Sitting of 26 July 1912

Preamble
The House met at Twelve of the clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Provisional Order Bills [Lords] (standing Orders applicable thereto complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:—
Gas Orders Confirmation (No. 1) Bill [Lords].
Ordered, That the Bill be read a second time upon Monday next.
Ashborne Urban District Council (Gas) Bill,
Barry Railway Bill,
Edgware and Hampstead Railway Bill,
Lords Amendments considered, pursuant to the Order of the House of 23rd July, and agreed to.
London Trust Company Bill [Lords],
Read the third time, and passed, with Amendments.
South Suburban Gas Bill [Lords],
As amended, to be considered upon Monday next.
Woking District Gas Bill [Lords],
As amended, considered; to be read the third time.
Great Western Railway Bill (by Order),
Lords Amendments considered, and agreed to.
West Riding of Yorkshire Asylums Bill [Lords] (by Order),
Consideration, as amended, deferred till Monday next.
Kent and Bela Fisheries Provisional Order Bill,
Read the third time, and passed.
Education Board Provisional Orders Confirmation (London, No. 1) Bill [Lords],
Education Board Provisional Order Confirmation (London, No. 2) Bill [Lords],
Read a second time, and committed.
Glasgow Corporation Order Confirmation Bill [Lords],
Read a second time; and ordered to be considered upon Monday next.
Local Government (Ireland) Provisional Orders (No. 3) Bill (by Order),
Lords Amendments considered, and agreed to.
Water Orders Confirmation Bill [Lords] (by Order),
Norfolk Fisheries Provisional Order Bill (by Order),
Second Reading deferred till Tuesday next.
Education Board Provisional Orders Confirmation (London, No. 1) Bill [Lords] and the Education Board Provisional Order Confirmation (London, No. 2) Bill [Lords],
Ordered, that, in the case of the Education Board Provisional Orders Confirmation (London, No. 3) Bill [Lords], and the Education Board Provisional Order Confirmation (London, No. 2) Bill [Lords], Standing Order 211 be suspended, and that the Committee have leave to sit and proceed on Tuesday next.—[The Chairman of Ways and Means.]

LICENSING STATISTICS, 1911.
Copy presented of Statistics as to the operation and administration of the Laws relating to the Sale of Intoxicating Liquor in England and Wales for the year 1911 [by Command]; to lie upon the Table.
TRAINING COLLEGES (ENGLAND AND WALES) (NUMBER OF STUDENTS OBTAINING APPOINTMENTS).
Return presented relative thereto [ordered 5th March; Mr. Samuel Roberts], to lie upon the Table, and to be printed. [No. 278.]
TRADE REPORTS (ANNUAL SERIES).
Copies presented, of Diplomatic and Consular Reports, Annual Series, Nos. 4942 and 4955 [by Command]; to lie upon the Table.
TREATY SERIES (No. 18, 1912).
Copy presented of Protocol between the United Kingdom and France respecting the Application of the Additional Articles of the Commerical Convention of 1826 to certain parts of His Britannic Majesty's Dominions. Signed at Paris, 6th July, 1912 [by Command]; to lie upon the Table.
SUEZ CANAL (COMMERCIAL, No. 4, 1912).
Copy presented of Returns of Shipping and Tonnage passing through the Suez Canal. 1909, 1910, and 1911 [by Command]; to lie upon the Table.

PUBLIC WORKS LOANS BILL, 1912.
Copy ordered "of Statement of Particulars of Loans of which the Balances outstanding are proposed to be remitted or written off (in whole or in part) from the Assets of the Local Loans Fund."— [Mr. Masterman.]
Copy presented accordingly; to lie upon the Table, and to be printed. [No. 279.]

TRUSTEE SAVINGS BANKS.
Return ordered. "for the year ending the 20th day of November, 1911 (1), from each Savings Bank in England and Wales, Scotland, Ireland, and the Channel Islands, containing, in columns, the number of such banks; the number of accounts remaining open; the total amount owing to depositors; the total amount invested with the Commissioners for the Reduction of the National Debt, excluding the surplus fund; the balance in the hands of the treasurer; the total amount of the separate surplus fund in the hands of the Commissioners; the other assets, including the estimated value of the bank premises, furniture, etc.; the total assets; the rate of interest paid to depositors on the various amounts of deposit, and the average rate of interest on all accounts; the annual expenses of management, inclusive of all payments and salaries; the rate per cent, per annum on the capital of the bank for the expenses of management; the average cost of each transaction; the total amount of Government Stock standing to the credit of depositors; and the total number and amount of annuities in course of payment, including in such Return a summary of all such Savings Banks as, under the provisions of
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the Act 26 Vic. c. 14, or otherwise, have been closed, and have transferred their funds, or any part thereof, to the Post Office Savings Bank, showing for England, Wales, Scotland, and Ireland, and the United Kingdom, the number of such banks, the number and amount of depositors' balances on the 20th day of November previous to date of notice to close; the number and amount of accounts so transferred, and the amount of compensation, if any, made to all or any of the officers of such banks; and showing, in separate columns, the particulars relating to such Savings Banks as have been closed during the year; and (2) showing the total number of depositors in Trustee Savings Banks; the total number of deposits; the total number of withdrawals; the average amount of each deposit account; the average sums paid in and drawn out; and the total number of persons who have deposited in single sums the entire amount allowed to be deposited during the year (in continuation of Parliamentary Paper, No. 253, of Session 1911)."—[Sir Frederick Banbury.]

ORAL ANSWER TO QUESTION.
  NATIONAL INSURANCE ACT.

    MEDICAL PRACTITIONERS.
    Mr. CATHCART WASONasked the Secretary to the Treasury whether, in view of the hostility of medical practitioners to contract practice, further negotiations will be suspended on that point, and the amount available for medical relief paid over to the insurance committees and not, as has been suggested, to the individual person insured?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman): I do not think it would be desirable to make a, statement now.

ORDERS OF THE DAY.
  BILLS PRESENTED.
    BEE DISEASE BILL.
    "To provide for the prevention of the introduction and spread of pests and diseases affecting Bees." Presented by Mr. RUNCIMAN; to be read a second time upon Monday next, and to be printed. [Bill 292.]
    EXPIRING LAWS CONTINUANCE BILL.
    "To continue various Expiring Laws." Presented by Mr. MASTERMAN; to be read a second time upon Monday next, and to be printed. [Bill 293.]
    PUBLIC WORKS LOANS BILL.
    "To grant money for the purpose of certain Local Loans out of the Local Loans Fund, and for other purposes relating to Local Loans." Presented by Mr. MASTERMAN; to be read a second time upon Monday next, and to be printed. [Bill 294.]
    OLD METAL DEALERS BILL.
    "To amend the Old Metal Dealers Act, 1861." Presented by Mr. SAMUEL ROBERTS; to be read a second time upon Tuesday, 22nd October, and to be printed. [Bill 295.]
  BUSINESS OF THE HOUSE.

    ESTIMATES FOR NEW SERVICES.
    Motion made, and Question proposed, "That, notwithstanding anything in Standing Order No. 15, Supplementary Estimates for new Services may be considered in Committee of Supply on Monday next."—[Mr. Lloyd George, for the Prime Minister.]
    Lord BALCARRES: I should like to enter a protest against this proposal. I do not know if the House remembers what passed in 1902. A pledge was given by the then First Lord of the Treasury (Mr. Balfour) that Estimates for new services should not be taken on any of the allotted days. I do not object to the Estimates for the new services being taken on Monday next, but I do object to their being taken on one of the allotted days in Supply. In 1901 the hon. Member for East Mayo (Mr. Dillon) objected to Estimates for new services of this kind being taken on an allotted day. The Rules then were provisional, but in 1902 they took their final form. The then First Lord of
    1518
    the Treasury said he would meet the views generally expressed in all quarters of the House and exclude new services from the allotted days. The discussion of the subject on 25th April, 1902, extends to two or three columns of "Hansard," but the whole point is found in these words:—
    "Mr. Dillon said that if the right hon. Gentleman's Amendment were carried, the provision to which he was referring would be rendered unnecessary, because when any new service or Supplementary Estimate not dealt with or provided for in the Estimates of the year was proposed it must be taken not within twenty days, but in time provided by the Government.
    Mr. Balfour: Any new service not included in the ordinary Estimates for the year, such as the loan referred to by the hon. Member, would be a new service, and if the Rule is passed in the shape in which it appears on the Paper, and with the Amendment—'not later than two days before the Committee is closed'—it would not come within the purview of the twenty-three days at all.
    "Mr. Dillon said that the Amendment of the right hon. Gentleman would do away with the difficulty which arose last year, and that being so he thought the concession a very substantial one."
    The average number of new services is one, two or three per annum, but this year we are presented with no fewer than fifteen. In addition, we have lost four whole evenings in Committee of Supply. We also lost an hour on the second day, three-quarters of an hour on the third day, three-quarters of an hour on the fourth day, and a half hour on the seventh day. The whole principle of the allotted days is abrogated if night after night we lose substantial amounts of time. Those on this side of the House complain of want of time in order to discuss Board of Trade Votes, Customs and Excise, and so on, while only last night some hon. Members on the other side protested that they lost the whole of the evening of the day allotted for Scottish Estimates.
    Mr. BOOTH: There have been two counts, and repeated protests, against the small attendance on the other side.
    Lord BALCARRES: I do not want to enter into a controversy on that point, but the House has never been counted out on a day allotted for Supply this Session. We have no objection to these Votes being taken on Monday next. As they are new services they cannot, under Standing Orders, be taken on an allotted day. It was done last year in respect of one particular Vote, but this year the number is fifteen. Last year it was done in order to provide an opportunity not otherwise obtainable for the discussion of payment of Members. What is now proposed is a very serious infraction both of the letter and the spirit of the pledge

    1519
    given by the First Lord of the Treasury, without which it would have been very difficult to pass these Rules.
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): I agree with the Noble Lord that if these new services had been taken within the twenty days usually allotted for Supply there would have been a great deal of strength in the argument which he submitted to the House. The position is this. There was an appeal made by the Opposition for more time to discuss these new services, which in the ordinary course would have been guillotined in the twenty days without any discussion at all, so long as they are put down two days before the Vote is taken. At any rate, two additional days
    were allocated for this very reason, and although fifteen new services on the face of it are rather formidable, six of these are for insurance, and practically they amount to one new service. It has been discussed over and over again, and I understand that on Monday there will be another discussion on the same subject. Two days have been allotted for the reason that I have explained, and I think it only fair that the Government should have this Motion to make the matter perfectly clear.
    Question put, "That, notwithstanding anything in Standing Order No. 15, Supplementary Estimates for new Services may be considered in Committee of Supply on Monday next."
    The House divided: Ayes, 136; Noes, 133.

    Division No. 162.]

    AYES.

    [12.24 p.m.

    Abraham, William (Dublin Harbour)

    Harvey, T. E. (Leeds, West)

    Munro-Ferguson, Rt. Hon. R. C.

    Adamson, William

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

    Nannetti, Joseph P.

    Ainsworth, John Stirling

    Havelock-Allan, Sir Henry

    Needham, Christopher T.

    Alden, Percy

    Hayden, John Patrick

    Neilson, Francis

    Baring, Sir Godfrey (Barnstaple)

    Hazleton, Richard (Galway, N.)

    Nicholson, Sir Charles N. (Doncaster)

    Barnes, G. N.

    Higham, John Sharp

    Nolan, Joseph

    Barton, W.

    Hobhouse, Rt. Hon. Charles E. H.

    Norton, Captain Cecil W.

    Beale, Sir William Phipson

    Holmes, Daniel Turner

    Nugent, Sir Walter Richard

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

    Hughes, Spencer Leigh

    O'Neill, Dr. Charles (Armagh, S.)

    Bentham, G. J.

    Isaacs, Rt. Hon. Sir Rufus

    Parker, James (Halifax)

    Black, Arthur W.

    Jones, Edgar (Merthyr Tydvil)

    Phillips, John (Longford, S.)

    Boland, John Pius

    Jones, Leif Stratten (Notts, Rushcliffe)

    Ponsonby, Arthur A. W. H.

    Booth, Frederick Handel

    Jones. W. S. Glyn- (Stepney)

    Raffan, Peter Wilson

    Bryce, J. Annan

    Jowett, Frederick William

    Raphael, Sir Herbert H.

    Burns, Rt. Hon. John

    Joyce, Michael

    Reddy, Michael

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

    Keating, M.

    Redmond, John E. (Waterford)

    Carr-Gomm, H. W.

    Kellaway, Frederick George

    Redmond, William (Clare)

    Clancy, John Joseph

    Kelly, Edward

    Roberts, Charles H. (Lincoln)

    Clough, William

    Kilbride, Denis

    Roberts, G. H. (Norwich)

    Collins, Stephen (Lambeth)

    King, J. (Somerset, N.)

    Robertson, Sir G. Scott (Bradford)

    Condon, Thomas Joseph

    Lambert, Richard (Wilts, Cricklade)

    Robertson, J. M. (Tyneside)

    Cornwall, Sir Edwin A.

    Lardner, James Carrige Rushe

    Roch, Walter F. (Pembroke)

    Cotton, William Francis

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

    Roche, John (Galway, E.)

    Crawshay-Williams, Eliot

    Lewis, John Herbert

    Roe, Sir Thomas

    Crooks, William

    Lough, Rt. Hon. Thomas

    Samuel, J. (Stockton)

    Crumley, Patrick

    Lundon, Thomas

    Scanlan, Thomas

    Cullinan, John

    Lyell, Charles Henry

    Schwann, Rt. Hon. Sir C. E.

    Dawes, J. A.

    Lynch, A. A.

    Sheehy, David

    Denman, Hon. R. D.

    Macdonald, J. M. (Falkirk Burghs)

    Sherwell, Arthur James

    Devlin, Joseph

    Maclean, Donald

    Smyth, Thomas F. (Leitrim, S.)

    Dillon, John

    Macnamara, Rt. Hon. Dr. T. J.

    Taylor, John W. (Durham)

    Donelan, Captain A.

    MacNeill, John G. S. (Donegal, South)

    Thorne, G. R. (Wolverhampton)

    Duffy, William J.

    Macpherson, James Ian

    Trevelyan, Charles Philips

    Elverston, Sir Harold

    McCallum, Sir John M.

    Verney, Sir Harry

    Esmonde, Dr. John (Tipperary, N.)

    M'Curdy, C. A.

    Wadsworth, J.

    Falconer, J.

    Martin, J.

    Walsh, Stephen (Lanes., Ince)

    Farrell, James Patrick

    Mason, David M. (Coventry)

    Wason, John Cathcart (Orkney)

    Fitzgibbon, John

    Masterman, Rt. Hon. C. F. G.

    Webb, H.

    George, Rt. Hon. David Lloyd

    Millar, James Duncan

    Weagwood, Josiah C.

    Goddard, Sir Daniel Ford

    Molloy, M.

    White, Patrick (Meath, North)

    Guest, Hon Major C. H. C. (Pembroke)

    Moiteno, Percy Alport

    Whyte, A. F. (Perth)

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

    Mooney, J. J.

    Wilkie, Alexander

    Hackett. J.

    Morison, Hector

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Morton, Alpheus Cleophas

    Wilson, W. T. (Westhoughton)

    Harcourt, Robert V. (Montrose)

    Muldoon, John

    TELLERS FOR THE AYES.—-Mr.

    Harvey, A. G. C. (Rochdale)

    Munro, R.

    lllingworth and Mr. Gulland.

    NOES.

    Agg-Gardner, James Tynte

    Archer-Shee, Major M.

    Balcarres, Lord

    Aitken, Sir William Max

    Ashley, W. W.

    Baldwin, Stanley

    Amery, L. C. M. S.

    Bagot, Lieut.-Colonel J.

    Baring, Maj. Hon. Guy V. (Winchester)

    Anson, Rt. Hon. Sir William R.

    Baird, J. L.

    Barnston, H.

    Antsruther-Gray, Major William

    Baker, Sir R. L. (Dorset, N.)

    Bathurst, Hon. Allen B. (Glouc, E.)

    Bathurst, C. (Wilts, Wilton)

    Guinness, Hon. Rupert (Essex, S.E.)

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

    Bennett-Goldney, Francis

    Gwynne, R. S. (Sussex, Eastbourne)

    Perkins, Walter F.

    Boscawen, Sir Arthur S. T. Griffith-

    Haddock, George Bahr

    Peto, Basil Edward

    Boyton, J.

    Hambro, Angus Valdemar

    Pole-Carew, Sir R.

    Bridgeman, W. Clive

    Harris, Henry Percy

    Pollock, Ernest Murray

    Bull, Sir William James

    Henderson, Major H. (Berks, Abingdon

    Pretyman, E. G.

    Burdett-Coutts, W.

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

    Rawlinson, John Frederick Peel

    Burn, Colonel C. R.

    Hewins, William Albert Samuel

    Rawson, Col. R. H.

    Campbell, Capt. Duncan F. (Ayr, N.)

    Hickman, Col. Thomas E.

    Rees, Sir J. D.

    Carlile, Sir Edward Hildred

    Hill-Wood, Samuel

    Ronaidshay, Earl of

    Carson, Rt. Hon. Sir Edward H.

    Hoare, S. J. G.

    Samuel, Sir Harry (Norwood)

    Castlereagh, Viscount

    Hope, Harry (Bute)

    Sanders, Robert A.

    Cator, John

    Hope, James Fitzalan (Sheffield)

    Sanderson, Lancelot

    Cecil, Evelyn (Aston Manor)

    Houston, Robert Paterson

    Sandys, G. J. (Somerset, Wells)

    Cecil, Lord Hugh (Oxford University)

    Hume-Williams, W. E.

    Sassoon, Sir Philip

    Cecil, Lord R. (Herts, Hitchin)

    Ingleby, Holcombe

    Spear, Sir John Ward

    Chaloner, COl. R. G. W.

    Jardine, E. (Somerset, E.)

    Stanley, Hon. G. F. (Preston)

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

    Keswick, Henry

    Starkey, John R.

    Chaplin, Rt. Hon. Henry

    Knight, Captain E. A.

    Staveley-Hill, Henry

    Clay, Captain H. H. Spender

    Lane-Fox, G. R.

    Steel-Maitland, A. D.

    Clive, Captain Percy Archer

    Larmor, Sir J.

    Stewart, Gershom

    Courthope, George Loyd

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

    Sykes, Alan John (Ches., Knutsford)

    Craig, Captain James (Down, E.)

    Lewisham, Viscount

    Talbot, Lord E.

    Craik, Sir Henry

    Locker-Lampson, G. (Salisbury)

    Tryon, Captain George Clement

    Croft, H. P.

    Locker-Lampson, O. (Ramsey)

    Tullibardine, Marquess of

    Dalrymple, Viscount

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

    Valentia, Viscount

    Dickson, Rt. Hon. C. Scott-

    Long. Rt. Hon. Walter

    Walrond, Hon. Lionel

    Dixon, C. H.

    Lonsdale, Sir John Brownlee

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

    Eyres-Monsell, Bolton M.

    McCaw, William J. MacGeagh

    Weigall, Capt. A. G.

    Faber, George Denison (Clapham)

    McNeill, Ronald (Kent, St. Augustine's

    Wheler, Granville C. H.

    Falle, B. G.

    Magnus, Sir Philip

    Wolmer, Viscount

    Fell, Arthur

    Malcolm, lan

    Wood, Hon. E. F. L. (Ripon)

    Fetherstonhaugh, Godfrey

    Mason, James F. (Windsor)

    Wood, John (Stalybridge)

    Fitzroy, Hon. E. A.

    Newdegate, F. A.

    Worthington-Evans, L.

    Forster, Henry William

    Newman, John R. P.

    Wright, Henry Fitzherbert

    Foster, Philip Staveley

    Newton, Harry Kottingham

    Yate, Colonel C. E.

    Gastrell, Major W. Houghton

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

    Younger, Sir George

    Gilmour, Captain John

    Parkes, Ebenezer

    Glazebrook, Captain Philip K.

    Pease, Herbert Pike (Darlington)

    TELLERS FOR THE NOES.—-Sir

    Grant, J. A.

    Peel, Capt. R. F. (Woodbridge)

    F. Banbury and Mr. Samuel Roberts.

    Gretton, John

    Ways and Means.
    Considered in Committee.
    [Mr. WHITLEY in the Chair.]

