Collins, Stephen (Lambeth)

    Jones, Henry Haydn (Merioneth)

    Rea, Walter Russell (Scarborough)

    Cotton, William Francis

    Jones, Leif Stratten (Notts, Rushcliffe)

    Reddy, M.

    Crumley, Patrick

    Jones, William (Carnarvonshire)

    Richardson, Thomas (Whitehaven)

    Dalziel, Sir James H. (Kirkcaldy)

    Jones, William S. Glyn- (Stepney)

    Roberts, Charles H. (Lincoln)

    Dawes, J. A.

    Keating, Matthew

    Robertson, J. M. (Tyneside)

    Doris, W.

    Kellaway, Frederick George

    Rowlands, James

    Duncan, C. (Barrow-in-Furness)

    King, J.

    Samuel, Rt. Hon. H. L. (Cleveland)

    Elibank, Rt. Hon. Master of

    Lambert, George (Devon, S. Molton)

    Samuel, S. M. (Whitechapel)

    Falconer, J.

    Law, Hugh A. (Donegal, West)

    Scott, A. MacCallum (Glas., Bridgeton)

    Ffrench, Peter

    Lawson, Sir W. (Cumbr'ld, Cockerm'th)

    Seely, Col. Rt. Hon. J. E. B.

    Gelder, Sir William Alfred

    Lundon, Thomas

    Sherwell, Arthur James

    George, Rt. Hon. D. Lloyd

    Macdonald, J. Ramsay (Leicester)

    Shortt, Edward

    Gill, Alfred Henry

    Macpherson, James Ian

    Simon, Sir John Allsebrook

    Gladstone, W. G. C.

    MrKenna, Rt. Hon. Reginald

    Smith, Albert (Lancs., Clitheroe)

    Glanville, Harold James

    M'Laren, Hon. F. W. S. (Lincs., Spalding)

    Stanley, Albert (Staffs, N. W.)

    Guest, Hon. Frederick E. (Dorset, E.)

    Meehan, Francis E. (Leitrim, N.)

    Strauss, Edward A. (Southwark, West)

    Gulland, John William

    Meehan, Patrick A. (Queen's County)

    Taylor, John W. (Durham)

    Gwynn, Stephen Lucius (Galway)

    Menzies, Sir Walter

    Tennant, Harold John

    Hackett, John

    Munro, Robert

    Toulmin, Sir George

    Hancock, John George

    Murray, Capt. Hon. A. C.

    Trevelyan, Charles Philips

    Harcourt, Rt. Hon. L. (Rossendale)

    Nannetti, Joseph P.

    Webb, H.

    Harcourt, Robert V. (Montrose)

    Nolan, Joseph

    Wedgwood, Josiah C.

    Harmsworth, Cecil (Luton, Beds.)

    O'Brien, Patrick (Kilkenny)

    White, J. Dundas (Glas., Tradeston)

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

    O'Connor, John (Kildare, N.)

    Wiles, Thomas

    Haslam, Lewis (Monmouth)

    O'Doherty, Philip

    Wilson, W. T. (Westhoughton)

    Havelock-Allan, Sir Henry

    O'Malley, William

    Wood, Rt. Hon. T. McKinnon (Glasgow)

    Haworth, Sir Arthur A.

    O'Shee, James John

    Hayden, John Patrick

    Parker, James (Halifax)

    Higham, John Sharp

    Pease, Rt. Hon. Joseph A. (Rotherham)

    TELLERS FOR THE NOES.—Mr. Dudley Ward and Mr. Wedgwood Benn.

    Howard, Hon. Geoffrey

    Pollard, Sir George H.

    Illingworth, Percy H.

    Price, C. E. (Edinburgh, Central)

    Jones, Edgar R. (Merthyr Tyvdil)

    Raphael, Sir Herbert Henry

    Question put, and agreed to.

    CLAUSE VII.—(Income Tax for 1911–12.)
    (1) Income Tax for the year beginning on the sixth day of April, nineteen hundred and eleven, shall be charged at the rate of one shilling and twopence, and the same Super-tax shall be charged, levied, and paid for that year as was charged for the year beginning on the sixth day of April, nineteen hundred and ten.
    (2) All such enactments relating to Income Tax (including Super-tax) as were in force with respect to duties of Income Tax granted for the year beginning on the sixth day of April, nineteen hundred and ten, shall have full force and effect with respect to any duties of Income Tax hereby granted.
    (3) The annual value of any property which has been adopted for the purpose of either Income Tax under Schedules A and B in the Income Tax Act, 1853, or of Inhabited House Duty, during the year ending on the fifth day of April, nineteen hundred and eleven, shall be taken as the annual value of such property for the same purpose during the next subsequent year; provided that this Sub-section—

    (a) so far as respects the duty on inhabited houses in Scotland, shall be construed with the substitution of the twenty-fourth day of May for the fifth day of April; and

    2076

    (b) shall not apply to the metropolis as defined by the Valuation (Metropolis) Act, 1869.

    Mr. STEWART: I beg to move in Sub-section (1) after the word "twopence" ["at the rate of one shilling and twopence"] to insert the words,
    "But any person who proves to the satisfaction of the Commissioners for Income Tax that his total income from all sources does not exceed five hundred pounds, and that he (or if such person is a widow, that her husband) has been or was engaged in the practice of any profession or in any business or other remunerative occupation for upwards of twenty years, shall be entitled in addition to all other exemptions, abatements, and relief enjoyed by him or her under any previous enactments to such relief from Income Tax as will reduce the amount payable on such as is unearned income to the amount which would be payable if the tax were charged on such unearned income at the rate of ninepence."
    I hope this Amendment will recommend itself to hon. Members on the other side of the House, for I am sure all of them have constituents who are deeply interested in this matter, which, I beg to say, is one of considerable importance. In the combat which is going on in the country between the Socialist party and the wealthy the effect of the very heavy new taxation upon the middle classes is apt to be lost sight

    2077
    of. Therefore if it were not mentioned at the present moment it might be assumed in some quarters that an Income Tax at 1s. 2d. in the pound in a time of profound peace—so far, at any rate, as this country is concerned—was a tax with which people generally were content. If in peace time we are bound to have under present conditions an Income Tax of 1s. 2d. in the pound, then it is fair to say that our taxation is on much too narrow a basis and lacking in variety. My Amendment is intended to afford some relief from the undoubted pressure which is brought to bear on the middle classes, and which they find it difficult to sustain. I am sure I am correct in saying that owing to a variety of causes, including trade failures, sickness, and so on, the great bulk of the middle classes are very well satisfied if they can gather together a little money with which to spend the declining years of their lives. On such people an Income Tax at 1s. 2d. in the pound is a great burden.
    We have heard a great deal in the past on the subject of sloppiness of definition, but never was a sloppier form of definition used in the financial world as a whole than this definition of unearned income. I maintain that there is no such thing as unearned money. There may be differences of opinion as to the fairness of the division of money after it is earned, but the money is always earned, either by the community or the individual. We hear a great deal from the other side of the House about money which is earned by the community. I venture to put in a plea for the money earned, and very fairly earned, by the individual. There are some reformers who think that to collect a dividend warrant is almost a crime. When an old man is poor we cherish him, and we do so rightly; but in the case of the middle classes, when a man has been defeated by age, or a woman is left alone by her husband's death, you choose that very period, the weakest time of their lives, to levy upon them extra taxation. When a trader or a professional man breaks down in health, as so many do under the strain of modern competition, and hands on his business or his practice to a younger man, the latter is allowed to have an Income Tax of 9d. up to £2,000 and 1s. up to £3,000. But the unfortunate older man, the man who has broken down in health and is forced to relinquish his former activities, is charged 1s. 2d. on anything he has saved. That may be good electioneering, but in my opinion it is very
    2078
    poor justice. Take the case of the merchant-steamer captain. In my Constituency I have many such men as that, and I hope I may touch a chord of sympathy in the heart of the Chancellor of the Exchequer, because many of them are Welshmen. Those men, by the laws of the service, are ordered off the bridge at the age of sixty-five. The man who gets the job of one of these merchant steamer captains when he retires on reaching that age is charged Income Tax at the rate of 9d., but the older man who comes ashore is charged 1s. 2d. on all he has saved.
    2.0 A.M.
    I also speak for many people who have come home broken in health from bad climates abroad. There is no country in the world, I suppose, which has a greater proportion of women who have lost their husbands owing to service in bad climates. Our educational centres in this country are full of women with children whom they have to educate, and when these women collect some slender dividends it is a travesty of justice to say that they are living on unearned money, when the money has cost the lives of the fathers of their children. You cannot do this thing with impunity. We have heard hon. Members talk of the Whisky Tax being put on too high and the smuggling point having been arrived at, and when you put the Income Tax too high the evasion point is not very far off, and it drives people to invest money outside your jurisdiction. In these days of increased travel, too, it is quite possible for people to live outside this country for five or six months of the year, and be free from your Income Tax altogether. All I ask is that this very narrow extension of the system of graduation, which you have already accepted as a principle, should be given to people who, I think, deserve it. I draw attention to the fact that pensions are treated as deferred pay and charged at the rate of 9d. I entirely approve of that, and all I ask is for the extension of the same privilege to people who have no Government behind them, and have to provide for their own pensions. The Civil Service up to now has been manned by men who have entered by competitive examination, but it is at the present moment being selected by preference and patronage and the status of the Civil Service has been considerably altered.
    In 1874—the golden days of Liberalism as they have been called—the Income Tax was 2d. in the £. Now it is 1s. 2d. in the £ and for rich people 1s. 8d., an increase

    2079
    of 700 per cent. in the one case and 1,000 in the other. That, in time of peace, should be sufficient to please even the most advanced followers on the other side. The remission I ask for is about £4 5s. in the case of an income of £365 a year; on £400, which is the smallest amount a respectable man can live on, so far as I can judge, it is £5 a year. The middle classes are, I think, the best weight-carriers of taxation in the country. They pay their rates and taxes both locally and Imperially, and there are many middle-class homes in this country where after paying rates, wages, school bills, doctors, and charities, there is less money for actual food than in the case of many people whose nominal income is considerably less. I asked the Chancellor of the Exchequer on the 23rd May the number of Income Taxpayers with £700 a year and under, and the amount collected as unearned increment, and the answer I got was that the information could not possibly be furnished. If the amount had been important the Chancellor of the Exchequer would have known something about it, and therefore I am justified in saying that the remission I ask for is really an unimportant matter. The way the tax is being screwed up now I think has a bad effect, because it discourages thrift and induces people to live on their capital, and if without children they go to an American life insurance company and buy an annuity, and when they die the money leaves this country altogether. I know gratitude is not very plentiful in politics, but I ask for a little recognition for a small and deserving body, and I ask the Government to remember that these people are those who really put them in power in 1832 and who kept them in power for many years. I therefore ask them now for the sake of old times to extend consideration to a very deserving body who apparently now have passed into oblivion.
    Mr. WALTER REA: I do not know whether I can follow the hon. Member who has just sat down on all the matters put forward on behalf of his Amendment, nor should I at the present moment be prepared to go as far as he does, but, as I did not move the Amendment in my name, perhaps I may be allowed in a very few words to put forward a plea for the people who have to pay this very heavy rate of Income Tax on small unearned incomes. I think I can claim some sympathy from the Chancellor of the Exchequer after the
    2080
    speech he made this afternoon on the question of the graduation and the proper burden of this tax. Of course there is at present a very rough and ready fashion of carrying it into effect, and pending the logical solution which one may look for from the Chancellor of the Exchequer when he can tackle the Income Tax scientifically, I do ask him to consider the case of the widow and also that of the small tradesman who has retired on very small savings, and finds there is a considerable burden in having to meet this tax. And really it is a very heavy burden upon a man with £300 a year to pay in one lump sum something over £8. I do not ask that he should be put on the same level as the man who earns his income, because I recognise fully the income in the former case does not cease with his exertions, but can pass with his death; but if my right hon. Friend cannot meet the whole case put by the hon. Member opposite—it is perhaps a little higher than I should venture to put it—he might at any rate take into consideration the case I have brought forward of differentiating between the person whose savings are small, and the person whose savings are large, by reducing the tax on incomes under £500 a year from 1s. 2d. to 1s. in the £.
    Mr. McKINNON WOOD: I am afraid the Government cannot accept this Amendment. The administrative difficulty connected with it is important, but I think on the point of principle it is rather difficult to justify. The proposal is that any person with an income under £500 if he has been engaged in the practice of any profession or in any business or other remunerative occupation for upwards of twenty years shall be entitled, in addition to all other exemptions, abatements, and relief to which he is now entitled, to have the tax on his unearned income reduced to ninepence. As a matter of fact, with the abatements that already exist, most of the people who come under this Clause are already paying Income Tax below 9d., and at the very highest something a little above 9d. It would be extremely difficult to say what was the practice of any profession or business. Would a barrister who had a brief, say, once in twenty years have been engaged in the profession of the law, and be entitled to the benefit of this proposal? I should like to point out that it does not follow that the person who has been twenty years in business is living on an income earned during those twenty

    2081
    years. He may be living on an unearned income with which he started or which he inherited, or it may be his wife's income, and in all these cases it is seriously proposed that that income should not be treated as unearned income, which it is in fact, but should be treated as earned income. I fear the proposal is not a very practical one, and I am sorry we cannot accept it.
    Amendment negatived.
    Mr. NEWMAN: I beg to move at the end of Sub-section (1), to add the words, Provided that as regards any assessment or collection of Super-tax Section 30 of 53 and 54 Vic., cap. 8 shall not be deemed to apply.
    This Amendment, though it seems technical, is in reality very simple. The Income Tax authorities appear to regard the Super-tax as a sort of second volume of the Income Tax. It may have gilt edges, but still it is regarded merely as a second volume. In reality the Super-tax is quite different from the Income Tax, and in that contention I have the Chancellor of the Exchequer himself to back me up. When the Chancellor of the Exchequer introduced his proposals for Super-tax, on the 16th of May, 1909, he made one or two remarks in which he seemed to regard Super-tax and Income Tax as not quite the same thing. He said:—
    "The machinery will be in the main independent of the machinery of the existing Income Tax, but the assessment will be made by Special Commissioners appointed under the Income Tax Acts."
    Later on he said:—
    "The yield of the Super-tax in a full year is estimated at £2,300,000, but as new machinery has to be set up, and returns have to be made by the taxpayers, the full yield will not be got in the first year."
    Therefore I think I can say I have the support of the right hon. Gentleman when I say that Income Tax and Super-tax are not one and the same thing. In the near future the Super-tax is going to be a vastly more important tax than the Income Tax. The Income Tax is going to be stereotyped and will remain at something like 1s., but our expenditure is going to grow, and another thing is that the people termed the masses are not going to pay any more taxation. They have enough laid on them in the way of indirect taxation. Every Chancellor of the Exchequer will have to turn to the wealthy classes to meet the growing deficiency.
    I can imagine when our side of the House are in power that these direct
    2082
    means of levying Super-tax will disappear altogether. I can imagine that we shall raise the £2,300,000 by other methods altogether. For instance I can imagine a tax on the American motorcar, or a tax on the German pianola, or a swingeing duty on Perrier-Jouet or on certain brands of cigars. If the present Government continue in office I can imagine that in the near future the Super-tax will no longer be sixpence but something vastly bigger. We had a hint of that the other day. The Chancellor of the Exchequer told us in connection with the Insurance Bill that it would have been possible for him to have gone to the country and say, "I will collect the money, the whole of the twenty-six millions, direct from the governing classes," and he told us he could have easily got it. Well, if he had it would have meant a big increase in the Super-tax. It is a mistake to suppose that the Super-tax is a new tax. It has been enforced before. All of us who know our history of England know there were certain English kings who, like the Chancellor of the Exchequer of the present day, were always impecunious, and these kings had their Super-tax Class. King John had the Isaacs, the Moses, and the Samuels of that day, whom he used to collect in Lincoln Castle and elsewhere, and tell them that if they did not pay the Super-tax they would have to lose a certain amount of ivory from their mouths. In the same way to-day we have the king, the lord of our finances, who summons us to pay our Super-tax.
    We get no sympathy, but King John and these kings, they at any rate did give their super-taxed subjects a yearly summons. So we, who are super-taxed, now ask in the same way to have a special order given us every year—not a standing order, but that each year the tax shall not be levied or assessed by the Income Tax authorities until it has been passed by Parliament. It may seem a small matter, and perhaps it is a small matter, that the Budget used to be introduced in May and passed in July. Now the Budget is introduced in May and passed in the end of December. Therefore I submit that whatever may be the arguments as to the legality of this particular Clause with regard to Income Tax, it should not stand with regard to Super-tax. We who pay Super-tax stand in a separate position, and should at any rate have the courtesy of having this tax passed by Parliament.
    Sir J. SIMON: The hon. Gentleman referred us to Section 30 of the Act of 1890, and said it would not apply to Super-tax. I understood him further to contend that Super-tax is not Income Tax. If it is not Income Tax Section 30 does not apply, and it is therefore unnecessary to accept the Amendment.
    Amendment negatived.
    Mr. COURTHOPEmoved to insert after the word "enactments" [all such enactments relating to Income Tax (including Super-tax)] the words "except Section 71 of The Finance Act, 1910." The effect of the Amendment will be to except from this sub-section the Clause in the Finance Act which deals with exceptions and abatements in the case of persons not residing in the United Kingdom. That Clause has, admittedly I think, been a very unsatisfactory one. To begin with, there are so many provisos contained in it that the case is very rare indeed where these exceptions and abatements cannot be claimed. Indeed I think the cases must be so few which are really affected by this complicated section that it would be much more satisfactory not to keep it alive.
    Mr. McKINNON WOOD: As the hon. Gentleman has said, there have not been many cases of real hardship in connection with this matter. One justification for making this abatement is that people contribute otherwise according to their means. That argument, however, does not apply to those people who are outside the country. As to the other part of the question, bankers in this country would consider it unfair to their business if this Sub-section were repealed. It would drive foreign business abroad. On that ground I think it necessary that the Sub-section should be retained.
    Amendment negatived.
    Mr. HARMOOD BANNER Mr. HARMOOD BANNER moved to insert at the end of Sub-section (2) the words,
    Provided that there shall be allowed as deduction from the amount on which Income Tax is calculated such sum or sums as have been paid by the persons assessed in respect of contributions under the National Insurance Bill.
    I hope we shall have some explanation as to what is to be the effect of the very heavy charge that now falls upon all
    2084
    trading companies and all individuals in respect of the National Insurance Bill. It is quite true that to some extent it may be stated that the present law will admit of a deduction but, as one who is well acquainted with the ability of Somerset House to avoid deductions made by traders and others with respect to their businesses, I think it is absolutely necessary that, now we are to have this enormous charge placed upon the industries of the country and upon the individual, we should have it made absolutely clear so that there should be no question about the matter. So far as the individual is concerned, there are provisos for deductions for Income Tax on premiums paid on life insurance. As regards compensation for accidents, however, it is by no means clear that such is allowed in a charge for profit and loss. It is absolutely necessary that we should have some clear definition of the rights to deduct from Income Tax the contribution paid under the National Insurance Bill and I will be glad to have some assurance from the Chancellor of the Exchequer.
    Mr. LLOYD GEORGE: As I explained in the House some time ago in answer to a question, any contributions paid by employers in respect of persons employed by them for purposes of profit will be allowed as a deduction on account of business expenses, and I do not think it is at all necessary to introduce words of this kind.
    Mr. CASSEL: Take the case of landowners who employ persons on their estates—farm hands, carpenters, woodmen, and people of that description whose services are required for the upkeep of the estate. I think it would be a case of extreme hardship if the landowner had to pay the contributions of these men and was not able to deduct them. Will the right hon. Gentleman tell the Committee what would happen in such cases?
    Mr. LLOYD GEORGE: I hardly like to give an answer to a question of that kind without a little more consideration, but I should have thought the test was whether the persons employed were employed for the purposes of profit. If you take the case of farm hands who are working on a farm and are employed for profit, then I should certainly say there should be a deduction, but in the case of an ornamental gardener I should say no deduction could be made. Farm hands, however, might be a test case.
    Mr. PRETYMAN: An owner of agricultural property is assessed for Income Tax under Schedule A, under which he is not allowed to make any deductions other than official statutory deductions, which I need not refer to in detail now. There is, so far as I am aware, absolutely no machinery of any sort which enables him on the assessment for Income Tax to consider the question of profit at all. In most cases, it is true, he makes no profit, but whether he does or does not it is absolutely apart from the Income Tax in any shape or form. If you have an owner of agricultural property employing a considerable staff of workmen for the maintenance of his estate, and for those workmen he has to pay contributions in respect of insurance, what we desire to ask is whether some machinery will be provided by which that might made a deduction in addition to the statutory deduction on a totally different basis to which he is already entitled.
    Mr. LLOYD GEORGE: Of course, it is very difficult in cases of that kind to make a deduction. I will tell you why. Take the case of a farmer. He may elect not to be assessed on his profit at all, but on an arbitrary basis which does not represent his profit in the slightest degree. He may make three times the profit that this basis represents, and in that case we are bound to accept the option he exercises. Therefore, in a case of this kind it is difficult to make any deduction at all, because he is not assessed on his profits. With regard to the case that the hon. Gentleman (Mr. Cassel) put to me, I should rather like to consider the question, and I shall be able to give him a definite answer to-morrow.
    Mr. COURTHOPE: The right hon. Gentleman has referred to the farmer. It is quite true the farmer is usually assessed under Schedule B. He has the option to be so assessed, but the landlord has no such option.
    Mr. LLOYD GEORGE: I said so. I made a distinction between the two cases. I would rather, with regard to the landlord case, that the hon. Gentleman (Mr. Cassel) should put a question to me to-morrow.
    Mr. CASSEL: The case I intended to raise was under Schedule A. I feel bound to say, as the point was raised suddenly, that if the right hon. Gentleman desires to consider it, I think we cannot press it further to-night.
    Mr. PRETYMAN: I think the right hon. Gentleman must see that the farmer is put in a distinctly worse position, because his profits will be reduced by the amount of the Insurance Tax under Schedule B. Of course, if he is under Schedule D he can deduct it, because it is a case then purely of a trade profit. Whether a man is a farmer or a cotton manufacturer he is on the same footing under Schedule D; but Schedule B has been expressly provided for farmers under present conditions. Yet the farmer is left to pay exactly as before under Schedule B, and therefore I say the farmer is placed in a distinctly worse position. The Insurance Bill hits the farmer especially hard, because the money payment from a farmer for his men is larger in proportion to his business than in any other case. Between the farmer and the labourer there is a great deal in kind, and very little in money payment. Therefore the burden is much heavier in proportion. I must enter my caveat against that. I should like the right hon. Gentleman to consider the case of the farmer under Schedule B, as well as the case of the owner of land under Schedule A, and to give an answer on both points after careful reflection.
    Amendment, by leave, withdrawn.
    Mr. HARMOOD-BANNER: I beg to move, at the end of Sub-section (2), to insert the words,
    Provided that in the calculation of Income Tax allowance shall be made in respect of diminution in value arising from waste or expiry of capital value.
    I think perhaps it would be considered cruelty to the Committee if I started to discuss the question of depreciation of this kind in all its aspects to-night, but it is nevertheless a matter of the very greatest importance to every trader, manufacturer, and merchant in the kingdom. The present Chancellor of the Exchequer, especially, has now brought the Income Tax into the position of being a fixed tax which is never to be taken off our shoulders. To the ordinary Income Tax is added the Super-tax, which especially is a burden on individuals, and as regards depreciation of assets is most unfair. It touches the individual who trades in his own name as against the individual who trades as a shareholder in a limited company in a way which can only be termed wicked. It is an absolutely unfair system that a man who carries on business and pays Income Tax has no depreciation