    IMPOSITION OF TAXES (TEMPORARY STATUTORY EFFECT).
    Motion made, and Question proposed,
    "That a Resolution passed by Committee of Ways and Means of this House for the imposition of any new tax, or for the variation of any existing tax, or for the renewal for a further period of any tax which is of a temporary character, whether at the same or a different rate, and whether with or without modifications, shall have statutory effect for a limited period, and that where such Resolution provides for the renewal of a temporary tax all statutory provisions which were in force with reference to that tax as last imposed by Act of Parliament, shall, during the said period, have full force and effect with respect to the tax as renewed by Resolution."
    Mr. LLOYD GEORGE: It has been the invariable practice, at least for over forty years, to treat a Resolution of this House imposing a new tax or renewing an old one as binding upon the subject until the Finance Bill of the year has been carried
    1522
    through and passed. There has been no legal decision on the subject at all, and it is doubtful whether, when it comes to be challenged, the Law Courts would accept that practice as binding on individual subjects. I think it is highly desirable that the practice, within limits, should have the effect of law; otherwise the Chancellor of the Exchequer who wished to impose a new tax would be placed in a very embarrassing position. If an indirect tax is put upon any commodity that tax has to come into operation immediately. At any rate that has been the practice of the Custom House up to the present. If an extra penny is put upon tea, or if the Sugar Tax is imposed, it is collected immediately at the port the very following morning. Unless that were so very serious consequences would ensue as far as that tax is concerned. Take the Sugar Tax.
    Lord ROBERT CECIL: That is a permanent tax.
    Mr. LLOYD GEORGE: I believe so; it was a new tax imposed a few years ago. This is purely a case where I think it is right to regularise it. Take the Sugar Tax. Supposing the decision of the Courts went against us, what would be the effect? Suppose the Chancellor of the Exchequer

    1523
    proposed in his Budget statement to put a tax of 4s. 2d. per cwt. on sugar as a War Tax, he would have to secure not merely the dispensing with the Standing Orders to carry his Resolution, but he would have to get the Report stage and to carry the Finance Bill in the course of a single night. Otherwise sugar would be imported to such an extent to this country that the Sugar Tax would be perfectly worthless for at least a year or two. That is a very serious thing with regard to war taxes, because they are generally levied to raise revenue for immediate purposes. Take the case of a tariff. If you had a tariff to impose you would have to carry your Bill and suspend the Standing Orders, not merely to carry your Resolution, but to get the Report stage through in a single night. Otherwise you would be in the position of waiting until there had been a long discussion upon it, and in the meantime the things you proposed to tax might be poured into the United Kingdom to such an extent that for, at any rate two or three years, the tariff would produce no revenue at all. I need hardly say that is not the special reason that appeals to me, but I think it my duty at this moment to propose to the House of Commons that the matter should be regularised. I know one objection will be that if a Resolution of the House of Commons is to have the effect of law, then the Chancellor of the Exchequer need not proceed with the Finance Bill at all; and, if he can proceed by means of a Resolution, he can postpone the Bill indefinitely. I agree that would be a very serious objection.
    Lord HUGH CECILmade an observation which was inaudible.
    Mr. LLOYD GEORGE: That depends on the form of the Clause. This is purely a Resolution to enable me to bring the Clause in, and as the Noble Lord knows very well a Resolution is always drawn in the widest possible terms. It will depend on the form of the Clause. I propose in the Clause that the Resolution shall only be binding if the Finance Bill becomes an Act of Parliament before 31st August, so that will be an improvement at any rate on the present practice. I thought that would appeal to hon. Gentlemen opposite and to the hon. Baronet the Member for the City (Sir F. Banbury). That will be a guarantee if the Clause is incorporated in the Finance Bill in the form in which we propose it that the Finance Bill will be pressed through before 31st August,
    1524
    because after 31st August we propose that the Resolution shall have no effect at all, and the taxes would not be collected under it. As far as those two taxes which are temporary taxes it would be a very serious thing for the revenue if the Bill was not passed by the 31st August. The Clause would be a guarantee that in future before the 31st August the Finance Bill would become an Act of Parliament. That is one limitation which we propose. Subject to that I propose that we should be empowered to introduce into the Finance Bill a Clause regularising the procedure which has been followed by Parliament at least for forty years, and I think it goes back very much further than that, although I am not quite certain, by which Resolutions of this House have the effect of law until the Finance Bill is carried and becomes an Act of Parliament. If the Finance Bill is not carried, then it is always to be assumed that the Resolution falls to the ground. I think in 1909 that practice was followed when Parliament was dissolved without the Finance Bill becoming an Act of Parliament, and we only collected the taxes with the general assent of the trades concerned. The Resolution is moved, and I have just explained why we have taken that course at the present moment.
    Mr. AUSTEN CHAMBERLAIN: By the courtesy of the Chancellor of the Exchequer I had the opportunity of seeing the terms of this Resolution, an opportunity which, of course, my hon. Friends have not had, and which under the particular circumstances under which the decision of the Government was taken, the Chancellor of the Exchequer was not able to afford in anticipation of this Debate. I therefore have been able to give it some attention, and to consider its bearing upon our financial procedure, but I am sure that the Chancellor of the Exchequer and the Government will understand that it is difficult for any large body of Members in the House to deal properly with a question of this kind brought before them suddenly and practically without notice at so late a period of the Session. If we are to deal with this matter now we have got to deal with it within the space of a few days. It would be rather a different proposition had we had it mentioned at the time the Budget was introduced, and had we had normal time for its consideration. What has given rise, or perhaps I had better say, who has given rise, to the proposal which the right hon. Gentleman has made.

    1525
    For many years Mr. Gibson Bowles sat as a Member in this House and was a most watchful and vigilant guardian of the proprieties of finance whichever party was in office. More than once by his knowledge of our practice he proved himself extremely inconvenient to the Government which happened to be in office, whether it was one which he supported or not. But he came to be recognised, and rightly recognised, as an authority upon financial procedure and as a jealous guardian of the old traditions and the statutory procedure which governs such financial business. This Resolution, of course, owes its birth to him. He is no longer a Member of this Assembly, but I am not sure that our procedure now is not the greatest tribute that has ever been rendered to his influence, and that this may not be considered as a red-letter day for him. It is true, as the Chancellor of the Exchequer has said, that for many years, for two generations, at any rate, I should think, it has been the custom to treat a Resolution passed in Ways and Means for the imposition of taxes as having provisionally the force of law until it is decided upon by the House. If it is subsequently embodied unmodified in the Act of Parliament, no alterations are required. The money that was intended to be raised has been collected with the least possible disturbance, and it remains in the Treasury into which it has been paid. If, on the other hand, at any subsequent stage of the proceedings, the House chooses to reduce or to reject the proposed tax, any money that has been collected has, of course, to be returned to the taxpayers from whom it was taken. That has been our practice, and I suppose it would have continued to be the practice and would have remained unchallenged if that licence, allowed to the Treasury without statutory authority, because it was for the general convenience of everybody, of tax-gatherer and taxpayer alike, of the trader as much as of the tax-gatherer, had not been grossly abused by the present Government. As long as the passage of the Finance Bill followed without abnormal delay upon the passage of the Resolution, it was not worth anyone's while to challenge the authority of the Resolution, because in all probability before his case had come to trial the Bill would have passed and the tax, the legality of which he was questioning, would have been sanctioned by Parliament.
    Mr. BOOTH: By both Houses?
    Mr. AUSTEN CHAMBERLAIN: By both Houses. I think that that is no longer necessary, but it does not affect the question now before us. It must still be sanctioned by one House and it must still have the sanction of the King before it has the force of law. It is because in recent years, in pursuit of entirely non-fiscal purposes, the Government have delayed the passage of the Finance Bill until as late as December, the very last month in the year, that the legality of the practice has now been challenged. Though I can understand that the Government do not wish to say so, I think I may be perfectly frank with the Committee, and say that this fact that the Government make a proposal of this sort is in truth an admission that they know they cannot successfully defend the case which Mr. Bowles has brought against them. I do not ask the Attorney-General or the Government to give me their assent to that statement; there is every reason why they should not commit themselves to it. But unless there was at least the gravest doubt in the mind of the Government as to their power to defend that action successfully, we should not have been troubled with this Motion at the present time.
    Now on the merits of the question. I speak with the responsibility of one who has held the office of Chancellor of the Exchequer and of one who has had to make alterations in the taxes of the country. The Chancellor of the Exchequer dwelt only on changes in indirect taxation, but, of course, the Resolution applies to Income Tax also. The two things, however, do not stand on quite the same footing. Let me deal first with direct taxes, and in particular with the Income Tax. I think I am right in saying that no loss would fall on the revenue in respect of Income Tax if you had not power to act on the Resolution charging the Income Tax the moment it was passed, provided when the Statute was passed the tax was imposed as from the date of the Resolution. I think that is so. There might be some difficulty in the collection; but in the main the objection to the procedure is not so much a revenue objection as the objection that it really is not a convenience to the taxpayer that he should have dividends and so forth, which he is accustomed to receive after the deduction of the Income Tax, paid to him in full, only to be called upon thereafter to make a return to the revenue of all such dividends and to pay out again the Income Tax which has not been

    1527
    collected at the source. That, I think, is a matter of general convenience as a general practice. At the same time it is not as critical as is the case of an indirect tax. There, as the Chancellor of the Exchequer has rightly said, in many cases unless your Resolution takes effect at once, you will have a gigantic loss of revenue. You may indeed ruin your hopes of revenue for the year in which the tax is imposed. In addition to that, you will cause an unnecessary disturbance of trade, to which above all the traders would take exception. It is just the fact that they did not want this disturbance of trade which led traders, when there was no authority for the Tea Duty in 1909, to combine to pay voluntarily in order to avoid any such upset of the ordinary routine of the trade. The exact proposals of the Chancellor of the Exchequer must be seen in print and carefully examined in order that we may know whether they are suitable or not. But I think it is clear that if Mr. Bowles' action is successful some action must be taken by the Committee in order to make it possible to deal with our indirect taxes in future; otherwise you will not be able to touch them, either to raise or to lower them, without the gravest disturbance to the trade and without possibly losing for the revenue a large part of the benefit which you hoped to derive in the year in which yon made the alteration.
    In these circumstances I certainly shall not oppose the Motion, and if the Clause appears to me to carry out well the object with which it is drawn I shall not oppose the Clause either. What we are asked to do, as I understand it, is to legalise a practice which has been followed by general consent for at least forty years, because it has been found generally convenient, and equally in the interests of the taxpayer, of the revenue, and of the trader. But in making legal that which has hitherto been done without the sanction of law, the Chancellor of the Exchequer proposes—and this is an essential feature in his case—to put a limit on the time during which this sanction shall be given to a Resolution such as has not existed at all hitherto, and thus prevent a recurrence in other hands than his of the financial scandals which have marked his tenure of office. I am glad that the Chancellor of the Exchequer has at the present time no intention of sinning again. [HON. MEMBERS:
    1528
    "Oh, oh!"] Hon. Members need not be anxious; I am not going to give an undue testimony to his character. Therefore as he is willing to prevent any one sinning as he has sinned, I think we had better take advantage of this temporary frame of mind, and before he falls again into temptation we had better put it out of his way to yield. There is one further condition that must be observed. Nothing we do now must be retrospective. In particular it must not prejudice the issue of the litigation which is before the Courts. That, I think, will be accepted by the Government at once. Clearly it would be a gross act of unfairness to intervene in the middle of a part heard case in order to produce a different result to what otherwise would accrue. Subject to that, and provided that proper limits are put to the use of the authority, I am not able to see any other more satisfactory way to deal with a situation for which some remedy must be found, if traders, taxpayers, and revenue authorities alike, are not to be put to great inconvenience and loss.
    1.0 P.M.
    Mr. LEIF JONES: The right hon. Gentleman opposite said that he had had the advantage of seeing the Resolution which the Committee are at present discussing. So far as I know he is the only Member of the House, outside the Government, who has had that advantage. We are placed in an exceedingly difficult position in having to discuss a Resolution of this kind without the smallest notice at all. A constitutional question of the first magnitude is raised by this Resolution, and, although it is not the custom to place Resolutions on the Paper in Committee of Ways and Means, still, in view of the exceptional nature of the Resolution proposed, I think the Government might have placed it upon the Paper. The view that the House of Commons might have been in this matter taken into the confidence of the Government is not confined to the other side of the House, because I do not think anyone can doubt that a constitutional issue of great extent is raised. We all recognise the practical inconvenience that will arise, if it should be decided that a Resolution of the House of Commons, in regard to the year's finance, is not to have the force of law in the months between April and October. But if that point is in doubt, and if you are going to legislate—as you are—in regard to it, it does seem to me to be most inconvenient

    1529
    that with litigation actually pending in the Courts we should be called upon, within three or four days, to place a Clause in the Finance Act which is to affect the point raised in that case. It is all very well to say that that case is not going to be touched, and that it will be decided independent of whatever Clause may be included in the Finance Bill. But for that case it is quite clear that the bulk of this Clause would not have been put into the Finance Bill. For my part I still cannot see why the Government should not have ascertained what the law on this matter is! I quite agree that if it is true that Resolutions of this House, having properly the force of law during the months from April to October, do not suffice, then it is necessary that we should take some steps to meet the practical inconvenience entailed. But I am not convinced they have not the force of law. It has been the unbroken practice for a, very long time that the taxes should be collected on the present basis. I do not see why the House should assume that that practice is against the law, especially without any decision of the Courts, and, because the matter has been raised that we should proceed to admit that we have been in the wrong in past years, and in a hurry and in a panic seek to legislate! Why should the date fixed be 31st August? If we have been right—and I am not willing for a moment to concede that we have not been right—the Government are actually proposing a limitation of our present powers. If we have been wrong, there may be something to be said for putting in the date; but the Resolution, as I understand it, will impose a limitation upon the powers of the House instead of an enlargement, which I understand to be in the minds of the Government. It is a very unfortunate thing that we should legislate without knowing the exact position in which we stand. Admittedly we do not know. Mr. Gibson Bowles' case will test the position in which the House does stand. For my part, I still think the Government would have done more wisely to let that case go to a decision, and let the House know where we stand. No practical inconvenience would have arisen this year. We are not going to touch the particular case raised, and before that case is decided no doubt that the Finance Act will be the law of the land. Therefore, the question for this year is a dead issue. I am told, in an interruption, that it is
    1530
    necessary to decide this question before the Resolutions of next year are brought forward. But this year we are in the exceptionally happy position of having an Autumn Session. If it should be decided that Mr. Gibson Bowles is in the right, and that the Resolutions of this House have not the force of law, and that therefore the taxes should not be collected upon the Resolutions of the House, there will be nothing to prevent the Government bringing in a one-Clause Act and carrying that into law. If there appeared to be too much time taken up with this, I would waive the objection which I have to the guillotine, and, so far as my vote goes, allow the Act to go through on a strict time-table. That would seem to me to be the better procedure, and it would have the advantage that we should have two or three months to consider the position in which the House was placed. I still hope the Government will be open to argument upon the question, and that we shall not be rushed into hasty legislation.
    Sir FREDERICK BANBURY: I have been very much impressed by the arguments of the hon. Gentleman who has just sat down. I do not agree with my right hon. Friend below me: if I had had the opportunity of reading the Resolution I might—although I do not think so—been convinced of its necessity. The position we are in at present is perfectly clear. The Finance Bill of the year is going to be passed within about a month. Therefore this Resolution, so far as this year is concerned, is absolutely useless. During the last six years we have had very many instances of the bad effects of hasty legislation, and I should have thought hon. and right hon. Gentlemen opposite would have paused before assenting to this most important question that could come before us this Session without the slightest notice of the Resolution having been given. I did not know at ten minutes to twelve o'clock that this Resolution was going to be proposed. My right hon. Friend (Mr. Austen Chamberlain) says it is going to alleviate the dislocation in trade. In connection with the Budget of 1909, the right hon. Gentleman said the traders voluntarily paid the Tea Duties. That statement by the right hon. Gentleman was the most powerful argument against the Resolution put, forward since the Debate began. I think it is quite evident that up to three or four years ago everyone knew the Resolutions would

    1531
    become law and that the Finance Bill would be passed in a short time, and it would not be worth their while to refuse to pay their taxes, because in a few months they would be obliged by law to do so; and it was not until the right hon. Gentleman opposite postponed the Finance Bill to the last days of the year that any difficulty of this sort occurred. Let me say what I fear may possibly be the result. I think the Resolution this year is unnecessary. I think the suggestion of the hon. Member opposite that if it is necessary we should discuss it at our leisure, when we have time to understand it in the Autumn Session, is a good one, but I venture to say such a Resolution would be most dangerous for this reason.
    We have only today passed a Motion amending Standing Order 15 which alters the whole of the Standing Orders, and the whole object of those Orders with regard to Supply. We have done so simply and solely because right hon. Gentlemen opposite have so muddled their business, and have got into such confusion, that they cannot get their work through without doing something of that sort. It is not the first time this has occurred. What would happen next year if you pass this Resolution which the right hon. Gentleman proposes? If there is an enormous Bill concerning land or a single tax which meets with plenty of disapprobation and requires a certain amount of time, then as sure as I am here the Finance Bill will be put off. What is to prevent a small amending Bill being brought in to leave out "August" and insert "December"? I could draw a Bill the title of which would be of such a form that no Amendment would be allowed except the insertion of a particular month, and if the Chairman put the question, "That December stand part," that would be the only question that could be discussed. Only last year I was a member of the Standing Committee on the Coal Mines Bill. The Budget was coming on on a particular day, and at a quarter to four o'clock that day I proposed we should adjourn and come down to hear the Budget. The hon. Member for Mansfied opposite replied to my Motion by saying, "Nobody cares about the Budget now," and the Committee sat on. If there was some electioneering measure before the House of Commons next year the procedure I have outlined could be adopted by the right hon. Gentleman. May I say, with all due defer-
    1532
    ence to my right hon. Friend (Mr. Austen Chamberlain), for whom, as he knows, I have great respect, I am afraid on this occasion the well-known and charming manners of the Chancellor of the Exchequer has seduced my right hon. Friend into the error of supporting this Resolution. I hope it would not be very presumptuous on my part to hope that my right hon. Friend has been convinced by the arguments I have adduced. If that be so, I hope he may urge the right hon. Gentleman the Chancellor of the Exchequer to withdraw the Resolution.
    Mr. LLOYD GEORGE: When I was advised it might be desirable to deal with this matter I felt I certainly would not have dealt with it in this manner if it was a contentious matter. I felt it was not a matter that specially concerned us this year. I am not sure that it particularly concerns us next year, so far as I can foresee. It is a matter that concerns every Government, and is much more likely to concern the right hon. Gentleman opposite, for the simple reason that the sort of taxation which he is pledged to is taxation of a character which would undoubtedly be more affected by this than any taxes I am pledged to. The hon. Baronet hinted at some taxes he thinks I have in my mind. I assure him these taxes would not in the slightest degree be affected by this Resolution.
    Sir F. BANBURY: What are they?
    Mr. LLOYD GEORGE: I got up to make a non-contentious speech, and I think this would not be the time, at all events, to indicate taxes that do not in the least relate to a non-contentious atmosphere. When I approached the right hon. Gentleman opposite I approached him in that spirit, and I said I certainly should not propose it this year unless it was something that would be accepted by both sides of the House. The right hon. Gentleman was not quite sure—he know his own view and the views of his associates near him, but not the view of the Opposition as a whole. In these circumstances I should certainly not press the Resolution upon the House if I gather there is opposition. I proposed it in that spirit to begin with, and I submitted it to the right hon. Gentleman. I agree it ought to have been down upon the Paper, although it is not the practice to put Resolutions down in Ways and Means, and as a matter of fact I am the first to have established the precedent of setting down Resolutions in

    1533
    Ways and Means. I am the first to have got notice given of them and to have them printed and placed upon the Paper. It was my intention that this Resolution should have been put down, and that that was not done was due to some misunderstanding. I only say that in order to make it clear there was no intention at all to rush it, and if it is the feeling of the House that they should have more time to consider it—I am not quite sure that even now they would consider it contentious matter—if it is clear they would rather it was not dealt with now, then I will not press the Resolution.
    Mr. AUSTEN CHAMBERLAIN: I think the Chancellor of the Exchequer has arrived at a very wise decision, because in form and in substance this Resolution raises a question of very considerable importance. It is a matter which will have to be dealt with, and it is desirable that it should be dealt with in a broad and non-party spirit. I am glad that the right hon. Gentleman has decided not to press this matter.
    Mr. RAWLINSON: I think it is very likely that this Resolution will be required. I quite agree as to its importance and the risk of loss to the revenue in regard to the collection of the Income Tax. This case came before the Courts in June, and last month I asked the Chancellor of the Exchequer if in regard to this matter he intended to take steps immediately to safeguard the interests of the revenue. I asked the right hon. Gentleman whether his attention had been called to the case of Bowles v. The Bank of England, and, if so, what steps he intended to take in order to safeguard the revenue by accelerating the passing of the Finance Bill. He replied that he was not in a position to make any statement while the matter was still sub judice.The position has not changed one iota.
    Mr. LLOYD GEORGE: That is not quite so. The position has changed, and the Crown appeared for the first time in the matter this week. If the Debate on this question is to continue, I am afraid I shall have to reconsider my decision.
    Mr. RAWLINSON: My complaint is that he did not do it a month ago instead of leaving it until now.
    Mr. JAMES HOPE: I think we ought to know exactly the position we are in in regard to this matter. The greater part
    1534
    of the opposition to this Resolution came not so much from the matter it contained as the fact that it was sprung upon the House without any notice. Now the Chancellor of the Exchequer says that he will not press it. Does that mean he is not going to do anything? I think the right hon. Gentleman's speech, and the remarks made by my right hon. Friend the Member for East Worcestershire, made out a prima facie case that something should be done. A long Resolution which is somewhat difficult to follow has been thrown at our heads. Do I understand that the right hon. Gentleman is not going to renew this proposal at all? If that be so, I think it would be a mistake. I would suggest that the matter be put off until next week, when we shall have had time, to think about whether we should consider the matter further. If the right hon. Gentleman withdraws it now he may have to propose it again, and I think that will be unfortunate. I think some temporary provision ought to be made to meet the difficulty the right hon. Gentleman has indicated, and what has actually arisen ought to be carefully considered. I would like to know what are the right hon. Gentleman's intentions in regard to this matter.
    Mr. JAMES MASON: This is obviously a matter which the House ought to have an opportunity of thinking over. The difficulty which arises in my mind is in regard to the proposed limitation to the 31st August, Obviously it is necessary that the tax should be legally collected before the passing of the Finance Bill. I want the right hon. Gentleman to tell us what is to happen if the Finance Bill is not passed by the 31st of August?
    Mr. LOUGH: Is it in order, after leave has been asked, to withdraw the Resolution to discuss its details? Must not any discussion be confined to the question whether the Resolution is to be withdrawn or not?
    The CHAIRMAN: What the Chancellor of the Exchequer said was that he did not propose to press his Resolution, and I do not think he exactly asked leave to withdraw. That is why I have been allowing hon. Members to say a few words.
    Mr. JAMES MASON: I hope the Chancellor of the Exchequer will give us some indication as to how he proposes to deal with this proposed limitation of time. If that is introduced into his proposal it will create very great practical difficulties in

    1535
    some cases. What would have happened in the case of the Budget of 1909? Obviously a Budget introducing a big new principle could not be got through by that particular date, and yet at the time when the Resolutions were passed in April it would be impossible to foresee for certain that that would be the case, and therefore the taxes would be collected between April and August on the supposition that the Finance Bill would be got through. But supposing it is not got through, how are you to deal with the taxes that have been collected? Obviously in any Budget dealing with some vital change in the fiscal system that difficulty will inevitably arise, and in every case of that kind the Budget cannot be passed by the date proposed, and there will have been a collection of taxes illegally, and therefore you must have some machinery by which you can return those taxes to those who have paid them. This is a difficulty which occurred to me, and I think we ought to have some indication as to the line to be taken.
    Mr. BUTCHER: May I ask the Chancellor of the Exchequer, if this Motion is withdrawn now, will he give an undertaking that during the Autumn Session he will put down a proper Resolution dealing with this matter, or introduce a Bill regularising the situation which will have the effect of protecting the revenue on the one hand, and on the other hand of seeing that the subject is not taxed in an irregular manner? Before the right hon. Gentleman obtains leave to withdraw his Resolution will he give the House that undertaking?
    Sir COURTENAY WARNER: I think certain hon. Members opposite are under a misapprehension. This Motion cannot be put off till October because it is a proposal with reference to the Finance Bill. If you do not take this Motion now or on Monday it must stand over altogether. The usual regulations and Bills can be brought in, and there will be no necessity at all next year for this proposal. If we do not do it in this simple manner now it will only mean a longer process next year. I very much regret that this Motion has been put off. I think it is a pity that the thing is not to be settled now and done with. Although it is an alteration of the law it is one founded on a custom which has been going on for years and years, and therefore it does not make any real alteration.
    Mr. BOOTH: I do not think we are quite justified in disposing of this matter in a summary way. It seems to me that a Resolution put forward by the Chancellor of the Exchequer and supported by the right hon. Gentleman the Member for East Worcestershire must have a considerable amount of substance in it. It does seem to me rather a bold thing for a private Member to interfere with plans affecting the finance of the country which are supported by two such distinguished Members of this House. I am inclined to press upon the Chancellor of the Exchequer to pass this Motion today. It does seem to me that we could not do anything more calculated to increase the respect in which this House is deservedly held than by regularising its position in this matter. We have to consider the binding effect of such a temporary Resolution until the Budget is passed. I have not seen fit to take part in the financial discussions of the House before, but this is the one topic in which I feel greatly concerned. The first point I would like to make is that the Resolution was not put down on the Paper. I have repeatedly urged this point about our want of information of the business before the House. I have been able to secure some substantial reforms, and I should be only too thankful if private Members would support me, as I support the hon. Member for the Rushcliffe Division (Mr. Leif Jones), in asking that these Resolutions should be in print and in our hands before we have to deal with them. I might illustrate my point by mentioning the reform instituted this Session in the way of indicating on the Order Paper on Monday the Bills that are printed. The object then was the same as the object now, namely, that Members should have full cognisance of the business put before them when they are asked to vote. A very great change has taken place, and now, I think, all the private Members' Bills are in print for perusal. This is another reform of the same kind. Every new Member is struck by the fact that a considerable amount of business takes place before his eyes which he cannot grasp. He has not a copy. Here we are asked this morning to discuss a Resolution which was not placed in our hands with the Order Paper which we get just after breakfast, and I am bound to join in the protest which has been made. That is the only criticism I venture to make.
    The Resolution seems to me to have this effect. It endorses and regularises what is the long-established custom. Refer-

    1537
    ence was made by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) to the fact that a law suit was in progress, and he hinted that the decision was likely to go against the Treasury. That was received with cheers by the entire party opposite. For once they forgot they were the constitutional party. I ask hon. Members opposite just to reflect upon their conduct this very afternoon. This is the state of the law. It has been the case during Conservative and Unionist Administrations, and these Resolutions have been passed and have been taken to have the binding force of law. Immediately it is suggested that the decision in a case now pending may cause us to change our procedure, it is received with the broadest cheers by the champions of law and order, and particularly by those hon. Members who resist every change which is in the nature of progress. How can the Opposition excuse their obvious jubilation at the suggestion that the Treasury was going to be defeated for following a precedent established by the Conservative party? If there is going to be any unfortunate result it will equally be a reflection upon the Treasury as conducted by the Conservatives as it will be upon the Treasury as conducted by the party now in power. Therefore I protest against that attitude of the Opposition. I have felt it my duty to do so, and I hope we have heard the last of these revolutionary cheers from the other side. The right hon. Gentleman the Member for East Worcestershire said the custom had been in existence for forty years. I do not know whether that accounts for the cheers of hon. Members opposite. I do not know whether they suggest anything which has obtained for forty years must be wrong; but that is not the usual attitude of the Conservative party. I want to raise a point with regard to the insurance payments. There are certain payments going on under the Insurance Act between now and 31st August to which this Resolution applies.
    The CHAIRMAN: I cannot see that in this Resolution.
    Mr. BOOTH: With great respect, I indicated I was simply going to ask a question; I am not going to discuss it. I want to ask whether this Resolution does, or does not, have any bearing on those insurance payments? I gathered from the right hon. Gentleman the Member for East Worcestershire it did apply to all taxes, and, if the Opposition are right that the
    1538
    insurance payments are taxes, then it must apply to the Insurance Act.
    The CHAIRMAN: The hon. Member heard me read the Resolution, and he must have observed that there is nothing in it about the Insurance Act.
    Mr. BOOTH: Yes, I heard it read from the Chair, but, after the speech of the right hon. Gentleman, I was not quite clear whether it would apply to the Insurance Act or not. You have a copy before you and I have not, and, if you assure me that under no circumstances would it affect the insurance payments because the insurance payments are not taxes, then I accept it at once. The Income Tax, to which the right hon. Gentleman referred, is of course capable of being collected after the date. There might be a retrospective collection. It is in a somewhat diffident spirit that I disagree with the right hon. Gentleman; but I do not agree that there would not be a very serious loss upon the Income Tax if the position were not put right. You cannot collect spilt milk, and it is all very well to say with regard to the Income Tax you can take it back, but I am perfectly sure if you attempted anything of the kind a great amount of the money would be lost. With regard to the indirect taxes, we are all agreed. The right hon. Gentleman the Member for East Worcestershire protested against the irregularity caused by the delay of the Budget, and said the taxes could not be enforced until late in the year. Who are the great sinners in this respect? The Tory party who threw the Budget out in the House of Lords. It is all very well for right hon. and hon. Gentlemen opposite to reproach us and to say it is only legal to collect the taxes late in the year. That is only a small sin, if it be one, compared with their own action in inducing the House of Lords to take its fortunes in its hands and throw out the Budget for their own party benefit. Therefore, it ill lies in the mouths of hon. Members opposite to talk about such a thing as delaying the passing of the Finance Bill. Whatever delay we may have been gulity of it is as nothing compared with the crime of throwing it out by an irresponsible body. The introduction of this Resolution is well worth the trouble we are now taking. It is a good thing that we should for the first time have some recognised date as suggested. It will be beneficial from the point of view of both sides of the House.
    Viscount WOLMER: That is not the Resolution.
    Mr. BOOTH: It is part of a scheme which I think would have a beneficial effect on Members generally. We might just as well have some specific date by which the Finance Bill must be passed, as that the 12th of August should be fixed for grouse shooting and we should endeavour to get Parliament up by then. I should have thought that this was a Resolution which could have been passed unanimously, and I am sorry we shall not be able to pass it with the general assent of the House.
    Mr. LLOYD GEORGE: My hon. Friend has appealed to me to proceed with this Resolution, notwithstanding the statement I made in the earlier part of the afternoon. I cannot do so. As far as I can see a substantial number of Members are opposed to our proposal being proceeded with at this stage, and, under these conditions, I must adhere to the statement I have made, because it would be a departure from the understanding which I had with the right hon. Gentleman the Member for East Worcestershire on the point. Before I definitely ask leave to withdraw the Motion, I wish to answer a question. I have been asked whether I can give some undertaking to deal with this matter in the Autumn Session. It is not convenient to give an undertaking of that kind. I would point out that it does not affect this year's finance, and I cannot see that it particularly affects the finances of next year. We shall have plenty of time to deal with it later on. I now ask leave to withdraw the Resolution.
    Resolution, by leave, withdrawn.
    Committee report Progress; to sit again upon Monday next, 29th July.

  FINANCE BILL.
  Considered in Committee.
  [MR. WHITLEY in the Chair.]

  Part I.—CUSTOMS.

    CLAUSE I.—(Duty on Tea.)
    The Duty of Customs payable on tea until the first day of July nineteen hundred and twelve, under the Finance Act, 1911, 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 and thirteen, on the importation thereof into Great Britain or Ireland (that is to say):—
    Tea, the pound Fivepence
    The CHAIRMAN: The first Amendment on the Paper on this Clause stands in the name of the hon. Member for Yarmouth. He will recollect that last year he had a similar Amendment on the Paper, and on the ground that it had been discussed and divided upon in the House on the Report of Ways and Means, I ruled that he could not move it in Committee. At that time an appeal was made to me by the right hon. Gentleman the Member for East Worcestershire, and the hon. Baronet the Member for the City of London (Sir F. Banbury), to further consider the point of Order then raised. I have done so, and I have come to the conclusion that there may be cases in which the Committee may be rightly desirous, under special circumstances, of dealing again with the question, although it has already been dealt with on Report of Ways and Means. For that reason I do not propose to rule the hon. Member for Yarmouth out of order. At the same time I would point out that this matter was debated and decided on 24th June, less than five weeks ago, and I think, unless there is any new matter to be discussed, I might suggest to the hon. Member whether it is desirable to debate the question again.
    Mr. FELL: I beg to move, after the word "pound" ["Tea, the pound"], to insert the words "if grown within the British Empire, fourpence; if grown without the British Empire."
    I am obliged to you, Sir, for the ruling you have given, and I will not abuse in any way the privilege you have accorded me. But this question stands in a different position to what it did in former days, and any privileges we possess in regard to discussing matters and Resolutions and dividing on them on the Committee stage, should not be in any way curtailed, but should, if anything, be extended. What I propose is a reduction of one penny in the duty on tea grown in our Colonies and within the Empire, a reduction, in fact, upon all tea grown in the British Empire. Owing to what may be described as errors or blunders on the part of the Government and to the speeches of one or two hon. Members opposite, the time at our disposal has been shortened, and, therefore, I shall not speak at any length on this proposal, although it is one of very great interest to the whole Empire. We have experienced some difficulty in getting the exact figures of the imports of tea into this country. Many questions have been put in this House, but through the using of

    1541
    two different dates, the calendar year and the financial year, the information forthcoming has differed very considerably. But we may roughly say that the tea imports into this country from the British Empire amount to about 280,000,000 lbs. a year, and those from China and other foreign countries have grown from 20,000,000 lbs. to 40,000,000 lbs. The last figures I had were 28,000,000 lbs. They have been as high as 44,000,000 lbs., but the outstanding fact is that the imports of tea from China show the substantial increase of 4,000,000 lbs. last year, representing a larger increased consumption than the increase in the consumption of tea grown within the Empire. I hope, however, the Minister in charge will be able to give me the exact figures of the imports. I must reply to one remark made by the Chancellor of the Exchequer upon the last occasion. He said that it is the poorer qualities of China tea which are imported into this country, and therefore the poor people drink it much more than the rich. I contest that altogether. There may be some dusty China tea coming into the country, but the China tea one sees sold everywhere is a higher-priced tea than the British-grown tea. Therefore it is the tea of the rich rather than of the poor. Another point which arises is that at the present time the duty on tea is prominently before the electors of the country. It has been stated on behalf of candidates of the party opposite that they are proposing to take off the taxes on the breakfast table.
    The CHAIRMAN: That will arise on the next Amendment.
    Mr. FELL: Do you mean the Amendment for the reduction of the Tea Duty?
    The CHAIRMAN: Yes.
    Mr. FELL: My Amendment will make tea cheaper for the people of this country, because it reduces the duty on tea coming from within the Empire by a penny, and as more than four-fifths of the tea comes from within the Empire, it will affect the price. The penny reduction which I propose will go directly to the consumer. The people concerned in the trade will make slightly more than that penny profit in the reduction of the duty. Less capital will be required in the trade, and when they take tea out of bond they will require less money. They will have larger stocks for the same amount of money, or will carry
    1542
    the same stocks for a smaller amount of money, and they will be able to allow the whole benefit of the penny to the consumer. It is frequently said with regard to the reduction of a tax that the consumer will not get the whole benefit, but in this case he will. As to Colonial preference, that comes in peculiarly appropriately at the present time, as we have over here the leaders of the great Dominion which started Colonial preference, and which we are now proposing to assist by giving them something in return. Nothing could be more satisfactory than for the country to decide at the present time to give something in return to our Dominions who are giving so much to us. You may say that the preference on tea will not affect Canada, but it will affect India, and it will be a sign to our friends from Canada that we are beginning to take the first opportunity since their arrival here of showing that we propose to give some benefit to those things which are grown within the Empire. We shall be holding out a hand to those who have held out their hands to us all these years. Canada has given us this magnificent preference—
    The CHAIRMAN: The hon. Gentleman is repeating the speech his colleague made.
    Mr. FELL: I do not remember what my colleague said on the last occasion. I thought we could speak again on some subjects in this Session on another stage of the Finance Bill. If not we shall be hampered. I started by saying that under the present conditions I thought we should be given every opportunity of discussing everything in the Budget fully. Of course. I do not wish to weary the Committee with anything that my colleague said. I will conclude by saying that this is the first sign we can give to our friends that we propose to meet them. It is a very small thing, but it will be the sign of some bigger thing to come.
    Mr. LOUGH: This subject has often been before us, but I do not think it could be raised on a more untimely occasion than the present. If the Motion had been for a, general reduction of the Tea Duty there might be something to be said for it. If our finances permitted, and if there was a million to be given away, I should be ready to support the Motion to reduce the duty to the old figure. This is a proposal to introduce Colonial preference by a side wind. There could not be a more unfortu-

    1543
    nate time at which to introduce this very doubtful principle. At the present time tea growers in India and Ceylon are having the best time they have ever had in their experience. Their prices are extremely high; their dividends are high, and they are getting a good thing out of the British people. At this moment, when they are reaping this great fortune out of the trade, the hon. Member comes forward and asks for another advantage to be given to them. It is most untimely, it is quite unnecessary, and it would be a burden on our own people. The hon. Member had not the exact figures with regard to the tea trade. Perhaps the Committee will forgive me if I show briefly how the matter stands at present. It is quite true to say that a great deal of the lower-price teas are at present coming from countries other than from India and Ceylon. I believe the prices of Indian and Ceylon teas are only kept within reasonable bounds and kept from going up immensely by the supplies which are coming from the other countries. The figures show that so far as China is concerned the imports were 8.2 millions three years ago, 10.3 millions the year before last and 14.4 millions last year. Therefore there is an increase of 75 per cent, in the consumption of China tea. This great increase is due to the fact that the poor people in this country have been forced to use it. It is not bad tea, because no bad tea is admitted into the country under the Customs Regulations. They have been obliged to go there to get something to protect them from the high prices which India and Ceylon teas have reached. The figures I have given apply to the three years 1909, 1910, and 1911.
    Let us look at the other countries which would be affected. Our imports from Java in the same three years increased from 20,100,000 lbs. to 21,100,000 lbs., or an increase of 5 per cent. When we turn to India or Ceylon there has been an increase from 252,000,000 lbs. to 257,000,000 lbs., or only 2 per cent.; so that at present these
    teas from other countries are extremely useful to the consumers of this country, and they have prevented a great rise which would add pence a pound to the price of tea. I cannot help pointing out also that there are no two countries with whom it is more important for our traders to keep on good relations than the countries which would be affected if such a Resolution as this were carried. These two countries are China and Holland. I cannot speak of China as part of the Empire, but it is a foreign country in which we are greatly interested, and in which we have a Colony which flourishes greatly upon its tea exports. It would be almost as great a scandal to hit China and the trade which comes here from Hankow by a foolish proposal of this kind, as it would be, to deal a blow at Indian or Ceylon. The Chinese are great historic friends of ours, and our Colony there deserves encouragement rather than a blow of this kind. The other country which would be affected is Holland, and Holland is, next to ourselves, the most Free Trade country in the world. With the aid of English capital, they are developing tea grown from seed brought from India, and it has greatly improved in quality, and it is of great benefit to the consumers in this country. Not a shadow of ground has been given broadly for this proposal. It is almost an improper proposal to make to introduce Colonial preference by a side wind of this kind on a single question. It shocks my sense of Parliamentary propriety that it should be brought forward in this way. It is inopportune and unnecessary. There are growers who are bulging fat with the profits they are making. They are doing splendidly. I am sure my right hon. Friend will not entertain the Amendment; but I can assure him there could not be a time when it would be less necessary for the consumers of tea in this country.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 156; Noes, 221.

    Division No. 163.]

    AYES.

    [1.59 p.m.

    Agg-Gardner, James Tynte

    Baring, Maj. Hon. Guy V. (Winchester)

    Campbell, Capt. Duncan F. (Ayr, N.)

    Altken, Sir William Max

    Barnston, Harry

    Carlile, Sir Edward Hildred

    Amery, L. C. M. S.

    Bathurst, Hon. Allen B. (Glouc, E.)

    Carson, Rt. Hon. Sir Edward H.

    Anson, Rt. Hon. Sir William R.

    Bathurst, Charles (Wilts, Wilton)

    Cassel, Felix

    Archer-Shee, Major Martin

    Beach, Hon. Michael Hugh Hicks

    Castlereagh, Viscount

    Ashley, Wilfrid W.

    Bennett-Goldney, Francis

    Cator, John

    Bagot, Lieut.-Col. J.

    Boscawen, Sir Arthur S. T. Griffith-

    Cecil, Lord R. (Herts, Hitchin)

    Baird, John Lawrence

    Boyton, Jomes

    Chaloner, Col. R. G. W.

    Baker, Sir Randoll L. (Dorset, N.)

    Bridgeman, William Clive

    Clay, Captain H. H. Spender

    Balcarres, Lord

    Bull, Sir William James

    Clive, Captain Percy Archer

    Baldwin, Stanley

    Burdett-Coutts, William

    Coates, Major Sir Edward Feetham

    Banbury, Sir Frederick George

    Butcher, John George

    Courthope, George Loyd

    Craig, Captain James (Down, E.)

    Hume-Williams, William Ellis

    Roberts, S. (Sheffield, Ecclesall)

    Craig, Norman (Kent, Thanet)

    Inyleby, Holcombe

    Rolleston, Sir John

    Craik, Sir Henry

    Jardine, Ernest (Somerset, S.)

    Ronaldshay, Earl of

    Crichton-Stuart, Lord Ninian

    Kerr-Smiley, Peter Kerr

    Rothschild, Lionel de

    Croft, Henry Page

    Kerry, Earl of

    Royds, Edmund

    Dickson, Rt. Hon. C. Scott

    Kimber, Sir Henry

    Salter, Arthur Clavell

    Dixon, Charles Harvey

    Lane-Fox, G. R.

    Samuel, Sir Harry (Norwood)

    Eyres-Monsell, Bolton M.

    Larmor, Sir J.

    Sanders, Robert A.

    Faber, George D. (Clapham)

    Lewisham, Viscount

    Sandys, G. J. (Somerset, Wells)

    Falle, Bertram Godfray

    Lloyd, George Ambrose

    Scott, Leslie (Liverpool, Exchange)

    Finlay, Rt. Hon. Sir Robert

    Locker-Lampson, G. (Salisbury)

    Spear, Sir John Ward

    Fisher, Rt. Hon. W. Hayes

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

    Stanley, Hon. G. F. (Preston)

    Fitzroy, Hon. Edward A.

    Lonsdale, Sir John Brownlee

    Starkey, John Ralph

    Flannery, Sip J. Fortescue

    MacCaw, Wm. J. MacGeagh

    Staveley-Hill, Henry

    Fletcher, John Samuel (Hampstead)

    Mackinder, Halford

    Stewart, Gershom

    Foster, Philip Staveley

    Macmaster, Donald

    Strauss, Arthur (Paddington, North)

    Gardner, Ernest

    McNeill, Ronald (Kent, St. Augustine's)

    Sykes, Alan John (Ches., Knutsford)

    Gastrell, Major W. Houghton

    Magnus, Sir Philip

    Talbot, Lord Edmund

    Gilmour, Captain John

    Malcolm, lan

    Terrell, George (Wilts, N.W.)

    Glazebrook, Captain Philip K.

    Mallaby-Deeley, Harry

    Thomson, W. Mitchell- (Down, N.)

    Goldsmith, Frank

    Mason, James F. (Windsor)

    Tobin, Alfred Aspinall

    Grant, J. A.

    Middlemore, John Throgmorton

    Tullibardine, Marquess of

    Greene, W. R.

    Mildmay, Francis Bingham

    Valentia, Viscount

    Gretton, John

    Mills, Hon. Charles Thomas

    Walrond, Hon. Lionel

    Guinness, Hon.W.E. (Bury S.Edmunds)

    Morrison-Bell, Major A. C. (Honiton)

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

    Haddock, George Bahr

    Neville, Reginald, J. N.

    Weigall, Captain A. G.

    Hall, D. B. (Isle of Wight)

    Newdegate, F. A.

    Wheler, Granville C. H.

    Hall, Fred (Dulwich)

    Newman, John R. P.

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

    Hambro, Angus Valdemar

    Newton, Harry Kottingham

    Williams, Colonel R. (Dorset, W.)

    Hamersley, Alfred St. George

    O'Neill, Hon. A. E. B. (Antrim, Mid)

    Wolmer, Viscount

    Harris, Henry Percy

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

    Wood, Hon. E. F. L. (Yorks, Ripon)

    Henderson, Major H. (Berkshire)

    Pease, Herbert Pike (Darlington)

    Wood, John (Staiybridge)

    Hewins, William Albert Samuel

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

    Worthington-Evans, L.

    Hickman, Colonel Thomas E

    Perkins, Walter Frank

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

    Hill-Wood, Samuel

    Peto, Basil Edward

    Wright, Henry Fitzherbert

    Hohler, Gerald Fitzroy

    Pole-Carew, Sir R.

    Wyndham, Rt. Hon. George

    Hope, Harry (Bute)

    Pretyman, Ernest George

    Yate, Colonel C. E.

    Hope, James Fitzalan (Sheffield)

    Rawlinson, John Frederick Peel

    Yerburgh, Robert

    Horne, W. E. (Surrey, Guildford)

    Rawson, Colonel Richard H.

    Horner, Andrew Long

    Rees, Sir J. D.

    TELLERS FOR THE AYES.—Mr.

    Houston, Robert Paterson

    Remnant, James Farquharson

    Fell and Mr. Denniss.

    NOES.

    Abraham, William (Dublin Harbour)

    Cotton, William Francis

    Haslam, Lewis (Monmouth)

    Adamson, William

    Crawshay-Williams, Eliot

    Havelock-Allan, Sir Henry

    Addison, Dr. Christopher T.