    2087
    allowed. Now the Income Tax is a fixed tax upon the profits of all individuals it is incumbent upon us not to allow the Finance Bill to go through without raising this question. When we had a discussion on it, I think two years ago, I had a little sympathy from the Chancellor of the Exchequer and he promised that he would look into it. I believe also I had the sympathy of our own ex-Chancellor of the Exchequer (Mr. Austen Chamberlain). The matter was promised consideration with a view of ascertaining whether justice could not be done in respect of this question of depreciation. It is too late to-night to enter upon so large and prolific a field. [HON. MEMBERS: "Go on."] I am afraid I am too anxious to go home to rest, and I venture to believe the Chancellor of the Exchequer will pay more attention to me and consider the question with a more enlightened and ready mind if I allow him to go home instead of pressing the point at this hour. I only urge upon him that it is a matter of immense importance, and as he has made his name on the National Insurance Bill so he will make it highly appreciated by the traders, manufacturers, and merchants in this Kingdom if he adopts a fair and proper principle of depreciation.
    Amendment negatived.
    Mr. GRETTON: I beg to move, to leave out Sub-section (3).
    This Clause is causing to a very large class of property a great deal of hardship. I will only deal to-night with the case of licences. Two leading cases have been decided, and in consequence there are a considerable number of cases pending in respect of valuation. I am quite sure the right hon. Gentleman will not wish that these cases should suffer injustice owing to the unequal action of a Clause of this kind in the Finance Bill. If this Clause is to take effect as it stands all appeals will be shut out for a period of four years. There is another case of some importance. There have been a good many land valuations lately, and there is a reasonable plea that there should be an extended period in order that these cases might all be gone into and not allowed to lie dormant, and in many cases settled with a great feeling of injustice arising in the minds of those concerned. I therefore ask the Government to give the matter consideration, and amend the words of the Clause so as to meet this very large class of cases.
    Sir J. SIMON: The hon. Gentleman, in so far as he has called attention to possible cases of hardship, may rest assured that the administration is alive to the point he has made. I have no desire that that hardship should be inflicted, but really the proposal he makes to remedy it, if it is necessary, is not a practical proposal. What he is proposing to do is not to make some provision in the case of licensed premises which may be affected by the recent decisions he has referred to, but he is proposing to prevent in respect of all inhabited houses and of assessments under Schedules A and B the provision which is made every year carrying forward last year's assessment except when you come to quinquennial periods. I am sure the hon. Gentleman will see that that would be burning down the house to roast the pig. It has been the practice for a long time, and it is the necessary practice, to carry forward the assessment from year to year. But what the hon. Gentleman particularly has in mind is the possible hardship of the assessments being insisted upon for a whole period of five years in spite of the fact that a mistake has been made. I am sure the hon. Gentleman knows that in point of fact when a case of that kind has been brought to their notice the Commissioners have properly met it. I am not sure that they meet it by strictly legal means, but from the point of view of the hon. Gentleman it does not matter so long as they meet it. The Government are alive to the point the hon. Gentleman makes, and if he will withdraw his Amendment I will see that, in so far as we can suggest, the Commissioners bear the point in mind.
    Mr. GRETTON: I am very thankful to the right hon. Gentleman. I rely on the strength and justice of the real facts to carry weight, but I would like to say that this method of dealing illegally with reason and justice in the assessment of taxation is extremely unsatisfactory. I would suggest to the Government to consider between now and the Report if there are not some means of introducing words in this Bill which will enable these appeals to be considered in a reasonable period after the termination of the year in order that injustice may not be done. I admit that the Commissioners in cases that have occurred to my knowledge have behaved fairly in this matter, but there is no doubt that they behave illegally, and it is always open to the Commissioners at any time,

    2089
    however urgent the case, to take shelter behind the law. That cannot be satisfactory, and I venture to state this matter in order that the Government may, as I hope, reconsider whether words cannot be inserted on Report so as to remedy this grievance.
    Mr. CASSEL: I submit that it is a most unsatisfactory position in which to leave this Clause. The Government admit that the Clause as it stands will work injustice, but they will rely on those who administer the law not to carry it out. That is a most unsatisfactory position in which to leave the matter, and it is one of the results of hurrying through the Finance Bill in such a way that we have not time to frame words to meet cases of injustice, and I certainly think if our protests were ever justified before, they are doubly reinforced by the fact that the Government themselves now admit that, owing to the lack of time, they cannot put in words to meet these cases of hardship, but have to leave it simply to the administration.
    Amendment, by leave, withdrawn.

Part IV.
  NATIONAL DEBT.

    CLAUSE VIII.—(Partial Application of Surplus for Development Fund and Sanatoria and Loan to East Africa Protectorate, 38 & 39 Vict. c. 45. 9 Edw. 7. c. 47.)
    (1) The old Sinking Fund for the financial year ending the thirty-first day of March nineteen hundred and eleven, as calculated under Section nineteen of the Revenue Act, 1911, shall, notwithstanding anything in the Sinking Fund Act, 1875—

    (a) to the extent of one million five hundred thousand pounds, be issued and paid by the Treasury at such times as they direct to the development fund under the Development and Road Improvement Funds Act, 1909, in lieu of the sums to be issued out of the Consolidated Fund under Sub-section (2) of Section two of that Act in the years ending the thirty-first day of March nineteen hundred and thirteen, nineteen hundred and fourteen, and nineteen hundred and fifteen respectively; and

    (b) to the extent of one million five hundred thousand pounds, be issued by the Treasury at such times as they direct, and carried by the
    2090
    Treasury to a separate account, and made available in such manner as Parliament may determine for the purposes of the provision of sanatoria and other institutions for the treatment of tuberculosis, or such other diseases as the Local Government Board, with the approval of the Treasury, may appoint; and

    (c) to the extent of two hundred and fifty thousand pounds, shall be issued by the Treasury at such times as they may direct for the purpose of the advance authorised by this Act to the Government of the East Africa Protectorate.

    (2) The Treasury may advance by way of loan to the Government of the East Africa Protectorate for the purpose of providing improved railway communication and harbours in the Protectorate, and improved water supply for Mombasa any sums not exceeding in the whole two hundred and fifty thousand pounds.
    The Government of the Protectorate shall annually, until the whole advance is deemed to have been repaid, pay to the Treasury interest at the rate of 3½ per cent. on the amount advanced, and also, by way of Sinking Fund, a further sum equal to 1 per cent. on the amount advanced, and the whole of the advance shall be deemed to have been repaid when Sinking Fund payments have been made sufficient, if accumulated at 3½ per cent., with yearly rests to produce an amount equal to the advance.
    Any sums paid on account of the principal or interest of the advance shall be paid into the Exchequer, and issued to the National Debt Commissioners, and shall be applied by them in like manner as the old Sinking Fund.
    Mr. J. F. HOPE: In the absence of my hon. Friend (Mr. Hicks Beach), I beg to move to leave out Sub-section (1).
    I do so roughly for the reasons stated by the hon. Baronet the Member for the City of London (Sir F. Banbury) last week. I object to sums like this being taken from the Sinking Fund. As the Chancellor of the Exchequer said last week, money which was proposed to be voted under this Clause was for objects which would commend themselves to the whole of the House, and the right hon. Gentleman then said that if he did not take them from the Sinking Fund he would have to borrow, and it would be absurd to borrow when he had the money at his disposal in the

    2091
    Sinking Fund. I would submit in the first place there is inconsistency in that, because it has always been the policy of the present Government not to allow any charges to be made by loans even for such purposes as to enable naval and military works which, under the former Government, were often provided for short periods. The point, however, which I wish to press is that this is a method of getting money without any proper inquiry as to its objects, at any rate in detail, and thereby removing Votes from the control of Parliament.
    If these sums were put on the Estimates in the ordinary way Parliament could consider closely the objects for which they were to be devoted. These matters as to development and as to sanatoria and the like will not be subject to any detailed Parliamentary inquiry at all. We are giving a cheque to the Government for the whole amount without any kind of guarantee as to details or as to the manner in which the money will be applied. The whole object of the elaborate financial structure which was erected by Mr. Gladstone was to prevent sums being voted without the most exhaustive provision for Parliament being assured as to the need and value of the purposes for which it granted the money. I think this is really a very bad precedent. Once it is admitted it will be made use of in the future, and whenever there is a surplus on the old Sinking Fund large sums which ought to be devoted to reduction of debt will be taken away, and the Government of the day will have the advantage of using these sums without the scrutiny which all estimates ought to have. It is an extremely reactionary provision, and one which may be made use of by future Governments to the great detriment of proper finance. I think a protest should be made against it, and I move the Amendment.
    Mr. LLOYD GEORGE: This was discussed at considerable length on Thursday of last week, and I hope I am not criticising the hon. Member too severely when I say that he did not attempt to advance anything new. He rather relied upon the arguments which were used then.
    Mr. J. F. HOPE: And which were not answered.
    Mr. LLOYD GEORGE: Well, I thought I did answer them. I did my best to put the case for the Government in that
    2092
    respect, and I am quite prepared to repeat the arguments now, but I do not think it would serve any useful purpose. Even if this money were obtained by way of loan the hon. Member would not get any more details than he does now. He did not get more details of loans under the Naval Works Act.
    Mr. J. F. HOPE: We should if you put it on the Estimates.
    Mr. LLOYD GEORGE: The hon. Member's suggestion was that we should borrow——
    Mr. J. F. HOPE: No.
    Mr. LLOYD GEORGE: Then his suggestion is that the money should be put on the Estimates of the year?
    Mr. J. F. HOPE: The suggestion was that there should be a "token" Vote, so that the matter could be discussed by Parliament.
    Mr. LLOYD GEORGE: There is a much more effective way than that, as I pointed out last week, and that is by discussing it on the Vote for the salary of the particular Minister to whom these duties are allocated. It is purely a question of the demand of the Opposition for time to consider the matter. I do not think I can advance anything more useful.
    Mr. HARMOOD-BANNER: I think we should vote for this Amendment, because the Government are proposing a new system of finance which is most objectionable. The money in the Old Sinking Fund ought to be used to pay off debt, but instead of that it is carried to the credit of three Funds, one of which is the Development Fund. This is a secret service fund, and no resolution is required to be passed by Parliament before the Treasury can take that money and check it out for such purposes as they may desire. Personally I consider that most objectionable finance—to create a secret service fund to be dealt with in that way. It is subject to corruption. It is a sum of money now placed in the hands of the Ministry which they can, if they wish, give to those places which return supporters of theirs to this House, and refuse to those places which do not. The money is merely "to be paid by the Treasury at such times as they may direct." There is no Parliamentary control, nothing but Treasury control. That, I say, is dealing with public money in a most objectionable

    2093
    manner, and rendering it subject to corruption. We know it does not now exist, but it might in the future. Manchester returns Members at present which support the Government; Liverpool does not. There is nothing to prevent Manchester requests being granted and Liverpool requests being refused because they are on the other side in politics. It is absolutely wrong that you should create a secret service fund in this way, and that is one reason why this is not a proper way of dealing with the Old Sinking Fund—placing it to the credit of certain accounts, and not purchasing stock. As regards Subsection (3) there may be some little control over that. We are committed here to an expenditure of a million and a-half on sanatoria. There will be £900,000 on the rates, and as well as that there will be some contributions from other funds. That is what is clear from the discussions which have taken place.
    Amendment negatived.
    Mr. C. BATHURST: I beg to move to leave out the word "to" ["such times as they direct to the Development Fund"], and to insert instead thereof the words "as to one-fourth part thereof to the credit of the capital account, and as to the remaining three-fourth parts thereof to the credit of the current account of."
    It was clearly intended by the Development and Road Improvement Funds Act that a very considerable sum should be paid, I think it was for four or five years, out of that Fund for certain purposes not strictly defined as to their capital or revenue character. These purposes I am in hearty sympathy with. They are mostly purposes of agricultural development or development of a similar character. Certainly some of them are of a nature which would justify the expenditure of capital money. Most of them, however, suggest expenditure on purposes which are transient in their character. But when we are, for the first time, taking this money, not out of the current account of the year but out of the Old Sinking Fund, which, under the Sinking Funds Act of 1865, has been applied to the reduction of National Debt, surely it is in the interests of good finance that we should earmark a certain part of that fund as applicable to capital purposes and the remainder as applicable to the purposes of revenue. I may remind the Committee that the construction of harbours is one
    2094
    of the purposes to which this fund is to be applied. Also the starting of farm institutes. That will no doubt mean buildings of a permanent character which will belong, like the harbours, to the Government or to some public authority. They all represent certain national assets, and are not property of a decaying character which would require reinstating every year out of a current fund. Lately we have heard that a grant is to be made out of this fund towards starting a poultry institute. That will become a national asset. It is not a matter upon which large sums will be spent every year. If that is so surely there ought to be something placed towards the credit of the national capital account, or is the money to be left to the Development Commissioners to be spent on other purposes suggested to them by a Government Department?
    Certain sums are going to be paid in the future for the maintenance of agricultural co-operation for the Agricultural Organisation Society. We believe that there is likely to be a considerable sum paid to the Irish Agricultural Organisation Society, although we believe the sympathy of the Government is not altogether with the proposal. But that is a perishing fund, if I may so call it. Surely we are entitled to say that some portion of this very large fund which is going to be represented to some extent by national assets in the future shall be applied as part of a capital account, the remainder only to be applied as part of a current account. It is not only in the interests of good finance, but it will show what there is for this expenditure, and what control Parliament has over it. The right hon. Gentleman is now obtaining a block grant, which apparently is going to wind up the finance of this Development Act. What is going to happen in the future to those institutions which are beginning to depend on an annual grant for current expenditure? Without some such provision for the future they will fail.
    Mr. LLOYD GEORGE: I think the hon. Gentleman is under a complete misapprehension. There are two sets of grants under the Development Act, the one for capital purposes, and the other an annual grant to be voted by Parliament from year to year. That annual grant for revenue purposes we are not dealing with at all. This is a grant for capital purposes—a grant of £500,000 a year for a certain number of years. We propose now to pay this one and a half millions in order to complete

    2095
    that grant towards capital purposes. The hon. Gentleman being anxious to secure a portion of this for capital purposes wants to ear-mark one-quarter of it. We propose to ear-mark the whole.
    Mr. C. BATHURST: Is it being applied by the Development Commissioners to capital purposes only?
    Mr. LLOYD GEORGE: That is certainly what the idea was when the grant was made. I think the hon. Gentleman will see that at any rate in the main they are using it for capital purposes. In the main I think the money is used for the purpose of institutions of that kind, and what the hon. Member is thinking about rather is the annual grant from the Estimates.
    Mr. PRETYMAN: Has Parliament now, or will it have in the future, any opportunity of knowing how the actual sum is spent? At what stage of our annual proceedings are any particulars available to the House of the manner in which the money is being spent? I suppose this sum is available for capital expenditure, and the money is not to be invested and the interest utilised.
    Mr. LLOYD GEORGE: This Bill makes no difference in that respect. All that has been decided by the Development and Road Improvement Act. It is simply an expenditure in accordance with the principles laid down there. Up to the present there have been reports to Parliament by the Commissioners as to the way in which the money has been spent. There was a very considerable Debate this year, and I have no doubt there will be Debates so long as the reports come in.
    Mr. C. BATHURST: Is not the right hon. Gentleman mistaken in saying that there is an annual sum as well as the capital sum under the first Part of the Act? The Development Fund means a fund into which only moneys applicable to the first part of the Act are applied. That has nothing to do with the Road Board Fund.
    Mr. LLOYD GEORGE: It was certainly intended that this money should be rather expended for capital purposes, and that there should be an annual grant made which is altogether apart from that.
    Mr. J. F. HOPE: How does Debate arise if the Development Commissioners
    2096
    go wrong? What Minister are we to "go" for—the Chancellor of the Exchequer, or who?
    Mr. LLOYD GEORGE: Certainly, "go" for me.
    Mr. BATHURST: I beg to move in paragraph (b) after the word "of" ["may determine for the purposes of"] to insert the words "research in connection with and of."
    In this country, and indeed throughout Europe, we know very little as yet about tuberculosis—what are the causes of the disease and how best to treat it. If we are going to expend a sum of £1,500,000 upon sanatoria, possibly in the shape of large stone buildings, for the cure of tuberculosis, we shall be standing in the way of research and inquiry into the nature of the disease.
    Mr. LLOYD GEORGE: On a point of Order. This Clause relates to the expenditure of money on the basis of a resolution for the provision of sanatoria and other institutions for the treatment of tuberculosis. Research is provided for out of an annual sum which is voted in connection with National Insurance, and very considerable provision has been made in that respect. I submit, therefore, that this Amendment cannot be in order.
    The CHAIRMAN (Mr. Whitley): I have looked up the Money Resolution on which the Clause is founded, and I see it is confined strictly to the purposes of the provision of sanatoria and other institutions. I am afraid that does rule out the question of research.
    Mr. C. BATHURST: Then I do not proceed with my Amendment.
    Amendment, by leave, withdrawn.
    Mr. W. O'BRIEN: I beg to move, in paragraph (b), after the word "of" ["the provision of"] to insert the words "or making grants in aid to."
    The object of this Amendment can be stated in a minute or two and I do not think it will be regarded as of a controversial nature. Some of us found it our duty to oppose the Insurance Bill in its application to Ireland but that is no reason why we should not seek to utilise its provisions. In this particular matter I ask that justice should be done to those

    2097
    who, even before the Chancellor of the Exchequer moved, took up one of the most humane projects of the measure, namely, the provision of sanatoria. The Clause as it stands will provide £1,500,000 for grants for the erection of sanatoria, but it is not retrospective in character. In the City of Cork the representatives of the people anticipated the Bill by being the first place in Ireland to erect a sanatorium at their own charges. All that we ask is that they should be placed upon exactly the same level as other bodies which have not yet taken action, and that they should be refunded the cost of the sanatorium. The Corporation of Cork erected the sanatorium on the most approved principle and levied a general rate of 1d. in the £ to cover the expense of the building. I may say the expenditure would have been much higher, except for the fact that the site was donated free by a gentleman who is a member of the Cork County Council. The ratepayers undertook the remainder of the cost and there is a sum of over £5,000 outstanding on loan. It would be justice to the ratepayers that they should have a grant to that amount, and I think it is also in consonance with the spirit of the Insurance Bill that the remaining £15,000 contributed by the ratepayers should be advanced, at all events for the purpose of the enlargement and perfecting of the sanatorium which has been a conspicuous success.
    Mr. LLOYD GEORGE: If the hon. Member had put this case before the Committee of the House on the Insurance Bill I must say that I should have thought he had a considerable case. The enterprise and public spirit of the ratepayers in the county, and city of Cork deserve every encouragement rather than discouragement, and if they were not put in the same position as those who will come in in the course of the next two or three years under the provisions of the Bill they would be penalised. That is the last thing in the world that ought to be done. I felt that the moment the case was presented to me I had no answer but to accept any reasonable Amendment to carry out the purpose the hon. Member has in view, and I think the first Amendment which the hon. Gentleman has just moved covers the whole point, so that I hope the hon. Gentleman will not move the next.
    Mr. MAURICE HEALY: I thank the right hon. Gentleman for the very fair spirit in which he has accepted this pro-
    2098
    posal, and my hon. Friend authorises me to say that, in view of the favourable reception given to the first Amendment, he does not propose to move the others.
    Amendment agreed to.