    Crooks, William

    Hayden, John Patrick

    Agnew, Sir George William

    Crumley, Patrick

    Hayward, Evan

    Ainsworth, John Stirling

    Cullinan, J.

    Hazleton, Richard (Galway, N.)

    Alden, Percy

    Davies, Timothy (Louth)

    Helme, Sir Norval Watson

    Allen, A. A. (Dumbartonshire)

    Dawes, J. A.

    Henderson, Arthur (Durham)

    Allen, Rt. Hon. Charles P. (Stroud)

    De Forest, Baron

    Henderson, John M. (Aberdeen, W.)

    Armitage, R.

    Delany, William

    Henry, Sir Charles S.

    Baker, H. T. (Accrington)

    Denman, Hon. R. D.

    Higham, John Sharp

    Balfour, Sir Robert (Lanark)

    Devlin, Joseph

    Hobhouse, Rt. Hon. Charles E. H.

    Baring, Sir Godtrey (Barnstaple)

    Dillon, John

    Hodge, John

    Barnes, G. N.

    Donelan, Captain A.

    Holmes, Daniel Turner

    Barton, W.

    Duffy, William J.

    Holt, Richard Durning

    Beale, Sir William Phipson

    Duncan, C. (Barrow-in-Furness)

    Howard, Hon. Geoffrey

    Beauchamp, Sir Edward

    Duncan, J. Hastings (York, Otley)

    Hudson, Walter

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

    Elverston, Sir Harold

    Hughes, S. L.

    Bentham, G. J.

    Esmonde, Dr. John (Tlpperary, N.)

    Isaacs, Rt. Hon. Sir Rufus

    Bethell, Sir J. H.

    Esmonde, Sir Thomas (Wexford, N.)

    Jones, Rt.Hon.Sir D.Brynmor (Sw'nsea)

    Birrell, Rt. Hon. Augustine

    Essex, Richard Walter

    Jones, Edgar R. (Merthyr Tydvil)

    Black, Arthur W.

    Falconer, J.

    Jones, Leif Stratten (Notts, Rushcliffe)

    Boland, John Pius

    Farrell, James Patrick

    Jones, W. S. Glyn- (Stepney)

    Booth, Frederick Handel

    Fltzglbbon, John

    Jowett, F. W.

    Boyle, D. (Mayo N.)

    Flavin, Michael Joseph

    Joyce, Michael

    Brady, P. J.

    George, Rt. Hon. D. Lloyd

    Keating, M.

    Brocklehurst, W. B.

    Gladstone, W. G. C.

    Kellaway, Frederick George

    Bryce, J. Annan

    Glanville, H. J.

    Kelly, Edward

    Burke, E. Haviland-

    Goddard, Sir Daniel Ford

    Kennedy, Vincent Paul

    Burns, Rt. Hon. John

    Greenwood, Granville G. (Peterborough)

    Kilbride, Denis

    Buxton, Noel (Norfolk, N.)

    Greenwood, Hamar (Sunderland)

    King, J. (Somerset, N.)

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

    Greig, Colonel J. W.

    Lambert, Richard (Cricklade)

    Byles, Sir William Pollard

    Guest, Major Hon. C. H. C. (Pembroke)

    Lardner, James Carrige Rushe

    Cameron, Robert

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

    Law, Hugh A. (Donegal, West)

    Carr-Gomm, H. W.

    Hackett, J.

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

    Clancy, John Joseph

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Lewis, John Herbert

    Clough, William

    Harcourt, Robert V. (Montrose)

    Low, Sir F. (Norwich)

    Collins, G. P. (Greenock)

    Harmsworth, Cecil (Luton, Beds)

    Lundon, T.

    Collins, Stephen (Lambeth)

    Harmsworth, R. L. (Caithness-shire)

    Lyell, Charles Henry

    Compton-Rickett, Rt. Hon. Sir J.

    Harvey, A. G. C. (Rochdale)

    Lynch, A. A.

    Condon, Thomas Joseph

    Harvey, T. E. (Leeds, West)

    Macdonald, J. R. (Leicester)

    Cornwall, Sir Edwin A.

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

    Macdonald, J. M. (Falkirk Burghs)

    1546

    1547

    McGhee, Richard

    Nugent. Sir Walter Richard

    Rose, Sir Charles Day

    Maclean, Donald

    O'Brien, Patrick (Kilkenny)

    Rowlands, James

    Macnamara, Rt. Hon. Dr. T. J.

    O'Connor, John (Kildare, N.)

    Samuel, Sir Stuart M. (Whitechapel)

    MacNeill, John G. S. (Donegal, South)

    O'Connor, T. P. (Liverpool)

    Schwann, Rt. Hon. Sir Charles E.

    Macpherson, James Ian

    O'Doherty, Philip

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

    MacVeagh, Jeremiah

    O'Dowd, John

    Sheehy, David

    McCallum, Sir John M.

    O'Kelly, James (Roscommon, N.)

    Smyth, Thomas F. (Leitrim, S.)

    M'Curdy, C. A.

    O'Malley, William

    Soames, Arthur Wellesley

    McKenna, Rt. Hon. Reginald

    O'Neill, Dr Charles (Armagh, S.)

    Stanley, Albert (Staffs, N.W.)

    M'Laren, Hon. H. D. (Leics.)

    O'Shaughnessy, p. J.

    Sutherland, J. E.

    Manfield, Harry

    O'Shee, James John

    Taylor, John W. (Durham)

    Marshall, Arthur Harold

    palmer, Godfrey Mark

    Taylor, Theodore C. (Radcliffe)

    Martin, J.

    Parker, James (Halifax)

    Tennant, Harold John

    Mason, David M. (Coventry)

    Phillips, John (Longford, S.)

    Thomas, James Henry (Derby)

    Masterman, Rt. Hon. C. F. G.

    pointer, Joseph

    Thorne, G. R. (Wolverhampton)

    Meehan, Francis E. (Leitrim, N.)

    pollard, Sir George H.

    Toulmin, Sir George

    Millar, James Duncan

    Power, Patrick Joseph

    Verney, Sir Harry

    Molloy, M.

    Price, C. E. (Edinburgh, Central)

    Wadsworth, J.

    Molteno, Percy Alport

    Price, Sir Robert J. (Norfolk, E.)

    Walsh, Stephen (Lanes., Ince)

    Mooney, J. J.

    Pringle, Wm. M. R.

    Ward, John (Stoke-upon-Trent)

    Morgan, George Hay

    Raffan, Peter Wilson

    Warner, Sir Thomas Courtenay

    Morrell, Philip

    Raphael, Sir Herbert Henry

    Wason, John cathcart (Orkney)

    Morison, Hector

    Reddy, Michael

    Webb, H.

    Muldoon, John

    Redmond, John E. (Waterford)

    White, J. Dundas (Glasgow, Tradeston)

    Munro, R.

    Redmond, William (Clare, E.)

    White, Patrick (Meath, North)

    Munro-Ferguson, Rt. Hon. R. C.

    Richardson, Albion (Peckham)

    Whyte, A. F.

    Murray, Captain Hon. Arthur C.

    Roberts, Charles H. (Lincoln)

    Wilkie, Alexander

    Nannetti, Joseph P.

    Roberts, G. H. (Norwich)

    Wilson, Rt. Hon. J. W. (Worcs., N.)

    Needham, Christopher T.

    Robertson, Sir G. Scott (Bradford)

    Wilson, W. T. (Westhoughton)

    Neilson, Francis

    Robertson, J. M. (Tyneside)

    Winfrey, Richard

    Nicholson, Sir Charles N. (Doncaster)

    Roch, Walter F. (Pembroke)

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

    Nolan, Joseph

    Roche, Augustine (Louth)

    Norman, Sir Henry

    Roche, John (Galway E.)

    TELLERS FOR THE NOES.—Mr.

    Norton, Captain Cecil W.

    Roe, Sir Thomas

    llingworth and Mr. Gulland.

    Sir J. D. REES: I beg to move, to leave out the word "fivepence" ["Tea, the pound … fivepence"], and to insert instead thereof the word "threepence."
    The right hon. Gentleman the Member for West Islington (Mr. Lough) just now said that the Amendment moved by my hon. Friend (Mr. Fell) was somewhat inopportune. I think he will make the same criticism in regard to the Amendment I now propose. He spoke from the point of view of the producers and distributers of tea. I am moving this on behalf of the consumers of tea. I entirely agree with the right hon. Gentleman that the producers and distributers are doing extremely well at present. The planters and owners of tea shares are all making money, and everything with them is prosperous, but the consumers of tea are not doing better than usual, and it is on their behalf I move this reduction of twopence. A penny is overdue. The Prime Minister, when Chancellor of the Exchequer, made a reduction of a penny, following upon a reduction of twopence made by the Conservative Chancellor of the Exchequer. It has been held by every Chancellor of the Exchequer, so far as I know, and by those connected with the trade, that it is extremely difficult to pass on a penny to the consumers, and that unless you have a reduction of twopence the distributers do not pass on the reduction to the consumers. The object we
    1548
    have is to let the consumers have the benefit. The consequence, therefore, was that the reduction of a penny, brought about by the Prime Minister when Chancellor of the Exchequer, pointed to the reduction of another penny, so that twopence might be taken off the price of tea to the consumers. The right hon. Gentleman the Member for West Islington urged that this was an inopportune time for reducing the taxation on tea. I would admit that, if it was the case that the large surplus which the Government have, and which I think was improperly acquired, because it was due to under-estimating or some cause of that kind, had been devoted at the present crisis to the requirements of the Navy. If it had been devoted to the provision of an extra squadron I should not have proposed this reduction of the Tea Duty now. But as the Government first of all acknowledged that there is a serious crisis, and then said, "We will deal with it next year," and as they at first proposed to devote the surplus of £6,000,000 to something or another, I do not know what, and then finally agreed reluctantly and as an after thought to put it to the reduction of debt, my proposal is that we should leave some of the money in the pockets of the people until it is required for the provision of another squadron.
    It is for that reason I move this reduction, which will go to the homes of all the poor people in the country. It will

    1549
    make the situation easier until the surplus has been, as I think it should by ship building, converted into an equilibrium, or possibly into a deficit. I should have agreed with the right hon. Gentleman opposite had not the circumstances been of such a character as I have endeavoured briefly to describe to the Committee. I would point out how hard the present duty of 5d. is on the consumers of tea. The 5d. is got alike upon the most expensive descriptions of tea and upon the cheapest and lowest class of tea. It is not levied ad valorem.. It is not tempered to the shorn lamb. Everything is taxed in the same manner, so that the consumers of tea from China with the fine aromatic flavour to which my hon. Friend referred, and of tea from Ceylon with the rough outside leaves, which is sold at a very much lower price, pay the same duty. I admit that this taxation, which is indirect, should be preserved. I am not at all for removing it altogether. I only wish that such a reduction should be made as the financial situation allows, and that if possible that reduction should operate on behalf of the poor. If the money is necessary and has to be raised, I say that tea is a proper commodity on which to levy a duty. I would let part of the surplus money return to the pockets of the people in the way of a reduction of the Tea Duty. While on this I would observe that the Chancellor of the Exchequer was entirely mistaken when in introducing the Budget he said there has been a decrease in the production of tea in the East. He was equally wrong in describing that reduction as having taken place in consequence of the conversion of tea estates into rubber estates. What it was due to was simply the fact that large distributers felt that they would only be safe by holding larger stocks out of bond. That accounts for the difference, of which the Chancellor of the Exchequer gave an entirely wrong explanation. That is by the way, but it is an important question, which tells upon the tea taxation of the year, and it is my duty to refer to it. Upon the point of the hardship of taxing the cheap non-alcoholic drink of the country, I should like to refer the Committee to the consumption per head in 1911. The consumption per head was 6.53 lbs., which is taxed at 5d. per lb. The consumption of coffee per head was 80 lb., on which there is a tax of l½d. per lb. That is a very much lower tax than on tea, although coffee cannot compare with tea as a necessity of the people.
    1550
    In some countries it does, but in this country it conspicuously does not.
    Take the incidence of taxation on different commodities, and you find that that well-known democratic drink, champagne, is taxed 20 per cent, of the value; coffee, which I think would be entitled to more favourable treatment, is taxed 22 per cent.; British beer, 24 per cent.; but when we come to tea it is 55 per cent., and it is only brought down to that figure because the average price has risen very much lately, and, therefore, tea taxation bears a lower ratio to the selling value than it did formerly. The sale price in 1911 was 8.8ld. per lb., and still the taxation is 55 per cent. of the valuation, which is exceedingly high. Such a tax should not be charged, if it, is possible to avoid it, upon the production of British labour, British capital, raised by British subjects in British Possessions, to the extent I think of seven-eighths. This is a temperance product. Though I do not think that beer and other things are inherently wicked, yet to many hon. Gentlemen that would be a strong argument, and every argument that we can think of in this House and that commends itself in any quarter should be used in favour of the reduction of the duty on tea. Though tea is a proper subject of taxation, I submit that this is the proper psychological moment at which we can, for the present at any rate, reduce that tax. On whom does this tax fall? If there is an overproduction of tea I admit that the producer pays, but if there is an equality between supply and demand—though, if anything, I should say that the supply is rather less than the demand at present—in either case the consumer pays. The explanation is very simple. Owing to the very heavy taxation in recent years all the planters in India, from whom the greater part of the tea comes, abstained from extending and also reduced the areas under cultivation. Tea is a plant which takes five years to come into bearing, and consequently the effects of these reductions are only now being felt. So though there is a very big boom in tea, it must not be supposed that there is any over-production. Such, indeed, is very far from being the case.
    It is also the case that planters have set to work to find new markets abroad. Russia is a continually improving market, and so far from there being an over-production of tea, there is to some extent a shortage. Again, it is extremely difficult to make large extensions of tea, because

    1551
    the labour difficulties from which we suffer in this country are extending in other countries and are met with in Assam and in other parts of India where the tea chiefly grows. The result has been that the supply has not kept pace with the demand, prices are high, and the duty of 5d. per lb. makes the burden exceptionally heavy. As regards statistics, at the moment they are somewhat confused on account of the strike in the East End of London. Take another result of the heavy duty which has a prejudicial effect upon the poor in this country. Considerable quantities of the lowest class of China tea are coming in. I am not here to depreciate China tea. Far from it. I pin my own faith on Indian tea, of which I have seen most and with which it is only right to say I have some connection in some large companies. But I do not think that in the slightest degree affects my credibility as a witness, though it shows I have some ground for knowing something about it. But the kind of China tea introduced at a time of high prices in this country is the kind of tea which I really depreciate. It is a kind of rubbishy tea which they will not have in the United States of America and many other countries, which somehow gets in here because our pure food laws are not so stringent or efficient, and it is mixed with the Indian tea which comes here of all kinds, mostly of good quality, but certainly of superior quality to that class of China tea of which I speak. It is mixed with the better teas of India and Ceylon, and thus reduces the price of tea at the expense of the stomachs of the poor in this country. The tax on this low class tea runs up to cent per cent of the value, which further emphasises the inadvisability of taxing up to the hilt an article which is so absolutely necessary to the poor of the country. I call the Prime Minister as a witness in favour of this Motion. Speaking at Cinderford in 1903 he said:—
    "I do not hesitate to say that it is the duty of the Chancellor of the Exchequer to set to work at once to effect, as I believe he might easily effect, such reductions in the expenditure of the country as would enable him to withdraw with the shortest possible delay one-third of the Tea Duty, which was always intended to be a temporary burden."
    That was what the Prime Minister, not then Prime Minister, thought it was a good thing for a Unionist Chancellor of the Exchequer to do. It would be interesting to know what would be the right hon. Gentleman's comment in office on his own words out of office. I come to his own action in
    1552
    office, to which I raise no objection. The term of office of the right hon. Gentleman as Chancellor of the Exchequer compares so favourably with that of his successor in this and all other respects that I am exceedingly unwilling to say a critical word of anything done by him. I wish that he had remained at the Exchequer. In 1906, as Chancellor of the Exchequer, he said:
    "Tea has become to the mass of our people a prime necessity of life, but it is still by far the highest in proportion to its value of all the taxes levied on articles of food."
    It is quite needless therefore for me to argue that tea is an article of food. The Prime Minister has admitted it. It would be superfluous for me to point out that the tax on this article of food is an excessive proportion of its value. We have a speech from the Prime Minister admitting that and urging on the Chancellor of the Exchequer the necessity of a reduction. But he never urged it upon his own Chancellor of the Exchequer. He unfortunately relinquished that office and passed it on to the present holder, after taking off only a penny, when, judging by his own words and by all the necessities of the case, the least remission made should have been twopence.
    I think that those who claim with such insistence to be the friends of the people in the most special sense, with a capital "P" and a very large "F"—should remember that the Chancellor of the Exchequer on this side courageously took off 2d. immediately after war time because he sympathises with the sufferings of the people, and also because he knew, as the Prime Minister knows very well, that a penny really only disturbs the distributer, puzzles the producer, and does not benefit the consumer. Therefore I say that 2d. should be taken off instead of the usual penny; I maintain that is the action which should be taken. The Tariff Reform, which I profess, and which I believe is professed on these benches, distinctly implies and involves the reduction of the Tea Duty. That is a fact which should be well brought home to the electorate of this country, which is perpetually being deluded by crazy and dishonest schemes for further spoliation of particular interests which do not find favour in certain quarters. I say it would be only fair to the electors that they should be distinctly informed that the reduction of the Tea Duty is an integral portion of that Tariff Reform which, I understand, is professed on these benches, and which I at any rate profess. It would

    1553
    be quite impossible to make any change in our financial provisions at the present moment which would be more beneficial to the poor of this country than that which I now suggest. The Chancellor of the Exchequer on occasion is fond of quoting a text in the Bible about poor people:—
    "Blessed is he that considereth the poor."
    We must all feel that, but I cannot help recollecting, whenever I see that text, another text about the man who:—
    "Lieth in wait secretly to catch the poor; and he does catch the poor when he draweth them into his net."
    I want to see the 5d. reduced by 2d., and I should be exceedingly glad to hear any hopeful words from the right hon. Gentleman opposite. In the present financial position of the Government, with their very large surplus, I submit that, if they do not devote it to increasing the Navy in this time of crisis, instead of keeping it in their hands, some of it might have gone into the pockets of the people. I believe that the true theory of Government is to interfere with the people as little as possible, and to leave as much of their money in their pockets as possible. But that is a theory exactly contrary to the principle which animates the present financiers who are in charge of the finances of this country. I believe, however, that it is the one and only true principle on which to act, and they have an opportunity now of putting it into practice. We should remember how much smaller are the duties which are levied in other countries, and also that other countries are levying duties upon the produce of foreign counties, whereas we are levying these duties upon our own produce. That is a wrong principle, whether the Government be a Free Trade, a protection, or a fair trade Government, or whatever be the colour of its financial views in this respect. I am myself susceptible of criticism, and it might be said that I am a man interested from the producers' point of view. I am well aware of that fact, and it is for that reason I have taken very great pains to explain myself in urging that at this moment such a reduction as I advocate is required.
    I urge it solely on behalf of the consumer. I represent a great many poor people in my Constituency, and I know of nothing that would be more grateful to them than this reduction of the Tea Duty. How often does it happen that the Government is in a position in which it is rolling in money, and has to pay more debt than it wished to pay, or intended to pay —certainly more than it intended to pay—
    1554
    simply because it does not know to what purpose to devote its immense surplus. I urge the Government as strongly as I possibly can to devote some of the money—I do not care for the cant about a free breakfast table—to reducing the duty on tea, which is the great breakfast, and often the dinner beverage of the majority of the poor of this country. I do not go into any cottage at any time of the day without seeing that the one drink is tea. People drink it; they make it into a stew, they boil it until it becomes extremely noxious, and they do this because tea is so expensive that they cannot afford to drink an infusion of it which is beneficial and not harmful. Hon. Members talk about the poor, yet here we have tea which is being misused until it becomes as noxious as opium or whisky. Poor people are driven to boil it and stew it until the black tannin becomes a source of mischief, and all this because they have to pay a very high price for their tea owing to the duty which is imposed. Why do the Government not take up this matter and bring some comfort to the homes of the poor, instead of talking perpetually about what is to be done? Here is a chance of doing some little concrete good upon the spot. I am very well aware that this subject comes annually before the Committee, and I am very unwilling, though I have other arguments, to reproduce them at greater length. It is a subject in which I am very much interested, but out of consideration for the feelings of the Committee I do not dwell upon it further than to submit the Amendment, for reduction of the duty, which I have on the Paper.
    Mr. D. MASON: I feel myself in rather an unfortunate position, because with a great deal of what the hon. Gentleman opposite has just said I am in entire agreement. Nothing would give me greater pleasure than to support the proposal of the hon. Member, but I think we are bound to consider what would be its effect in regard to the Budget Bill as a whole. The hon. Gentleman told us of the necessity for economy. It has struck me, and I have no doubt others on this side of the House, that while hon. Gentlemen opposite are very enthusiastic economists, there is one subject in their advocacy of economy which they always exclude from their contemplations, and that is economy with regard to the question of armaments. I am afraid that we cannot have true economy unless we are prepared to apply economy all round. If you insist as to the necessity of these armaments, then they have got

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    to be financed somehow. Hon. Gentlemen opposite, who are always so enthusiastic about that expenditure, qualify their enthusiasm by moving this Motion. It reminds me of the story of the time when Sir Robert Peel brought in his Free Trade measure and when he received a letter from a correspondent in Scotland, who, while congratulating him on that great measure, pointed out that there was one industry requiring Protection, i.e., that of curing fresh herring. Hon. Gentlemen opposite must face this question in its entirety, and if they wish to deal with extravagance they must do it all round. In view of the prospective liabilities of which we have heard for the past few days we cannot, however much we might wish, do away with this tax, although I agree with much of what the hon. Gentleman has said, and although I am sure many Members on the Labour and Liberal Benches sincerely desire to relieve the poorest in the land of this burden. I do not say that we claim to have a monopoly of sympathy with the poor, but the hon. Gentleman must, to be consistent, look at this question in its financial aspect as well as in its sentimental aspect. It seems to me that if we are to have this expenditure that it is right that all sections of the community should be willing to pay their proportion of the charge and face it in their taxation. That is the only thing that will ever teach the people that if they insist and support either Government in this expenditure they must be prepared to pay their share of it. Some of us believe that you could get adequate defence and more moderate expenditure by means of a financial reserve, which I think would give you the same security.
    The DEPUTY-CHAIRMAN (Mr. Maclean): I think the hon. Member is ranging quite wide of the Amendment.
    Mr. D. MASON: I bow to your ruling. My point is if you wish to bring about a reduction in the Tea Duty you must also have regard to its effect on your finance. We on this side are unable to support the very admirable proposal of the hon. Gentleman. I wish we could support it, but we cannot do so, because we feel that in view of the present financial position of the country the continuance of the duty, in view of the increasing liability adumbrated to us, is absolutely necessary. At the same time I would like to see a reduction of the tax, and I, for one, believe
    1556
    if the Chancellor of the Exchequer had come forward with the reduction, in view of the fact of having a surplus of £6,500,000, he might have got an increased income. It does not necessarily follow that when you reduce the duty you reduce the revenue, because the reduction in price often stimulates consumption. People, instead of using tea over and over again because it is at a high price, would use more of it if the price was reduced and would thus increase the revenue from it. If you could so adjust your tax as to lead to improved consumption you would not suffer in revenue and you would at the same time benefit the health of the people.
    Mr. NEWMAN: I confess I have a certain amount of sympathy with the right hon. Gentleman who will reply for the Government in support of this tax. The Chancellor of the Exchequer in proposing and imposing this tax imposes a tax which is thoroughly hated and disliked all over England, and necessarily so. I suppose there are about five million breakfast tables, and therefore to say that this is a tax on a luxury is ridiculous. It is a burden and tax on the average citizen of the country and a very unfair burden. The hon. Gentleman who has just spoken challenged us when we criticised this tax to tell the House where we are to get an equivalent revenue. Curiously enough the Financial Secretary to the Treasury in the Resolution in Committee of Ways and Means threw out the same challenge and asked us where could they get the revenue which they derived from this tax. In supporting this Amendment I suggest to tax luxuries and not necessities. It has been said of us that we want to tax the poor man's loaf and not to tax luxuries. Can the right hon. Gentlemen opposite say that tea is a luxury? Tea is a necessity. Can they honestly say that they have looked around the whole scope of taxation and that there is not a single luxury which they could tax and by which they could remove the tax on tea? The term "luxury" is of wide definition. Are there no amusement they could tax and thus take off this hateful tax on tea? After all that is not a new or novel idea. Some of us in this House have been lately perhaps over to France and to the theatres in Paris. We pay our money to go into those theatres, but we pay something else. We pay 10 per cent, of a tax, which was referred to by the Postmaster-General when he was defending his

    1557
    scheme of Irish finance. Not long ago there was a certain amount of discussion about tickets of admission to a certain enclosure in a racecourse. These tickets of admission, or badges, cost on the average £3 each—£4 for gentlemen, £2 for ladies; and, as 6,000 are issued, that means £18,000. Does anyone mean to tell me that if we charged ladies and gentlemen 10 per cent, on those tickets they would not gladly pay it? Of course they would. There would get at once £18,000, money at present actually thrown away. Extend that principle to all the racecourses in the United Kingdom. If you charged 10 per cent. on the admissions to the grand stands you would raise an enormous amount of revenue. The tax would, of course, be graduated downwards. You would not charge 10 per cent. on the 2s. 6d. ring. But all sections ought to pay for the upkeep of the defence of the country; therefore, if you charged 10 per cent. on a £2 admission to the grand stand, you might charge the man in the shilling ring a penny. Then suppose you charged 10 per cent. on stalls at the theatre, letting the gallery and pit go free. That would do no harm whatever. Another tax which would bring in an enormous revenue is a tax on advertisements or posters. In France, if anybody wants to put up an advertisement for chocolate, boots, or anything else, he must affix a 25 or 30 centimes stamp. If a candidate at an election in France wishes to put up a poster, he has to pay a small tax for it. Take the poster issued by one of the papers in England at the last General Election, entitled
    "What! tax my land? If every one of those had had to pay 2½d.—
    The DEPUTY-CHAIRMAN: I did not wish to stop the hon. Member in a general reference to luxuries; but he is now going into details which, though interesting, are not in order on this Amendment.
    Mr. NEWMAN: I am glad to hear that my remarks were interesting; that, at any rate, is a compliment. I would simply point out, in reply to the challenge that we criticise the Tea Tax, but do not show how the revenue can otherwise be raised, that we are perfectly ready to, and, on another occasion, will do so. It is easy to show how the revenue can be raised in a way to hurt nobody, and in a way by which a tax which is oppressive and does harm can be remitted and great good done to the poor of the land.
    The CHANCELLOR of the DUCHY of LANCASTER (Mr. Hobhouse): I am sure the hon. Member opposite has put forward his suggestion for the taxation of tickets for race courses and theatres and of advertisements in all good faith as a new and original idea suggested to him by the example of other countries. But I do not suppose that there is any Chancellor of the Exchequer who, as the month of April has come round, has not received by the thousand letters making exactly the same proposals, the worth of which, however, examination by the Treasury and by successive Chancellors of the Exchequer has entirely failed to prove. The slightest examination will show that the supposed sources of revenue indicated by the hon. Member would not produce any substantial result at all. It was a very happy thing for this, country when, a good many years ago, the tax upon advertisements was deliberately removed, on the ground that it was a hindrance to commerce. I am sure that the present House of Commons would not desire to impose any unnecessary hindrance upon commerce by resorting to so false a financial proceeding.
    Mr. NEWMAN: What about France?
    Mr. HOBHOUSE: In my own experience I have constantly heard Frenchmen decrying and deploring the very system of taxation suggested by the hon. Member. The Mover of the Amendment explained at considerable length the motives which influenced him in the course he was taking. I am not qualified to judge of those motives, and I have no curiosity on the point. I merely take the proposal as it stands on the Paper. If the tax on tea was placed at 3d. instead of 5d. there would be a loss to the Exchequer of something like £2,500,000. That is a very serious loss for the Exchequer to contemplate in a year when, whether we like it or not, we have a heavy and increasing expenditure to meet. The hon. Member did not indicate the source from which the deficiency might be made good, and I do not know that it was his business to do so. But he claims, and I do not question his claim, to be a serious Member of the House. That being so, one would have thought that, without indicating the precise tax which might be increased in order to make good the deficiency, he would at any rate have given some indication as to how the required revenue might be obtained.
    Sir J. D. REES: I did indicate it in regard to this year—the surplus.
    Mr. HOBHOUSE: That is not taxation. The chief sources which occur to me as being open to make good any deficiency caused by the reduction in the Tea Duty are Income Tax, Death Duties, and the substitution of some other tax upon food. I do not know whether the hon. Member desires to see the Income Tax raised higher than 1s. 2d.
    Mr. HEWINS: Is the right hon. Gentleman entitled to discuss these alternatives, when we on our side are not permitted to give our alternatives?
    Mr. HOBHOUSE: As far as I understood, the Deputy-Chairman ruled that we were not to go into detail. I hope I am not going into detail.
    The DEPUTY-CHAIRMAN: My ruling was that a general reference to other alternatives was permissible, but to go into details of alternative taxation is a matter for the Second Reading stage, and not for the Committee stage on this specific tax. I admit that I allowed the hon. Member for Enfield (Mr. Newman) to go a little further.
    Mr. PRETYMAN: Is it not the custom, when the Minister in charge himself raises the question of alternative taxation and refers in considerable detail to many specific proposals, that Members on the Opposition side should be allowed to reply in the same strain?
    The DEPUTY-CHAIRMAN:I was listening to the right hon. Gentleman rather closely, but I did not understand him to go very far into detail.
    Mr. HOBHOUSE: Of course, I will follow the ruling laid down, but I would only point out that an extraordinary deficit would arise if the proposal were adopted, and that the Chancellor of the Exchequer would have to make good a loss of two and a half millions.
    Sir J. D. REES: How would that be so, seeing that the Government's own account shows an increase of six millions in the year? I dispute it.
    Mr. HOBHOUSE: I desire to maintain possession of the House. The suggestion put forward by the hon. Member for Coventry is that the effect of taking off some of the taxation which now exists upon tea would be to increase the consumption.
    Mr. D. MASON: Yes.
    Mr. HOBHOUSE: I think that is very possible. The satisfactory part of the consumption of tea is that in spite of the level of taxation there is a very satisfactory increase of tea consumption in this country. It is true, as has been pointed out in the House, that a good deal of that increased consumption is of tea not grown in India or Ceylon, but even in the case of Indian and Ceylon tea there has been a rise in the consumption which amounts, I think, within the last two years to something over 3,000,000 lbs. So that, relatively high as the duty may be—and I would remind hon. Members that it is not so high as it was left by the late Government—there has been a considerable increase in consumption of Indian and Ceylon tea, and a much greater increased consumption of China and Java tea, and of tea from the Colonies, though this latter is practically a negligible quantity. The people of this country buy increasing quantities of tea every year. Tea is no longer a luxury—certainly to the poorer households it is a real necessity. I think, therefore, we may congratulate ourselves on that fact. It is impossible to make good the deficit of revenue created if the proposals suggested were adopted. The ruling from the Chair forbids me to make any reference to any taxation of tea that might be suggested to meet such a deficiency, but it must be remembered that we have within the last ten years reduced the taxation on tea, and if the exigencies of the financial situation permitted we would only be too delighted to repeat our former process.
    3.0 P.M.
    Major ARCHER-SHEE: On a similar proposal not very long ago the Government majority fell to twenty-two. We on this side of the House are in favour of increasing our trade with our Dominions as much as possible, and if we were to reduce the Tea Duty by 2d. in the lb. we should have to at once increase our trade with India, and at any rate, that would enable India to do a better trade with us in manufactured goods. The right hon. Gentleman doubts that statement. He said last year, in discussing a somewhat similar proposal, that as India took four-fifths of her imports from another country he did not see that we should increase our exports to India by increasing our trade in this way. But the right hon. Gentleman's statement last year, that India took four-fifths of her imports from another country was quite inaccurate. As a matter of fact in the year to which he alluded, 1910, India's total imports, if you take the

    1561
    amount of specie at 4,500,000, was 1,000,000,000 rupees. In that same year, according to the Board of Trade Returns, which I must say I prefer to the right hon. Gentleman's statement, the amount of goods which India imported from the rest of the world, was 500,000,000 rupees. In other words, instead of four-fifths of her imports coming from the Mother-country it is only two-thirds, so that there is a fallacy in the statement of the right hon. Gentleman. I will read the House the right hon. Gentleman's statement, because I think it is very important. He said:—
    "India at present takes about four-fifths of her imported goods from us; on the other hand, we are by no means her best customer."
    There is another very important matter, and that is that the Indian statistics at that time, and even now, do not state the country of origin, but only the country of the shipment of the goods. The Indian Government is at present reorganising her statistical department in order to be able to give the information as to the country of origin. The President of the Board of Trade, in answer to a question of mine a couple of months ago, stated that we in this country would alter our Board of Trade Returns and try to give the country of origin instead of the country of shipment. I venture to say that if the country of origin instead of the country of shipment is put down in these Returns we should find that the exports of foreign countries to India are very much greater than put down hitherto. There is another point in connection with that, and that is that in 1906–7 our total share of the imports of India was 66.6 per cent. In 1910–11 our proportion of the imports had sunk to 61.1 per cent., that is, even less than two-thirds, and those are figures given in a lecture in March at the London School of Economics. I think, therefore, that if we could increase our trade with India we could, no doubt, get a preference on certain things in the Indian Tariff. Even without going into protection we should increase our trade, therefore this reduction of the Tea Duty would be a very great advantage. The importance of Imperial unity is admitted by everybody, and I believe that hon. Members opposite are having their eyes opened to the absolute necessity of drawing closer the bonds which unite the Empire.
    I hope that no partisan prejudice against Tariff Reform or Imperial preference will prevent them studying this subject, and seeing if they cannot do something by this
    1562
    means to increase our ties with the Empire at large. The late Secretary to the Treasury, who has just spoken, said that we had put forward no alternative by which we can raise revenue which might be lost by adopting the Amendment of my hon. Friend. The right hon. Gentleman said that the amount of revenue lost will be £2,500,000. Under the ruling which has been given from the Chair by Mr. Maclean we were told we could not go into great detail in this matter, but I think I would be in order in mentioning very briefly a method by which we could get this revenue and at the same time reduce the burden upon the poorer classes of the community. If we take the figures of last year, we find that 11,000 motor cars were imported into this country from foreign countries, and if we were to take the value of these at £5,000,000, and if we were to put an equivalent duty on to that put on by the United States—that is, 45 per cent. —we at once get the revenue which we would lose by taking off the Tea Duty. It cannot be contended that motor cars are a necessity of the poorer classes of the community; they are certainly a luxury, and I myself would far rather see a thumping duty upon motor cars than that an absolute necessity of the poor, such as tea, should be taxed. The right hon. Gentleman also said that, in spite of the heavy duty upon tea, there had been an increase of 3,000,000 lbs. of consumption. He did not mention that the total consumption in this country of Indian and Ceylon tea is something like 300,000,000 lbs., and therefore an increase of 3,000,000 lbs. is only an increase of 1 per cent. If you consider that the growth of the population is going on at the rate of 400,000 a year, it is quite obvious that the growth in the consumption of tea is not keeping pace with the growth of population. I therefore have the greatest pleasure in supporting the Amendment of my hon. Friend.
    Mr. BARNES: We have had two forma of Tariff Reform from the opposite side this afternoon, and by way of preface to my remarks I may say I am absolutely opposed to Tariff Reform in any shape. It may appear very plausible to put a tax on motor cars, but I am against Tariff Reform in the shape of a tax upon commodities produced in this country, which employ large numbers of men and women under fairly good circumstances, and therefore I am against the motor-car tax.
    Major ARCHER-SHEE: Foreign motor cars.
    Mr. BARNES: Oh, that would bring on a very big discussion.
    The CHAIRMAN (Mr. Whitley): I have not heard what took place before, but I must say my view is that it would not be in order to go into questions of that kind and questions of patting duties on motor cars.
    Mr. BARNES: I had really anticipated your ruling. I had no desire of entering into the matter in detail, but I thought I should be justified in making a reference to what was said by the hon. Member who has just sat down. That is all I desire to do. I was going on to say that the reduction of the duty on tea and, indeed, the reduction of the duty upon goods of everyday consumption by the people of the country, if that is Tariff Reform, then I am a Tariff Reformer; but let me suggest that the Opposition have no monopoly of that sort of Tariff Reform. As a matter of fact, the Government and the Liberal party have been going about the country for generations saying that they are also Tariff Reformers in that respect. An hon. Friend has reminded me of what has occurred at Crewe; if it has not figured there it has figured in a hundred other elections. The Liberal party have always been saying they are in favour of the abolition of indirect taxation and in favour of the abolition of taxation upon the breakfast table commodities. I am also in favour of the abolition of these taxes. In conjunction with my hon. Friends on these benches I have been, generally speaking, acquiescent in these taxes for the last few years, because we have been led to believe that other issues were at stake, such as the reform of the House of Lords, and so on, and therefore we have not voted, speaking generally, in favour of the reduction of these taxes. On this occasion, speaking for myself, I am going to vote in this Division strictly upon the merits, and I am going to vote in favour of the reduction of the Tea Duty by 2d.
    I listened to the speech of the Chancellor of the Duchy (Mr. Hobhouse) with the utmost attention, and in the hope that I should hear some argument in answer to the hon. Gentleman opposite. The argument of the hon. Gentleman opposite was one with which we are all familiar. We have had it put forward that these taxes are a burden upon our poor people, and I listened to the argument of the Chancellor of the Duchy with the hope of hearing some reason given by which I could
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    support the Government if it were possible to do so, but there was not a shred of argument in favour of this tax. The right hon. Gentleman told us it was impossible to make up this reduction of £2,500,000 which would be entailed by the adoption of this Amendment. To my mind it would only amount to £2,000,000, and as there would be increased trade consequent upon the reduction of the tax, the amount would be further diminished, but it is not my business to make up the £2,000,000. We are told that the Government could not make up these £2,000,000 now, but they ought to have foreseen this and have made provision for it. For my part, I say that having regard to the increased wealth of the country and the capacity of the country, I think it is the duty of the Government to relieve people from this indirect taxation upon commodities of everyday consumption and to make it up out of the increased wealth of the country. I have voted with the Government during the past six years that the tax has remained on. I have come to the conclusion not to do so any longer and I will therefore support the Amendment for the reduction.
    Sir F. BANBURY: I congratulate the hon. Gentleman on having at last arrived at an independent state. The hon. Gentleman has told us that for the last six years he has held, in the language of the Radical party, the idea of "a free breakfast table," but although holding this view in the last six years he has consistently voted against it. Now at the last moment he has come to the conclusion that he will exercise his vote upon the merits of the question. That is a striking commentary on the manner in which hon. Gentlemen opposite have hitherto exercised that privilege which the free-minded electors of this country have conferred upon them. I am also going to vote upon the merits of this question, and I am going to support the Government. For many years I sat on the opposite side of the House, and when hon. Gentlemen and right hon. Gentlemen sitting here moved a reduction of the Tea Duty I always voted against them and in favour of my own Government. Ever since I have been on this side of the House, and on every occasion, I have supported the Government when this Resolution has been moved, because I cannot conceive how any of us who sat on the opposite side and said there should be a duty on tea can consistently turn round now and vote against it. Therefore I

    1565
    intend to support the Government. I do not know whether the independence of the hon. Member for Blackfriars has been aroused because he knows that this Division will result in favour of the Government. I am always a little suspicious when hon. Members below the Gangway on the opposite side announce that they are going to take an independent attitude, and I suspect that they have beforehand chatted with the Whips as to what the result of taking that attitude will be.
    Mr. BARNES: I never have made any arrangements with the Whips in this House, and I never will.
    Sir F. BANBURY: It is possible to ask whether the Government are likely to be in a minority or not. That is not an arrangement but it is an inquiry, and it is quite possible that the hon. Member has made that inquiry. In this matter I have not acted inconsistently for the last twenty years, but I have acted consistently, and I shall endeavour to do so in the future. May I point out to my hon. Friend that you could not impose a duty of 45 per cent. Conceive what foreign countries would say about it. It is for that reason I disagree with my hon. Friend. I hope my hon. Friends on this side of the House will consider what they are going to do in supporting this Amendment. We are told, and I believe with considerable truth, that coming events cast their shadows before. There has been a shadow in this House and, if that old proverb is true, possibly something in the near future may arise. I would ask my hon. Friends to consider, in view of the enormous expenditure we are committed to at the present moment, whether it would still be possible to further reduce indirect taxation. I do not believe it would. I have not the figures, but I believe indirect taxation has been reduced by 45 per cent, or 55 per cent.
    Mr. LLOYD GEORGE: I think it is 42 per cent.
    Sir F. BANBURY: The result of this proposal would be that the poor classes would pay no taxation at all, and while they would have the power of returning hon. Gentlemen like the hon. Member for the Blackfriars Division, they would not be called upon to pay the piper owing to the foolish action of the hon. Member for Blackfriars. I hope my hon. Friends will consider a little more carefully what they are doing before they divide the Committee on this Motion.
    Mr. AMERY: I know that my hon. Friend always votes simply on the merits of a question, but this is not a question of the reduction of indirect taxation. My hon. Friend suggested an alternative form of indirect taxation, and one which would have been an advantage even from the revenue point of view on account of the increase in consumption of tea. I do not want to argue that point. The answer we give to the Financial Secretary to the Treasury is that there are a large variety of ways by means of which these £2,000,000 could easily be raised. There are various forms of indirect taxation which would not be so unfair in their incidence upon the poorest class of the population as the Tea Duty. This is a very high, and inordinately high, duty upon a necessity of the poorest of the people. My hon. Friend who moved this Amendment described it as a duty of 55 per cent., but that is only the average incidence of the duty upon all the tea consumed in this country. On the tea of the poorest classes it is a duty of nearly 100 per cent, on a necessary of life. Tea is just as much a necessary of life as wheaten bread. You may say that after all the people need not eat wheaten bread, but rice or maize, but that is not the question. The poorest people in the country consume very largely two articles, namely, bread and tea. I wish it were not so, but that unfortunately is the fact, and to make a diet of bread tolerable, you want some stimulant like tea. When I examine the Budget of the poorest of the people, I find that the weekly consumption of tea involves a tax upon them very much higher than a 2s. duty on wheat would impose upon bread.
    The Secretary to the Admiralty gave the other day the Budget of a worker in the dockyard, and in that family the duty paid on tea alone would have been enough to put a ld. on every loaf they consumed. Whatever our view on the question of Protection, we must admit that this particular duty bears enormously hard upon the poor. The right hon. Gentleman the Member for Islington talks about this being an inopportune moment for raising this question, but surely there is no more opportune moment than a time when the cost of living admittedly has enormously increased and when there is a great deal of discontent owing to that very fact! Besides all this, in the present year we have had a very considerable surplus. Further, you have just put a tax upon every working man's household expenses through the Insurance