    CLAUSE IX.—(Transfer of Government Stock by Deed.)
    (1) Notwithstanding anything in Section twenty-two of the National Debt Act, 1870, any stock belonging to a stockholder shall, if registered for the time being as stock transferable by deed in manner provided by regulations made under this section, be transferable by deed instead of in the manner provided by that section.
    The Treasury shall provide by regulations for a separate stock register being kept for stock which is for the time being transferable by deed, for the conditions upon which stock is to be entered in or removed from that register, for the mode in which the transfer by deed is to be carried out, and for the payment of any fees in respect of the entry or removal of stock from the register and the carrying out of any transfer of stock by deed.
    (2) No stamp duty shall be payable in respect of any deed of transfer of the stock.
    (3) In this section the expression "stock" means any stock which is for the time being transferable in the books of the Banks of England and Ireland under the National Debt Act, 1870.
    Amendments made: In Sub-section (1), after the word "section" ["manner provided by that section"], insert the words, "the Banks of England and Ireland, respectively, with the concurrence of."
    At end of Sub-section (1) insert the words, "The provisions of The National Debt Act, 1870, and any Act amending the same, shall apply to stock transferable by deed in pursuance of this Section as they apply to stock transferable in the books of the Banks of England or Ireland, except so far as express provision is made to the contrary by this Section or by the regulations made thereunder."—[Mr. McKinnon Wood.]

Part V.
  GENERAL.

    CLAUSE 10.—(Amendment of Schedule to Revenue Act, 1911, 1 Geo. 5. c. S.)
    The Revenue Act, 1911, shall be read as if Section ninety-one of the Finance (1909–10) Act, 1910, were not included in the schedule of enactments repealed.
    Question proposed, "That the Clause stand part of the Bill"
    Mr. AUSTEN CHAMBERLAIN: I wish to ask what is the meaning of this Clause?
    Mr. McKINNON WOOD: This Clause is introduced with the object of correcting a mistake in the Revenue Act of this year.
    Bill reported; as amended, to be considered to-morrow (Tuesday).

METROPOLITAN POLICE RATE BILL.
Read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Gulland.]

MILITARY MANŒUVRES BILL [Lords].
Question proposed, "That the Bill be read a second time."—[Mr. Gulland.]
Sir H. CARLILE: I really must enter a protest against taking this Bill at this hour. It is half-past three in the morning, and if the right hon. Gentleman proposes to take it now it will be necessary for me to call upon him to make a clear statement, and it must be a long statement, on the contents of the Bill. The alterations are most serious. We have had no notice of any proposal to take the Bill, and it is not treating the House with due respect at this hour of the morning to insist upon the Second Reading
Colonel SEELY: I hope the hon. and gallant Gentleman will not persist in his objection to our taking the Bill now. I should be very glad to make a very full statement if he wishes it. In point of fact, if he will consider the Bill and the Memorandum he will find the difference is very small. The Bill has been very fully discussed in another place, and has been on the Paper for more than a week. The
2100
only two points of difference in the Bill are that it proposes to shorten the period for which notice shall be given from six months to four months, but, per contra, the 30th April is fixed as the date by which notice must be given. Those most intimately concerned in the matter are satisfied that by fixing the date at 30th April it will be really more convenient to all parties concerned than the plan under the Bill as unamended, under which it is provided that six months' notice should be given. There are other matters in connection with the closing of the roads. I think, on the whole, if the hon. and gallant Gentleman will refer to the Debates in the Lords he will see that every care is taken that no possible inconvenience can be caused to anybody concerned. If the hon. and gallant Gentleman will refer to Clause IV. of the Bill he will see the substantial alteration. At any rate, there will remain a majority of persons elected in the locality.
Sir H. CARLILE: The right hon. Gentleman refers me to Clause IV. of the Bill. He has made no reference to the fact that during manœuvres it is proposed to go through woodlands and parks. We are to have our parks run over by Artillery and Cavalry. My own park should certainly be available for anything of the kind, but I insist on the point that this Bill should be considered by the House. It is not sufficient for the right hon. Gentleman to say that it has been considered in another place. I am surprised in these days that the right hon. Gentleman should suggest such a thing. Is this to take place in our woodlands at a time of year when any game there is quite young?
Mr. DEPUTY-SPEAKER: I would remind the hon. and gallant Member that he has already made one speech.
Sir H. CARLILE: I was merely drawing the right hon. Gentleman's attention to the fact that he was passing Section IV. without giving any explanation of the most important provisions. That is not fair to the House. I absolutely protest against it. It is perfectly ridiculous.
Colonel SEELY: The hon. and gallant Gentleman has forgotten, I think, that we are on the Second Reading of the Bill. I should be most happy to explain to him fully the whole provisions of the Bill at a subsequent stage. If the hon. and gallant Gentleman wishes to raise the point with regard to the woodlands, I assure him I

2101
will be most glad to point out how the matter stands. It is proposed in the Bill that woodlands and parks may be used by the troops under the present Act. The landowners of this country are most anxious that there should be no restrictions placed on the troops, and I cannot believe that the hon. and gallant Gentleman wishes, at whatever hour in the morning to stand out as the one hon. Member of this House who wishes to prevent this Bill going through.
Sir H. CARLILE: It ought to be discussed.
Colonel SEELY: Yes, but the hon. and gallant Gentleman must allow me to make my statement.
Sir H. CARLILE: You have no right to put words into my mouth. [Interruption.]
Mr. DEPUTY-SPEAKER: I must again remind the hon. Gentleman that he has already spoken. I allowed him one very lengthy interruption, and he must listen patiently to what the hon. and gallant Gentleman has to say in reply.
Sir H. CARLILE: On a point of Order. May I say I rose because the right hon. Gentleman attributed to me an expression of opinion I did not use. The right hon. Gentleman said I proposed to be the only man apparently who objected to this Bill. I expressly stated that I had no objection so far as my own place is concerned. I insisted on discussion.
Mr. DEPUTY-SPEAKER: The hon. Gentleman has already stated that in his speech.
Sir H. CARLILE: And the right hon. Gentleman had no business to deny it.
Colonel SEELY: I said I hope the hon. and gallant Gentleman would not be the only hon. Member to object to the Bill, and I still hope he will not be the only hon. Gentleman to object. If he wants me to discuss the matter, I can only say that I have here particulars for a very lengthy explanation. But I repeat that I hope he will not be the only hon. Gentleman to object.
Sir H. CARLILE: Object to what?
Colonel SEELY: To any of the provisions of this Bill. I assure the hon. and gallant Gentleman I did not mean to impute to him in any way that he would be so unpatriotic as to close his place to the
2102
troops. I think the House is now satisfied, and may give the Bill a Second Reading.
Whereupon, Mr. DEPUTY-SPEAKER, pursuant to the Order of the House of 24th October, proposed the Question, "That this House do now adjourn."
Adjourned accordingly at Twenty minutes before Four o'clock a.m., Tuesday, 12th December, 1911.

  Imports and Re-exports (Cocoa, Confectionery, etc.).
  Imports and Re-exports (Cocoa, Confectionery, etc.).
  Liquor Licence Duties (Ireland).
  Liquor Licence Duties (Ireland).
NATIONAL INSURANCE BILL.
  REGULATIONS.
  REGULATIONS.
  TRAINING COLLEGES (BURSARS AND STUDENTS).
  TRAINING COLLEGES (BURSARS AND STUDENTS).
  Pension Sub-Committees, County Kilkenny.
  Pension Sub-Committees, County Kilkenny.
  Customs and Excise (Amalgamation).
  Customs and Excise (Amalgamation).
  Land Purchase (Ireland).
  Land Purchase (Ireland).
  Charge of Assault, County Meath.
  Charge of Assault, County Meath.
  Reinstatement of Evicted Tenants (Ireland).
  Reinstatement of Evicted Tenants (Ireland).
  Congested Districts, County Clare.
  Congested Districts, County Clare.
  Labourers' Cottages, Ballycastle Rural District.
  Labourers' Cottages, Ballycastle Rural District.
  Magistracy, County Kilkenny.
  Magistracy, County Kilkenny.
  Hounslow Barracks (Army Pay and Record Offices).
  Hounslow Barracks (Army Pay and Record Offices).
  County Court Judges (Pensions).
  County Court Judges (Pensions).
  Dungloe (County Donegal) Mails.
  Dungloe (County Donegal) Mails.
  Southall Post Office.
  Southall Post Office.
  Cable Rates (Australia).
  Cable Rates (Australia).
  Lodging Pupils (Scotland).
  Lodging Pupils (Scotland).
  Bee Disease (Keswick and Cockermouth).
  Bee Disease (Keswick and Cockermouth).
  Foot-and-Mouth Disease.
  Foot-and-Mouth Disease.

Preamble
The Earl of ONSLOW—Sat first in Parliament after the death of his father.
The Lord DELAMERE—Took the Oath.

SHOPS BILL
Brought from the Commons.

MAXWELL'S DIVORCE BILL. [H.L.]
PILKINGTON'S DIVORCE BILL. [H.L.]
Returned from the Commons, agreed to.

BURGH POLICE (SCOTLAND) AMENDMENT BILL.
Return showing the Amendments proposed to be made in Section 82 of the Burgh Police (Scotland) Act, 1903, by the Bill: Ordered to be laid before the House (The Lord Pentland).

NATIONAL INSURANCE BILL.
Petitions against; of the Council and Committee of the British Constitution Association, of No. 11, Tothill Street, London, S.W.; read, and ordered to lie on the Table.
Petitions for amendment of; of persons signing; read, and ordered to lie on the Table.

SHOPS BILL.
Read la; to be printed; and to be read 2a on Thursday next (The Lord Ashby St. Ledgers). (No. 240.)
BURGH POLICE (SCOTLAND) AMENDMENT BILL.
Return respecting: Laid before the House (pursuant to Order of this day), and to be printed. (No. 241.)

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT MORLEY): My Lords, I beg to move the Motion standing in my name.
Moved, That Standing Order No. XXI be considered in order to its being suspended, and that for the remainder of the Session all Government Bills which are entered for consideration on the Minutes of the day shall have, precedence of other Bills and Notices.—(Viscount Morley.)
On Question, Motion agreed to, and ordered accordingly.

PIER AND HARBOUR PROVISIONAL ORDER (No. 4) BILL.
THE EARL OF GRANARD: My Lords, before asking your Lordships to suspend the Sessional Order as regards this Bill, it is only right that. I should state the reasons which make this Motion necessary. The negotiations with regard to the Bill have been very difficult. The local inquiry was held as far back as March. 23 last, but no Order could be made before June 29. The Bill was introduced in the House of Commons on July 21, and since then no time has been lost with regard to it. The Board of Trade are very anxious to complete the Order, winch has been an unusually difficult one but is now not opposed. I venture, therefore, to ask your Lordships to make an exception in this case and allow me to move the suspension of the Sessional Order so far as this Bill is concerned.
Moved, That the Order made cm the 29th day of March last. "That no Provisional Order Confirmation Bill brought from the House of Commons shall be read a second time after the 4th day of July next," be dispensed with, and that the Bill be now read 2a.—(The Earl of Granard.)
LORD BALFOUR OF BURLEIGH: My Lords, this is a very unusual request, even after the explanation of the noble Earl. It seems to me that a great deal of time has been lost. Apparently the Bill was not introduced into the other House until nearly three weeks after the time when it ought to have been read a second time in your Lordships' House, and it does not seem to me that in these circumstances we should suspend our Sessional Order at

735
this late period of the session. The House resolved that no Provisional Order Confirmation Bill brought from the House of Commons should be read a second time after July 4. and yet on December 11 it is proposed to read this Bill a second time. If you are going to allow such a long interval to elapse, I do not see the use of retaining the Sessional Order.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords. I am glad the noble Earl in charge of the Bill and the noble Lord opposite have drawn attention to this matter, because it does at first sight look a little unusual that your Lordships should be asked to suspend the Sessional Order in the case of a Bill which was only introduced into the other House after the date at which, by our Sessional Order, it should have been read a second time here. But the ease is a little exceptional, and I think your Lordships would do well to suspend the Sessional Order in this case and allow the Bill to go forward in the ordinary course, and, if your Lordships pass it, receive the Royal Assent at the end of this session. The fact is that the Order was lodged at the end of January, as is usual. The local inquiry commenced at the end of March, which, as a matter of fact, was only a fortnight after the usual time, and I understand that it was owing largely to geographical difficulties that delays took place which resulted in the Order being introduced at so late a period in the other House. But what really has delayed this Order more than anything else is this. There were two Orders originally in this Confirmation Bill. The other Order was opposed, and the opposition to that Order, which has been dropped, resulted in this Order, which is unopposed, being delayed. If this Order had been in the Bill by itself the Bill would probably have reached your Lordships before we adjourned in August, when no question would have been raised as to the propriety of suspending the Sessional Order. These being the facts, I think your Lordships would do well to agree to this Motion now, having entered a caveat that it is not self-evident that a Sessional Order made in July should necessarily be suspended five months afterwards on a Bill which only reaches your Lordships in December.
On Question, Motion agreed to: Bill read 2a accordingly, and committed for To-morrow.

NATIONAL INSURANCE BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE SECRETARY OP STATE FOR WAR (VISCOUNT HALDANE): My Lords, I do not think that I should be either assisting your Lordships or consulting your convenience were I to begin with a disquisition on the value of national insurance. The subject has been before the mind of the country for many months past, and I think a considerable distinction is drawn between the general principle and the form in which it may be embodied. The great majority for this Bill on its Third Reading in the other House last week shows that, so far as the general principle is concerned—and I allude to no more than the general principle—the mind of the country is fairly well set upon it, and therefore I propose to go straight to what is the real question before the House to-day, and that is, whether my right hon. friend the Chancellor of the Exchequer has well and truly laid the foundation on which a system can be reared.
Before I go to the discharge of a duty which I hope to compress within a reasonable time, there is one thing I should like to say. I regret as much as any of your Lordships can the fact that this Bill comes up for consideration at so late a period of the session, for in this House there are many who, from their knowledge of local government and from other fields of experience, would have been well able to contribute to a minute scrutiny of the provisions of the Bill. But the measure comes before us at a period when that is not possible and the only alternatives are o to put it off for a prolonged period, or else to deal with it without the opportunity for that discussion which a subject so important merits. It might be well, it might be the ideal course, to postpone for a prolonged period—and it would need to be a prolonged period—the examination of this measure: but there is a well-known French proverb which says that the best is the enemy of the good, a proverb which I think applies here. Suppose we were to delay the passing into law of this Bill, what then? The position of the friendly societies in particular would be deplorable. The very fact that the public has given practical consideration to the new system, and that Parliament is a fair way on in

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passing it through, has led to a great transformation already in the situation of these societies. Their members are falling off in number because new entrants are not coming in. As always happens, people are waiting to see what fresh system is going to come into operation, and they are suspending their natural habit of joining these societies in large numbers. Therefore in the interest, not only of the friendly societies, but of all the great business bodies which have to deal with this matter, it would be truly an unfortunate result if the period of suspension were prolonged.
But there is another consideration which I own weighs with me very much. This Bill can only, to use an expression which I have already used, lay the foundation. The example of Germany is highly instructive on this point. The great system which came into existence more than a generation since, under the auspices of Prince Bismarck, had been considered with all the capacity of that highly scientific nation, never given to launching a scheme without having in the most careful fashion thought it out beforehand. And what has the experience of Germany shown? The great majority of the people of Germany thoroughly approve of the system, and say it has proved to be a great blessing; but the history of the question shows that almost from the first the experience of the new system disclosed the necessity for the transformation of the original ideas, with the result that in Germany, within the limits that were originally laid down, and as experience has progressed, modification after modification has been made in the system; and even to-day great modifications in the German system appear to be impending. Therefore I say of this Bill that it can be no more than the providing of the ground on which a system is to be reared, with regard to which it is necessary to proceed experimentally, and as to which it is impossible to say that any particular scheme is best without the guiding assistance of experience. All that can be done is to determine the limits within which you will proceed, to ascertain in as careful a manner as possible the various factors of financial safety, and, having done that, to proceed tentatively, with the certainty that in a few years as experience goes on you will have to remould your system in many points, and that it is only experience which can guide you to the final form which it must ultimately assume.
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The task of the Chancellor of the Exchequer has been a very difficult one. He had to deal with an entirely new conception as to which there was very little experience to guide him, and however much my right hon. friend may have excited criticism as to details, I think nobody can doubt that he has thrown into this matter an energy and devotion and a command of his material which are remarkable in the case even of a Minister introducing a very great reform. And what your Lordships, I take it, have as the real question before you to-day is not this and that detail, but whether the framework which he has fashioned, financial and administrative, as well as legislative, is a sound framework, and one within which and upon which you may build up the edifice which we are aspiring to construct. With these remarks I pass to what are the purposes and principles of the Bill. If I wanted to define its object in a sentence, I would say that that object was to introduce among the majority of the working classes the habits of providence which distinguish a large minority, but still a minority, at the present time. There will always be an aristocracy of labour who will be content with nothing short of things that go far beyond the benefits which even this Bill will confer. Those who know the working classes are aware of the extraordinary extent to which they effect insurances, not merely in friendly societies and trade unions, but with the great industrial companies and the insurance societies of the country. It is a system which I am glad to say is progressing with the progress of the working classes; but apart from those who make special provision there is a large number who insure something like the benefits of this Bill. At present about 6,000,000 of those who work with their hands provide against sickness. We hope by the machinery of this Bill to raise that number to something approaching 15,000,000—to cover practically the whole field of those who work with their hands.
The Bill deals with the two subjects of sickness and breakdown, and in a minor but still a very important degree with unemployment. I shall say more about sickness and breakdown to-day than about the other subject, because, following the course which was taken in the other House of Parliament, my noble friend Lord Beauchamp will take charge of the unemployment section of this Bill, and therefore it is only very generally that I shall deal with the provisions relating to unemployment. The system that the

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Bill proposes to introduce is, even as regards health, a limited one. We do not touch death for the good reason that the field of insurance against death is well covered. There is an extraordinary number of policies against death current among the working classes, quite enough to make it unnecessary and inexpedient to touch that side of the case, because I must remind your Lordships that the purpose of this Bill is not to supersede the friendly societies, not to do work which they are already doing, but greatly to expand their work and to introduce their operations into ground which they do not at present cover. Therefore we do not touch death. But there is another object which the Bill aims at effecting indirectly, and that is the object of preventing disease instead of merely providing for it. At the present time it is admitted that something like 30 per cent, of the pauperism in this country is due to sickness. Consumption alone effects tremendous ravages among our population. Some 300,000 people every year are always ill with consumption in these islands, and about 60,000 die from it every year, with an average previous life of not more than live years since the disease began to make itself manifest. Therefore we have there a tremendous problem in prevention, and I hope to show your Lordships that the Bill does a great deal, not merely to provide for sickness when sickness has once set in, but to prevent sickness arising at all. And the machinery we set up will introduce better inspection, greater care, and motives of prudence which do not at present exist, and if that were the only result which the Bill would effect it would be well justified.
I now come to the machinery of the Bill. The first question I have to answer is, What are the principles on which the machinery rests? The first principle is one which I need not discuss at length—it is the principle that to make a system of this kind effective it must be compulsory. All experience shows that, and this proposition has been so generally accepted after a great deal of discussion that I do not propose to trouble your Lordships by going into details on that point. The next principle is that the system should be contributory. That is a phase of this scheme to which, speaking for myself, I attach very great importance. I believe that every system of insurance, whether against old age, against sickness, or against death, is far better if placed, so far as you can place it, upon a
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contributory basis. I may be asked, Why, then, did you not put old-age pensions on a contributory basis? My answer to that is a very simple one. The class we were seeking to provide for under the old-age pension system was a class which in the main had had no opportunity of providing for itself, a class which was upon the very margin, a class of people who had spent their substance during their working lives on their families and dependants, and who came to old age without a chance of making any provision. But this Bill does introduce the contributory principle even as regards old-age pensions. When I come to explain the system of additional and extension benefits which the Bill contemplates, your Lordships will find that among those are an increase to the existing old-age pensions and an acceleration of them, both dependent upon a contributory basis; and I think it is all to the good that the contributory system should be so extended that it can touch even this class of benefits.
The third great principle of the Bill is to use not the machinery of the State, but that of the friendly societies. The friendly societies have this enormous advantage, that if you work through them you have a state of things in which every member is interested in getting the utmost for his money, in keeping down false cases, in excluding cases of malingering, in encouraging habits of carefulness and prudence such as obviate sickness, and it is the esprit de corps of the friendly societies and their watchfulness in this direction that is your greatest safeguard against malingering. We were led to that consideration by the experience of Germany. The splendid system of Germany has had the one defect that the tendency is for the rate of sickness, of apparent sickness I should say to rise, and for malingering to make itself manifest. That comes, we think, in a considerable degree from the fact that the responsibility for looking after these things is in Germany mainly centralised and with the State. In Germany there are local funds, but they are under close supervision and highly centralised State management. The result is that there is not the same direct motive as with the friendly societies to deal with cases of malingering, or to take those steps and give that counsel which tend to reduce the rate of sickness. In Germany, too, the system has got into the hands of the State in a complicated form that we do not desire to see here. For instance, disablement is

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under a separate authority from sickness, and old-ape pensions are mixed up with disablement and sickness. In Germany there are thirty-one pension offices and ten-trades institutions, and there are varying rates of contributions and varying rates of benefit.
The result of the consideration of this most valuable German experience—and I think the world owes a great deal to Germany for the lesson it has taught in being the first to fashion out a system of national insurance—is that we do well, if we can, to give the people themselves a direct motive to look after each other and to guard against imposition, and on the other hand, to get the most for their money. What I have stated to your Lordships is a root principle of the Bill. Our intention is that the Insurance Commissioners should not look upon themselves as there in any way to supersede the friendly societies, but rather 1o encourage them in every way to develop their own business. We wish the friendly societies not only to take on the vastly increased business which we are asking them to assume, but also to conduct their own business with extra benefits outside what this Bill contemplates in their own fashion. The last thing we desire is any way to say, as some have said, that the day of the friendly societies is over. On the contrary, I hope that friendly societies are opening a new and still more important chapter of their history—a chapter in which their functions will be greater and more important than has been the case hitherto. Everybody who has had to do with these societies knows the spirit of mutual watchfulness which the members exercise over each other. If a man has a tendency to drink, which affects the increase of his sickness allowance, he is at once called to book, and I am told that the friendly societies exercise great pressure in the interests of temperance. Then take the case of a servant who is suffering from anæmia, a disease which is said to result from a too confined indoor life. The friendly societies watch over those cases, suggest a change of situation, and do an amount of detail work of that kind which is of vital importance if you are to keep down the rate of sickness. Those are the three great principles of the Bill. Now I come to the machinery by which they are to be made effective.
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At the root of this Bill and at the root of every scheme of this kind lies finance. Unless the financial system on which the Bill is based is sound the scheme must fail, and really if I were to select what seems to me to be the most vital point in this Bill I should say it is the financial system which it embodies. That financial system is one which has received the closest attention for a good while past from the best experts whom the Chancellor of the Exchequer could collect. Not only have some of the most distinguished actuaries in this country, actuaries specially connected with the work of friendly societies, been engaged upon it, but the experts at the Treasury have been giving prolonged attention to the subject, with the result that a scheme has emerged which I hope when your Lordships hear what it is—and you know a good deal of it already—you will think represents at all events the most prudent course that could have been adopted, and one which lays down limits beyond which the financial results of the scheme cannot stray. If the financial system is sound, we have got our factor of financial safety. We have got limits outside which the scheme cannot naturally expand. I will ask your Lord ships' indulgence while I say a few words about this root consideration.
Three courses were open to the Government in face of the difficulty which confronted them. They wanted to bring everybody compulsorily into insurance, but then some of these people were old and some were young. If you brought them all in compulsorily, you would have had to bring them all in at the same rate of contribution, or you would have had to find money in the shape of doles to equalise the contributions. To something like that we have ultimately come, but in a very different form. That would have been a most clumsy and complicated alternative. The only other alternative to the one which was ultimately adopted was this, to equalise the position of old and young members under the, insurance system by making a large grant in respect of each person. As a matter of fact, the sum would have been £63,000,000 sterling to put every life on the same footing. That did not seem a justifiable way of going to work. The third course is the one we have adopted, arid it is this. Every person who comes into compulsory insurance and is over the minimum age will have what is called a reserve credited

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to him. Take the position of a man of 40. Sickness begins to become more frequent as you get on in life. Therefore to insure against it you have to pay more if you start your insurance at that time. But if you have been in insurance from the age of 16, the minimum age, then your contributions have rolled up over a period in which there is less sickness, and they provide you with a reserve which enables you to say at 40, "I have contributed all these years since the age of 16, therefore my contributions are adequate to enable me to reap the fruits of the ordinary benefits, notwithstanding that with me sickness is likely to be more than in my earlier days." What we had to do was to put the man of 40 in as good a position as the man at 16. The man of 16 is making a fixed contribution, the man of 40 is making exactly the same contribution, but we had to provide the man of 40 with the same reserve as he would have had to his credit if he had been in insurance since the age of 16. The way in which that is done is that the State gives, through the Insurance Commissioners, to each man insured a credit appropriate to his age. In the case of the man of 40 it is larger than in the case of the man at 30, and so on. The man of 16, of course, requires no credit because he has come in at the initial age.
Now, how is the money for that to be provided. It is a credit in each case from the State on which the friendly society can draw. It can treat the man as having at his credit the amount of that reserve and draw for his benefits. It is done in this way. We have divided the benefits into three classes. The first class are what are called the minimum benefits. If your Lordships look at Clause 8 of the Bill you will find the three classes of benefits mentioned. The first is the minimum benefits, such as 10 s. a week during sickness, 5s. during disablement, medical benefits, and so on. Those are the minimum benefits which everybody, with one exception, is to have. The second class of benefits referred to in Clause 8 and also referred to in the Schedule which deals with benefits is what are called the additional benefits. These are benefits which may assume various forms—additional to old-age pension, anticipation to old-age pension, dental treatment (a most important matter with the working classes), increased sickness allowance, and various things which belong to a higher category of benefits. Then there is the third class
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of benefits which are called extension benefits. They are foreshadowed and referred to in Clause 8, but Parliament has hereafter to determine the form which these are to assume.
The minimum benefits come into operation at once. Every one is entitled in principle to his benefits from the date at which he comes into insurance, so long as these are minimum benefits and he pays the standard contribution to get them. But the contribution which the insured person pays is loaded with a margin of about 6 per cent., and that 6 per cent, will make the friendly societies who manage their business prudently carry on their business at a profit, and that profit will go to provide the second class of benefits—the additional benefits. After three years the insurance society is to have its assets valued. If there turns out to be an increase in those assets, the profit on the carrying on of its State Insurance business—and this fund is carefully segregated—is to go for the purpose of adding additional benefits to the minimum benefits. That may happen as early as three years after the passing of the Bill and possibly in some cases even a little earlier, and it is a process which will go on. In the case of well-managed societies these additional benefits will be there, and in the case of societies that are not well managed their members will be annoyed because they will find that their society has not been conducting its affairs in such a fashion as to secure for them the additional benefits.
Then there are the extension benefits which are left to be defined by Parliament hereafter. The reason for that is that we want more experience to show what is the best form which these benefits should assume when they come into operation, and they cannot come into operation, for a reason which is fundamental, before a little over eighteen years from the inception of the system. I explained that the reserves credited to the older insurers have to be wiped out, and they are wiped out in this way. The sevenpence which is the amount of contribution that an employed man and his employer pay is sufficient, not only to secure the minimum benefits, but also to provide a margin for the additional benefits which is rolled up by the friendly society. The State comes in at this stage. Under Clause 3 of the Bill the provision of the cost of benefits is to be made, two-ninths by the State, and

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seven-ninths by the employer and employed. Taking a benefit which is contributed to by the employer and the employed to the extent one of threepence and the other of fourpence—that is to say, sevenpence in all—the State will contribute two-ninths of the cost of the benefit which that premium purchases. Now how does that work out? The benefit is calculated as worth sevenpence. The employer and employed provide that sevenpence; but then two-ninths of the cost of the benefit is taken off by the intervention of the State, which is bound under the Bill to pay two-ninths of the cost of the benefit. Now the benefit is worth sevenpence, and if your Lordships will do a little sum you will find that two-ninths of sevenpence represents a penny and five-ninths. That penny and five-ninths is not wanted for the purchase of the benefit. The contribution of the employer and employed goes entirely in this purchase of the sevenpenny benefit and additional benefits, but the one penny and five-ninths which is released from their contribution by the contribution of the State goes through the hands of the Insurance Commissioners to extinguish these credits. It rolls up to a large sum every year, and the actuarial calculation shows that, at the end of a little over eighteen years, the whole of the credits which are given for the older lives will be wiped out by the operation of that penny and five-ninths. It is a fair enough transaction, because the man gets sevenpence worth of benefits for sevenpence. What he does not get is the equivalent of the State contribution. The equivalent of the State contribution to the extent of a penny and five-ninths goes to extinguish these credits, so that the result will be that after eighteen years there will be a large increase in the amount of money set free. The whole of the State contribution will be coming in to provide these extension benefits under Clause 3 in the shape in which Parliament shall by that time decide to fashion them. There may be a considerable addition to old-age pensions, there may be old-age pensions at 65, there may be increased sick allowance, there may be very much extended medical treatment, and there are a vast variety of ways in which these things may be dealt with. It is for Parliament to say. But the point is this, that from to-day the money is rolled up which will eighteen years after this provide those extension benefits of which I have spoken.
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I do not feel any confidence that I have succeeded in making myself clear on this question of finance. It is very complicated. I think I understand it myself, and I trust that your Lordships will have understood something of it from what I have said. There has been a huge controversy as to whether the State was contributing twopence or whether it was not. Some said it was not, and that it was all a fraud; others said it was, and that it was a great boon. The truth is that what the State is paying is what will work out on the average, over a tract of years, to at least a contribution of twopence. The State pays two-ninths, and as the benefits increase the State has to pay more and more, so that when we get to the extension benefits period the State will be paying more than twopence, but in the earlier stages it will not pay so much. Taking the average, the equivalent of twopence is being rolled up for the benefit of all the insurers. The younger insurer when he reaches the age of 34—I think I have added 18 to 16 correctly—will get these much larger benefits which have been provided by the effect of this process of wiping out. He will get the full benefit of the State contribution. That is the financial scheme of the Bill. It has been worked out by the actuaries with the utmost caution, and I think myself, as far as I can judge, that they have been very conservative in their margins. There are some parts of the Bill where really the actuarial data are very scanty and about which you cannot be sure. For instance, take the case of a married woman. The periods of sickness with a married woman are so uncertain that there is nothing very reliable that can be gone on. We at first thought it would be wiser to keep married women out of the Bill altogether, but that could not be done and accordingly we have taken them in on as conservative a margin as possible. But for the rest we have had valuable data to go upon. There is the experience of the friendly societies, and the actuaries have loaded the premiums with a considerable margin to cover contingencies, and I am informed by those most competent to judge that, on the general part of the scheme, the calculations of the actuaries are not only apparently very reliable, but are based on a very conservative footing. And in addition to that, in every case a margin has been added to cover unforeseen contingencies. Therefore I venture to

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hope that experience will show that the basis upon which these calculations have been made is sound. Again I say that beyond ascertaining certain general facts, such as I have referred to, it is impossible to have any certainty in a matter of this sort. We are making a great new departure, justified by what I believe will be the incalculable benefits which the introduction of these habits of insurance and prudence, and the consequent prevention of disease, will bring to the great mass of our population. To do this you must risk something. All that we can do in a matter so novel, and in which experience affords so little guide, is to use the best material we can and come to the most careful conclusions that are possible.
So much for finance. Now I come to the way in which this is worked out. First, I will take the machinery of the Bill with respect to sickness and breakdown, and I will go at once to the question of the persons who come under the obligation to insure against these evils. To begin with, all persons employed under a contract of service must be insured compulsorily. There are exceptions to that, such as where the work is not manual and the remuneration exceeds £160 a year. The clerk, for instance, who gets over £160 is under no obligation to insure. Then there is a second class which will contribute a considerable number of people to the benefits of this scheme and which will be equally assisted by the State, and that is the class of voluntary insurers, the class of persons who are not employed within the definition I have given and whose incomes are less than £160. Another class is those who have been employed contributors for five years. They are then entitled to go into the class of voluntary insurers and escape further compulsion if they please. These are the two classes—the compulsory insurers and the voluntary insurers. As to age limits, nobody comes under the obligation at a lower age than 16 or after 65.
Now I pass to the benefits. I have already told your Lordships of the three classes of benefits, the third of which is left for future definition. But the benefits generally your Lordships will find described in Clauses 8 to 13 of the Bill. The benefits so far as they are minimum or ordinary benefits consist of items such as the following—sickness, in the case of a man 10 s., and
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in the case of a woman 7s.6d. a week, for 26 weeks. A point has arisen here as to which there has been a good deal of controversy. If you allow' people to get sickness allowance for the first three days, experience has shown that that is a potent cause of malingering, and in those cases generally they are able to look after themselves for so long, or they are looked after. We have thought it best to bring them into the, insurance benefit on the fourth day. Exception has been taken to that by some of the friendly societies on this ground, that their own practice has been to bring their members into insurance earlier. One quite respects and appreciates the desire to maintain a tradition, but we have been unable to satisfy ourselves that it is a good tradition. Remember you are using State funds here, and malingering becomes a thing you have to guard against more closely than under the restricted voluntary system of friendly societies. Therefore we do not think we should be justified in recommending that the first three clays of sickness should be brought in, and in that we are following certain precedents in the Workmen's Compensation Act. We thought it right to compensate, and we have more than compensated, for the exclusion of these three days, by extending the sickness benefit for 26 weeks instead of 13 weeks, with a diminished benefit towards the end. Therefore although we know we have not quite satisfied all the friendly societies on this point, we think we have come to the right decision, more particularly as it is absolutely vital in a matter of this kind, where State resources are engaged, to ascertain clearly the limits of your liability and take care that the taxpayers' money is not wasted.
Then there is disablement or breakdown benefit of 5s. a week. If a person is permanently incapacitated or temporarily incapacitated after a period of illness as a result of some specific disease, then he gets disablement allowance. Then there are medical treatment and medicines, with the proper appliances; sanatoria benefits for cases of tuberculosis; and maternity benefit of 30 s. for the wife of an insured person. Of course, if a married woman insures, as she can do, she does not get two maternity benefits, but she gets the same thing, because she gets the 30s., her husband's benefit if she is the wife of an insured person, and also 7s. 6d. a

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week for four weeks' sickness allowance, which amounts to the same thing. Then I come to the additional benefits, which may begin to come into operation very quickly. First, there is medical treatment for the children and dependents of the insured person. That I think is very valuable. Then there is dental treatment, and those of your Lordships who have, had experience of the suffering of servants from the want of dentistry will appreciate what a valuable right this may become. Then there are increased sickness and disablement benefits, an increase of maternity benefit, extra allowance during convalescence, earlier and larger old-age pensions, and other, benefits to which I need not refer. Those are the additional benefits, and the extensions in Clause 8 are left to be defined by Parliament when the question becomes practical in the light of the experience then gained. An additional benefit, as I have explained, comes from the margin of 6 per cent, with which the insurance premiums are loaded, and although the employed and the employer between them contribute seven-pence and sevenpence worth is given, still the benefits do not cost quite seven-pence. The State contribution not only lowers them, but there is yet another margin included and that rolls up to provide the additional benefits. The result is that in well-managed societies there may be a surplus after the first valuation which will provide the first instalment of the addition to the benefits.
The principle of the Bill is what in insurance slang is called a "flat rate." In Germany the people contribute different sums in proportion to their wages. A man with large wages contributes more in the way of premium and gets larger benefit, and a person with small wages contributes little and gets very little benefit; but there is under our system the same contribution and the same benefit for everybody, and the result of this system ought to be, if these calculations work out, that at the end of eighteen years nearly £7,000,000 will be available for the provision of the extension benefits of which I have spoken. Of course it is said, and with great truth, that this system imposes an additional burden upon employers of threepence a week in respect of each person insured. That is quite true, and one is always loth to add anything to the burden on industry. But the experience of Germany is very
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instructive on this point. The testimony of the employers of labour in Germany is almost unanimous that the system has been of benefit even to themselves. In the first place, it has brought about a better distribution of charity, and they do not have to provide sick allowances and benefits individually. In the second place, it has tended to greater efficiency on the part of the workmen; and, in the third place, it has been worked into the cost of production. Our employers have a rather lighter burden to bear than the German employer with whose products they compete, and my hope is that this burden, which after all is small in proportion to the enormous results it brings about, will prove to have relieved the best class of employers of a good deal of the responsibility for charity that comes upon them at the present time, and to have produced assistance from which not only the employers but the State will have got good value for their expenditure, if only in the direction of relief from anxiety and burden by having a contented and pro-vided-for population who have not constantly to make applications for assistance.
Now I pass to the contributions. These your Lordships will find in Clauses 4 to 9 of the Bill, and in the Second Schedule. The contributions consist of a total made up in this way—two-ninths are borne by the State in the case of men, and one-fourth by the State in the case of women, and seven-ninths in the case of men and three-fourths in the case of women by the employers and employed. Then in the Schedule it is laid down what the contributions are to be. The employer pays threepence; the employed, if he is a man, pays fourpence, and if a woman threepence. Where the remuneration is under a certain rate, where cheap labour is employed and board and lodging is not given, the employer's contribution is larger and the proportion paid by the employed goes down. Where under 9s. a week is paid the employed pays nothing; but in these cases, and up to 12 s. a week of wages, the State contributes one penny. That is quite a different grant from those to which I have referred. The contributions are what I have stated, and, as I said, taking the average for the period of years the State contribution will be twopence—at one period it is rather less and at another period it is rather more, but it averages a payment of twopence.