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    Act. On the merits of the case, I think there is a strong case for reducing this particular duty, and I am glad we have had from the hon. Member for the Blackfriars Division a frank recognition, which I wish we had had from other hon. Members, that it is an essential part of the policy which Tariff Reformers advocate to remit certain excessively high duties which are at present imposed upon the necessities of life of the poorest people in the country. That has been our whole contention from the first, and it would have been a little fairer if some of our opponents, instead of raising a tremendous outcry about merely a contingent possibility of an increase in the cost of certain articles of food, had admitted the certainty and the extraordinary heaviness of the tax that is at present imposed upon food. This tax on tea is of such a character that the whole of it, and not only the tax itself, but the interest on it which the importer has to pay, does fall necessarily and certainly upon the consumer. At any rate, even by the admission of many hon. Members opposite, there is a chance—you may consider it a small chance; we consider it a certainty—that in the case of the alternative duties we suggest the burden will not fall upon the consumer; or, if it does, it will only fall partly upon him, and will fall proportionately, partfalling upon the importer.
    There is a further reason. If we reduce this duty, we shall substitute other duties which will increase production, and, if you increase production, you automatically increase revenue. It is generally reckoned that from 12½ per cent, to 14 per cent, of the cost of production goes to the revenue. For every pound's worth of any article, whether an agricultural product or a motor car, that is produced in this country, the revenue, through the Tea Duty, the Tobacco Duty, the Spirit Duty, and the Income Tax, whatever it may be, is from 2s. 6d. to 3s. richer. Our whole proposal is to lighten those duties which bear most directly and most heavily upon the poor consumer in order to shift them upon things that are to some extent luxuries, and at any rate make them fall upon the richer classes of the community. Consequently, you would get rid of duties which do nothing to stimulate production and which certainly fall upon the consumer, and you would impose instead duties which are not likely to fall upon the consumer at any rate as a whole, and
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    which by increasing production would give an increase of revenue without the need of imposing further duties.
    Mr. MITCHELL-THOMSON: I only want to add one word to what my hon. Friend below me has said in reference in particular to that portion of his speech where he contrasted the weight of this tax with the weight of possible other alternative methods of taxation. It is somewhat difficult to be met by the Chancellor of the Duchy of Lancaster telling us quite courteously he has no money. He asks us what is our alternative? We are in a great difficulty because, under the Rules of Order, we cannot suggest an alternative. The right hon. Gentleman knows perfectly well what it is, and the Committee knows perfectly well what it is. All I can say is if the right hon. Gentleman does not by this time know what our proposals are, he has shown himself very unwilling to learn. Let me take one of them. Hon. Gentlemen opposite are very much in the habit of accusing us of being food taxers. I want to put it to them, because I am sure they are anxious to look at this question fairly. Have they ever thought how this, as a food tax, compares with the food tax which any Tariff Reformer, even in his wildest moments, ever dreamt of imposing. I will make the widest possible assumption. Let us take for comparison a suggested tax of 2s. a quarter on foreign corn, and I will throw in gratuitously the assumption that the tax raises the price of every quarter of corn imported into this country.
    The CHAIRMAN: I had to call the hon. Member for the Blackfriars Division of Glasgow to order on this question, and I hope the hon. Member will not pursue the matter.
    Mr. MITCHELL-THOMSON: I will not pursue it; I will only state very shortly the conclusion. I will assume the worst possible case, and even assume the price is raised by the full amount of the duty. The consumption of corn per head of the population is six bushels, and, even if the price is raised by the full amount of the duty, that is 1s. 6d. a year. Now see what this duty on tea is? The consumption of tea in the country is 6.53 lbs. per head. Multiply that by the duty on tea, and we get a duty not of 1s. 6d. per head, but something like 2s. 8½d. per head. Now do hon. Gentlemen opposite see why I say the present system of taxation means food taxes more heavy than ever entered the head of

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    the wildest Tariff Reformer in his most wild moments. I am one of those who has all along voted consistently for the reduction of this tax. I think in principle it is an unfortunate tax. It is very unfortunate that a tax of this character should be a tax by weight and not an ad valorem tax. If even at its present figure it were an ad valorem tax the burden would fall much more lightly upon the poor. At present actually the cheaper the kind of tea consumed the heavier is the amount of the duty. Therefore, I think it is unfortunate from that point of view that it is a duty by weight and not a duty ad valorem. I only rose to point the moral of what my hon. Friend has said. I am sorry the Rules of Order do not allow us to discuss, as we are perfectly ready to do, our alternative policy, which perhaps we shall have an opportunity of settling earlier than some hon. Members think, and of thus relieving the poorer population of this country from a crushing weight of taxation which presses upon them and placing it on the shoulders of those who ought to bear it.
    Mr. LANSBURY: I rise to support the reduction for altogether different reasons from those mentioned by the hon. Member who has just sat down. I support the reduction because I am an entire Free Trader. I believe in taking all duties off all commodities of general consumption. I also do so because I am perfectly certain, if the hon. Member for North-West Norfolk (Mr. Hemmerde) were here, he could tell us a much better method of getting the money than hon. Gentlemen opposite. As far as I understand their policy—[An HON. MEMBER: "What is it?"] I believe I have no right to say, and, after the correspondence I have read in the newspapers and letters to candidates, I am afraid nobody can say. But I understand that the policy of hon. Members opposite is to take the tax off one kind of commodity and put it on another. That is just the difference between tweedledum and tweedledee. The unhappy people who use bread are to pay 1s. 6d. I want that they should pay nothing at all. There are plenty of very rich people in this country who can make up this money. The strongest reason I have for supporting the reduction, and on this I would lay particular emphasis, is because the very poor pay relatively so much more than any of the rest of us. It is one of the most iniquitous taxes on the poor, because when a person buys tea at 8d., 5d. goes straight away into the Exchequer. Is there anyone who pays
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    Income Tax relatively to his income in anything like that proportion in the shape of Imperial taxation?
    It seems to me, when the supporters of the Government are going about the country at this moment advocating a free breakfast table, and putting before the constituencies propositions for securing a free breakfast table, and when they are being supported by letters from the Chancellor of the Exchequer himself, it seems rather curious we should be debating in the House of Commons with this Government in power whether or not these things should be done. Common people do not understand it. I do not understand it. I am only an ordinary person, and when I read these letters and when I hear speeches such as I heard the other night I do not understand why a Government with an enthusiastic majority behind it does not bring into the House of Commons a proposal which would free the breakfast table of duties and impose the burden on land or big incomes. It is quite possible to raise this money in other ways, and I suggest that, in common honesty, the Government ought to withdraw at least a portion of their Budget and reintroduce it with some of those tremendous reforms that candidates in the country are either hoodwinking the people with or really desire to carry. If they mean what they say, here is an excellent opportunity for the Government to carry out a policy which at least some of them are talking about for the purpose of getting votes at Crewe and other places. I therefore propose to vote, with a great deal of enthusiasm, for this reduction of 2d., although I would very much prefer to see the tax wiped out altogether.
    Mr. AUSTEN CHAMBERLAIN: I very seldom agree with the hon. Member who last spoke, and my agreement with him on this occasion is only partial. I agree with him heartily thus far, that it is very desirable that the Government and the Chancellor of the Exchequer should square their Parliamentary conduct with their platform and epistolary utterances. The hon. Member cannot understand why the Chancellor of the Exchequer, in view of his extra Parliamentary attitude and the attitude of his colleagues, does not at once remove this duty on tea. I believe I understand why he does not, because he himself explained it in a short and very interesting speech no later than last December. What I fail to understand is why his statesmanlike utterances given expression

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    to in this House do not govern his utterances elsewhere, or affect the attitude of candidates and Members of his party when they go electioneering. What did the Chancellor of the Exchequer say about this? He said he was one of those who held that in a country like ours everybody ought to contribute something towards the national expenditure. I entirely agree with him. It is a sound doctrine. It is a doctrine which honest politicians must maintain above all things, when there is an increasing demand to use public money to help individuals or classes in the community. That is a policy which, in one form or another, is adopted by all parties in this House, but it is only tolerable if a portion of the expenditure is found by all classes in the community. It would be shameful and demoralising to the nation to teach any particular class that it might be exempt from taxation and yet free to put its hands into the public purse. If you are content to regard them as partners who are to contribute to the cost of a policy of social reform which, in various phases, we are all in favour of, although we are not agreed as to the form it should take, that is possibly a right policy. But it is only possible if it is carried out in partnership, and it is not a right policy if it is to be done at the expense of one class exclusively for the benefit of another class.
    I agree with what the Chancellor of the Exchequer said in the speech I have quoted. I am speaking from memory. If he thinks that I exceed in any way in my comments what he said in his original speech he will correct me, but I am pretty confident that I am within the mark. If it be granted that every class of the community is to pay, how are they to do so? They are either to contribute indirectly or to pay some direct tax. If it be by means of a direct tax it must be an Income Tax. I know there are theorists in finance who advocate with great force and power that the proper remedy would be to extend the Income Tax downwards. Is that practicable? Is it practicable from the point of view of the cost of collection? Are the results of our attempts to levy direct Income Tax under another name for different purposes from the masses of our people such as to encourage us to try to exact the whole of the contribution of the working classes in the form of direct deductions from their wages? I venture to say that the people concerned would themselves not approve of such a proposal, and that it would be ruin-
    1572
    ously expensive in collection. However advisable it may be in theory, in practice such a system would stand condemned by the cost of collection. If you are not to do that, if you are not ready to impose any other indirect tax, which is the attitude of the Government at present, how can they abolish or reduce the Tea Duty? The Chancellor of the Exchequer said frankly, last year, he must ask for contributions from all classes to national defence, and to the cost of carrying on the Government and the great social reform— great social measures—which are in operation. But he was not prepared, and he did not think it advisable to take any contributions in the shape of Income Tax from the working classes below the present Income Tax limit. He must, therefore, take it from such a duty as the Tea Duty. That is the answer to the hon. Member who last spoke as to why the Government do not accept this Motion for a reduction of the Tea Duty. But why the Chancellor of the Exchequer, holding that view, and speaking as the financial representative of the whole Government—I do not attempt to distinguish between his view on this matter and that of any of his colleagues, or to suggest any difference—why, while expressing that view for the whole Government they allow these totally contradictory statements to be made wherever there is a by-election I cannot understand, and I cannot help thinking that that is a matter on which the House should draw its own inferences.
    Mr. LLOYD GEORGE: The right hon. Gentleman, in the course of the very interesting speech he has delivered, appealed to hon. Members on this side of the Committee to square their platform with their Parliamentary utterances. The right hon. Gentleman has legitimately very considerable influence in the House and knows that the difficulty must be greater on his own side than on ours. If he had made that appeal first of all to his own Friends I think he would have found it very difficult.
    Mr. AUSTEN CHAMBERLAIN: I do not think there is any necessity for it.
    Mr. LLOYD GEORGE: I am afraid there is. I do not rise for the purpose of making recriminations, but to make a serious contribution to the Debate. I have never concealed my views on the subject of indirect taxation. I cannot say that I am in agreement with a good many Friends of mine on this side of the Com-

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    mittee. I hold very strong views with regard to that, but substantially I am in agreement with what the right hon. Gentleman said. He has pointed out that very considerable expenditure is being incurred by the Government of this country, partly for the protection of our shores, and partly for the purposes of social reform, which directly benefits the working classes of the country. Roughly, out of the £26,000,000 which was raised in the course of last year, about £13,000,000 goes to defence, and I think 15 per cent, goes directly to the pockets of the classes upon whom undoubtedly taxes bear heavily. I do not want to raise a large discussion on the question of direct and indirect taxation. The Debate raises a very large issue, as this Amendment is receiving the support of hon. and right hon. Gentlemen on the other side. They very naturally convert it into a Tariff Reform Debate, in so far as the ruling of the Chair permits. It is perfectly clear that they are supporting the Amendment from that point of view. They are proposing to deprive the Government of a revenue of something between £2,000,000 and £3,000,000. They must know that if this Amendment were carried today it would be the duty of the Government to find that £2,000,000 or £3,000,000 in some other quarter. They must also know that it would be quite impossible for hon. and right hon. Gentlemen on this side of the Committee to find the money in the direction they indicate. [HON. MEMBERS: "Why?"] For perfectly obvious reasons. We on this side of the Committee are Free Traders, but hon. Gentlemen opposite are Tariff Reformers. Undoubtedly they could take that line, but we could not possibly do so. Therefore, we should have to find this money in directions and by methods which would be in accordance with the general principles of finance held by Members of the Government, and by those who support them. Is that really what the hon. Gentleman who moved the Amendment and his Friends really want. The hon. Member for Bow and Bromley (Mr. Lansbury) is perfectly frank. He says: "I would put this upon the shoulders of the rich." That could be done.
    Mr. LANSBURY: Then let us do it.
    Mr. LLOYD GEORGE: But is that the intention of those who support this Amendment? It is a very serious responsibility that they are undertaking. I do not withdraw in the slightest degree from the
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    statement which I made in December last. I think that when expenditure is incurred for great national purposes, whether for social reform or defence, it is not merely the duty but the privilege of every Member of the community to contribute something towards it. It is a very serious thing to encourage the idea that all the burdens should be taken from the shoulders of one class of the community and placed upon the shoulders of the other. I have never denied that, but I have said, and I still say, that there are classes of the community who are not bearing their fair share. But I have never, whether in opposition or upon this side of the House, countenanced the idea that any section of the community should escape.
    Mr. SANDYS: On a point of Order, Mr. Whitley. You called my hon. Friend to order for putting forward his alternative scheme. Is the right hon. Gentleman in order in putting forward his alternative scheme.
    The CHAIRMAN: I do not think the right hon. Gentleman is going beyond the bounds of order.
    Mr. LLOYD GEORGE: I carefully refrained from indicating any alternative scheme. I simply said that there are alternatives within the four corners of Free Trade finance. I realise that it would be quite out of order to indicate those alternatives. What I do say is this, and I am emphasising what was said by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), that the proposition that any section of the community should escape from responsibility altogether, while having their share of power, is a very serious proposition for anybody to encourage. I will say this— and I have said it before—that I should be very glad to find some other and better method than this whereby the working classes, the least favoured portion of the community so far as possessions are concerned, should have the contribution levied upon them. I wonder whether hon. Gentlemen who are supporting this Amendment have thought out what better method there is. Theoretically, there are many better methods. Theoretically, an Income Tax like that levied in Prussia and Saxony is better. I forget what the income limit is in Saxony. I think it is about £40 a year. Theoretically that is a very much better method, but from the point of view of anyone who has the

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    responsibility of collecting taxes, it is an extraordinarily difficult method. All those who have had to get something which is in the nature of an equivalent to the Income Tax from the working classes, insurance companies, and the like, have to take it in halfpennies and pennies a week. They find it impossible to collect a substantial sum. Let hon. Members bear in mind what has been done in regard to rating. People do not pay directly, but through the landlords. The landlord pays the tax, and then collects it in weekly subscriptions.
    Sir GEORGE YOUNGER: Not in Scotland.
    Mr. LLOYD GEORGE: I was not aware of that. As a matter of fact, they had found from experience that it is impossible to collect the rate in this country except through the landlord, allowing him 20 per cent, or 30 per cent, for collection. I think that is an alternative which, at any rate, I cannot see my way for practical reasons to recommend.
    Mr. JOHN WARD: Why not look above, and graduate the Income Tax above the present rate of £5,000?
    4.0 P.M.
    Mr. LLOYD GEORGE: That is the very point I was putting. I have no doubt more money could be raised in that way, but I am putting quite frankly the other point, the question of whether certain classes of the community should escape taxation altogether, and I should think if any party in this House takes the responsibility of laying down that proposal it is a very serious one indeed. What it really means is that, whereas the bulk of the authority and power is vested in one class, the whole burden of the responsibility would rest upon another. This is not the first time I have laid down this doctrine by any means. I do not think it is a sound principle of government. I agree that the Tea Duty bears heavily on a very poor class of the population, and if it were possible to find some other means of reaching the wage-earning classes without putting this burden upon the poorest of them—I am not so sure there are not other methods, but I am certain whoever proposes them would meet with a measure of unpopularity which it would be very difficult to overcome, at least for some time. It would be worse than contributory insurance. One of the peculiarities of the party system is that the moment you do a thing of that sort
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    the party in opposition for the time being is almost driven to take advantage of any proposal of that character. The hon. and learned Gentleman is quite sure his virtue, at any rate, would be superior to any inducements of that character. I daresay they would, but my experience has not been a very encouraging one in the last year, when proposals were made by which the working classes were invited to contribute to a system which should benefit them. I think hon. Gentlemen opposite are incurring a very great responsibility when they are pressing forward proposals of this kind. The right hon. Gentleman suggested that I had said something outside which appeared to support this proposition. I am not aware that I have. I have never advocated that policy inside or outside. I think I have been perfectly consistent in that respect. I still maintain the proposition that I laid down before. I wish it were possible to find some better method of raising revenue from the wage-earning classes of the country. I do not say this is by any means the best, but whenever I look out for alternatives I feel exactly as the right hon. Gentleman does, that the practical difficulties are so great that it would be almost impossible to overcome them, and that until we find an alternative of that kind, as long as we are incurring huge expenditure for the benefit of these classes at any rate, we cannot see our way for the moment to reduce this expenditure. If revenue were so to expand that it was possible to relieve taxation, no one would be better pleased than I should. The hon. Member (Mr. Barnes) does not realise that we have reduced taxes upon food by £5,000,000 since we came into office, and although he seems to feel that in the six years he has been supporting us he has got nothing in return, he has actually got £5,000,000 or £6,000,000 for the classes he represents. That is an enormous reduction, and it is one which has occurred at the time when general taxation has gone up, so that there has been a reduction in the amount of indirect taxes and at the same time a considerable increase in the direct taxes. I want my hon. Friends to bear that in mind. An hon. Gentleman interrupted one of my hon. Friends and said, "What about the surplus of £6,000,000?" As he knows, half that is savings from the Navy, or rather spendings which will have to be incurred again, and with regard to the rest, the expenditure has gone up so much more in the course of

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    this year, more especially on the Navy, that I should be very glad if it were possible to reduce the Tea Duty, and I very regretfully say it is impossible to do so.
    Lord ROBERT CECIL: The right hon. Gentleman says we are entitled to vote for a reduction of this duty, because the only alternative we put forward is one that he cannot accept. That means that the Opposition is never to move a reduction of any duty under any circumstances, because it is quite obvious that the Government of the day would never accept any proposition except that which was contained in their Budget. Therefore I do not feel oppressed by that observation at all. He next dealt with the observations of the hon. Member (Mr. Lansbury) and the right hon. Gentleman (Mr. Austen Chamberlain) in reference to the Radical cry of a free breakfast table. He must have it one way or the other. The right hon. Gentleman writes to his supporters in by-elections with great regularity and expresses his views rather vaguely, I admit, but with considerable vigour, but there is no word of reproof for their advocacy of a free breakfast table. They are allowed to go and get as many votes as they can by advocating a free breakfast table. Then he comes to the House and says, with great emphasis and a great air of conviction, that he cannot assent even to a reduction of the Tea Duty. I do not think that is fair. Either he is duping or allowing his followers to dupe the electors in the country or he is trying to mislead his followers in this House. He said, theoretically, there were many better methods of raising a contribution to the taxation of the country from the working classes, but if they were examined none of them would answer. I am not convinced, I must say quite honestly, that that is so. I share the right hon. Gentleman's difficulty in putting the whole burden of taxation upon the Income Tax payer as he is at present constituted. I agree that it would be a very bad plan to do it even in the interests of the working classes. I do not agree with the view held of taxation that by putting it on the rich it is the rich only who pay. That has always appeared to me to be a fallacy. I believe all taxes fall ultimately on the same people. I do not believe it matters ultimately who pays in the first instance. I do not mean to say that you may not inflict great hardship on individual members of a particular class by suddenly putting a burden on those individuals, but when the taxation
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    has had time to settle down and you leave it for a certain number of years unaltered, I believe the burden of taxation falls ultimately on the same shoulders, and that it is shared, in proportions which it is very difficult to estimate, by the whole body of the taxpayers of the country. It is indeed my objection to the policy which he has constantly put forward and advocated, more on platforms than in this House, that he is going to give a boon to the poor by putting more taxation on the rich. I do not think that is practicable, and it would be very dishonest if it were.
    I dissent from the argument of the hon. Member for Bow and Bromley (Mr. Lansbury) who stated that he desires to raise the whole of the taxation of this country by putting it on the Income Tax, not only because I think it would be very unfair to existing Income Tax payers, but because it would be enacting the worst form of indirect taxation on the poor. The great objection which used to be stated to indirect taxation was that people paid it without knowing what they paid, and that therefore the burden of taxation collected in that way did not tend to turn their minds to the consideration of questions of economy, and the methods by which taxation could be made to fall more equitably. The Income Tax is really the very worst form of indirect taxation, because it is, to some extent, paid by the poorest in the country, and they are quite unconscious that they are paying it. They are paying it in lessened wages, or less employment, or something of that kind, and they do not really know that that is ultimately due to the burden on the taxpayers.
    Mr. CHIOZZA MONEY: Do I understand that we are now entitled to discuss the Income Tax on this Amendment?
    The CHAIRMAN: Of course, it would be impossible to omit altogether references to other taxes, but I think the Noble Lord, in the line he is now taking, is trenching on the discussion of a future Amendment.
    Lord ROBERT CECIL: I had almost finished that part of my argument. The hon. Member might have been a little more patient. I do not believe that the indefinite extension of the Income Tax—I am not satisfied that there should be a universal Income Tax—is the right way of raising money. I do not see that it would be practicable to collect it from the poorest, but I think myself there would

    1579
    not be great difficulty in raising it from a very much lower level of riches than that on which it is raised at the present moment, provided, of course, that it could be graduated in order to meet the hardship of any individual who had first to pay the tax. I do not see why the collection of it should be more difficult than the collection of the contribution under the Insurance Act. I observe that the Secretary to the Treasury denies that that is a tax. I do not understand the view held by hon. Gentlemen opposite as to what is a tax and what is not. It appears to me that the contribution under the Insurance Act is clearly a tax. I do not see any particular difficulty in raising taxes by collection at the source of payment. I am quite sure that if taxation could be raised in that way, if the taxes could be taken off tea and sugar, and if all indirect taxation could be entirely taken off the poorest, that would be the fairest and most honest way of raising the taxation of this country. I am not going into the other matters which have been suggested today, but I must say that I shall vote for this reduction, not because I am satisfied with all the arguments that have been adduced in favour of it, but because I am satisfied that the Tea Duty not only presses on the poorest, but is an unfair duty, because it is levied at an equal rate on all classes of tea. That does appear to me to be a duty very difficult to defend. I shall support the reduction partly as a protest against the action of the Chancellor of the Exchequer, and partly because the duty presses unfairly on the poorest.
    Mr. CHIOZZA MONEY: I wish briefly to refer to a point to which prominence has been given by the Noble Lord who has just sat down, and my right hon. Friend the Chancellor of the Exchequer to the point whether it is wise and politic to exempt altogether from taxation of any kind those who have very small incomes. That is the point which is really involved in this discussion on the Tea Duty, and I understand that the Chancellor of the Exchequer was entirely opposed to the idea that we should exempt from taxes those who were very poor. That, I think, the Noble Lord agreed with.
    Mr. LLOYD GEORGE: What I said was I am opposed to exempting the wage-earning classes from taxation for national purposes, but I did not apply this to the very poor.
    Mr. CHIOZZA MONEY: It is all a matter of what we mean by the very poor. I submit that while the Chancellor of the Exchequer is entitled to claim every credit for the reduction of indirect taxation, and, further, for the point that he made that not only has indirect taxation been actually increased, but its proportion to the general body of taxation has been reduced, which is even more important, at the same time the further point arises, are we doing enough to relieve from taxation the wage-earning classes. I am very sorry to find from what has been said in several quarters that it is supposed to be a new principle of taxation that a certain part, at any rate, of the wage-earning class should be relieved from taxation. But that is not a new point. It is not a new Socialist doctrine, as is so often thought. On this point, may I give a short quotation from John Stuart Mill, who wrote in 1848. He had been explaining, what is obvious to everyone now, but was not so obvious then, that the incidence of £5 taxation upon a small income was very much greater than the incidence upon a larger one, and he said:—
    "The mode of adjusting these inequalities of pressure that would seem to be the most equitable is that recommended by Bentham, of leaving a certain minimum of income sufficient to provide the necessaries of life untaxed. The exemption in favour of the small income should not, I think, be stretched further than the amount of income necessary for life, health and immunity from bodily pain."
    There we have, in 1848, Mill quoting Bentham, the founder of modern Liberalism, that small incomes should be altogether relieved from taxation. I believe that the same principle has been traced further back still and can be attributed to even older authors. It only remains then for us to decide what is the minimum income which is necessary for life, health, and immunity from bodily pain.
    Mr. BARNES: On a point of order. I submit that the question of exemption from taxation of very poor people is quite outside the scope of this Debate, because it would still leave poor people subject to taxation.
    The CHAIRMAN: My impression is that each Member who has contributed to the discussion has taken it one bit further. The hon. Member for Blackfriars was one of those who did that. I think that I must trust to hon. Members. I understood the hon. Member was putting his point quite briefly, and I think it would be unfair to stop him in his reference to what was said by the Chancellor of the Exchequer.
    Mr. CHIOZZA MONEY: I simply wanted to put the point briefly after what the Chancellor of the Exchequer has said. It only remains to decide what should be the minimum wage, but I would point out that the only plea for exemption from the Tea Duty must be on the ground that small incomes of the kind referred to ought to be exempt from taxation altogether. It is on that ground, at any rate, that I myself, under different circumstances, should be prepared to vote for the reduction of the Tea Duty. If I am not prepared to vote for it on this occasion, it is, of course, for
    the reason, as we well know, that this Amendment is in the nature of a "hardy annual," brought forward for a certain purpose, and which can hardly expect to be treated as a serious Amendment. I earnestly hope that the Chancellor of the Exchequer will consider this very important point as to exempting very small incomes from taxation.
    Question put, "That the word 'five' stand part of the Clause."
    The Committee divided: Ayes, 223; Noes, 183.