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I have spoken throughout as though the friendly societies were the only machinery for the Bill. That unfortunately cannot be the case. We leave the friendly societies at present perfectly free to choose their lives; we do not interfere with them; we invite them to choose their lives because we wish to keep up their esprit de corps and that watchfulness which has been the policy of the friendly societies up to now. But there are the cases that the friendly societies will not take into insurance. For example, there is the case of the man of fifty years of age who wishes to come into insurance. The friendly societies will not take him because, even with his reserve, it is a life likely to have an undue proportion of sickness. Consequently we have had to make provision for these lives who cannot get insurance from voluntary agencies. We have to give this man an option, and the option we give him is the deposit insurance system through the medium of the Post Office. Those who come in there receive State contributions to their benefits in the same way as the others, and are dealt with under the same contributions and obligations, but there is this difference—they receive only what they have paid in and the State contribution in addition; they do not receive benefits at the expense of the other members. Each deposit insurer is treated on his own account, and, unlike the case of the friendly societies, he cannot call in his neighbours to contribute if the burden on his premium becomes heavier than in the ordinary circumstances would be the case.
Deposit insurance is obviously not so good as the insurance through the friendly societies. We know that, and, what is more, we do not contemplate that it should continue in its present form. It was necessary to provide for deposit insurance at the outset because of the older lives, but as people come in at the age of sixteen they will be much more freely taken by the friendly societies than when they come in at forty. A friendly society does not concern itself so much, in the case of anybody coming in at the age of sixteen years, as to whether it is a life that is likely to be sound or not. In the ease of insurance against death you take great account of the character of the life. Anybody with a tendency to heart disease, for instance, is rejected; but in the case of a friendly society insuring against sickness as distinguished from death, the person with heart disease is a
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gold mine; he is very valuable, because if his life is short you have had his premiums. He is presumably a normal life as regards sickness in the meantime, and you get his premiums and do not have the burden of his old age coming upon you. Therefore we know from experience that those coming in at the age of sixteen are likely to be in the freest way taken by the friendly societies, and when everybody has come in at the age of sixteen there will be comparatively few coming in at the age of forty or fifty. So we have provided in the Bill that this deposit insurance system through the Post Office is to continue in its present form only until 1915. By that time we shall be in a position to remould this part of the scheme. Experience will have taught us what number of lives we are likely to have to deal with, and we may be able to deal with them in a somewhat different fashion, with more paternal care exercised, or we may continue the system with some modifications. At any rate, of this we are certain, that deposit insurance contributors will become year by year a diminishing class, and before long this class will become so restricted that we shall have to deal with them in some other way. A deposit insurer has this advantage, that if he dies with money to his credit, he can leave four-sevenths of it behind—money representing, roughly, his own contributions as distinguished from those of his employer and the State.
I pass from the consideration of deposit insurance to the next piece of machinery as to which I wish to say something—the friendly societies themselves; with regard to whom I have already stated to your Lordships that it is our desire to effect an improvement in their condition. To begin with, they will be enormously strengthened financially by the addition of these contributions. The State contribution in itself will be of great value to them, and they will be the main instrument and in the course of time practically the exclusive instrument in working out the policy of this scheme. That means there will be an amount of pressure against malingering, an amount of mutual observance among the members with a view to economy which we could not possibly have got under any system which did not rest upon decentralisation, but upon direct supervision by officials. The object is to eliminate officials as far as we can, and to rely on the co-operation of the members themselves.

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A contributory system with societies like this is a valuable thing if it works out as a successful institution. I believe it will be found far better and far more acceptable than a non-contributory system based on Socialistic principles, of which one hears a good deal of talk just now, but which I believe we shall find much less talked about when there is a compulsory system at work in conjunction with the friendly societies developed and strengthened in a fashion we do not appreciate at this time. Friendly societies will administer sickness, disablement, and maternity benefits. Certain benefits will be left to the local health committees, which I will deal with in a few moments, and in particular the medical and sanatoria benefits will be administered through the local health committees for reasons connected with the medical profession and other reasons on which I will touch later. But the main instrument will be the friendly societies.
I have used the words "friendly societies." I want now to make a correction of that. Friendly societies will mean in the future the friendly societies of to-day and also something else. "Approved societies" is the right term, and it is the term used in the Bill. The approved societies will be societies of the type of the friendly society, but they may include sections of societies or corporations which exist for quite different purposes than those of a friendly society. The approved societies will not only include workmen's provident associations organised by employers, they will not only include trades unions, but they will also include sections founded for the purpose by great insurance companies, such as the Prudential, which will be able to start branches for the working of this huge system. One condition which we impose in the case of all, friendly or private society, or whatever it may be, is that they observe certain conditions. The first is that in the working of the section which handles the Government business they make no profit; the second is that the affairs of the section or the society, as the case may be, are to be under the control of their members. Those are the two great conditions, and any society which conforms to those conditions may be approved either as a whole or in the form of a separate section conforming to the conditions. We have made provisions which enable existing insurance societies and societies of other kinds to take up powers in their charter or memorandum of
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association. When a society has been approved it will come into the line of conduct which the Bill prescribes. It will be inspected and investigated with a view to discover, among other things, whether it has a deficit or a surplus. If it has a deficit it can be made good out of surplus in the hands of the central body of the society or by way of compulsory levies, as is done under the Friendly Societies Acts at the present time. It will receive a certain amount of money to handle. Under the general scheme of the Bill the money is collected by the Post Office in the form of stamps; the Post Office pays over to the Insurance Commissioners the contributions, and the Insurance Commissioners invest them and hold them and liquidate the credits which the individual members hold. They will hold a certain amount of funds for the members of the societies—that is to say, at the credit of the societies themselves. Consequently it will be open to the Insurance Commissioners to hand over to the societies that part of the fund for investment, and we have provided that if the societies desire it they have the option of either leaving the investments as to a certain proportion—the proportion which comes from members' contributions—in the hands of the Insurance Commissioners to remain invested by them, or to take them over and invest them to that limited extent, repaying the contributions of their own members themselves. But if they do that they must invest in trustee securities. The accounts of the societies I need not say must be kept in a separate form as regards this class of business, and the societies must give security and conform to the conditions. Small societies may federate, a provision which we think will enable a large number of small societies under 10,000 members to come into the working of the scheme.
Now, my Lords, I come to the public authorities which are to superintend the administration of the measure. As I said, the policy is to interfere as little as possible and only so far as is necessary to guarantee security. To begin with, there are the Insurance Commissioners. As the Bill first stood, there was only one body of Insurance Commissioners—that for the United Kingdom; but discussion showed that the fact that there were in Ireland, for example, different rates of wages and different prices would necessitate an adjustment in the contribution. If your Lordships look at

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the Schedule you will find that the contributions and benefits in the case of Ireland are different from the contributions and benefits in the rest of the United Kingdom. Moreover, in Ireland there is established under Irish local government a local dispensary system under which medical benefits are already provided for. Ireland wanted a new scheme, and the work of the Commissioners would have involved a great deal of inspection and study on the spot. It was therefore thought better to set up separate bodies of Commissioners, because what was true in the case of Ireland was true also, although in a rather less degree of Scotland, where the conditions are different from those in England. The customs in regard to agricultural labourers, for example, and other features of national life are not the same. The result is that there are now four sets of Commissioners, one for England, one for Scotland, one for Ireland, and one for Wales. Provision is made for these Commissioners to meet and manage their affairs to a certain extent in common. Under Clause 83 of the Bill—an important clause which ought not to be overlooked in the study of this subject—there is a joint committee of the four bodies of Insurance Commissioners, and that joint committee, under a President, will discuss and ascertain matters of policy which are fundamental and common to the whole system. The Insurance Commissioners can only, of course, exercise a general control and look after finance. When you come to local questions, such as the conditions of health in a particular district, you want a less centralised system, and that we have provided in the local health committees.
I should explain that if the Bill is read a second time in your Lordships' House to-day I shall move that it be committed pro forma in order to be reprinted with the term "insurance committee" substituted for "health committee." as some of the local authorities are taking exception to the term local health committee as likely to lead to confusion, it being at present in existence. As there are on this point some 90 verbal Amendments it will be necessary for your Lordships to have the Bill reprinted with this correction. Each of these committees will consist of from 40 to 80 members, appointed under regulations made by the Insurance Commissioners in such a way as to secure the representation of insured persons to the extent of three-fifths of the
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members of the local committee; there will be one-fifth by the county council or the county borough council, two members appointed by the medical practitioners in the county, and so on. In that way we hope to get a committee that will settle the multitude of questions which will arise and which will vary from locality to locality, questions with which the Insurance Commissioners could not themselves adequately deal. The functions of the local insurance committees will be to report on health. That is the great thing. They will furnish statistics not only about abnormal but about normal conditions, such as we do not possess at the present time, and this ought to be of great value in combating disease. They will conduct special inquiries. If the rate of sickness turns out to be abnormally high they will set on foot an inquiry which will usually be under the auspices of the Local Government Board, and they may bring either local authorities or private persons to account for insanitary conditions, polluted water supplies, and so forth, which have led to excessive sickness and so thrown an excessive charge on the insurance fund. Such are the main functions of the authorities which will administer this Bill. These local committees will also manage the admission to the sanatoria which are to be erected in the main under the auspices of the Local Government Board. The Government propose to start these sanatoria by contributing £1,500,000 for their erection, and there will be an expenditure of about £1,000,000 in addition on their upkeep every year. Then they must make the medical arrangements for the deposit insurers with whom the societies do not deal, provide instruction as to the preservation of health, and undertake the delicate and difficult business of negotiating with the doctors. I shall come to the doctors in a minute or two. Such are the functions of the authorities which will administer this Bill.
Now, my Lords, a few words about one or two of the classes which come in. Married women are a great difficulty. We have had to deal with them on a special footing, because you cannot let married women in like ordinary persons. Their ailments are such as to be beyond the knowledge, much less the control, of the ordinary or of any other friendly society. Consequently we have made special provision for them. Clause 43 deals with married women, and provides in substance

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this. If a woman who has been insured before marriage marries she gets ordinarily no benefit while her husband lives if she is unemployed, but one third of her transfer value—that is, the value at which she stands in her society—with the reserve credited to her will be carried to a special account, and two-thirds of it will be earmarked for her. The object of ear-marking one-third of that is that if her husband dies and she becomes a widow she may get back into insurance as if she had never been out of it, and although she may, perhaps, be an oldish woman by that time she will not have to pay increased premiums. If she becomes employed after her husband's death no arrears will be counted during the marriage, and the transfer of this account will give her her proper reserve value, and she will go on as if she had never been out of insurance. The married woman, if employed during marriage, can go on being insured with the old benefits; we have taken that risk. If she is not employed, she may become a voluntary contributor at special rates and on special terms, and if she does not wish to contribute as a voluntary contributor we have allowed her reserve value to take effect on a basis which takes special cognisance of those illnesses which affect married women. Her remaining two-thirds will be applied so as to give her 5s. a week during confinement—an extra payment—and special payments during sickness and distress. So your Lordships will see that married women come off pretty well. If a woman marries and ceases to work and goes out of insurance and then takes up employment again as a widow, all arrears are blotted out and she comes in as if she had never passed out of insurance. If she continues to go on she can go as an employed contributor; she can go on as a voluntary contributor, with benefits at a moderate rate; or she can say, "No, I have two-thirds remaining, and those two-thirds I will take in the form of special benefit—payment during confinement, and payment during a period of distress or sickness." So much for married women.
I come now to a very thorny point, the point about domestic servants. I think there has been a great deal of misapprehension with regard to this point, and I must say from what I have seen, looking at the case of domestic servants as a whole, that I can conceive no class more likely to benefit by this Bill. My right hon. friend the Chancellor of the Exchequer, in a letter
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which he wrote the other day to some ladies who had doubts on this subject and asked him for information, said this—
"Let me remind you briefly how the proposal affects them. It means that the State undertakes a liability of some £800,000 a year in respect of benefits to domestic servants, and that the employers of servants contribute some £1,200,000 a year for the same purpose. From the money thus made available, together with the servants' own contributions, every servant will be entitled to free medical attendance, to the payment of 7s. 6d. a week during sickness for six months, and 5s. thereafter if permanently incapacitated, and free treatment in a sanatorium if she contracts tuberculosis. These are the minimum benefits under the Bill, but if, as has been said, domestic servants do not require the full sickness benefit, the money thus saved can be used with any other savings to give some other benefit, as, for instance, a superannuation fund which would provide pensions at an earlier age than seventy. I may add that servants who marry are given the value of two-: thirds of their insurance in any one of several; ways, the remaining one-third being used to give them the right to immediate benefit should they become widows, so that if they are excluded altogether they will be unable to profit by the specially favourable terms given in the Bill to women who were insured persons before marriage. This would be a great deprivation to them."
The Chancellor of the Exchequer refers to alternative benefits which servants may have. That is provided for by Clause 13 of the Bill. That clause enables special schemes to be made, with the approval of the Insurance Commissioners, for special classes, including domestic servants. That is the only case in which the minimum benefit is allowed to have substituted for it certain other benefits, among them being an increased old-age pension, various provisions for sickness and old age, assistance of dependents, and other things which ought to be very valuable in the case of servants.
The insurance societies and friendly societies will doubtless make many of these alternative schemes and compete for the insurance of domestic servants. When you consider the great benefit in money which domestic servants get in this fashion, surely this is a scheme which really adds very much to their savings and puts them in a position in which they will be very much better off than they are at the present time. We all know that a large class of employers treat their servants with the utmost kindness, and take care of them during sickness. But we also know this curious fact, that when a servant leaves there is a kind of code of honour among them never to ask their employer for assistance after they have left him for a certain time, although they will do so a

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short time after leaving. They do not like to come back after a time, and many of them do not go back into the same class and are very ill provided for. The figures which we have obtained show that in the Poor-law infirmaries a very large proportion of the sick are domestic servants, girls who have dropped out of employment and who have no one to look after them. Servants are very apt to be careless about their savings, and if the brother or brother-in-law goes into business he thinks it quite legitimate to go to the girl and ask her to lend him her savings for the purpose of his business, and very often the money is lost. The excuse given for borrowing from her is that she has no one depending on her, or that she will marry and it will be all right; but that does not always happen, and there are many cases where a systematic provision such as this Bill makes with all sorts of alternative forms of benefit, every one of them on the soundest financial basis and State aided, would be of the greatest value to servants. No doubt there has been a great deal of trouble about this clause, but I think as it stands it is in as elastic a fashion as could well be desired. If the employer chooses to make the arrangement, he or she can undertake to give the servant six weeks' maintenance during sickness, and then the employer's contribution is somewhat diminished. There are various ways in which the servant can be helped. She can go into hospital with 7s. 6d. a week to assist her while there, or she can draw her 7s. 6d. a week while sick in her mistress's home and pay the doctor on her own account. I will say no more about the provisions as to servants.
I should like to say a word or two about soldiers and sailors. I will take the case of the soldier, because I know more about him. With the Colours he does not need much insurance; he is looked after in the hospitals of his camp. When he leaves the Colours and goes into the Reserve and enters civil employment he is, perhaps, over 30, and he comes in at a disadvantage as an old life. Therefore we have to bring him into insurance as at 16 in the ordinary way; but there is no necessity for us to charge him as much as we charge the ordinary civilian at 16, because the Army takes care of the soldier during his service. The same mutatis mutandis is true of the Navy. Therefore there is a reduced contribution. The soldier will pay only 1½d. a week during his service, and out of
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Army funds another 1½d. a week will be paid as the employer's contribution, and the State will pay 1d. The fund thus created will be enough to provide a proper reserve value if, on leaving the Service, he is transferred to a friendly society. If for some reason he cannot get into an insurance society, there is a new insurance fund set up and his contributions will be carried to that.
Consumption is, unfortunately, very common among both soldiers and sailors, and there is a new Army and Navy Insurance Fund set up by the Bill which makes the same provision for soldiers and sailors as an approved society would have done. Clause 45 deals with that, and creates a great reform both for the Army and the Navy. The effect of it is that consumptive soldiers and sailors will be looked after in the future, will get sanatorium treatment, and will get a breakdown allowance for the rest of their lives. The noble Earl opposite (Lord Selborne) knows that under decks and in the engine rooms there is a great deal of phthisis in the Navy, and by a provision which certainly is not ungenerous these men get that treatment in addition to their sickness pension if they have a sickness pension for sickness contracted during service. As to agricultural labourers, special provision is made for them because of the custom which prevails in many districts with regard to sickness benefit; they can join societies, in which case they and their employers will each put down one penny. In the case of seamen in foreign-going ships, because the Merchant Shipping Acts already impose a heavy liability on them we have provided especially for them here by clauses which I am glad to say represent the work largely of the ship-owners. The Government owes a great deal to Sir Norman Hill, who negotiated these matters and enabled them to produce a system which will not only be good for the shipowners, but which will, I think, materially improve the condition of oceangoing civilian seamen.
One word about the doctors. They will be dealt with by the local insurance committees. The doctors will not be worse off than those who are now associated with friendly societies. On an average they will probably be 2s. per head better off than they are now. It is extraordinary how little they get from the friendly society. I had a case the other day where

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I had an opportunity of ascertaining what the local doctor got from the friendly society. He received about 3s. a head, and his ordinary fee for attending a working-class patient was not more than 1s. 6d. That is outside the friendly society system, and of his fees he recovered only 14 s. in the £1. That shows how difficult is the position very often of the country doctor. Now he will get his money for certain under this system, and he will be better off to the extent probably of, on an average, 2s. a head. But that is not all. Under a provision in the Bill the local health committee, after inquiry, can determine what is the rate of wages in a district above which people ought to employ their own doctors at their own charges and make their own arrangements with them. If they think that a man with 30 s. a week, having regard to the average income of the industrial classes in the locality, may be properly left to deal with his own doctor, they will fix that rate for that locality, and pay him the ordinary doctor's fee under the scale and leave him with the aid of that fee to supplement it from his own resources and make his own arrangements with the doctor. There is great elasticity left to the insurance committee in dealing with the doctor, and I trust that a little experience will prove that there is no cause for friction.
Now just a word or two about the other part of the Bill as to unemployed insurance, which, as I have said, my noble friend behind me (Lord Beauchamp) will deal with more fully later on. At the present time there is only a comparatively small proportion of the industrial population insured against unemployment, and in certain trades—shipbuilding and engineering, and the group of trades under those heads—there is a great deal of unemployment because the employment is seasonal in character. At one period of the year there is plenty of employment, and at another period very little. The system of insurance against unemployment extends only to those trades, but there is power, after inquiry, to extend it to other trades. The scheme is a weekly allowance paid through the Labour Exchanges and the existing trade unions. The effect of the scheme will be to substitute for about 350,000 people, now insured against unemployment voluntarily in their societies in these scheduled trades, about 2,500,000 in all, which is an enormous increase in
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the number of people thus secured. The workmen will pay about £1,000,000, the employers about £900,000, and the State about £750,000. These sums will be raised by contributions of 2½d. by the workmen, 2½d. by the employer, and the rest from the State. Then there are provisions in the Bill to encourage employers to keep on their men, even though they may have to diminish the amount of employment they give them. So long as they give them continuous employment and do not discharge them merely because things are slacker than at other times, they get a diminution in their contributions which is worth considering. The unemployment benefit is 7s. a week given for not more than fifteen weeks. Moreover, there is no payment for the first week. That is in order to shut out the man who figures as unemployed because he is not keen to work. Again there are provisions for the person who is really hard-working and keen. For instance, if a workman has paid for 500 weeks and reaches the age of 60, either he or his representatives may get the balance of the payments standing to his credit over the cost of benefits which he has actually received. Then, again, there are cases in which the workman fails because of his incapacity and want of skill. In such cases there is power on the part of the insurance officers to send him to a technical school and pay for his instruction so as to fit him for employment. Generally speaking, a man cannot go out of employment and say, "I am unemployed"; he has to take the employment offered him by the State, and if he does not take it and there is no reasonable excuse for his not doing so he does not get on the to unemployed fund. It is only the man who is unemployed through no fault of his own and who cannot get employment who gets the benefit of the system. There is also a clause providing for payments out of the moneys provided by Parliament to voluntary societies making payments to workmen, whether they are in an insured trade or not, whilst unemployed.
To sum up the alterations which have been made in this Bill since it was introduced in the House of Commons in May, they are broadly these. Separate Insurance Commissioners; extension of consumption treatment beyond the sanatorium to the women and children of the family as well as to the man himself; sick pay for

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twenty-six weeks instead of thirteen; wage earners of less than 9s. a week free from the obligation to contribute; soldiers and sailors, and mercantile civilian seamen brought in under the special enactment to which I have referred; the changes in the case of married women which I have described; special clauses dealing with agricultural labourers, and a variety of other benefits. Clerks also get the benefit of these arrangements which can be made under the special scheme; the margin of contribution under the Bill as originally proposed has been somewhat reduced, but it is still a good 6 per cent., which is ample, to cover even what might be called depredations, and it is a margin which has been well justified by the actuaries. This is a Bill which must to a certain extent be speculative. I am aware that in all cases our data are not data which can be said to be reliable, but in the main, and taken in bulk, the data which we have are, we think, sufficient to ensure that the scheme will work out as has been calculated, provided the limits of the framework are observed. As we know, there must take place modifications in the direction of the readjustment of the system and of the benefits within those limits, and I cannot but say for myself that it seems to me the sooner this Bill comes into operation the better. The sooner it comes, the sooner shall we get the experience which is requisite. No amount of discussion, even if it went on for years, could make us more certain, or make us certain at all, about many of the points that arise, but that is no reason for not introducing the system. Germany went into national insurance upon the basis of working experimentally and gradually adapting itself to the system.
This Bill has been before Parliament since the 4th of May last It has been discussed in the other House during the summer, during the autumn, and during the winter Even during the recess my right hon. friend was active everywhere, and many other people were engaged in discussing the Bill and its provisions; it has been criticised by the friendly societies, by the actuaries of the insurance companies, and by every kind of expert. Modifications have been introduced in it, and I do not wonder that many Amendments were sure to result from a process of criticism of that kind. We may not have yet got to the end of possible modifi-
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cation, but I do think we have got to a point at which actual experience would be more valuable than anything else; and it is because I believe that we have got a framework and a financial foundation which is secure and upon which we can build, that it seems to me that actual experience is now justifiable as our next resort.
The Bill must have other important effects which it is desirable to call into existence at once. There is for example, the prevention of disease. Take the case of children alone. At present, as your Lordships know, under an Act which became law recently—the Notification of Births Act—children have a better chance of life and health than they had before. That Act merely says that the birth is to be notified to the medical officer of health as well as under the old system to the registrar of births. The medical officer of health pays a visit to the child, and then the voluntary health society—these societies are springing up everywhere—comes into operation, and in many cases visits the child and watches over it from infancy until it reaches the school age. I know, from my own experience of the work of societies to which I subscribe, that that work is being done now, and it is a work which would be immensely stimulated by this Bill. Then from five years of age to fourteen there are now medical inspection and treatment in the schools, and the Chancellor of the Exchequer has promised a further grant next year in aid of those local bodies which have to provide for medical inspection in the schools. I am sorry to say there is still a gap between the age of 14 and 16, and I wish that gap could be filled up by the establishment of the continuation school system which is actually in force in Scotland at the present time, and which was promised for England by a Bill which unfortunately was dropped this session. After the age of 16 the friendly societies begin to look after the life of the young man or woman. It seems to me that we have here a system which ought to do much in the way of preventing disease and towards enabling us to obtain that necessary scientific and statistical knowledge. Take, for instance, phthisis. It surely will be possible to stamp that disease out when you have every case tracked down and watched as you will have under the Bill.

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My Lords, these things open up a vista ahead, and they may not all be realised. Anticipations are often disappointed, and one's most sanguine ideas, based even on the greatest care and study, too often fail; but this Bill does give some of us hope, and such are the aspirations of those who have framed it. It is a step forward towards the realisation of an ideal of a yet greater and more general character. I can conceive no ambition more noble than the ambition of making the race better physically and morally. I know of no care of the soul which does not involve the care of the body as its indispensable concomitant. I know of no system by which the condition of the race can be raised which does not turn on supervision and precaution and upon the elimination of the causes of evil, such as can only be compassed by a great national scheme. Whatever be the result of this measure, whether it realises its expectations or whether it does not, the spirit in which my right hon. friend has entered into his task is a noble one, and I claim for him the admiration of those who, whether they agree with the results or not, believe in the work of a man who puts his wholes heart and soul into the task he has undertaken.
It may be, my Lords, as I have said, that these things will not turn out to the utmost of our expectations, but, on the other hand, for the reasons I have endeavoured to state, I believe that a foundation has been laid from which we may hope for much. We who sit here and those who sit in the other House are the trustees of a great opportunity, and what we have to consider is whether on the balance of our doubts, on the balance of advantages and disadvantages, the time has not come when we ought to take advantage of it. There may be, I believe there will be, hereafter a time when men will look back to the work of those who were legislators in this generation, who sat in these Houses in this year, and who passed this Bill, and will say that they launched a new influence, an influence for good, an influence for the fashioning of character, an influence that has opened a new power both for our generation and for the generations that are to come after us.
Moved, That the Bill be now read 2a.—(Viscount Haldane.)
THE MAKQUESS OF LANSDOWNE: My Lords, we are all, I am sure, ready to admit the moderation of tone and the mastery of the subject which characterised the speech to which we have just listened. It has, I have no doubt, added much to the knowledge which the House possesses of this intricate and complex subject, and for that contribution to its literature we shall all be grateful. I observe that a few days ago the noble Earl who sits beside the noble Viscount told his hearers on a public occasion that he doubted whether there were more than a dozen people who understood the Bill now before us, and with becoming modesty he hesitated to include himself in that Dumber. The speech of the noble Viscount may possibly have added two or three recruits to that intelligent, but exiguous, band, but I am afraid that he has left a good many of us not quite satisfied and not quite so convinced as he is that this Bill is in all respects a perfect measure. We are, however, grateful to the noble Viscount for his statement, and let me add that we are grateful to His Majesty's Government for having supplied us with the printed Memoranda that lie on the Table—documents which must have cost the compilers a great deal of trouble to prepare, but which summarise the contents of this Bill in a very convenient shape.
My Lords, I have risen in my place because it seems to me that it would be more convenient at this early stage that the House should be made aware of the manner in which we on this Bench regard the situation that confronts us. It is a remarkable situation, whether we consider the measure that we are now invited to discuss or the particular moment in our Constitutional history at which that measure comes before us. Let me say in the first place—and here I take up what I might almost call the challenge which fell from the noble Viscount—that we on this side of the House desire to disclaim altogether anything like hostility to the principle of this Bill. I am sure we have listened with satisfaction to the tribute which the noble Viscount paid to the increase of thrift among the working classes of this country, and I am sure that there is no member of this House who would not with his whole mind support any well-considered proposal by which that admirable tendency might be stimulated and encouraged. Many of us are publicly

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committed to the principle of the Bill. Several of those who habitually act with us have co-operated, I venture to think usefully, with His Majesty's Government in its discussion, and I will go further and say that in my belief if the fortunes of political war were to bring about a change in the position of the two Parties we ourselves should probably be found ready to deal with this great question. But, my Lords, I venture to add that these feelings on our part must not be regarded as in any sense debarring us from the right to criticise freely either the contents of the Bill or still more the precipitation with which it has been brought before us on this occasion. The noble Viscount will, I am sure, be the last to contend that such criticism as the measure has encountered has been futile or superfluous or other than helpful.
Is it, then, the case that there is no more to be said? Is the noble Viscount prepared to tell the House that his Bill is beyond the reach of further criticism? Can he even claim with confidence, and he did put forward the claim, that the foundations of the Bill are well and truly laid? No one would, I think, have judged from the speech of the noble Viscount as we listened to his easy periods that there was throughout the country such an amount of uneasiness and misgiving with regard to the effect of the measure as I believe to exist at this moment throughout the United Kingdom. My Lords, this measure is a stupendous measure. It leaves a considerable part of the field of insurance untouched, but it, nevertheless, affects the whole fabric of society in this country. People are, I think, too fond of discussing this Bill as if it was one which merely concerned the comparatively limited interests of certain classes of the community. It affects the whole community. It is not merely a question of placating the friendly societies, or throwing a sop to the doctors, or to any other aggrieved class. There is a great deal more in it than that.
I call it a stupendous measure because, in the first place, it is a stupendous measure of taxation. The noble Viscount admitted, I think rightly, that the question of finance formed one of the most important aspects of the Bill. His Majesty's Government plead guilty, I understand, to a cost to the country which will, by the year 1932–3,
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have risen to something like £26,000,000. That sum capitalised would represent about £1,000,000,000. But some of us have not forgotten the extraordinary miscalculations which took place in regard to old-age pensions. We remember how the estimate of the cost of that measure rose from, £6,000,000 to £13,000,000, and eventually to something like £20,000,000 sterling. There are many who are deeply convinced that in this case also there has been a great underestimate of the ultimate cost. I have seen an estimate, apparently proceeding from high authority, which places the total ultimate cost at no less than £40,000,000 sterling; a sum which capitalised would represent an addition of no less than £1,600,000,000 to the liabilities of the nation. My Lords, that is an enormous liability.
VISCOUNT HALDANE: The noble Marquess appreciates that that is not out of taxes. That is the total cost to employers and employed. The State liability is much less.
THE MARQUESS OF LANSDOWNE: Whether the noble Viscount has regard to the part of the sum raised by taxation or to the cost met from other sources, it is, I maintain, a vast addition to the financial burden which this country will have to bear, and it comes at a moment when the country is already reeling beneath the financial burdens accumulated on its shoulders and when the credit of the country has reached a lower point than has been known within our time. The noble Viscount may say "If you want to have national insurance you must pay for it." That is a perfectly just observation, but I venture to dwell on the great cost of the measure, because it docs seem to me that in such circumstances the country is entitled to ask for precise information as to the amount of liability in which it is going to be engaged It has a right to be satisfied that the finance of this measure is watertight. It has a right to ask whether all this money goes to the right people and whether any classes which ought to be provided for are left out in the cold; and whether any of the money is wasted. So far as I have been able to study the subject it seems to me to be extremely difficult to answer all these questions in a satisfactory manner.

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If the Bill is so satisfactory to all concerned why is it that every day brings us some fresh protest or remonstrance from some part of the country? I do not like to weary your Lordships with an account of the representations I myself have received with regard to this Bill. I have received them from great chambers of commerce, those of Glasgow, Newcastle, and Exeter among them; from merchants and traders in Edinburgh. Glasgow, Aberdeen, Wigan, and London; from great agricultural organisations; from some of the most important friendly societies, including the Hearts of Oak Benefit Society, the Manchester Unity Friendly Society, the United Friendly Societies Assurance Company, and the National Union of Holloway Societies with a membership of 100,000. There have been public meetings all over the country. There was a meeting the other evening in the City of Manchester at which 900 firms were represented concerned in 200 different trades, and at which over 16,000 signatures were collected. I have had remonstrances from the General Federation of Trade Unions, and it is rather remarkable to find trade unions coming to your Lordships' House to protect them against the rash legislation of His Majesty's Government. Then there are the doctors, the shipbuilders, the clerks, and even agricultural labourers have sent me remonstrances. Surely there is not likely to be all this smoke unless there is a certain amount of fire behind it.
May I say half a dozen words with regard to some of the interests most affected by the Bill. In the first place, let me take the friendly societies. I was very glad to hear the noble Viscount recognise the importance of the place that the friendly societies occupy in our social system. We have, it seems to me, every reason to be grateful to them for the part they have hitherto played, and I am glad to find that in this Bill His Majesty's Government desire, so far as possible, to lean upon them and to respect their wishes. I noted that the noble Viscount urged particularly that what he called the esprit de corps of the friendly societies should so far as possible be respected, but I cannot help thinking that on that point he has not given entire satisfaction. It is quite true that the larger societies find themselves in a very strong position under the Bill. Their liabilities are assumed to some extent, and
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their reserves are liberated. They are, as the noble Viscount truly said, able to select their own lives, and the result of this Bill will probably be to make their position ever stronger than it is now.
But then what about the smaller societies? The noble Viscount will remember that when this Bill first saw the light only societies numbering more than 10,000 members were to have been allowed to retain their present position of independence. That limit, I am glad to say, has been reduced to 5,000; but my Lords, below the 5.000 limit there are a number of solvent and respectable societies, who greatly resent the idea of being grouped with other societies. They greatly resent the idea of, their being made to bear the deficits or to share the surpluses of the societies with which they are grouped, and they resent the effects of this Bill because it seems to them, and I think seems to them naturally, to diminish their independence and to deprive them of that individuality to winch they attach the greatest importance. It is typical of the manner in which this Bill was put through the other House of Parliament that an Amendment, which seems a not unreasonable Amendment, for reducing the limit of membership to 1,000 did not even receive any discussion at all.
The friendly societies, as the noble Viscount is probably well aware, are greatly exercised in their minds in regard to one particular point—I mean the proposal that sick pay, instead of running as now, under the old régime, from the first day, should run from the fourth day only of the insurer's sickness. That has occasioned them profound dissatisfaction, and I understand that they are also by no means satisfied with the proposal of the Chancellor of the Exchequer for dealing with the sum of something over half a million, which is liberated by that arrangement.
May I say one word with regard to the case of the hospitals?. This Bill has greatly disturbed and alarmed those who are interested in the voluntary hospitals of this country. I am bound to say it seems probable that things will go hard with them under the Bill. They have hitherto received very generous support, and particularly from the working classes them-

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selves. There are many of them who depend largely upon the small weekly subscriptions of the working men, supplemented, no doubt, by a regular subsidy from the firms by whom they are employed. What the managers of those hospitals feel is that, when the men are obliged to provide 4d. for sickness insurance and 2½d. for unemployment insurance, they will hesitate to continue that regular subscription which they have been in the habit of paying to the hospital fund, and the same thing, no doubt, will be the case with regard to the subscriptions of the employers. I noticed the other day a statement by Sir Henry Burdett, who has a right to be heard on the subject of voluntary hospitals, that this Bill meant "the death of voluntary hospitals": that it would have the effect of diminishing their income by one-half, and oblige them to close half the beds which they are at present able to maintain. That is a matter which certainly, to my mind, deserves the consideration of his Majesty's Government.
Then there is the case of the doctors. I know that His Majesty's Government have made almost superhuman efforts to propitiate the doctors, and they are quite right. But have they succeeded? I never open my newspaper without seeing a fresh protest from the doctors, and I think we must all feel great sympathy with them. Doctors with a working-class practice are probably amongst the most hard-worked and worst remunerated of our professional men. Some of the points which they have urged have, no doubt, been met, but some are still unsatisfied. The position in which doctors will find themselves under the Bill is not a very enviable one. They will be at the mercy, on the one hand, of the health committees, on which the representatives of the friendly societies are in a majority, and they are also, as I under- stand the Bill, entirely at the mercy of the Insurance Commissioners, who at any moment can strike a medical man off the panel, and thereby ruin his professional prospects. I cannot help thinking that His Majesty's Government, if they desire the Bill to work smoothly and successfully, should be at pains to satisfy the doctors on the points which they have raised. I wonder whether the noble Viscount has noted a movement which appears to be on foot for the establishment of a National Medical Union, the object of which is, I understand, to resist the effects of the Bill. A movement
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of that kind is not a negligible one, and I cannot help thinking that at this point, also, His Majesty's Government might do more than they have done to meet the representations which have been made to them.
With regard to the employers, the noble Viscount must be aware that amongst that class, also, the greatest uneasiness prevails. They ask themselves where these millions which the noble Viscount tells us they will have to contribute are to come from. Are they to come out of the wage fund? At this moment the general complaint amongst the working classes is that the cost of living is increasing and that wages are not increasing to a corresponding extent. Are they to employ fewer men? One of the objects of this Bill is to meet the evil of unemployment. Is the money to come out of the profits of trade? That is rather a serious look-out if that is the source from which the money is to be found. Does not that imply a new burden upon the commerce of the country, a new burden which it is not by any means prepared to bear? I met a gentleman not many hours ago connected with the engineering business. He told me that he believed that this Bill would put £30 on to the price of every locomotive built in this country for export. The noble Viscount reassured us by citing the example of Germany. He told us that in Germany employers are quite content to accept these responsibilities, but the noble Viscount forgot the little difference between the case of our manufacturers and the manufacturers of Germany. The manufacturers of Germany are not, as our manufacturers are, entirely at the mercy of unrestricted free imports.
A word as to the working classes. The working classes notoriously desire a National Insurance Bill, and one would have thought that they would be scrambling over one another to obtain this Bill, with all the attractions of that 9d. for 4d. which is held out as a bait. As far as I am able to ascertain the facts of the case, the working people regard the Bill with the utmost suspicion. They are asking themselves a number of questions. They find out that the 9d. provides them only with part of the benefits which they at present receive under the best friendly societies. They have discovered that the Government 2d. is not really 2d. at all, but a fraction which

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may vary and which does not by any means necessarily amount to 2d. They find that there is nothing for the man who is incapacitated and incapable of earning what is called a living wage. Then there is, I believe, among the working classes a widespread apprehension of the inquisition into their private affairs which is likely to take place under the Bill. They know they will be liable to a kind of supervision which will differ very largely from the kind of supervision to which they have been used under the friendly societies. There are other points which they regard with a certain amount of misgiving. For example, the taxation of young lives to meet the deficit on older lives, the equal contribution demanded from all trades, whether healthy or unhealthy, the equal contribution from all incomes, whether larger or rather smaller; and last, but not least, the needless in- elusion in the Bill of certain classes who are perfectly well able to take care of themselves. These are all points on which the working classes are, I believe, anxious and disturbed in their minds.
But there is one class of those who are affected by this Bill whose case seems to me hardest of all. I refer to the deposit contributors. I do not believe there is any point of the Bill at which its inequitable operation stands out more clearly. These are the poorest and the worst organised class in the whole community. They stand most of all in need of assistance, and under this Bill they get less assistance than any other class. In the first place, it must be remembered that the right which the friendly societies possess of selecting their own lives—necessarily the best lives—must have the effect of driving a great number of people into the class of deposit contributors. I understand that at this moment there are something like 800,000 who will come under the class of deposit contributors, and it is anticipated that that class will be very largely increased.
VISCOUNT HALDANE: Diminished. They must be very largely diminished as the friendly societies continue to take the young lives in at 16. The large number of deposit contributors arises from the fact of the lives being old. Many of the friendly societies will not take old lives but they do not discriminate between lives at 16 to any extent.
THE MARQUESS OF LANSDOWNE: Is the noble Viscount advised that 800,000 is probably the maximum of the deposit contributors?
VISCOUNT HALDANE: Yes, as soon as all the deposit contributors who are to come in come in under the compulsory clause the numbers should go down each year.
THE MARQUESS OF LANSDOWNE: I will take that from the noble Viscount, although my information leads me to a different anticipation. He is more familiar with the subject than I am. My point is this, that this class of deposit contributors really get nothing that can be called insurance in the proper sense of the word. All that the deposit contributor gets is a right limited by the amount of his own contribution. Let me take the case of a man whose contributions, including his own and the employer's and the contribution of the State, amount altogether to 8⅓. a week. At the end of a year, supposing the man has been employed 50 weeks, and that is a generous assumption, he finds himself with 35 s. to his credit. From that 35 s. would have to be deducted the charges for the medical benefit, for administration, and for sanatoria, totalling to 13 s. 9d. That leaves the deposit contributor with a balance to his credit of only 21 s. 3d. Supposing that the case of the maternity benefit arises, the man's account will be bankrupt. That seems to me to be a weak point in the Bill and one deserving of attention.
There is another matter which I must say fills me with considerable apprehension, and that is the administrative; difficulties which will arise when this Bill comes into operation. I understand, according to the reports of the actuaries, that it is anticipated that we shall have eventually to deal with a total a little below 18,000,000 of contributors. What an appalling figure that is. That means 18,000,000 separate accounts; it means a vast amount of correspondence, a vast amount of inspection, and a vast amount of collecting in small sums. Just consider for a moment the immense army of officials that will be necessary in order to superintend the working of this machinery. I have before now ventured to express my concern at the manner in which we are adding to the official army of this country. If the noble Viscount could keep his Territorial battalions up to strength in the same manner