    Division No. 164.]

    AYES.

    [4.20 p.m.

    Abraham, William (Dublin Harbour)

    Falconer, J.

    McCallum, Sir John M.

    Adamson, William

    Farrell, James Patrick

    McKenna, Rt. Hon. Reginald

    Addison, Dr. Christopher

    Ffrench, Peter

    M'Laren, Hon. H. D. (Leics.)

    Agnew, Sir George William

    Fitzgibbon, John

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

    Ainsworth, John Stirling

    Flavin, Michael Joseph

    Manfield, Harry

    Allen, A. A. (Dumbartonshire)

    George, Rt. Hon. D. Lloyd

    Marshall, Arthur Harry

    Allen, Rt. Hon. Charles Peter (Stroud)

    Gladstone, W. G. C.

    Mason, David M. (Coventry)

    Armitage, R.

    Greenwood, Granville G. (Peterborough)

    Masterman, Rt. Hon. C. F. G.

    Asquith, Rt. Hon. Herbert Henry

    Greenwood, Hamar (Sunderland)

    Meagher, Michael

    Baker, Harold T. (Accrington)

    Greig, Colonel J. W.

    Meehan, Francis E. (Leitrim, N.)

    Baker, Joseph Allen (Finsbury)

    Grey, Rt. Hon. Sir Edward

    Menzies, Sir Walter

    Balfour, sir Robert [Lanark)

    Guest, Major Hon. C. H. C. (Pembroke)

    Millar, James Duncan

    Banbury, Sir Frederick George

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

    Molloy, Michael

    Baring, Sir Godfrey (Barnstaple)

    Hackett, J.

    Molteno, Percy Alport

    Barton, W.

    Harcourt, Rt. Hon. L. (Rossendale)

    Money, L. G. Chiozza

    Beale, Sir William Phipson

    Harcourt, Robert V. (Montrose)

    Mooney, J. J.

    Beauchamp, Sir Edward

    Harmsworth, Cecil (Luton, Beds)

    Morgan, George Hay

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

    Harmsworth, R. L. (Caithness-shire)

    Morison, Hector

    Bentham, G. J.

    Harvey, A. G. C. (Rochdale)

    Morton, Alpheus Cleophas

    Birrell, Rt. Hon. Augustine

    Harvey, T. E. (Leeds, W.)

    Muldoon, John

    Black, Arthur W.

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

    Munro, R.

    Boland, John Pius

    Harwood, George

    Munro-Ferguson, Rt. Hon. R. C.

    Booth, Frederick Handel

    Haslam, Lewis (Monmouth)

    Murray, Captain Hon. A. C.

    Boyle, D. (Mayo, N.)

    Havelock-Allan, Sir Henry

    Nannetti, Joseph

    Brady, P. J.

    Hayden, John Patrick

    Needham, Christopher T.

    Brocklehurst, W. B.

    Hayward, Evan

    Neilson, Francis

    Bryce, John Annan

    Hazleton, Richard (Galway, N.)

    Nolan, Joseph

    Buckmaster, Stanley O.

    Helme, Sir Norval Watson

    Norman, Sir Henry

    Burke, E. Haviland

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

    Norton, Captain Cecil W.

    Burns, Rt. Hon. John

    Henry, Sir Charles S.

    Nugent, Sir Walter Richard

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

    Higham, John Sharp

    O'Brien, Patrick (Kilkenny)

    Byles, Sir William Pollard

    Hinds, John

    O'Connor, John (Kildare, N.)

    Cameron, Robert

    Hobhouse, Rt. Hon. Charles E. H.

    O'Connor, T. P. (Liverpool)

    Chancellor, H. G.

    Holmes, Daniel Turner

    O'Doherty, Philip

    Clancy, John Joseph

    Howard, Hon. Geoffrey

    O'Dowd, John

    Collins, G. P. (Greenock)

    Hughes, S. L.

    O'Grady, James

    Collins, Stephen (Lambeth)

    Isaacs, Rt. Hon. Sir Rufus

    O'Kelly, James (Roscommon, N.)

    Compton-Rickett, Rt. Hon. Sir J.

    Jones, Rt.Hon.Sir D.Brynmor (Sw'nsea)

    O'Malley, William

    Condon, Thomas Joseph

    Jones, Edgar (Merthyr Tydvil)

    O'Neill, Dr. Charles (Armagh, S.)

    Cornwall, Sir Edwin A.

    Jones, Leif Stratten (Notts, Rushcliffe)

    O'Shaughnessy, P. J.

    Cotton, William Francis

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

    O'Shee, James John

    Craig, Herbert J. (Tynemouth)

    Joyce, Michael

    O'Sullivan, Timothy

    Crooks, William

    Keating, Matthew

    Palmer, Godfrey

    Crumley, Patrick

    Kellaway, Frederick George

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

    Cullinan, John

    Kelly Edward

    Phillips, John (Longford, S.)

    Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)

    Kennedy, Vincent Paul

    Pollard, Sir George H.

    Davies, Timothy (Lines., Louth)

    Kilbridge, Denis

    Ponsonby, Arthur A. W. H.

    Dawes, J. A.

    King, J, (Somerset, N.)

    Power, Patrick Joseph

    De Forest, Baron

    Lambert, Richard (Wilts, Cricklade)

    Price, Sir Robert J. (Norfolk, E.)

    Delany, William

    Lardner, James Carrige Rushe

    Pringle, William M. R.

    Denman, Hon. Richard Douglas

    Law, Hugh a. (Donegal, West)

    Radford, George Heynes

    Devlin, Joseph

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

    Raffan, Peter Wilson

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

    Lewis, John Herbert

    Raphael, Sir Herbert H.

    Dillon, John

    Low, Sir F. (Norwich)

    Reddy, Michael

    Donelan, Captain A.

    Lundon, T.

    Redmond, John E. (Waterford)

    Doris, William

    Lyell, Charles Henry

    Redmond, William (Clare, E.)

    Duffy, William J.

    Lynch, A.

    Richardson, Albion (Peckham)

    Duncan, C. (Barrow-in-Furness)

    McGhee, Richard

    Roberts, Charles H. (Lincoln)

    Elverston, Sir Harold

    Macnamara, Rt. Hon. Dr. T. J.

    Robertson, Sir G. Scott (Bradford)

    Esmonde, Dr. John (Tipperary, N.)

    MacNeill, John G. S. (Donegal, South)

    Robertson, John M. (Tyneside)

    Esmonde, Sir Thomas (Wexford, N.)

    Macpherson, James Ian

    Roch, Walter F. (Pembroke)

    Essex, Richard Walter

    MacVeagh, Jeremiah

    Roche, Augustine (Louth)

    Roche, John (Galway, E.)

    Soames, Arthur Wellesley)

    Webb, H.

    Roe, Sir Thomas

    Stanley, Albert (Staffs, N.W.)

    White, Patrick (Meath, North)

    Rose, Sir Charles Day

    Strauss, Edward, A. (Southwark, West)

    Whyte, A. F. (Perth)

    Rowntree, Arnold

    Summers, James Woolley

    Wiles, Thomas

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

    Taylor, Theodore C. (Radclifle)

    Wilkie, Alexander

    Samuel, Sir Stuart M. (Whitechapel)

    Tennant, Harold John

    Williamson, Sir Archibald

    Schwann, Rt Hon. Sir C. E.

    Thorne, G. R. (Wolverhampton)

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

    Scott, A. MacCailum (Glas, Bridgeton)

    Ure, Rt. Hon. Alexander

    Winfrey, Richard

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

    Verney, Sir Harry

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

    Sheeny, David

    Wadsworth, John

    Sherwell, Arthur James

    Ward, John (Stoke-upon-Trent)

    TELLERS FOR THE AYES.—Mr.

    Simon, Sir John Allsebrook

    Warner, Sir Thomas Courtenay

    lllingworth and Mr. Gulland.

    Smyth, Thomas F. (Leitrim, S.)

    Wason, John Cathcart (Orkney)

    NOES.

    Agg-Gardner, James Tynte

    Gilmour, Captain J.

    Newton, Harry Kottingham

    Aitken, Sir William Max

    Goldsmith, Frank

    Nicholson, William G. (Petersfield)

    Amery, L. C. M. S.

    Grant, J. A.

    Nield, Herbert

    Anson, Rt. Hon. Sir William R.

    Greene, W. R.

    Norton-Griffiths, J. (Wednesbury)

    Archer-Shee, Major M.

    Gretton, John

    O'Neill, Hon. A. E. B. (Antrim, Mid)

    Ashley, W. W.

    Guinness, Hon. Rupert (Essex, S.E.)

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

    Bagot, Lieut.-Colonel J.

    Guinness, Hon. W.E. (Bury S.Edmunds)

    Paget, Almeric Hugh

    Baird, J. L.

    Gwynne, R. S. (Sussex, Eastbourne)

    Parker, Sir Gilbert (Gravesend)

    Balcarres, Lord

    Hall, D. B. (Isle of Wight)

    Pease, Herbert Pike (Darlington)

    Baldwin, Stanley

    Hall, Fred (Dulwich)

    Peel, Captain R. F. (Woodbridge)

    Baring, Maj. Hon. Guy V. (Winchester)

    Hambro, Angus Valdemar

    Perkins, Walter F.

    Barlow, Montague (Salford, South)

    Hamersley, Alfred St. George

    Peto, Basil Edward

    Barnston, Harry

    Hancock, John George

    Pole-Carew, Sir R.

    Bathurst, Hon. A. B. (Glouc., E.)

    Hardie, J. Keir (Merthyr Tydvil)

    Pollock, Ernest Murray

    Bathurst, Charles (Wilts, Wilton)

    Harris, Henry Percy

    Quilter, Sir William Eley C.

    Benn, Arthur Shirley (Plymouth)

    Henderson, Arthur (Durham)

    Rawson, Colonel R. H.

    Bennett-Goldney, Francis

    Henderson, Major H. (Berks, Abingdon)

    Remnant, James Farquharson

    Bentinck, Lord H. Cavendish-

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

    Roberts, S. (Sheffield, Ecclesall)

    Boscawen, Sir Arthur S. T. Griffith-

    Hewins, William Herbert Samuel

    Rolleston, Sir John

    Boyle, W. Lewis (Norfolk, Mid)

    Hickman, Colonel Thomas E.

    Ronaldshay, Earl of

    Boyton, J.

    Hills, J. W.

    Rothschild, Lionel de

    Bridgeman, William Clive

    Hill-Wood, Samuel

    Royds, Edmund

    Burdett-Coutts, William

    Hodge, John

    Salter, Arthur Clavell

    Burn, Colonel C. R.

    Hohler, G. Fitzroy

    Samuel, Sir Harry (Norwood)

    Butcher, J. G.

    Hope, Harry (Bute)

    Sanderson, Lancelot

    Campbell, Capt. Duncan F. (Ayr, N.)

    Hope, James Fitzalan (Sheffield)

    Sandys, G. J. (Somerset, Wells)

    Carlile, Sir Edward Hildred

    Horne, W. E. (Surrey, Guildford)

    Scott, Leslie (Liverpool, Exchange)

    Carson, Rt. Hon. Sir Edward H.

    Horner, A. L.

    Spear, Sir John Ward

    Cassel, Felix

    Houston, Robert Paterson

    Stanley, Hon. G. F. (Preston)

    Castlereagh, Viscount

    Hume-Williams, William Ellis

    Starkey, John Ralph

    Cator, John

    Ingleby, Holcombe

    Staveley-Hill, Henry

    Cautley, Henry Strother

    Jardine, E. (Somerset, E.)

    Steel-Maitland, A. D.

    Cecil, Evelyn (Aston Manor)

    Jessel, Captain Herbert M.

    Stewart, Gershom

    Cecil, Lord Hugh (Oxford University)

    Jowett, Frederick William

    Strauss, Arthur (Paddhigton)

    Cecil, Lord R. (Herts, Hitchin)

    Joynson-Hicks, William

    Sykes, Alan John (Ches., Knutsford)

    Chaloner, Colonel R. G. W.

    Kerr-Smiley, Peter Kerr

    Talbot, Lord E.

    Clay, Captain H. H. Spender

    Kerry, Earl of

    Taylor, John W. (Durham)

    Clive, Captain Percy Archer

    Knight, Captain E. A.

    Terrell, George (Wilts, N.W.)

    Clough, William

    Lane-Fox, G. R.

    Thomas, James Henry (Derby)

    Courthope, George Loyd

    Lansbury, George

    Thomson, W. Mitchell- (Down, N.)

    Craig, Captain James (Down, E.)

    Lewisham, Viscount

    Tobin, Alfred Aspinall

    Craig, Norman (Kent, Thanet)

    Lloyd, George Ambrose

    Touche, George Alexander

    Craik, Sir Henry

    Locker-Lampson, G. (Salisbury)

    Tullibardine, Marquess of

    Crichton-Stuart, Lord Ninian

    Locker-Lampson, 0. (Ramsey)

    Walrond, Hon. Lionel

    Croft, H. P.

    Long, Rt. Hon. Walter

    Walsh, Stephen (Lanes., Ince)

    Dalziel, Davison (Brixton)

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

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

    Denniss, E. R. B.

    MacCaw, Wm. J. MacGeagh

    Wedgwood, Josiah C.

    Dickson, Rt. Hon. C. Scott

    Macdonald, J. R. (Leicester)

    Weigall, Captain A. G.

    Dixon, Charles Harvey

    Mackinder, Halford J.

    Wheler, Granville C. H.

    Duke, Henry Edward

    Macmaster, Donald

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

    Eyres-Monsell, B. M.

    M'Neill, Ronald (Kent, St. Augustine's)

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

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

    Malcolm, Ian

    Wilson, W. T. (Westhoughton)

    Falle, Bertram Godfray

    Mallaby-Deeley, Harry

    Wolmer, Viscount

    Fell, Arthur

    Martin, Joseph

    Wood, Hon. E. F. L. (Ripon)

    Fetherstonhaugh, Godfrey

    Mason, James F. (Windsor)

    Wood, John (Stalybridge)

    Finlay, Rt. Hon. Sir Robert

    Middlemore, John Throgmorton

    Worthington-Evans, L.

    Fitzroy, Hon. Edward A.

    Mildmay, Francis Bingham

    Wright, Henry Fitzherbert

    Flannery, Sir J. Fortescue

    Mills, Hon. Charles Thomas

    Yate, Colonel C. E.

    Fletcher, John Samuel (Hampstead)

    Morrison-Bell, Major A. C. (Honiton)

    Yerburgh, Robert

    Foster, Philip Staveley

    Neville, Reginald J. N.

    Gardner, Ernest

    Newdegate, F. A.

    TELLERS FOR THE NOES.—Sir

    Gastrell, Major W. H.

    Newman, John R. P.

    J. D. Rees and Mr. Barnes.

    Gibbs, G. A.

    Mr. JAMES HOPE: I beg to move, at the end of the Clause, to add the words, "except in the case of tea between the
    1584
    value of one and two shillings per pound on which the duty per pound shall be four-pence, and tea of the value of one shilling

    1585
    or less on which the duty shall be threepence."
    This Amendment, which is a much more modest proposal than the last, aims at establishing a distinction between luxuries and ordinary articles of consumption. This distinction is in fact established in other taxed articles. For instance, in connection with tobacco, there are special luxury taxes on cigars and cigarettes, which are regarded as being mainly the luxuries of the well-to-do classes, as against the ordinary tobacco used by the poor. The same is true of wine. Sparkling wines, which are par excellence the luxury of the rich, bear a special rate as compared with those of ordinary consumption. I propose to extend this principle to tea. I admit that the scheme of differentiation proposed by the Amendment has its difficulties, largely for the reason that one has to graduate downwards. As it is impossible for a private Member to propose a higher tax on the more expensive varieties of tea, one must take 5d. as the maximum and graduate down from that. I need not labour the point as to the great difference in prices of tea. They vary from 1s. 3d. up to 8s., or even more in the ease of special teas which are regarded as luxuries. I propose that the cheaper kinds should pay a lower rate of duty. In fact, my proposal approaches an ad valorem duty. It is interesting to follow the history of the Tea Duty. There have been periods in which an ad valorem tax has been levied, while in others the tax has been fixed. For forty-four years in the eighteenth century there was a tax partly by the pound, and partly ad valorem. Then for over ten years there was a uniform tax of 12½ per cent. ad valorem, which is a very much lower duty than prevails at the present time. Then came a period when it went up to 20, and afterwards to no less than 107. In 1834–5 differential rates were proposed, but not ad valorem The rates were put on the tea irrespective of the price. That system did not prevail for very long. It may be noted that Mr. Gladstone in bringing forward his financial statement in his great Budget of 1853 did not pretend that there was any great difficulty in the ad valorem rates. He proposed to simplify the duties by reducing the lower rates of the then existing duties, but he did not pretend that you could not have graduation. A former occasion on which the rate was changed was owing to complications arising from the East India monopoly, and
    1586
    also from the fact that different classes of tea were subject to different rates, which were, however, not ad valorem rates.
    This proposal will take very much less revenue from the Chancellor of the Exchequer than the last Amendment. A great deal of it he could make up again by proposing a rate of more than 5d. on the expensive quality drunk by rich people. I submit the Amendment is a just one in principle, and I do not believe, from the experience of the past, that there could be any insuperable difficulty in carrying it out. Anyhow, the Minister who says that the Insurance Act is only a beginning is not, I think, the man to allow himself to be baffled by technical difficulties. I am quite sure he will be able to get out of them, and if he were in any difficulty on technical points I have no doubt his friend Lord Devonport, who is an expert authority on this subject, would be able to suggest some means out. I think this proposal is a perfectly fair and a perfectly reasonable one. While not sparing any class of tea drinker, it does carry out the principle which finds agreement on the opposite side, that the luxuries of the rich should pay a higher duty than the comforts of the poor.
    Mr. HOBHOUSE: I am not quite sure whether I should treat this Amendment very seriously. [An HON. MEMBER: "Why not?"] I am coming to that in a moment. This subject was fully debated in 1905 towards the end of the term of the last Government, and the right hon. Gentleman the Member for East Worcestershire countered every single argument advanced by the hon. Member. More, the hon. Member himself went into the Lobby against what is now his own proposal.
    Mr. HOPE: I know more about tea than I did then.
    Mr. HOBHOUSE: The hon. Gentleman has not given us the advantage of that knowledge then. He has merely repeated the arguments which were repeated in the course of that Debate, and which proved so entirely unconvincing to him on the occasion I refer to.
    Mr. HOPE: What is the date of that Debate?
    Mr. HOBHOUSE:1905.
    Mr. HOPE:And the month?
    Mr. HOBHOUSE: April. I should have thought the hon. Gentleman, before putting

    1587
    forward this proposal, would have refreshed his memory by turning to that Debate. The hon. Member will find his name marked on the Division List.
    Mr. HOPE: May I ask, is not the name of the Chancellor of the Exchequer in that Division List in favour of that Amendment?
    Mr. HOBHOUSE: May I ask the hon. Gentleman one question? Does he raise this point in favour of the trade. Does he come here armed with authority from the tea dealers and the traders of this country, or has there been any desire expressed on their part for the change proposed by the hon. Member.
    Mr. HOPE: I do not represent any financial interest.
    Mr. HOBHOUSE: Is it in the interest of the trade or of the consumer that the hon. Gentleman makes this proposal? So far as I can ascertain the trade are not at all in agreement with the proposal of the hon. Gentleman because it is not possible to collect duties of the kind he proposes. One thing is quite clear, it would be most difficult for the Customs authorities to estimate the duties as between the wholesale and the retail price when the tea would reach the consumer in the retail shops. Prices realised in the market are entirely different to those realised by the shopkeeper, and it would be almost impossible for the Customs Department in this country to divide the tea imported into this country and to classify it so as to obtain the different prices suggested by the hon. Member. I do not intend to weary the Committee repeating the arguments put forward by the right hon. Gentleman for East Worcester six years ago in opposition to a similar Amendment. The Amendment is not practical or desirable, and will not bring any relief to the poorer classes because in certain parts of Ireland, and in this country a great deal of the most highly priced tea is bought. Poor people insist upon the higher priced tea of the best quality, while the people who are far better off are content to buy cheap and rubbishy tea.
    Mr. HOPE: May I ask the Chancellor of the Exchequer, in view of his former vote on this question, to support my Amendment now. The right hon. Gentleman who has just sat down does not contest the justice or fairness of the Amendment.
    Mr. HOBHOUSE: Oh, yes, I do.
    Mr. HOPE: He is in favour of the poor paying as much as the rich pay.
    Mr. HOBHOUSE: Oh, no. I pointed out that no relief would be given to the poor.
    Mr. HOPE: Belief will be given to the poorer people who buy the cheaper class of tea. That is quite certain. All the objection the right hon. Gentleman makes is that it would not be practicable. But it used to be done, and it was up to 1853, and Mr. Gladstone did not make anything of it when he proposed a uniform rate. He only said then that an ad valorem rate in addition to a fixed rate did not bring in very much. But there was a mixed system and you had a proportionate duty. I do not believe that a Government which has brought about so many changes in far more difficult matters really could not find an easy way to get out of this difficulty.
    Mr. AUSTEN CHAMBERLAIN: I do not want to press this matter, but I think my hon. Friend has some cause to complain when the Chancellor of the Duchy rebukes him with inconsistency. I have been making a rapid calculation of the number of hon. Gentlemen opposite who voted for this proposal on the occasion to which the Chancellor of the Duchy has alluded, I mean those who are or have been Members of this Government, including those who have been otherwise provided for and who have ceased to be Members of this House. I gather from that calculation that about twenty-five Members of the Government have committed themselves to this principle, and therefore I think the Chancellor of the Duchy is treating them with scant courtesy. For one, there is the Chancellor of the Exchequer, in his days of greater freedom and less responsibility, although he assumes great freedom now— I do not think he would repeat that vote in his present position. I think it sits ill on the Chancellor of the Duchy to take these lofty airs when the record of his colleagues is such a shady one.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 158; Noes, 237.