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as His Majesty's Government keep their official army up to strength, there would be nothing to complain of. Let it be remembered that under this new dispensation the agents would have to supervise all these accounts and those who contributed to them, and to exercise a supervision infinitely more strict than anything to which the people have hitherto been used. Under the new system you will have people brought in under the friendly societies whom the Chancellor of the Exchequer described as new and undisciplined members and who will want a great deal of looking after. Do not let us forget that if the supervision is not strict, is not somewhat inquisitorial, the so-called minimum benefit may find itself considerably reduced. I understand that the expenses of management of the industrial insurance companies of which the Board of Trade takes cognisance amount to something like 17 per cent., and we shall be indeed fortunate if the amount of supervision expenses in this case does not exceed that percentage. Take it at 25 per cent. and you will have £5,000,000 that will not go to the necessitous people we desire to help, but which will be poured away in salaries and expenses of management.
And whilst this new official army will be enormously costly and vastly numerous, it will also be immensely powerful. Take the Insurance Commissioners; their powers are enormous, there is scarcely anything they cannot do under the Bill and under the regulations. I do not know that there need be any limit at all to their powers. With them rests the control of the relations between the approved societies and the insured persons. They can withdraw approval from any society. They control the local health committees. They can include some persons and exclude others. They have the power of penalising individuals without appeal, a not unusual feature in the Liberal legislation of the present day. Unless I am misinformed, the clause constituting this new department was passed in another place under the guillotine without discussion. On all these points that I have touched upon it seems to me that there are doubts to be removed, misgivings to be allayed, and inequalities which require to be redressed.
Can we be surprised that this should be so when we consider the history of this
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measure. It was introduced without any previous investigation, so far as I am aware, by the Government. I do not believe there is any precedent for any measure of social legislation of this magnitude ever having been attempted without some previous inquiry. I have no doubt there were some communications with the friendly societies, but there was nothing like a full and proper inquiry into the whole subject in all its branches. The noble Viscount referred to the precedent of Germany which he said, was instructive. I am told that in Germany there were inquiries which lasted three or four years before any legislation was attempted in regard to national insurance. Even then, as we are aware, that legislation turned out unsatisfactory at a good many points and had to be the subject of legislative amendment. Yet we know as a fact that the Chancellor of the Exchequer expected to get his Bill through Parliament in the month of August this year. Now it comes to this House swollen with innumerable Amendments and scarcely recognisable by those who studied the original Bill. At every stage of its progress it has been tinkered and transformed, and now in, I might almost say, the last hours of the session we are asked to address ourselves seriously to the task of revising this Bill. The original Bill contained 87 clauses and covered 78 pages. The Bill now on the Table contains 115 clauses and covers 140 pages. There is hardly a paragraph of the Bill that has not been rewritten and transformed. In the Committee stage of the House of Commons on Part I of the Bill no fewer than 32 clauses were put through without detailed discussion; 18 new Government clauses were put through in a single night under the guillotine. On the Report stage 77 clauses were not discussed at all, and 70 were altered by the Government without discussion. No fewer than 470 Government Amendments were put through on the Report stage. As to Part II, which was sent to a Committee upstairs, 16 out of 25 clauses were not discussed at all on the Report stage. It is quite true that a great many of these alterations were made in order to meet criticism, but will it be contended that because that is so the right of free discussion which has hitherto been extended to us on every great Bill should not be allowed on this? My Lords, I venture to think that we Unionists were not unreasonable when we asked that the

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House of Commons should not part with this Bill until it had been further considered. And I cannot but think that the Government were not reasonable when they met that demand by the charge that we desired to wreck and obstruct the Bill.
I come to the vital question which we have to ask ourselves this evening—What ought this House to do with the Bill on the Table? Perhaps we ought first to ask what can we do. We naturally turn to that fragment of a written Constitution with which His Majesty's Government presented the country in the month of August. Under the Parliament Act this House has a right in ordinary cases to claim three rejections preceded by a period of two years for the examination of a doubtful measure, but in this case I am not sure that the conditions laid down by the Parliament Act have been complied with. Under that Act this House is entitled to a full period of one month before it disposes of a measure. We are to be put off with a few days only, and I therefore take it that, if we were to reject this Bill, that rejection could not be counted as one of the three rejections to which we are entitled. That seems at any rate arguable. If I am right, we are in this position: that we could, if we stood upon our privileges, claim four rejections altogether and a period of two years, dating not from the Second Reading this last spring, but from the Second Reading of the measure next year whenever it might be reintroduced into the House of Commons. That would extend our period of delay to a date somewhere in the year 1914.
But we are bound to ask ourselves what we should gain, what the country would gain, were we to insist upon our full rights. I venture to suggest that we ought to think twice before we embark upon a conflict which would inevitably be long and bitter, and would probably be also infructuous. Our attitude, as I conceive, is anything but one of uncompromising hostility to this Bill. We wish it to be dealt with; we do not desire that there should be any needless delay. I agree with the noble Viscount when he told us that in his view a long postponement of legislation upon this subject would be for many reasons most unfortunate. But even if we were to claim the full period to which we are entitled, could we have
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any security that the Bill would in the meantime be materially improved? Now noble Lords opposite would not be able to alter and improve the Bill because they would have to return it to us under the Parliament Act in the identical shape in which they presented it at first. We, on the contrary, on our side would probably stand a very poor chance of obtaining in such circumstances a calm and dispassionate consideration for the Amendments we might desire to suggest.
But quite apart from the attitude which the Government might be expected to adopt in reference to changes proposed by your Lordships, we have this most important point to consider. This Bill is not a Money Bill, but it is a Bill which spells money at every clause, and I regard it as absolutely certain that if your Lordships were to set to work to alter and amend it, you would be met at every turn by the claim of House of Commons privilege. We have had in this house painful experience of the manner in which that claim has been insisted upon by the other House of Parliament. I am sure many of your Lordships remember a leading case that occurred when we were dealing with the Old Age Pensions Bill, when an Amendment which everybody knew was an improvement was contemptuously sent back by the House of Commons, and when the Prime Minister observed that the moment was not one for relaxing the privilege of the House of Commons. And yet we all know the Amendment was afterwards embodied in a Bill which was passed with everybody's consent. Therefore I should not look forward with any hopeful anticipation to a struggle with the other House of Parliament over the amendment of the Bill on the Table. I am afraid that if we were to hold up this Bill for amendment, we should find ourselves embarked in a long and bitter controversy in which the hands of this House would virtually be tied. There would be regrettable delay, our action would be misrepresented, and in the end we should be able to achieve very little.
We have no wish either to wreck or to defer the operation of the Bill for two or three years. What we hoped for was that there would be breathing space given in the other House of Parliament, breathing space for the classes affected, breathing space for His Majesty's Government to take

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stock and to amend their Bill, breathing space above all for the House of Commons, which is not hampered by privilege, to deal with the measure in whatever way might seem to it necessary. That interval might have been turned to good account. There might have been an inquiry—a Royal Commission or Joint Committee, I do not care which—to examine the possibility of correcting some of the blots in the Bill which might then have come up to your Lordships' House, not as the hurried outcome of a confused controversy, but as representing the deliberate and matured judgment of the other House of Parliament. But that breathing space, as we all know, was refused peremptorily, and we know very well why. We know that the Government have other liabilities to meet next Session of Parliament and we know that the inclusion of this Bill between the interstices of Home Rule, Household Suffrage, and Welsh Disestablishment, would not have been exactly convenient to His Majesty's Ministers. From the moment that reasonable request was refused in the House of Commons it does not seem to me to matter greatly whether this House takes a few days more or less for the examination of this Bill.
May I say one word as to an alternative proposal, which has received a good deal of influential support? It has been suggested that your Lordships might pass this Bill tacking on to it a clause under which it would be necessary that the measure should be referred to a poll of the people. That is, I admit, a plausible and attractive suggestion, but I should be slow to recommend it to your Lordships. I think there are obvious reasons against it. In the first place, there is at this moment on the Statute-book no machinery for the Referendum. If we were to endeavour to legislate for that purpose we should find ourselves involved in a controversy, not on the merits of the Bill, but on the merits of the Referendum as a piece of Constitutional machinery. What seems to me more serious still is that if this procedure were to be adopted the electors would be placed in the position of having to choose between the Government Bill and no Bill at all. That is not a dilemma we should like to face. We desire the Bill to pass, but we desire it to be reconsidered in very important particulars. I am afraid that resort to the Referendum in these circumstances would
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only result in a misleading, and, therefore, mischievous verdict. Our choice, then, I conceive, is between the alternatives indicated by the noble Viscount in his speech. We have to choose between this Bill, with all its defects, with all the friction and the litigation to which we believe it will lead, with all its mistakes, some of them, I am afraid, irreparable—we have to choose between this Bill and two or three years of acute and distracting controversy between the two Houses, controversy, which, as I pointed out just now, would probably in the end be absolutely fruitless.
My Lords, we have come to the conclusion that the acceptance of the Bill is the wiser course for this House to take. There is only one thing which we will not advise your Lordships to do, and to which I certainly decline to be a party—I mean a sham attempt to revise this Bill in the few days that remain to us—an attempt that would be handicapped, on the one hand, by the limited time at our disposal, and, on the other, by the knowledge that the greater part of the Bill is of a nature which we are unable to touch or to amend. Such an attempt would be made with a certainty that we could not insist upon most of our Amendments, and, worse than that, that we should be saddled with a share of responsibility for the injustice and extravagance which are written large upon many of the provisions of the Bill.
LORD SANDHURST: My Lords, I agree with what has just been said by the noble Marquess. I personally would most willingly have welcomed more time for the consideration of this Bill, because it not only affects every household, but has to do with the present and perhaps the future interests of one of our most learned professions, and as it at present stands it may have an everlasting effect upon the fortunes of some of our charitable institutions. I should not have ventured to intrude myself upon your Lordships' notice had it not been for the fact that for the last thirty years I have been concerned in the work and management of some of the large London hospitals which are supported by voluntary contributions, and also that when I had the honour of being Governor of Bombay I had under me, I should think, a greater number of medical officers at one time than ever fell to the lot of an administrator, because those were the days of the beginning of the plague.

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It is impossible for me to follow my noble friend through every sentence of his speech. I propose to deal only with that portion of the Bill which has reference to the doctors and how they may be affected, and also as to the effects of the Bill on our charitable institutions and hospitals. Before I come to that, I am anxious to ask my noble friend's attention to one or two matters in connection with this Bill which he did not touch upon. One is the question in regard to midwives. Under the Mid wives Act, midwives are now bound under penalty to send for a doctor in cases of necessity, and the local supervising authority at present can pay for this out of the county funds. I should like to know at a future stage whether some arrangement could not be made so that the society might make arrangements for the reimbursement of the fees which will have to be paid to a medical man whom the midwife, as I have said, is under a penalty obliged to call in.
With regard to the deposit contributor, I should very much like to see some plan devised and put in the Bill by which the insurance could be paid in a lump sum. By such means the deposit contributor could assume the position of a person insured by a society, or, again, a child could be insured for life or any shorter period by the payment of a lump sum. It is easy to imagine cases arising in which such procedure would be advantageous and advisable, cases, for instance, where people wished to provide for the children of faithful servants, where an employer wished to provide for the children of his employés, and for those whom the societies would not take. I believe this is well known as a principle which is taken advantage of by insurance societies; and further than that, I think there would be little trouble in proving the tiling to be financially sound.
Then I do not think it is mentioned in the Bill whether the guardians can take maternity relief into consideration as regards applicants for indoor relief. That is to say, would an unmarried woman who is insured be liable to be refused admission to a Poor-law infirmary for confinement on the ground that she was not destitute? At present if she is destitute she can claim to be admitted to those admirable State hospitals. This is a matter of very great importance, because if she is not admitted this unfortunate girl is worse off than she was before. Then it seems necessary, I
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think, to secure that the maternity benefit paid to the husband shall in reality be applied for the benefit of the wife. I do not think that the question is quite clear as it stands. We all know that it sometimes occurs that women are not tended with all the care necessary, and a bad character might very easily spend the money in drink or on anything else. I should very much like to see that put beyond doubt. It is possible, in fact very probable, that my reading of the clause has not been correct, but my noble friend will, perhaps, be able to inform me of that at a later stage.
I listened with very great interest to what my noble friend said in regard to the medical men. We all know that they put forward in the first instance six points through the British Medical Association. Four of those points, I think I am correct in saying, are already embodied in the Bill, and the others can be met under the machinery provided in the Bill, so far as is consistent with the public and professional interests, provided that the financial requirements are satisfactorily adjusted. No doubt there may be difficulties about the arrangements with the doctors. It may not be easy to get the medical profession promptly into administrative line, but we may feel confident, I am sure, that while these arrangements are in the course of making or proceeding to perfection the poor people will not suffer from want of medical attendance. I think that the "flat fee," as it is called, in the case which the noble Viscount mentioned was 3s. As the House knows, the estimate for the "flat fee" was made on the analogy of what is known as "club practice." At present the medical man dealing with the members of a club treats them at a flat fee of, say, 4s. per annum, but I fear that under the working of this Bill it will be found that the conditions and results to the medical man will differ very much from the present club practice. In some respects that is no doubt to be desired, but when the medical man has had his flat fee of 4s., he has had into the bargain, in addition to the members of the club, his practice extended to a number of patients who pay fees per visit rather higher than the noble Viscount stated. In the cases I am alluding to they pay as much as 2s. 6d. or 3s. 6d., and those private patients as a rule form the bulk of his income and practically enable him to take the number of poorer patients at the flat fee. But I think it is reasonable to

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anticipate, if my noble friend's Bill is going to be a success, that the greater number of these private patients will merge themselves into insurance paying people, and the consequence is that the private patients will disappear and also the margin which enables the medical man to take the poorer patients at a lower fee. I am afraid it will be found that his remuneration will be insufficient.
But, again, this ordinary domiciliary attendance at 6s. per annum is really only half the story, because what about the journeys, special cases, minor operations, adenoids, anæsthetics, and so on? All these special services will be in addition to the ordinary work, which of itself can hardly be properly remunerated at the 6s. per annum. It will follow, therefore, that these special services cannot be properly performed or performed at all, and recourse must be had to the hospitals now supported by voluntary contributions. And to show what this means as regards the work of the general medical hospitals at present, I can tell you from my own experience that at one of the largest London hospitals in the summer time it was about two and a-half months before a child could get operated on for adenoids. Then it must be remembered that the insurers will be paying insurance money for this relief, and they will naturally expect it to be administered to them with as little delay as possible; but in addition to these small operations there are countless other medical and surgical cases by which an individual is incapacitated from going to work, and is the society to go on paying while the patient is waiting for a bed as well as during the time that the operation or the treatment is effecting its cure? If so, this will happen, that while you have the great anxiety of the patient to obtain the bed in the hospital you will also have your societies backing him up by urgently appealing for additional hospital accommodation.
My Lords, this leads me to the call on the hospitals and their work in connection with this Bill. I give my noble friend this admission, that it is possible—indeed, I think it is more than likely—that under the Bill the work of an out-patients' department may diminish, that the hundreds of thousands of out-patients will most perceptibly decline. But, on the other hand, there is in connection with the out-patients' department of a large hospital a variety of what are known as special departments
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where maladies or diseases in connection with the eyes, the ears, the throat, the nose, and a host of other things, are dealt with; special departments efficiently provided with the most expensive and up-to-date apparatus, as well as presided over by the best brains that can be found among very distinguished medical men, I expect the result will be that the pressure upon these departments, instead of diminishing, will be considerably increased in regard to their work. But, after all, it is not the outpatients who are the most costly. The in-patients are the more expensive, and, as I have already shown, the pressure of the numbers of would-be patients, supplemented by the pressure of the societies for beds will, to my mind, cause the necessity of increasing the existing hospital accommodation, and hospital accommodation will be still more necessary than ever.
It is possible, of course, that much may in future be done by dispensaries for the treatment of trivial cases. It may be necessary for them to act as clearing houses for different diseases. I cannot help thinking that something of the kind will have to be set up in regard to the sanatorium treatment. But except by taking money from sanatorium benefit for diseases other than tuberculosis I do not see where any funds are to come from to deal with this matter; so we have it again that until some such clearing house system is set up, all the minor cases as well as the more important cases will, as now, be thrown indiscriminately on the general hospitals. Therefore in spite of the desire expressed by the Chancellor of the Exchequer, the tone of which I quite appreciate, not to bring in the hospital question. I cannot help thinking that it will open itself with surprising and increasing insistence after this Act has been in operation for some little time. But while there is no money available that I can see for setting up dispensaries, or for giving money to hospitals, there is machinery to a certain extent. I observe that under Clause 20, and I think also under Clause 63, a health committee or a society is empowered to subscribe to hospitals, but no society has funds at its disposal, so far as I can see, outside those allotted to sanatorium and medical benefit, all of which would be required for these particular purposes; and it can hardly be doubted that no society will subscribe to other institutions until at least their first triennial valuation shows a surplus.

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The liability for the treatment of the sick under the Bill seems to me to be tremendous. Under Clause 8 (b) we find this benefit conferred—
"Treatment in sanatoria or other institutions or otherwise when suffering from tuberculosis, or such other diseases as the Local Government Board, with the approval of the Treasury, may appoint."
This may embrace the whole of the Pharmacopœia, the whole gamut of disease and medicine and surgery, and your only hope and refuge, except for these medical officers who I venture to think are hardly sufficiently remunerated, will be the general hospitals which are supported now by voluntary contributions; and what makes me anxious about it is this—I think this was referred to by the noble Marquess opposite—that all the time this work is increasing, and I have not the least doubt it will increase, the difficulty of getting hold of funds is increasing also day by day. I may mention that all these hospitals are attended and served almost entirely by medical men without any pecuniary reward whatever. I am not speaking of the three hospitals known as the "endowed hospitals." Your Lordships know only too well, by the innumerable circulars and appeals you receive daily, the straits to which hospitals are reduced. I have myself sent out thousands upon thousands of appeals. I do not see how their situation is likely to improve; I think it is likely to get worse. As was pointed out by the noble Marquess, employers now contribute very generously to these institutions; in some cases workers, as in the North of England, contribute in various centres, and their subscriptions, made by weekly donations, amount to many thousands of pounds in the year—I believe in one place to as much as £17,000. But under this Bill it will be enacted that for medical relief both the working man and his employer shall pay their contributions by another system, and, though I do not adopt the figure which I have seen set out, it has been said that employers will pay seven or eight millions. But one can see very easily that it will cost a great deal of money.
I have no doubt that certain employers, rich men and others, will continue to support these charities, but still you cannot expect them when the outgoing is so great—is necessarily so great—under
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the Bill to subscribe in the large way they have done before. There are three avenues in this Bill by which assistance might be obtained. I have already referred to the medical sanatorium benefit. I have referred also to the friendly societies and their subscriptions, and also I have remarked, I think, that no well-managed society would give a subscription unless its position in regard to surplus was proved by a proper valuation. But there is a third way, by way of contribution from the rates—half from the rates, and half from the Treasury. We who have had to do with these authorities know very well that unavoidable and necessary delays must occur, and in the meantime the position of hospitals gets more serious. It seems to me really necessary that we should have in this Bill, or else in an amending Bill at no very distant date before it is too late, some provision for enacting an institutional benefit to be administered by the committees on the same lines as sanatoria.
There is one more point in connection with these hospitals which I think should not be lost sight of, especially in view of what appears in the Memorandum and in view of what was said by my noble friend about the prevention of disease. In connection with these general hospitals, or a great many of these general hospitals, in London and the country are medical schools where lecture rooms, and libraries, and all the paraphernalia of medical education are to be found, as well as the material in the wards and in the out-patients' department for observation and study by the students. But my fear is this, that if these great charities have to any considerable degree in the course of time to shut down in London and the country, medical education will suffer. My noble friend has mentioned it, and I venture to think that this is a matter of very real importance, because the progress of science is bound up with the arrangements which must be made in the Government Bill. We must remember that the success and solvency of the measure depend upon the prevention of disease, and only by an advance in science and the promotion of better methods for preventing disease will the drain on sick funds be diminished, and only as they diminish, I think, will you manage to make your scheme a success.
A very important thing is medical ability, and this in its turn depends on

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the service under the Bill being such as to attract good men. If the Bill merely extends the undesirable condition of the club or contract practice, I think it will mean that in a future generation recruits for the medical profession may not come up to the high standard of to-day, and the development of preventive medicine depends on enthusiastic labour and co-operation of the best intelligencies. I feel very strongly that the medical charities may suffer, and I am also anxious about the condition of the doctors. It has been mentioned that there may be very great difficulties of administration. I was twenty years ago chairman of an inquiry into metropolitan medical relief by a Committee of this House, and in our Report is found this statement—
"It was suggested that it might be advisable to map out London into districts, so that a person leaving one district, and, therefore, his medical association, would easily attach himself to the medical provident association of another district; but the Committee, while agreeing that such an arrangement would be highly desirable if practicable, doubt whether in London, with its heterogeneous and migratory population, such an organisation would be possible."
If that was true then—and I think it was—it is still more true now, because of the increase of population and the greater facilities for moving that population about. I cannot help fearing that the charities will suffer. It is so very easy to interfere with an old system, and possibly to put something up in its place which, however good on paper, you cannot by any means be sure will act efficiently. The older system of charitable relief and the hospitals themselves got on extremely well with the Poor-law authorities and kindred institutions of that description, and I should very greatly regret if their usefulness and efficiency is in any way curtailed by this Bill. No doubt the imperfections of the Bill will be remedied in the course of time as new generations grow up that have become accustomed to the intrusion and inquiry which will be necessitated, and then it will be found to be a vast and widespread benefit. We have been told several times that it has taken about twenty-five years in Berlin to get the thing near perfection. That is an inspiring and cheerful outlook. And if that is so I think we might very easily, if there had been more time, have gone into and revised this Bill, especially as I sincerely hope that the Bill will turn out to be a success and benefit to a great
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many people. I conclude by expressing my regret once more that we have not had time to remedy some of the imperfections that admittedly exist in the Bill.
THE EARL OF DUNMORE: My Lords, if it were not for the exigencies under which this House is called upon to consider this Bill, which is one of the longest and most complicated Bills ever put before your Lordships' House, I should have hesitated to intervene in the debate. But as a member of the London County Council I have been asked to draw attention to those features in the Bill in which they and many other local authorities throughout the country are concerned. This Bill sets up a local health committee in every county and in every county borough, the committee to consist of not less than forty members. It is very important to note how the membership of these committees is made up. Only one-fifth of the total membership is to represent local authorities, and three-fifths to represent the persons insured under the Bill. A protest was handed to me just now in regard to these local committees addressed to a member of this House from the Shipbuilding Employers' Federation, representing about seven millions of money. They protest not only against the injustice of the incidence of the Bill, with regard to which I shall have a word to say later, but also against the exclusion of employers from the local health committees. Now if you turn to the composition of these local health committees you will find that local authorities are most inadequately represented. They are only represented by one-fifth of the total membership. These local health committees are to administer medical and sanatoria benefits, and if the funds provided under the Bill are insufficient to meet their estimated expenditure they can apply to the Treasury and to the county councils to sanction the difference between their income and their estimated expenditure.
Now, my Lords, what would be the position of the local authority? The Treasury, with the mass of the taxpayers of the United Kingdom at their back, may be willing to sanction this excess of expenditure, but what may be a very slight affair to them may be a very heavy burden to a district, and the local authority for very good reasons may be unwilling

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to acquiesce in the proposed arrangement under which the extra burden would be thrown upon the rates. Your Lordships must remember that there is no incentive to economy on the part of the local health committees. They are not responsible to the ratepayers. They are a standing body, and any scheme they want to bring forward, although it may be excellent in itself, may represent a burden which the ability of the district would be totally inadequate to bear. The local authority will be in a very difficult position; they will be placed in the position of having to refuse to give assistance towards objects desirable in themselves and towards which the Treasury have intimated their willing ness to subscribe. The health committee under such circumstances will be in a position to place great pressure on the local authority. They will be able practically to force expenditure on that body to which they will not be disposed. In fact, we shall have an unelected body interfering with and practically controlling an elected body. I understand that it is the intention of the Government by their insurance scheme so to reduce the poor-rate as to compensate the local authority for any extra burden which may be put upon them. But, my Lords, how can this be, the case when the Government's subventions in aid of the rates are already totally inadequate, and have been admitted to be totally inadequate? I would further point out that as the medical benefits affect some 15,000,000 people, a very small proportion of whom are on the poor-rate, any reduction in the poor-rate would be in no way commensurate with the new liabilities which will come on the local authority by these deficiencies in local health committee funds. Your Lord-ships must remember that the medical benefits are going to affect people whose incomes go up to £160 a year, and it is ridiculous to talk of such people being in any way connected with the poor-rate. The local authority, in fact, under the provisions of this Bill will be undertaking a new financial responsibility in respect of vast numbers of people who are in no way connected with the poor-rate.
If the Government's contention were correct, if the effect of this Bill were to reduce the poor-rate, and if the Government's subventions were sufficient for local expenditure, which is certainly not the case, even then I should feel compelled to
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protest against the introduction of an unnecessary complication into the already complicated relations between Imperial and local finance. Those complications, I think, are admitted on both sides of this House. In fact, your Lordships were led to believe that His Majesty's Government were going to deal with the whole of this question of Imperial and local expenditure within the course of this year. Up to now I regret to say that His Majesty's Ministers have so far not seen their way to redeem their pledge. I protest, as I have protested on a former occasion in this House, against the readiness with which Parliament imposes new obligations and new burdens on the ratepayers without the ratepayers consent. I hold that money raised by rates ought to be expended by those bodies who are directly connected with the ratepayers. That principle does not obtain in this Bill. When this Bill was first introduced we were led to believe that the benefits of the Bill would be met by the arrangements for contributions from the employer, the employé, and the State, which would go to make up the total. But now what is the ease? The employer will pay his fourpence as an employer, but he will also pay an increased amount as a ratepayer. The employé will pay his subscription, and the State will pay, as the noble Marquess pointed out, something less than a penny of the money, I think it is, and the balance of the burden by this Bill will be divided between Imperial taxation and the rates. Half of it will fall on the rates. I said just now that the Government would give less than a penny, because, in spite of what the noble Viscount said, the two-ninths which the Government pay of benefits when they mature is a very different thing from paying twopence into a fund where it would be allowed to accumulate and earn interest in so far as it was not drawn upon.
Now it is true that the State is only deferring the evil day. In effect, what they are doing is pledging future Governments to meet vast and practically unknown liabilities. I think the noble Marquess the Leader of the Opposition said it would represent something like £1,600,000,000 of capital. Well, quite apart from that, there may be unknown expense and unknown expenditure going to be put on the rates under the clause with which I have just dealt. In any case the financial liabilities with which future Governments will be

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faced is bad enough, but I see no reason why in the meantime an unknown and unlimited burden should be placed on the ratepayers. In all previous experimental legislation—and surely we are justified in saying that this scheme is experimental—a limitation has been put on the amount of the rate which could be imposed If you take the Feeding of School Children Act you will find that a ½d. rate was imposed by Parliament; but in this case, if you examine the provision dealing with the relation between local health committees and local authorities, you will see there is no limitation on the burden which can be placed on the rates.
As regards the Government's contention as to the effect of insurance on Poor-law expenditure, I think that must be intended to apply to those more fortunate individuals who are able to become members of approved societies. Whatever may be the case in regard to members of approved societies, I have little confidence that those coming under what is known as deposit insurance will in any large numbers be removed from the poor-rate. The noble Marquess dealt just now with the hard case of the deposit and Post Office contributor, and I noticed that the noble Viscount in introducing this Bill said there were 800,000 deposit contributors, and that in future as these young persons could come into the scheme, that probably would diminish. With all respect, I venture to challenge that statement. I have here the actuarial report on this Bill, and I notice this statement—
"As regards the increase in the future of these compulsory contributors who fail to join approved societies and become deposit contributors, it is in the nature of the case almost impossible to make an estimate which will be of any value."
Then the actuaries go on to say—
"On the other hand, their numbers will be recruited not only by those persons entering the scheme in future at the age of sixteen who may fail to join societies, but also by the transfer of a certain number of persons from the ranks of the societies owing to prolonged unemployment."
The scheme for these persons who are rejected by approved societies is not an insurance scheme, as the noble Marquess remarked this evening. The existence of the Post Office contributor entirely vitiates the claim of this Bill to be called a National Insurance Bill. So far as sickness and disablement benefits are concerned they cease as soon as the amount of the Post
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Office deposit is exhausted. That man will then have nothing between him and the poor-rate. The freedom of choice as to accepting members which is left to these approved societies, and I think necessarily left to them, will greatly strengthen these societies. They will get all the best lives. The weaker and smaller societies will get the inferior lives; and the worst lives, those who are most in need of insurance, will drift into the Post Office deposit scheme. I think it is an unfortunate feature of this Bill that its whole tendency in working is to separate the strong from the weak, and give most to the strong and least to the weak. It divides up the people of this country into good lives, middling lives, and bad lives, and it is the last who will reap the least benefit from the Bill, although relatively in proportion to their means they pay the most.
In a great national scheme in which the principle of compulsion is applied to all, surely there ought to be some attempt at equality of treatment? The Post Office contributor is not the only case of inequality of treatment. It will be seen that at the commencement the scheme applies one flat rate for both young and old. I listened with great interest to the noble Viscount's speech in which as far as I could make out—the noble Viscount will correct me if I am wrong—he said that in order to get the older people into the scheme the great expense would really devolve on the State. I think that is the noble Viscount's contention—that the State would be practically paying one penny and five-ninths to enable the older people to come into the scheme on the same flat rate as the younger people. Now, what I make out so far is this. In order to allow the older people to come into the scheme at the same rates a vast sinking fund, amounting to, I think the noble Viscount said, £63,000,000—I have made it out to be £66,000,000—is to be provided. I make out that that is built up by taking out of the contributions of every member of an approved society a sum amounting to a penny and five-ninths in the case of a man, and 1½d. in the case of a woman. After all, the State—the Government, that is—pay nothing into this common fund except a liability. They only pay two-ninths of these benefits when they mature, and therefore I cannot understand the noble Viscount's contention that it is the State which is building up this sinking

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fund which is going to pay off the deficit caused by these older people coming into the scheme.
VISCOUNT HALDANE: May I just explain? It is quite true that one penny and five-ninths comes out of what the employer and employed pay, but that is made up by the State paying two-ninths of the benefit. The one balances the other. If you take the age of 16 you will find the two contributions are exactly balanced, and the one cancels the other.
THE EARL OF DUNMORE: If I understand the noble Viscount's contention, it is quite true that one cancels the other at some future date. But it does not cancel it to-day. The young people who enter the scheme to-day are going to pay, and are to be compelled to pay, in order to enable the older people to come into this scheme.
VISCOUNT HALDANE: They exactly cancel at the age of 16.
THE EARL OF DUNMORE: In 16 years.
VISCOUNT HALDANE: No, at 16—at the initial age.
THE EARL OF DUNMORE: I am afraid I cannot yet see the noble Viscount's contention. If the State paid 2d. into the fund at the present moment, and that fund bore interest, and if they paid in their contribution at once, I could see it; but as they only pay the liability and are only responsible for two-ninths of the benefits when they are approved, I cannot see by any reasoning that you can say the young are not really paying towards the fund more than they need in order that the older people may enter into the scheme. I must apologise to the noble Viscount if he is right, but I really cannot see the noble Viscount's contention.
Then to turn to another point in respect of young persons, to a matter in which the London County Council and many other local authorities have taken a deep interest. Under Part I of the Bill, when you come to consider this scheme you will find that, contrary to the whole trend of modern social legislation, this Bill offers direct incentives to the employment of juvenile labour. If you turn to the part of the Bill which deals with health insurance, your Lordships will see that the employer has to make a weekly contribution in
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respect of each person employed. Certain of the employed are exempted from insurance. A person of 70, or a person having a pension or other property amounting to 10 s. a week is exempted from contributions under the Bill—he has to make no contribution; but for obvious reasons the employer has to make the same contribution as he makes in respect of other people. There is another class, young persons under the age of 16, who are also exempted from this Bill, and in this case, for some unknown reason, the employer is also exempted from making his payment. When you turn to the part dealing with unemployment insurance the same thing obtains there. Young people up to the age of 16 are exempted from insurance, and again you will find the employer is exempted from making his payment. I can only say the reason is quite extraordinary. One of the greatest evils which we are contending with to-day is the unhappy facility with which young persons get into blind alley occupations, and yet here in a great social reform scheme you find provisions which offer direct incentives to employers to employ juvenile labour. Indeed, there are inducements to enable employers to get rid of these young persons when they reach the age of 16—that is, at the insurable age—and replace them by other and younger employés.
My Lords, I am not going to detain you at this hour by going further into a Bill which we have really had no time to consider, a Bill which covers 140 pages of print. There are many of your Lordships in this House who are well acquainted with, and who have worked a good deal at, social work, and who, I know, would have been quite willing to give your services towards making this Bill what it ought to be—a beneficial measure to the country. I regret that a vast social reform scheme closely affecting the interests of millions of our people should be forced through the House of Commons under the guillotine and those other instruments whereby free discussion is not satisfied, and that it should be sent to your Lordships' House under circumstances which preclude you from giving it even that attention which would be given to a Bill promoted by a private company in their own interests. It is not thus, my Lords, that the country can look forward to well considered schemes of social reform being placed upon the Statute Book.
LORD CLIFFORD OF CHUDLEIGH: My Lords, the circumstances in which this Bill comes to your Lordships' House under the very limited powers which are left to us to improve its defects caused by those gaps in the discussion in the other House allow me only briefly to point particularly to Clause 62, upon which I intend to put down one Amendment, because it is to a certain extent outside the actual provisions or the actual purpose of the Bill. The Bill is an Insurance Bill, but Clause 62 adds to it certain penal provisions which have nothing to do really with the question of insurance. To that extent Clause 62, the clause upon excessive sickness, might be said to be beyond the original purview of the Bill. The point to which I wish to call the attention of the House is one of those which was entirely undebated in the House of Commons, and is one of vital importance on general grounds. For any injury or any injustice that may be done to the individual insurer the Bill provides ample legal remedy, and an appeal; but while the penal provisions in Clause 62 may affect individual holders of property to the extent of thousands of pounds, while they may penalise an employer of labour in consequence of the conditions and nature of the employment, which may be in itself one that involves danger and one for which the Legislature has already imposed certain provisions and restrictions which are intended to minimise the danger of that employment, this penalty is imposed by a person who is sent down to inquire, without any of those safeguards which hedge the Judicature and other public bodies, and without any limit as to the amount of penalty he might impose. I do not think that there is any instance of such powers being given to an individual who has no legal position and not even a legal appointment.
In a letter which some of your Lordships may have seen in the papers addressed by the Chancellor of the Exchequer to Sir Ryland Adkins, the Chancellor says that he would sooner withdraw the clause than have the appeal which we propose—that is, an appeal from any order made by a person holding an inquiry under this section to two or more of His Majesty's Judges sitting together, on a point of law, or on the merits in respect of the determination or rejection of any evidence, such appeal to be made by any
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person, company, or authority which feels aggrieved by the decision of the person holding such inquiry, and the decision of such Court of Appeal as then constituted to be final on all issues. Now I intend to put down this Amendment in the Committee stage of the Bill, and my reason for particularly mentioning it in this case is that I have a hope—a very faint hope—that, even if this Amendment cannot be conceded, at least something may be done to give the person who is making this inquiry some independent position, and to insure that this appointment shall have the sanction of some high judicial authority who will see that his qualifications, his impartiality, and his independence may be equal to the enormous powers which are likely to be put into his hands. The Chancellor of the Exchequer's fear is that if an appeal of this kind is given it may frustrate the objects of the clause. On the other hand, we feel that it may be very likely that the absence of an appeal may act in exactly the same way, because a public health committee might be unwilling to institute such an inquiry when they have over their heads the feeling that, great and difficult as may be the points for discussion, it is an inquiry from the issue of which there is no possible stepping back; and I hope that either some limitation of the amount which may be entrusted to this officer may be made, or else that some greater safeguard than exists at present may be made for the appointment of one who is competent to the task.
Then there is one other point I should like to mention in the hope that the noble Viscount will introduce in his reply something upon it. That is the point which was alluded to by Lord Sandhurst with regard to the position of the hospitals. As I take it, under the Bill the position is this, that the subscriptions and the revenues of the hospitals will undoubtedly fall off. The hospitals will be left with empty beds which their funds will not allow them to support, and it is the duty of the health committee and of the friendly society to discover some means by which such cases as require hospital treatment may be met and provided for. The societies will have the power of making terms with the hospitals, and they will presumably have considerable funds with which possibly they may be able to make favourable terms to open those empty

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beds of the hospitals. But the health committee, I take it, will only be for the purpose of making arrangements with the hospital as to the medical benefits at their disposal. Therefore the result will be that the hospital beds, so far as they exist, will be filled by members of the various societies and not by those who are Post Office depositors and who come under the local health committees. I think this would be very much to be regretted, because it will be the poorer members and the older people who are not in the societies who will probably require the use of the hospitals most and they will be those against whom the hospitals will have to close their doors.
THE LORD BISHOP OF BANGOR: My Lords, the noble Marquess opposite has enumerated a number of points in this Bill in regard to which great anxiety is felt as to the injury that it may probably, or very likely, cause, and I have to ask myself whether, if he thinks that the Bill here and there on all these points will do great harm, we are in this House acting a patriotic part if we follow the noble Marquess in carrying out what I understood the noble Marquess's view to be-—that is, not even in the limited time at our disposal to make some attempt to amend the Bill. I suppose this House has a very large number of experts, men whose authority in finance and philanthropy and in various other ways is second to none, and I ask myself again, Is all that wealth of experience; and knowledge not to be put at the service of the country at a time when a Bill so largely affecting the fortunes of all classes is about to be passed?
What is this House for but to try as best it can to revise and make good in such ways as it may the measures that are brought before the country? It is said that we should possibly throw ourselves into collision with the other House. Well, should we? I understood the noble Viscount to deprecate our employing much time in making any Amendments to this Bill. But still are we to understand that, however good an Amendment may be, however well calculated it may be to obviate some of those points on which the Bill is likely to do mischief, the Government will advise the House of Commons to reject thRt Amendment and say that if we insist upon
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it they will not go on with the Bill? I cannot believe that. The noble Viscount said the foundation was well and truly laid. Surely our plain duty is, if we think there is any inequality in the foundation or anything that will cause the superstructure to fall down, at this hour to make it more effective. I suppose all of us who sit on this Bench were glad to hear that a Bill of this kind was going to be produced. All our lives we have amongst such people been inculcating thrift, and we were all glad that a measure of national insurance should come, and we welcomed it, and every one of us would be sorry if the Bill were lost. It occurs to us all that there are a great many points in which it might be amended. I do not mean points of finance, with which, perhaps, this House ought not to meddle, but other points. As I read this Bill on Saturday and tried to understand it, it was, I am afraid, rather like an old lady making out a cross-country journey in Bradshaw; and it occurred to me that a woman living with a man not married was put in a better position than a woman living with a man in lawful wedlock. No doubt I was absolutely wrong and under a misunderstanding, but still, supposing it occurred that there was any foundation for that, why should we not try to amend it?
Then, again, are we not to make any suggestion whatever to the Government by which the powers given under the Bill, if there is a possibility of their being tyrannically used, should be lessened? If any other point has been given to us as a suggestion with regard to the hospitals and societies, are we not to press that as an Amendment on the Government? I cannot think so. Then there is a question about these local health committees. I understand that the noble Viscount is going to change their names. If we think that those committees could be better constituted—and I myself think there is no reason why the employer should not be represented on them—may not we make these suggestions to the Government and have a certain time given us in which to make them? I am not pressing anything that would cause real trouble to the Government, but, after all, when people look at the House of Lords they will say, and I think it will not redound to the credit of this House, Because they could not do all they could to make this a good Bill, they did not do the little in their power in the time at their disposal with helpful

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suggestions so that this Bill should press less heavily upon the various members of the community.
VISCOUNT HALDANE: My Lords, my noble friend who sits by me (Earl Beau champ) had intended to reply upon the Bill and deal with the unemployment part rather more fully than I did, but the course which the debate has taken renders it hardly necessary at this hour, and I only rise to say a very few words. The course which the noble Marquess opposite has taken, I cannot doubt, is a wise one. Certainly he tried most judicially the propositions which were brought before him, and the sentence which he pronounced on the Referendum was very just and conclusive against the possibility of doing anything with that. Then, as the noble Marquess pointed out, for the rest you have to choose between, not a series of intermediate courses, but between two very widely different things. The speech of the right rev. Prelate has opened up great possibilities. The Government is not desirous of placing any obstacle in the way of the course he suggests. We are quite ready to listen to anything of the kind; but I did not gather from him that he confined himself to any one point in the Bill. It seemed to me there was a vast vista of amendment towards which he looked, and which would take up a very long time. As regards what was said by Lord Clifford of Chudleigh about hospitals, it will be found that there are pretty wide powers as regards hospitals in the Bill.
LORD CLIFFORD OF CHUDLEIGH: But I did not see where the money was to come from.
VISCOUNT HALDANE: There are certain funds at the disposal of local health committees in the matter, and also powers on the part of the societies subscribing. That is a part of the case which I think
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experience will work out. I agree with my noble friend that the hospitals play a most important part in this scheme, and in Germany things have so worked out that the insurance system is the life and soul of the scheme. Almost everybody coming for treatment goes to the hospitals. That may not turn out to be so here, but at least it is a thing to remember when predicting what will happen here. Then as regards the whole matter I will now ask your Lordships to give the Bill a Second Reading, and I will put down the Committee pro forma for to-morrow merely for getting the Bill reprinted with the Amendments substituting insurance committees for health committees.
On Question, Bill read 2a, and committed to a Committee of the Whole House To-morrow.
House adjourned during pleasure; and resumed by the Lord Granard (E. Granard).

MERCHANT SHIPPING BILL.
Read 3a (according to order), and passed.
PUBLIC ROADS (IRELAND) BILL.
Read 3a (according to order), with the Amendments, and passed, and returned to the Commons.

SALES FOR AGRICULTURAL PURPOSES BILL. [H.L.]
House in Committee (according to order): Amendments proposed by the Select Committee made: The Report of Amendments to be received to-morrow.
House adjourned at half-past Eight o'clock, till To-morrow, half-past Ten o'clock.