    Division No. 165.]

    AYES.

    [4.45 P.m.

    Aitken, Sir William Max

    Gibbs, G. A.

    Nicholson, William G. (Petersfield)

    Amery, L. C. M. S.

    Goldsmith, Frank

    Nield, Herbert

    Archer-Shee, Major M.

    Grant, J. A.

    Norton-Griffiths, J. (Wednesbury)

    Ashley, Wilfrid W.

    Greene, W. R.

    O'Grady, James

    Bagot, Lieut.-Colonel J.

    Guinness, Hon. Rupert (Essex, S.E.)

    O'Neill, Hon. A. E. B. (Antrim, Mid.)

    Baird, J. L.

    Gwynne, R. S. (Sussex, Eastbourne)

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

    Balcarres, Lord

    Haddock, George Bahr

    Parker, Sir Gilbert (Gravesend)

    Baldwin, Stanley

    Hall, D. B. (lsle of Wight)

    Pease, Herbert Pike (Darlington)

    Barlow, Montague (Salford, South)

    Hall, Fred (Dulwich)

    Peel, Captain R. F. (Woodbridge)

    Barnston, Harry

    Hambro, Angus Valdemar

    Perkins, Walter F.

    Bathurst, Hon. Allen B. (Glouc, E.J

    Hamersley, A. St. George

    Peto, Basil Edward

    Bathurst, Charles (Wilton)

    Hardie, J. Keir (Merthyr Tydvil)

    Pole-Carew, Sir R.

    Benn, Arthur Shirley (Plymouth)

    Harris, Henry Percy

    Pollock, Ernest Murray

    Bennett-Goldney, Francis

    Henderson, Major H. (Berks, Abingdon)

    Quilter, Sir William Eley C.

    Bentinck, Lord H. Cavendish-

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

    Rees, Sir J. D.

    Boscawen, Sir Arthur S. T. Griffith-

    Hewins, William Albert Samuel

    Roberts, S. (Sheffield, Ecclesall)

    Boyle, W. L. (Norfolk, Mid)

    Hickman, Col. T. E.

    Rolleston, Sir John

    Boyton, J.

    Hills, J. W.

    Ronaldshay, Earl of

    Burdett-Coutts, W.

    Hill-Wood, Samuel

    Rothschild, Lionel de

    Burn, Colonel C. R.

    Hohler, G. Fitzroy

    Royds, Edmund

    Butcher, J. G.

    Hope, Harry (Bute)

    Salter, Arthur Clavell

    Campbell, Capt. Duncan F. (Ayr, N.)

    Horne, W. E. (Surrey, Guildford)

    Samuel, Sir Harry (Norwood)

    Carlile, Sir Edward Hildred

    Horner, Andrew Long

    Sanderson, Lancelot

    Carson, Ft. Hon. Sir Edward H.

    Houston, Robert Paterson

    Sandys, G. J. (Somerset, Wells)

    Cassel, Felix

    Hume-Williams, W. E.

    Sherwell, Arthur James

    Castlereagh, Viscount

    lngleby, Holcombe

    Spear, Sir John Ward

    Cator, John

    Jardine, E. (Somerset, E.)

    Stanley, Hon. G. F. (Preston)

    Cautley, H. S.

    Jessel, Captain H. M.

    Staveley-Hill, Henry

    Cecil, Evelyn (Aston Manor)

    Jowett, F. W.

    Stewart, Gershom

    Cecil, Lord R. (Herts, Hitchin)

    Kerr-Smiley, Peter Kerr

    Strauss, Arthur (Paddington, N.)

    Chaloner, Col. R. G. W.

    Kerry, Earl of

    Sykes, Alan John (Ches., Knutsford)

    Clay, Captain H. H. Spender

    Knight, Capt. E. A.

    Talbot, Lord E.

    Clive, Captain Percy Archer

    Lane-Fox, G. R.

    Terrell, George (Wilts, N.W.)

    Courthope, George Loyd

    Lansbury, George

    Thomson, W. Mitchell- (Down, N.)

    Craig, Captain James (Down, E.)

    Lewisham, Viscount

    Tobin, Alfred Aspinall

    Craig, Norman (Kent)

    Lloyd, G. A.

    Touche, George Alexander

    Craik, Sir Henry

    Locker-Lampson, G. (Salisbury)

    Tullibardine, Marquess of

    Crichton-Stuart, Lord Ninian

    Locker-Lampson, O. (Ramsey)

    Walrond, Hon. Lionel

    Dalziel, D (Brixton)

    Lonsdale, Sir John Brownlee

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

    Denniss, E. R. B.

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

    Wedgwood, Josiah C.

    Dickson, Rt. Hon. Sir G. Scott

    Lyttelton, Rt. Hon. A. (Hanover Sq.)

    Weigall, Capt A. G.

    Dixon, C. H.

    MacCaw, Wm. J. MacGeagh

    Wheler, Granville C. H.

    Duke, Henry Edward

    Mackinder, H. J.

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

    Eyres-Monsell, B. M.

    Macmaster, Donald

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

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

    McNeill, Ronald (Kent, St. Augustine's)

    Wilson, W. T. (Westhougthon)

    Falle, B. G.

    Malcolm, Ian

    Wolmer, Viscount

    Fetherstonhaugh, Godfrey

    Mallaby-Deeley, Harry

    Wood, Hon. E. F. L. (Ripon)

    Finlay, Rt. Hon. Sir Robert

    Middlemore, John Throgmorton

    Worthington-Evans, L.

    Fitzroy, Hon. E. A.

    Mildmay, Francis Bingham

    Yate, Col. C. E.

    Flannery, Sir J. Fortescue

    Mills, Hon. Charles Thomas

    Yerburgh, Robert

    Fletcher, John Samuel (Hampstead)

    Neville, Reginald J. N.

    Foster, Philip Staveley

    Newdegate, F. A.

    TELLERS FOR THE AYES.—Mr.

    Gardner, Ernest

    Newman, John R. P.

    James Hope and Mr. Fell.

    Gastrell, Major W. H.

    Newton, Harry Kottingham

    NOES.

    Abraham, William (Dublin Harbour)

    Boyle, D. (Mayo, N.)

    De Forest, Baron

    Adamson, William

    Brady, P. J.

    Delany, William

    Agnew, Sir George William

    Brocklehurst, W. B.

    Denman, Hon. Richard Douglas

    Ainsworth, John Stirling

    Bryce, J. Annan

    Devlin, Joseph

    Allen, Arthur Acland (Dumbartonshire)

    Burke, E. Haviland-

    Dickinson, W. H.

    Allen, Rt. Hon. Charles P. (Stroud)

    Burns, Rt. Hon. John

    Dillon, John

    Armitage, R.

    Buxton, Noel (Norfolk)

    Donelan, Captain A.

    Asquith, Rt. Hon. Herbert Henry

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

    Doris, W.

    Atherley-Jones, Llewellyn A.

    Byles, Sir William Pollard

    Duffy, William

    Baker, H. T. (Accrington)

    Cameron, Robert

    Duncan, C. (Barrow-in-Furness)

    Baker, Joseph A. (Finsbury, E.)

    Chancellor, H. G.

    Elverston, Sir Harold

    Balfour, Sir Robert (Lanark)

    Clancy, John Joseph

    Esmonde, Dr. John (Tipperary, N.)

    Banbury, Sir Frederick George

    Clough, William

    Esmonde, Sir Thomas (Wexford, N.)

    Baring, Sir Godfrey (Barnstaple)

    Collins, Stephen (Lambeth)

    Essex, Richard Walter

    Barnes, George N.

    Compton-Rickett, Rt. Hon. Sir J.

    Falconer, J.

    Barton, W.

    Condon, Thomas Joseph

    Farrell, James Patrick

    Beale, Sir William Phipson

    Cornwall, Sir Edwin A.

    Ffrench, Peter

    Beauchamp, Sir Edward

    Cotton, William Francis

    Fitzglbbon, John

    Beck, Arthur Cecil

    Craig, Herbert J. (Tynemouth)

    Flavin, Michael Joseph

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

    Crooks, William

    George, Rt. Hon. D. Lloyd

    Bentham, G. J.

    Crumley, Patrick

    Gladstone, W. G. C.

    Birrell, Rt. Hon. Augustine

    Cullinan, J.

    Greenwood, Granville G. (Peterborough)

    Black, Arthur W.

    Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)

    Greenwood, Hamar (Sunderland)

    Boland, John Plus

    Davies, Timothy (Lincs., Louth)

    Greig, Colonel J. W.

    Booth, Frederick Handel

    Dawes, J. A.

    Grey, Rt. Hon. Sir Edward

    1590

    1591

    Guest, Major Hon. C. H. C. (Pembroke)

    Macveagh, Jeremiah

    Radford, G. H.

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

    McCallum, Sir John M

    Rattan, Peter Wilson

    Hackett, John

    M'Kean, John

    Raphael, Sir Herbert H.

    Hancock, J. G.

    McKenna, Rt. Hon. Reginald

    Reddy, M.

    Harcourt, Rt. Hon. L. (Rossendale)

    M'Laren, Hon. H. D. (Leics.)

    Redmond, John E. (Waterford)

    Harcourt, Robert V. (Montrose)

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

    Redmond, William (Clare)

    Harmsworth, Cecil (Luton, Beds)

    Manfield, Harry

    Richardson, Albion (Peckham)

    Harmsworth, R. L. (Caithness-shire)

    Marshall, Arthur Harold

    Roberts, Charles H. (Lincoln)

    Harvey, A. G. C. (Rochdale)

    Martin, J.

    Robertson, Sir G. Scott (Bradford)

    Harvey, T. E. (Leeds, W)

    Mason, David M. (Coventry)

    Robertson, J. M. (Tyneside)

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

    Masterman, Rt. Hon. C. F. G.

    Roch, Walter F. (Pembroke)

    Harwood, George

    Meagher, Michael

    Roche, Augustine (Louth)

    Haslam, Lewis (Monmouth)

    Meehan, Francis (Leitrim, N.)

    Roche, John (Galway, E.)

    Havelock-Allan, Sir Henry

    Menzies, Sir Walter

    Roe, Sir Thomas

    Hayden, John Patrick

    Millar, James Duncan

    Rose, Sir Charles Day

    Hayward, Evan

    Molloy, M.

    Rowlands, James

    Hazleton, Richard (Galway, N.)

    Molteno, Percy Alport

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

    Helme, Sir Norval Watson

    Money, L. G. Chiozza

    Samuel, Sir Stuart M. (Whitechapel)

    Henderson, Arthur (Durham)

    Mooney, J. J.

    Schwann, Rt. Hon. Sir C. E.

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

    Morgan, George Hay

    Scott, A. MacCallum (Glas., Bridgeton)

    Henry, Sir Charles

    Morrell, Philip

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

    Higham, John Sharp

    Morison, Hector

    Sheehy, David

    Hinds, John

    Morton, Alpheus Cleophas

    Simon, Sir John Allsebrook

    Hobhouse, Rt. Hon. Charles E. H.

    Muldoon, John

    Smyth, Thomas F. (Leitrim, S.)

    Hodge, John

    Munro, R.

    Soames, Arthur Wellesley

    Holmes, Daniel Turner

    Munro-Ferguson, Rt. Hon. R. C.

    Stanley, Albert (Staffs, N.W.)

    Howard, John Geoffrey

    Murray, Captain, Hon. A. C.

    Summers, James Woolley

    Hudson, Walter

    Nannetti, Joseph P.

    Sutherland, J. E.

    Hughes, Spencer Leigh

    Needham, Christopher

    Taylor, John W. (Durham)

    Isaacs, Rt. Hon. Sir Rufus

    Neilson, Francis

    Taylor, Theodore C. (Radcliffe)

    Jones, Rt.Hon.Sir D.Brynmor (Sw'nsea)

    Nicholson, Sir Charles N. (Doncaster)

    Tennant, Harold John

    Jones, Edgar (Merthyr Tydvil)

    Nolan, Joseph

    Thomas, James Henry (Drby)

    Jonas, Leif Stratten (Notts, Rushcliffe)

    Norman, Sir Henry

    Thorne, G. R. (Wolverhampton)

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

    Norton, Captain Cecil W.

    Ure, Rt. Hon. Alexander

    Joyce, Michael

    Nugent, Sir Walter R.

    Verney, Sir Harry

    Keating, M.

    O'Brien, Patrick (Kilkenny)

    Wadsworth, John

    Kellaway, Frederick George

    O'Connor, John (Kildare, N.)

    Walsh, Stephen (Lanes, Ince)

    Kelly, Edward

    O'Connor, T. P. (Liverpool)

    Ward, John (Stoke-upon-Trent)

    Kennedy, Vincent Paul

    O'Doherty, Philip

    Wardle, G. J.

    Kilbride, Denis

    O'Dowd, John

    Warner, Sir Thomas Courtenay

    King, J.

    O'Kelly, James (Roscommon, N.)

    Wason, John Cathcart (Orkney)

    Lambert, Richard (Wilts, Cricklade)

    O'Malley, William

    Webb, H.

    Lardner, James Carrige Rushe

    O'Neill, Dr. Charles (Armagh, S.)

    White, J. Dundas (Glasgow, Tradeston)

    Law, Hugh A. (Donegal, West)

    O'Shaughnessy, P. J.

    White, Patrick (Meath, North)

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

    O'Shee, James John

    Whittaker, Rt. Hon. Sir Thomas P.

    Lewis, John Herbert

    O'Sullivan, Timothy

    Whyte, A. F. (Perth)

    Lough, Rt. Hon. Thomas

    Palmer, Godfrey

    Wiles, Thamas

    Low, Sir F. (Norwich)

    Parker, James (Halifax)

    Wilkie, Alexander

    Lundon, T.

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

    Williamson, Sir A.

    Lyell, Charles Henry

    Phillips, John (Longford, S.)

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

    Lynch, A. A.

    Pollard, Sir George H.

    Winfrey, Richard

    McGhee, Richard

    Ponsonby, Arthur A. W. H.

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

    Macnamara, Rt. Hon. Dr. T. J.

    Power, Patrick Joseph

    MacNeill, John G. S. (Donegal, South)

    Price, C. E. (Edinburgh, Central)

    TELLERS FOR THE NOES.—Mr.

    Macpherson, James Ian

    Pringle, William M. R.

    lllingworth and Mr. Gulland.

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

  Part II.—INCOME TAX.

    CLAUSE 2.—(Income Tax for 1912–13.)
    (1) Income Tax for the year beginning on the sixth day of April, nineteen hundred and twelve, 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 eleven.
    (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 eleven, shall have full force and effect
    1592
    with respect to any Duties of Income Tax hereby granted.
    (3) The annual value of any property which has been adopted for the purpose either of 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 twelve, 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

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

    Mr. POLLOCKhad given notice of an Amendment to insert, at the beginning of the Clause, the words, "After the commencement of this Act."
    This is an important Amendment, especially after what has been said this morning, and its object is to emphasise the fact that it is the Act of Parliament which alone authorises and gives statutory authority for the collection of these taxes. Up to the present time doubts have been expressed as to the necessity for the Act, and it has been suggested in some quarters that the Resolution is sufficient. But our own practice rather indicates that a mere Resolution is quite insufficient, because in our Procedure it is laid down:—
    "A Resolution passed by Committee of Ways and Means requires confirmation by Act of Parliament."
    It is made equally clear in another Section, which lays it down that:—
    "A Resolution passed by the Committee of Ways and Means, when agreed to by the House, requires confirmation by Act of Parliament."
    This Amendment is designed to make it perfectly clear to all persons that it is the Act of Parliament which gives the effective authority under which Income Tax is collected. May I remind the Committee how matters stand at the present time. There is a Section in the Act of 1890 which says that in order to ensure collection in due time the provisions of the previous Income Tax are to be held to have force as if the duties were actually granted by Act of Parliament, and clearly the object of that is to keep standing the machinery that is absolutely necessary to enable the Inland Revenue authorities to issue papers and require answers and statements of income on which the tax is to be eventually paid. It has, I believe, been held by the Law Officers of the Crown that the Income Tax Acts for previous years do not give effective statutory authority for the new collection until a Statute has been passed. A difficulty arose in connection with working under a Resolution, and not under a Statute in the year 1902. In that year under a Resolution in Committee of Ways and Means, a large amount of Loan Stock was issued under the Loans Act, 1901. The Resolution was passed on 27th April, 1902. The Act which gave statutory authority to that Resolution did not receive the Royal Assent until August. In consequence of the long period which elapsed between the passing of the Resolution and the Royal Assent being given, a dividend accrued due on the stock. The Treasury were placed in a difficulty,
    1594
    whether they should act on the Resolution, or require statutory authority before the money was paid. The Comptroller and Auditor-General was advised by the Treasury that he could pay the money, and with very great reluctance he did so. He determined that he could only pay it if the opinion of the Law Officers of the Crown was taken. That opinion was taken, and it was held that there was no authority whatever to pay that dividend, and that it had been wrongly paid because it was paid in pursuance of a Resolution of the Committee of Ways and Means, and not in pursuance of statutory authority. It was held that there was no debt, that there was no statutory authority for the loan, and, therefore, there was no statutory authority for the dividend. That matter came before the Public Accounts Committee in 1903, and the Comptroller and Auditor-General asked that his action might be excused on the ground that he was placed in a difficulty. The purpose of my Amendment is to make it quite plain that it is the Act of Parliament which is the real authority, and that no Resolution of the House of Commons can be claimed to have a statutory or effective legal authority. If we pass the Amendment the Clause will run:—
    "After the commencement of this Act Income Tax for the year beginning on the sixth day of April nineteen hundred and twelve 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 eleven."
    The effect will be that when the Bill has been passed the full collection of Income Tax can be made for the year. It will emphasise the fact that there is need for the Bill to be passed into an Act as rapidly as possible.
    And, it being Five of the clock, the Chairman left the Chair to make his Report to the House.
    Committee report Progress; to sit again upon Monday next.
    Whereupon Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to Standing Order No. 3.
    Adjourned at Two minutes after Five o clock till Monday next, 20th July.

    PETITIONS PRESENTED DURING THE WEEK.
    The following Petitions were presented during the week and ordered to lie upon the Table:—

    TUESDAY.
    County Courts Bill—Petition from Dewsbury, in favour.
    Criminal Law Amendment Bill—Petition from London, in favour.
    Mental Deficiency Bill—Petition of the Royal Sanitary Institute, in favour.

    THURSDAY.
    Shops Act, 1911—Petition from Hawick, for alteration of Law.

    FRIDAY.
    Criminal Law Amendment Bill—Two petitions in favour, from Newport and Carisbrooke.
    Established Church (Wales) Bill—Petitions from Aberdare, Berse Drelincourt, Briton Ferry, Carniwch, Christchurch, Clydach, Conway, Ebbw Vale, Forden, Gwenddwr, Llanengan, Llanfrechfa Upper, Llangyfelach, Llanlleonfel, Llansantffraid yn Mechain, Longhoe, Miskin, Neath, Oystermouth, Ruthin, St. Ann's, Sketty, Swansea (5), Trewithen, Wales, and Ystalyfera, against.

NATIONAL INSURANCE ACT.
  STAMPING CONTRIBUTION CARDS.
  STAMPING CONTRIBUTION CARDS.
  CHIEF ENGINEER.
  CHIEF ENGINEER.
  London and Provincial Assurance Company.
  London and Provincial Assurance Company.
  National School Teachers (Ireland).
  National School Teachers (Ireland).
  Labourers' Cottages (Tralee Rural District).
  Labourers' Cottages (Tralee Rural District).
  Compensation at Donaghadee.
  Compensation at Donaghadee.
  Castleisland Election Petition.
  Castleisland Election Petition.
  Fort Construction, Portsmouth (Fair-Wages Clause).
  Fort Construction, Portsmouth (Fair-Wages Clause).
  Coal Mines (Minimum Wage) Act— Warwickshire.
  Coal Mines (Minimum Wage) Act— Warwickshire.
  Belfast and County Down Railway (Accident near Conlig).
  Belfast and County Down Railway (Accident near Conlig).
  Street Traffic Signals.
  Street Traffic Signals.